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You were just talking about times when its okay to sell if youve had gains on some of these big cap tech names. Yeah, im not advocating that this is a get out now moment, i just think that we have had such a good run, there was something that came out on the screen this morning that we are having the best quarter since the Fourth Quarter of 1999 and i just cant be, oh, well, so what, when was that that was a seminole top. Theres been some fantastic runs and i think that sometimes we forget why we own stocks we own stocks to create wealth there was a gentleman on just now, mr. Bailin and he said so many good points, he agrees with me on selling some of the ones that have really moved he would like to rotate into the stocks that havent moved yet. What i am saying is there is no sense for a lot of our investors who watch to rotate into something that hasnt moved when they can just sit and wait with some cash, which is cash has been so vilified and i think that i am not coming in early like some of the people, i dont need to go over their names anymore because they happen to be some very good investors, but i am not coming in and saying get out when they did. They missed a huge move, one of the greatest moves of my lifetime it could still go on i did a piece last name with Larry Williams saying the best actual day of the year is the day before july 4th but i do feel that it is not a shocking thing to say theres so many signs that were getting, why not obey some of them and go and take a little off and maybe you can say, do you know what, i took some off before something bad happened silence david i was going to let david weigh . You stunned us into silence i was just listening, carl, as usual, waiting for you to follow up on some of that genius. I dont know listen, jim jim, you talk about bad signs. We had howard marx on yesterday, pretty good investor, right, and then i checked a twitter file by my friend dave portnoy and howard marx doesnt look that good on that, but at the same time he has been longer a good investor. Shorter term theres people that can be really right. Its enjoyable to be right, but, remember, youve made no money until the money leaves the stock market and gets into your bank account. It is one thing to rotate we could rotate into freeport and caterpillar. Im not obvious what happened in the polls, looks like joe biden raised more money than trump and he says the Corporate Tax rate should go up, thats 20 off the s p. Im also not oblivious whats happening to covid in these states where i hope those people dont come up to us. They didnt want new yorkers to come down to there i think the idea that the baseball season is going to go on a oblivious to whats happening on teams unless its a 15day dl when you get covid im seeing things that make me feel like, wow, and im supposed to get off for a week after july 4th and i know thats going to be canceled by a downturn. That always happens. Youre right on election risk, too. The times has biden up 14. Wow. You mentioned howard marx on closing bell yesterday talking about how its not necessarily healthy to be in a period where people are trading stocks for fun. Here is what he said the participation of people hong its a gambling game and, you know, they think of it like betting on football is not a healthy thing. I think its what you brits would call punters thats not a great thing you know, the leader of the punters says that he got excited when he learned about 60 days ago that stocks only go up and if theres been buying and if stocks are being held by people who believe that they only go up, i think that bodes ill now, i think that this is tangential and its at the margin so i dont think that this is a systemic challenge, but its not healthy to have people who are buying stocks for fun. Fair to say, jim, howard has been befuddled by the price action for the last couple of months. Right i mean, look, you can watch dave portnoy and take him incredibly seriously and i think that that is not what he wants he makes fun he spoofs people or you could say, wait a second, do i decide to follow him . And i think that he would say, dont you see that im having some fun now, are stocks supposed to be fun, no. But do you know what, the world has changed and there is a new cohort thats gotten in and they are very binary, they do believe that a stock is like a sports competition, but also theres no sports so theres some people who are desperate for something to do. Is that good i dont want to put any value judgment on it all i can say is its not something that happens early in a big move and i think we could all agree that empirically its not something that happens early in a big move. Right well, portnoy has said to you, jim, that when sports comes back hes going to change his focus. Right. Do a lot of other people follow is there going to be a lack of a bid that weve seen from retail in some of these names if and when sports comes back slowly but surely as it eventually will i would say probably. I think a lot of people do go into a casino and they go to games where they are games of chance and then as we know if a casino there are games of skill, blackjack is a game of skill you can win 51 49, you can play by rules there are a lot of people in the game of chance and howard marx is right about that but i am hoping that those same people shift over and say, do you know what, i actually think that there is longer term things i should own, maybe i can own fractional shares of stocks that have come down and so i dont want to dismiss these people i want to help them. It is so easy to dismiss them. Dave would be one of the first people to say dont you see im having some fun here, meaning not that i think stocks are fun, but that im having fun. You know, jim, it does bring to mind that period and i have said this a number of times of course in the mid to late 90s where we saw the dotcom boom continue to rise but there are a lot of differences, too, and important ones there were so Many Companies that had no chance of ever having a bit of cash flow in that period. There were so many investment banks happy to take these Companies Public regardless because they had the word internet in their Business Model in some fashion or other there were so many analysts willing to found the table on those companies that had been taken public despite the fact there was no chance they would have profitable. Its a lot different now yes, there are speculative names, splr spacs being created all over the place, who knows what theyre going to buy, there are names we watch when we say 35 times revenues but you can make an argument that there is at least the opportunity for real growth and real free cash flow. Absolutely, and thats what makes this so difficult. I look at a proctor and know its come down big from its high, its asserting itself overseas, they have a fabulous Balance Sheet. Its an interesting stock to me. At the same time i can make a case, i know this is ridiculous, for microsoft. You could say microsoft that is just a stock that is off the rails, its like cisco when its hold at 40 times earnings in 1999 but its not. Its a good company that has changed its stripes and doing cloud work in a world where covid has changed the game so i cannot just dismiss microsoft. I can dismiss Royal Caribbean. I can. Because covid is turning out to be a much more tough enemy than we thought youre absolutely right, the track i dont like these articles which just say, do you know what, this market is overvalued because you and i both know if you backed out the cash on alphabet and you can do that, thats okay to do, you dont have an expensive stock, i heard someone say that facebook is incredibly expensive. I wish it was expensive. The multiple has been shrinking forever. Heather bolini fabulous piece out today talking about stocks that have had multiple earnings for thats a good piece do you know what, youre right, david, i still think its okay to make a little money and you havent made it until its kaching right we will talk more about the goldman please bolini takes google to 1775. To jims point about renewed covid risk lets turn to meg tirrell and talk about some states like arizona coming off eight Straight Days of order hospitalizations good morning, meg. Good morning, carl. Dr. Fauci yesterday testifying on the hill that hes seeing a disturbing surge in multiple states including arizona, texas and florida and says these next couple weeks will be crucial to try to make head way to stop trends more than 33,000 new cases and the seven day average rose for eight Straight Days is now at 29,000 the positive rate ofest tests hitting 6. 7 seven states reported new highs for current hospitalizations from arizona, arkansas, california, more than 5,000 people currently hospitalized. Hospitalized north carolina, south carolina, tennessee and texas now more than 4,000 houstons Texas Medical Center warning it may exceed icu capacity within two weeks. Now, cities that are seeing the fastest growth, phoenix, arizona, ten days case doubling time, tampa, san antonio, orlando, austin, whereas those areas in the northeast seeing those fastest slow downs so quite concerning Trends Health officials warning action needs to be taken now to try to stop them. That was certainly a theme of faucis testimony yesterday, meg. We will dig into that a lot more this hour. Thanks we will take a quick break futures a big weak calls to get to. There are target changes on amazon, upgraded morgan stanley, downgrade of paypal and a new street high on peloton we are back after a short break. Where will you go first . Wherever you make go, lexus will welcome you back with exceptional offers. Get zero percent financing and make no payments for up to 90 days on all 2020 lexus models. Experience amazing at your lexus dealer. 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 some reports after the bell yesterday from the wall street journal indicating that dell is considering a spinoff or other transaction, perhaps the sale of its 83 stake in vm ware, frustrated by the fact that it doesnt seem to get any credit for a stake that is basically worth the overall market cap of dell before you even get to dells business. Youre seeing right there of course shareholders reacting to that possibility i can confirm what the wall street journal did report yesterday as well this is certainly something being studied by the company we should point out it is not something that can happen until at the earliest september of 2021 given that is when you could actually do a spend that would be taxfree to shareholders because you need five years to pass prior from the time that they made the purchase what would it look like . Well, thats whats sort of going on right now in terms of some of the advisers who are investigating this for dell and obviously dell itself. Again, the timeline on this is some time away but you do at least have for now operational guys going deep for a bit trying to understand t these two companies have been brought together and so there is also the question of when you separate them can you still at least maintain the benefit that they have of michael dell going out and making sales calls, for example, on behalf of vm ware or any or any number of things this one dell approach that they have had that have been beneficial for both companies what would it mean dell the hope would be would become an investmentgrade company, for example, because you would jettison a certain amount of debt with vm ware if it were to be spun to shareholders it would of course potentially show the value of in dells business and val slue to those shareholders to look at vm ware and go why isnt any of the ownership stake reflected in the market cap or is it that we dont value dells business at all . A long way to go here. It does appear likely to move towards that as this year and next year move along, but, jim, its going to be quite a while imagine some of the large holders, remember, elliott has been in there, would be happy with it, one would imagine michael bell would own a pretty sizable stake in vm ware given his ownership stake in dell. Perhaps there wont be the friction that he always seems to face whether its when he took dell private or when he was taking it public again and the value of vm ware, people always question at least some carl icahn, for example, questioned his motives, perhaps they wouldnt do as much here we will keep an eye on it. A long way to go here. Dell had a dynamite quarter, the principal hardware beneficiary of the stay at home quarter. I think vm ware is a fabulous company, a great on Board Company chiefly to Amazon Web Services but also the cloud services, i find its been constrained by the ownership by dell, people have been thinking one day it has to happened its been constrained by just what is going to happen with this chunk david, the Tax Implications would they change . Lets say we had a widen president city in 2021 would we expect that michael dell would not make as much money no, not necessarily i suppose its a spin so the key here is it being treated taxfree thats been a part of the tax treatment for a long time. Great point. It has to take place five years after you purchase the asset for it to be spun off in a taxfree manner. I dont see that as changing one part that could figure into this and it does figure into a lot of the conversations im hearing from investment bankers, listen, if dell was sort of independent, the old shrink to grow, would it want to do an acquisition . Could you imagine it going out and trying to merge with hp . Well, under a Biden Administration that might become less tenable, it would probably take forever regardless of the administration from an antitrust level, but thats what keeps coming up when you think about a Biden Administration, would antitrust be even tougher . I mean, that said its been so unpredictable under the Trump Administration that its hard to necessarily say one would be better than another, but its certainly coming up now and when bankers are talking to companies that are thinking about things its almost too late at this point, youre not going to get something closed before inauguration day, but it comes up that would potentially be a debating issue for dell if after this transaction it wanted to do another deal. If we thought these were Strategic Industries i could see Peter Navarro saying we want to stop the chinese pc companies, let these two companies merge, dell and hp become a juggernaut and they would save a lot of costs. It would be a terrific move. I dont know weve seen tmobile merge, obviously with sprint, tmobile business being sold today looking like its pretty good if you got the stock at 103 i believe michael dells company i was surprised that the stock didnt move up more after that quarter and i bet you michael was, too michael shot the lights out, that was a fantastic conference call, i thought this thing was on the way to the moon and it got stymied, hit a brick wall. They crushed it in the stay at home universe. Just crushed it. Yeah, well, and that you get the frustration and the reason why they are examining this because of that frustration with the lack of movement in the stock price really since the company returned to the public markets, jim guys, take a quick break here we will talk to the imf, this h have renewed forecasts for 2020. The one advanced economy that they see posting positive growth in 2020 wh wco bk. Ene meac turn on my tv and boom, its got all my favorite shows right there. I wish my Trading Platform worked like that. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. 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Announcer the opening bell is brought to you by nuveen. A leader in income, alternatives and responsible investing. Four minutes before the opening bell, a rare down open it would appear to be. Lets get to a mad dash. Here is a stock that has not seen a lot of down days. Peloton. Yep, i wring up peloton, people are saying why do you peek on square, i happen to love square so just get that on the record peloton, david, continued momentum is the piece name from key bank, raisingat the same times. This has been happening over and over again what do they say the weekly delivery checks turned out to be seven to 11 weeks, thats not new, weve known that social distancing will severely limit the boutique fitness market, thats not new we knew that okay we see multiple catalysts to drive longterm growth all the catalysts are known 15 billion company, Great Company fantast fantastic, perfect for this moment and as we get more cases of covid even more perfect, but nothing in there that hasnt been thought of before and thats what im concerned about. You take the same information and you pay more for it every day, has not been a good sign. I dont think a lot of the newer people realize that that is not a good sign. I think they may think, wow, once again, look at that, look at that, look at that. Its not like that, its the opposite every one of the reasons why this gentleman says and i believe it is gentleman yes, new should buy it are things that we have already thought of. They are not new theres nothing new, its just lets pay more for it. I want to know play that, id rather find something that is doing about eter than i thought. Maybe peloton is without knowledge of it im paying a higher price for the same thing i knew yesterday. You are, but it still begs the question what actually ends up turning it around i know fewer buyers than sellers but what actually creates those conditions is the key question here, particularly with the fed, where it is right now, and this idea that stocks only go up, which in some ways at least for those who are new to this market is a belief that they dont see being tested. How about if someone says, listen, we want to sell a ton of stock, how about insider selling, how about if you started seeing a vaccine if you heard something lets say if meg broke in right now and said that modern in a is seeing good results for six weeks, people would say isnt that one of the principal reasons we wanted to buy peloton. You have a vaccine, a potential insider selling. In the interim, yes, the sky is limit. Stocks are fun they only go up. These are i think so this you and i have heard of a couple times in our career. I come back and say those times can continue but they were not the beginning of a major move. Right right. Did you like the portnoy video of Warren Buffett throwing pitches of portnoy and he keeps circling the bases do you worry at all with portnoy, he is recommending some of these really small stocks now. I dont like that thats a bad call. Whats he doing is he recommending stuff there is no no regulation that stops him from saying whatever the heck he wants and then selling it once it goes up based on the people who are following him, jim. I dont like that. He is not under the regulations we have where obviously we cant own stocks, we cant own corporate bonds, we cant own options, cant virtually own much of anything other than etfs. It mazes issues but i think that the opens of baseball season he said on air with me that hes ready to do sports he likes stocks, but theres nobody better in sports and hes having a good time in stocks again, i think having a good time what he thinks is different from my good time. My good time is saying, do you know what, what a great thing, facebook has done a big i will sell half my facebook and play with the houses money. That to me is a great time these are different great times. Indeed, jim there is the opening bell, guys, as we wait to see how brent fills in you mentioned facebook, the times with a piece out about how the ad boycott is gaining scheme north phase, patagonia, rei, eddie bauer, Magnolia Pictures the company has 8 million advertisers, but there is a growing sense that advertisers are conflicted when it comes to how they see facebooks stance on hate speech. I think that you have to look at the makeup of what facebook is doing facebook shops, the strength in the facebook small to midsize is rather telling its the same thing by the way you will see it in the stock of etsy theyve really done a lot of pivoting yes, the consumer products, there may be some residual anger at them, im not a fan at all of their stance just to go on record, but i also know that weve seen these periodic attacks on by the times on facebook obviously i happen to think they are attacks because the articles appear and then look at these, these are all companies that are very im sure a lot of people the right would say theyre sanctimonious, i think these are fantastic caps that have great conscience, but there are thousands of advertisers that dont have any other way to get to their customers than through facebook so these are periodic, north face remember part of vf and people come back i just think that maybe if you have a ben an jerrys has a great conscience and dont like what facebook stands for, sure, they can afford to say no to their audience but a lot of companies cant afford to say no they have to be in there and i think thats important we should point out the boycott, so to speak, only really goes for most of these the companies through the end of july, which sort of raises questions about how firmly you believe in what youre saying if youre going to come back to the advertising platform in the next couple of weeks. Amazon, jim, i see web bush now goes to 3050 so we are not only talking about three handles look, i struggle with amazon, its the largest position in my chapel trust by far and why is that because, well, the answer is because i think that its the most fundamental transforming company of our era other than apple, but when i read this i say, well, wait a second, hes paying up again, nobody necessarily thinks this is a big quarter for earnings, spending 4 billion on covid to be sure that their workers are more protected than others. I wish he hadnt done the piece. I know you cant say put it back in the bottle, but i think that, you know, this is not the time to pound the table on amazon the time was when it was at 1800 or when the president attacked it for the post office, ripping off the post off you wait until stocks are down to make these kinds of calls, not when theyre flying. Its not the way you do it it has not been a great way to do it. Its a skill set and, david, you know it, too, there is a skill set to window upgrade, you wait, you hold back, you keep your powder dry, you wait for the wides of the eyes and then you strike you dont say stocks always go up and i woke up this morning and like amazon. No theres good ways to do it and bad ways its okay. We may be entering a period of time, though, where analysis is going to fail to really identify key moments and or i mean, of course this has been the case for many, many years, there are only a handful of analysts who really find true pieces of information that are real value, jim. People can talk about valuation, k true to it, downgrade as a result of it, but its rare that you find the analysts who actually find something that is a piece of information that an investor would want to know in terms of how theyre identifying certain security now to value it. How about the biden stocks . The Health Maintenance insurers, they stopped going up. The drug stocks stopped going up, the bank stocks stopped going up these are all biden stocks i think that we cant be oblivious to the biden stocks. These are stocks that when bidens ratings go up they go down and now youre starting to hear talk about maybe the Bank Dividends are going to go when they did the stress test i dont even mind two markets. I came up with faang years ago i dont mind that, its just that i dont like to see a whole cohort of probably 40 of the market that goes down if biden gets elected because that is not going to be a positive thing for the stock market. No, but there are a lot of other things that come into play in this election beyond the performance of the stock market, jim, and by the way, we can all remember the time that trump was elected and the Immediate Response and then what happened afterwards. Thats true were raising points were raising points understood. And its still really early. Jim, you mentioned the financials it will be interesting to see their quarters because the level of debt and Equity Capital markets activity has been extraordinary and there is certainly something to be expected there in terms of big profitability for the banks that are active, very active in the capital markets. Now, it may be muted as a result of increase in reserves that weve seen and will continue to likely see, but one would have to imagine the financials are definitely benefitting, you know, the goldman, morgan stanley, jpmorgan you know the names from this incredible activity that does take me to tmobile which im watching claw back here to basically flat they sold 198 million shares at 103, i tweeted about it yesterday, you know, number of sovereign funds you broke the story dont say you tweeted about it, you broke the story. You know, weve been following this for quite some time apparently they did reduce the seem of the convertible offering which could be also having a bit of an impact, but there it is, thats really extraordinary. No, it isnt extraordinary. It isnt extraordinary because sinofi sold shares of regeneron at 515, its now 628 and pnc sold a ton of blk at 420 and now take a look where that is, its up gigantically. Its not necessarily unusual theyve been great deals. In this market youre right and it seems as though there are any number of investors who want to make tmobile sort of a cornerstone of their portfolios. Yes. Happy to do it at 103 for a sizable chunk and we will likely be holders for some time remember we have three wireless players and this companys market value is rapidly rising, not quite to the levels of verizon and at t but not that far. All right. 60 billion or so, 70 billion. Its big. In the kind of ballpark and no longer led by john ledger but very aggressive. The deal to sell boost to dish also comes up today, back to capital markets, dish is going to be raising a billion dollars in senior notes for general corporate purposes, the company says, but this will refocus people on the 5g efforts of course of dish and its founder charlie erogan they continue to move aggressively in that area. I continue to hear there is a question of course as to whether they will be able to raise as much money as they need, will they bring in a deeppocketed partner of some kind could that be a Cable Company, the likes of a google or will mr. Erogan choose to still go it alone. Jim, it always takes me back to something you, i think, pointed to a number of times when you hear about dish and the 5g efforts that they are going to be making which is the tower companies. I dont know how they have been performing lately but one would imagine they are the beneficiaries of this. Theyve been great. Sbc has been Great American tower have been my favorite but its a fabulous company. These guys have been such huge winners. You wish you were in that business it reminds me when people had a vision of owning a small cellphone company, i mean, these guys have been just coining money. Takelet went to lockheed martin. Yeah. That guy when the shorts were after him he came right on, he demonstrated exactly where the shorts were wrong. Unbelievable buy and he took the shorts on in a way that i very rarely have seen a man of great conviction and just said, listen, its a ten year ten year roadmap he was wrong its probably now about 14 look at that look at that that downturn there, look at the longer term. Yeah. Its been amazing david, how about comcast being involved, Parent Company of this network. In what you were talking about a Cable Company might be involved. Oh, you know, its possible i mean, listen, were going to be continuing im going to focus on at least dish because i think its interesting and it was such an important part of the governments willingness to allow the tmobile sprint merger not to mention the judge who said no to new york state and other states about blocking the deal as well, his plan will it be focused on the Santa Barbara err price where there is going to be a real need for 5g on factory floors and things of that nature . Will it be truly nationwide or focused in key sort of markets a lot of questions at this point not a lot of answers, erogan said 10 billion is the number, some have questioned that although there has been a significant change in the way that you actually go about building these networks, so much has now become about software as opposed to, you know, having to put the box in at the tower base and things of that nature, jim but its going to keep my attention. And focus on that tmobile. Tmobile finishes up, david, thats just a sign of tremendous demand. Yeah. You mentioned earlier whats different. Why is it not are there why could it go on the demand for equities is insatiable because there is no yield anywhere thats the fed again a lot of places that had good dividends they had to eliminate their dividends. Were desperate for field and youre seeing what happens when youre desperate for yield. Carl, yesterday American Airlines phil has been reporting on their capital rates i did misstate yesterday, remember they increased actually both the convertible and the common took offering at American Airlines but both of those airlines, ual, american, have been quite successful in raising new money as well. Yeah, travels getting a ton of news this week, s p cuts carnival to junk follows moodys last month and barclays cuts Royal Caribbean and norweigian to equal weight. Lets get to bob pisani. That Carnival Cruise commentary i think very important overall. Two issues moving the market, the reopening trade and trade and tariff in general. Lets take a look at the sectors here and remember when the reopening issue is not going as well as people had hoped, generally you get impact on energy stocks, bank stocks, industrials, thats exactly what were seeing tech conditions its relative outperformance and absolute outperformance and Consumer Discretionary which moves with tech because its tech oriented also doing well here here you see energy banks and industrials a bit on the weak side is the reopening story going well or not . Carl was referencing the trade and travel, the travel and leisure stocks, carnival is down, downgrade over there at s p that we you a barclays down grading the cruise lines they had it overweight, i dont know why, but you see the impact there going on gottlieb was talking about the possibility that hospitals in texas, california, florida, arizona might have to make decisions to suspend elective surgeries again, obviously thats having an impact on all of this. Another issue is trade and tariffs. Look at the s p futures overnight, about 330, we had reports there might be a trade war on tariffs with the eu and the united states. That dropped europe, europe opened down about 2 there you see us dropping on that news. Its been a wild overnight session recently in the futures overall. Now we are debating about ginn and beer and olives and truck and transports all the names like daimler and chrysler were down, air companies down like saffron and the banks all were down here this has taken longer than everybody thinks and the trade and tariffs issue is another layer on the stress of the markets were seeing not affecting mega cap names, everybody is still positive apple, amazon, here they are, all positive, folks. Biggest stocks that are out there still moving the markets thats the most important thing to look at, the dispersion between sectors thisyear is truly remarkable normally its not unusual to get 10 percentage point swing between the high secretary err and the low sector this is the end of the first half of the year that were dealing with, but these are pretty extraordinary dispersions here technology is up 1 for the year, Consumer Discretionary which has tech stocks, essentially tech oriented are up and look at Everything Else, the s p is down 4 for the year, this is for the Year Health Care doing pretty well, but industrials down 15 , banks down 30 and still showing no signs of bouncing. Thats the story for the first half of the year its tech thats winning out on the stay at home story and Everything Else, health care doing okay as well, but Everything Else kind of struggling still if you look underneath the hood. Guys, back to you. Thats true, bob. Nasdaq has gone green as zoom video hits a new record high lets get to Rick Santelli as well this morning. Good morning, carl. Two day of tens is a fascinating chart, yesterdays high 73 basis points, today were going to look to see if that resistance works and do remember that if we look at the last time rates really had a surge and they are surging just a little bit, weve been up in yield every day even though today has turned unchanged for the week, if you look back you could see on a month to day chart that the five or six sessions leading to last employment report really juiced Interest Rates, they ended up trading over 90 basis points its mathematical. When you shut the economy things arent going to measure well, when you reopen it as spotty as some may believe its going to improve. That was the issue last employment report, now the openings have hit a stride many believe we will see improvement on the employment front. If we could look for rates to rise as we go into a week from this fridays employment report. As for the dollar index, yesterday its low was right under 9640 which is unchanged on the year we did get a bounce off of unchanged, we are up about a third of a cent, but maybe sometimes its better to take a step back. Lets look at a fouryear chart. Many of my sources that are cycle traders say once you trade over 100 in the dollar index it seems as though it cycles down in threeyear cycles with he would like to see a turn it doesnt mean its going to be weaker every day or weaker every month but in the general scheme of things the trade over 100 usually is a breaker for the dollar index carl, jim, david, back to you. All right rick, thank you very much. We will take a break here. Obviously dow down to 60, a couple components in the green including apple and microsoft, but a lot of the financials and industrials and Energy Leading it lower we are back in a moment. 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Com coronavirus is the Top Performing dow component despite, jim, this politico piece citing three sources that the doj and a coalition of state ags are taking the first steps they say toward launching an antitrust probe of the company well, i just think that this idea that the app store is some sort of vast monopoly is like saying that facebook is a vast monopoly over a lot of social media, alphabet is monopoly over a vast source of queueying it is surprising that the Trump Administration would be after someone who is successful. Thats supposed to be in the dna of what trump stands for im not a buyer into this sell call on that maybe people will take action because the stock has been up so much, but good luck. Good luck. This is not the kind of case that i think should ultimately impact the stock there will be a settlement if you want to go that far. But dont sell the stock on this sell it because the company is doing poorly which its not. But you dont think, jim, i mean, you mentioned it google does dominate search. Facebook does dominate social. Apple does dominate in this area and has incredible influence over the ability of a company to be successful if it needs the app store for distribution we were talking about the Biden Administration i was talking about it from an antitrust perspective on deals. Dont you think there might be a heightened scrutiny as well . Although, its not as though there hasnt been some scrutiny already. I dont think this doj is going to be the trust buster i just dont see it that way i know that if Elizabeth Warren were at the top of the ticket, you could expect the doj to be a trust buster at a certain point the president would say is this really a pressing issue the idea that the Apple App Store i mean, you know, round up the usual suspects. Were casablanca gambling it is kind of like that. Elizabeth warren as attorney general could be interesting yeah. Wow. David, apple would be cut to the core well, that brings to mind the comments out of valuex which maybe well talk about after the break with the dow down 330. [narrator] the shark vacmop combines powerful suction with spray mopping to lock away debris and absorb wet messes, all in one disposable pad. Just vacuum, spray mop, and toss. The shark vacmop, a complete clean all in one pad. 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. A cruiselines have had it handed to them this week downgrades from barclays today for royal and norwegian and more suspension of global cruises we were back in a couple minutes 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. An extra 15 percent credit on car and motorcycle policies . Ok . Thats 15 percent on top of what geico could already save you. So what are you waiting for . Dj khaled to be your motivational coach . Yo devin remember to brush in a circle motion. Thank you. Dj. Khaled. Tiny circles, devin. Do another one. Another one. Is this good . Put in that work, devin. Dont give up. Geico. Save an extra 15 when you switch by october 7th. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. Lets get to jim and stop trading. The Jonas Brothers talks about how the ev business for gm could be worth 100 billion. The company is only valued at 40 billion. Its tesla versus gm value then coming back, maybe its it may not be the right way to look at it i find the hamletizing is rough, but be aware gm is cheap versus tesla. I would still say buy tesla. I like it i dont like gm. I saw some you prefer tesla so gm . Absolutely. Tesla has had a run. It would be great with it was weaker im not sure of the value of gm in a new world it should be going up because if you fear covid, you cant car pool and cant take mass transit but theyve been buying caravan in a instead people are playing tesla as if china and germany is going to be big. Im not fighting it. Yeah. Item crossed the tape a little bit ago. Auto Safety Agency opens probe into model ss on reports of touch screen failures but tesla has been down this road. All auto makers have been from time to time i like it for 700 points. I see these things, i investigate. You pay a penalty. Look, a lot of us probably wish they investigate something serious would happen, but thats not the way it works its like boeing where holy cow, that investigation is a serious one. Its hurt that company, but for the most part investigations are open because some people are angry and the Justice Department looks into it or somebody looks into it. You come to a settlement, and thats the way the legal system works unless its gm for ignition failure that causes death or the boeing investigation which is the most serious i think i can recall indeed. Theres a lot of that brewing at the moment how about mad tonight . I decided to go a little bit different. I think that we need to do Contact Tracing. And the governor in rhode island has done more about how to open a state. You should listen to what this governor has to say. Shes a business person, and she knows how to handle this okay its a call state, blah blah blah, i can tell you that there are ways to do it, way to open and ways to not. Thats why youve got to speak to this governor governors are the center of the storm. We are getting numbers out of texas as we speak. See you tonight. Thank you in the meantime, good morning, welcome to squawk on the street. Weakness on tap this morning oil is done. Dow is down almost 400 an asaturdayment of risks today. Theres covid risks as we await more data from various states in the south. Theres trade risks. And some election risk as the times has biden up 50 to 36, and of course, theres been a lot said about what a Biden White House could do to the stock market absolutely. Youre seeing it play out in major averages with the coronavirus cases back in the forefront. Numbers facing increases in case loads. Also new daily records set for arizona, texas, california which is prompting officials to tighten rules on gatherings and maybe follow social distancing guidelines more carefully. Youre seeing hospitalization tickups in some of the states as well its not just here you have what i call spikes in countries like south korea, australia, germany as well as you said, you couple it with the trade tensions which are growing, its not just china its europe as we get ready to potentially here in the u. S. Implement another 3. 1 billion in tariffs on imports from the uk and europe, and they too dropped their own list also something that i think hasnt been getting enough attention is the possibility of tariffs again on aluminum from canada remember, next week that u. S. Mca trade agreement is set to go into effect. Its playing out in the commodities area not just equities but commodities. You have crude lower ahead of the eia Inventory Data were getting later this hour. And also gold. Its basically essentially flat right now. Its an 8year high trading. Thats part of the conversation. What all this means for Economic Growth, for debt levels, for more fiscal and monetary stimulus and its something that i think will be probably talking about with the imf later this hour as well as they revise their economic global numbers lower. Yeah. The imf numbers were 4. 9 . You couple that with another bankruptcy from a retailer, gnc, a small company, but sonos laying off 12 of the worldwide work force youre seeing those negatives being responded to along with as you say, the increase in hospitalizations in a number of key states that have seen a surge in cases over the last number of weeks. Were watching that carefully, carl its sort of hit or miss as to whether the market will respond or not i guess in part due to the perception of whether it really will have an impact on Economic Activity in those states people are looking at death count remains relatively muted youre talking about eight Straight Days of hospitalization records in arizona and cities like houston in a regular flu season, david, their hospitals do get strained. Its definitely something to worry about as people start spending more time indoors its the summer down there, and youre in an area where youre going to be breathing a lot more circulated air we know thats a huge transmission mechanism for all this, morgan yeah. It is. Its going to be something were going to have to watch and the truth is you cant control what individuals are going to do on a daily, sometimes hourly basis this is tricky to see how this plays out as we do await and hope and wish for not only meaningful treatments but of course, a vaccine maybe by the end of this year or early next year so well leave it there. In the meantime, all of this continuing to have an impact on the economy, on the labor market and for that were going to bring in u. S. Labor secretary eugene scalia. Mr. Secretary, its great to have you good to be back, morgan i want to start with the news that kicked off the week, that was specifically the temporary ban on certain types of immigration visas. Weve had a number of not only tech ceos but also chamber of commerce and other businesses come out and voice opposition and say its going to have a negative Economic Impact what is your response . Well, were very focussed right now as you would want us to be on getting American Workers back into the workplace. We made Great Strides in may i think were making Great Strides right now. Well put a new jobs report out next week. But we know that there are just too Many Americans still on unemployment out of work, and we want to do what we can to get it back on the job. Part of that is obviously making sure theyre not losing positions to people coming in on guest worker visas thats why the president suspended the h1b program and others until the end of the year, and the way i look at this is were doing twothings were pausing it and then reforming it the h1b program reflects a good idea let the best and brightest come and contribute to the economy, but its drifted from that purpose. Its abused some were going to make some reforms, but were also going to contribute to the recovery there will be exceptions for people that we need to help with covid with food supply or if theres a critical worker the Business Needs to avoid financial hardship, theres an exceptions process to accommodate these things while still making sure American Workers are getting first consideration. Im curious it got my attention given the fact the l 1 visas, exceptions to the j1 visas. How have you modelled this in terms of the potential for americans to fill in some of the jobs what do you expect in terms of a direct translation if i can be clear about one thing, its food supply. For example, people helping in agriculture with seafood thats the focus not restaurants where youre right, there have been people put out of work. And what weve looked at is the fact that weve got a number of employers trying to bring in h1b workers even at companies that at the same time have people on layoff and so we want to make sure priority is being given first to getting American Workers in. And we want to take a longer look at how the programs are used one example, you have some circumstances where a company will bring in workers and say that theyre workers for that company, but theyll be assign to another company and a displaced worker on that company. We want to address situations like that as well. Thats interesting. I think the counterargument especially when you talk to some of the companies that rely heavily on the visas, this has been an argument for years even before covid hit and we had a tight labor market theres a mismatch of skills in the labor market right now so how do you address that and how do you address that quickly especially given the fact that the nature of work across so Many Industries in the midst of the pandemic is changing . Well, we address it in part that weve got millions of unemployed americans who ought to be given a close look before bringing people overseas over the next few months to get the americans back to work but obviously training is something that will take on greater importance as we look to bringing people back to work weve been taking h1b fees at the Labor Department and using them to fund the training of American Workers in the same occupations. We announced major grants to do that earlier this year well continue to look at programs like that, too. To support getting American Workers back into these positions. Im going to quote, guest workers are needed to boost American Business, not take american jobs. There are a number of republican senators who oppose this move by the administration and believe that at certain levels of unskilled labor, theres simply not a desire on the part of American Workers to take the jobs and you really are threatening Certain Industries what do you say to them . Well, with all respect to the republican senators that have criticized this and many republicans and democrats who support it, the president s focus right now is as it has been, on American Workers, and enabling them to get back to work in good paying jobs were making progress. Weve taken a number of steps to do that. Earlier you mentioned usmca coming online next week. I think thats going to be another great boost for American Workers. The president got that through congress in january. But as i said, if there is a company that has a Critical Role to fill, there will be an exception process here but we really want the focus to be right now on the millions of americans who remain out of work who we want to get back into the workplace right now. Right you know, you mentioned that exception or exemption which youre going to develop for people who are, quote, necessary to facilitate the immediate and continued economic recovery of the u. S. When are you going to do that and how are you going to actually determine who those people are thats a process the state department and department of Homeland Security and Labor Department will work on together to receive requests from companies saying we need to bring this particular person in. That will be developed over the next few weeks the president has done so much to support the growth of American Business with tax cuts, with that do regulatory initiatives which remain so high on his list of priorities. I dont think the American Businesses need to be concerned that this is a president who doesnt understand the importance of developing business in order to create jobs that has been the single greatest hallmark of his presidency from my perspective at the department of labor i dont think Business Needs to worry the president is not going to support their growth in order to support job growth. But when you have incredibly when youve had the very difficult circumstance weve dealt with high unemployment, we just need to take a pause and look very carefully before were bringing in nonu. S. Workers to take jobs that u. S. Workers might fill yeah. Mr. Secretary, when it comes to those skilled, you know the stories. You know how many businesses in this country have been started by immigrants, by people who came here because it was the place to find opportunity. At a high level as well. And how Many Technology Oriented Companies which is so important overall to the defense, so to speak, of the united states, rely on these people i mean, again, dont youre puts the future growth of companies and the economy overall by limiting the amount of skilled workers that can come here who will conceivably start new businesses president trumps policies have done so much to help the growth of companies. And to the contrary, when i look at the longerterm reforms we will make to h1 b, those are intended to help better fulfill the purpose of bringing in the best and brighter. Youre seeing too much with the h1 b is people bringing into relatively low wage jobs not the high paying jobs intended. Theres people at the high end of the economy with refined skills but were not seeing enough of that were seeing too much of people saying in on the visa and taking jobs from American Workers weve heard from American Workers had to train the worker who is came in and then took the positions from them. That kind of misuse of the system will address while preserving that really Important Role that it does have to play longterm in our Economic Growth shifting gears a bit. With tens of millions of americans out of work, the fact that you have case loads increasing in a number of states and some officials in some of the localities saying they may slow down or even walk back some of their phased in economic reopenings right now, with the 600 in additional benefits set to expire at the end of next month for the unemployed workers, i know you dont agree with that being extended but what would you see take place in its stead right now . Well, the 600 benefit that was added in the cares act was an important thing to do when we were closed in the economy in march. We had an unusual circumstance where governments were saying to the american people, you cant work right now and we needed to take the measures to flatten the curve and slow the spread, but theyve worked there are places to keep an eye on we know the virus isnt gone were certainly placing great emphasis at the Labor Department on Workplace Health and safety and the proper measures to contain the virus. But were reopening, and weve seen terrific economic numbers on jobs, retail sales, new home sales. Very encouraging better than projected. And so i dont think the 600 benefit is the answer going forward. We can take a look as we get farther into july, whether there are other measures we can talk about a bonus for going back to work i think thats worth discussion. Obviously there remain important state Unemployment Insurance benefits remember, during the great recession, 2008, 2009, the federal plus up on Unemployment Insurance was just 25 a week. We did 600 a week well do it through the end of july i think thats been a very strong support but as were reopening the economy, i think we just need different measures all right the u. S. Labor secretary, thank you for joining us today thank you dow is down about 1. 5 this morning. Various risks here including economics. The imf downgrades the growth forecast for advanced economies around the world were going to check in with Gita Gopinath after a break. While the future of work remains a question mark, one thing is certain reopening will be a journey. Thats why salesforce created work. Com to help at every step of the process, with tools like manual Contact Tracing to help prevent one from becoming three and three from becoming more. While displaying Key Information in one place on a Customer Relationship platform you trust. Because heres one more thing were sure of. Relationships are the heart of business. So lets tackle this together. The imf downgrading the Global Growth again. Sara eisen is with us. Good to be back and good to welcome back the imf chief economist. Gita, welcome. Hi, sara. This was a shockingly bad downgrade, down to 4. 9 growth for the Global Economy this year just april you were projecting a 3 slide what changed so much that made you so much more pessimistic about the World Economy . There were a couple of reasons. One is that the first half of this year turned out to be somewhat worse than we anticipated in april in many countries the period of lockdown was extended and going forward, we expect to have much more persistent social distancing because the Health Crisis is not over and thats going to have an effect also on potential growth. So these factors led to the downgrade. Lets talk about the u. S. Which you see a sharp 8 contraction for the year in terms of Economic Growth and then in 2021, only growth of 4. 5 which dashes a lot of hopes that people have in the market about a vshaped recovery and claiming back the growth we lost why dont you see that happening . So im sorry. Were projecting a very big hit to the Second Quarter gdp growth i think minus 45 annualized we have a recovery after that. 2021 is below the prepsoriasis numbers. Theres good news on the employment front, but if you look at the level of unemployment claims and they are steady at that level, it tells you this crisis will play out for much longer. Do you embed an idea that well get a vaccine at some point, whether its this year or next year in the way you forecast the economy in the baseline, we are making we arent putting any data on the vaccine, but in the data were assuming that through a combination of measures some of it is people practicing social distancing, wearing masks, offices being rearranged appropriately, that we might see some increase in infections but we will not see the kind of stringent lockdowns we saw in the first half of this year. The question is whether we might have a big second wave, and we have looked at that scenario thats why if theres a second wave, thats a case where Global Growth is going to be pretty much closer to zero in 2021 as opposed to 5. 4 which we are projecting now but again, its uncertain. There could be an up side. We could have better use of treatments and vaccines and the recovery could be faster an that weve projecting theres a theme, the developed world is going to hit harder than the emerging world in terms of growth this year do you chock that up to the fact that the virus response policies have been better elsewhere what is causing that if you look at the size of the downward revisions, if you take emerging markets and exclude china, that downward revision is bigger phenomenon emerging markets compared to other economies. In april it was a case that was reversed that was because the Health Crisis hadnt spread as severely to emerging markets. Now it is there. And, in fact, the pandemic has shifted to latin america and many emerging markets are seeing rising cases so yes, we actually do have a bigger hit and also its important to keep in mind when you take a country with Lower Per Capita income with a big hit, thats a big increase in poverty for these countries and for the world. Policy response theyve been robust around the world in terms of Central Banks and governments. Do we need more stimulus in the u. S. And if so, where should it be targeted so were not out of the woods. We dont have a solution to the Health Crisis. And so substantial support will need to be continued what form ittakes is going to depend on how the recovery goes going forward. If there is a stronger recovery, and we are seeing stable improvements, then in that case, you can see a switching of incentives from keeping people at home to actually encouraging them to return to work, and also now allowing workers to reallocate from sectors that are shrinking to sectors that are grow we expect to see this kind of sector reallocation going forward. Substantial support will be needed both on the fiscal side and on the monetary side, and also keep in mind that while theres a real crisis, there is no financial crisis. Thats come about because of substantial support from the Central Banks in the world and that is a risk about suppose we have bad news and we trigger tightening of financial conditions at that time there would be further stimulus that has to come in. It seems like theres so many uncertainties, so many unknowns and question marks about how all this could unfold over the coming months and years. Are there key metrics youre using that are maybe different or more creative or more realtime than some of the more traditional data sets . I think there are a lot of im ves or thes trying to gauge much more quickly where were at in terms of a potential recovery or not given the fact that things change on a daily basis. Well, absolutely, sara. I mean, we cannot use the back ward looking models which use day from from before the crisis to try to project. We build new models taylored to this kind of Health Crisis, and we have to look at more high frequently data as opposed to looking for official estimates to come out. We are using a combination of new modelling to column with projections. As of now, the worst was in the first half of this year, and we are seeing recoveries, but we are concerned about the strength of the recovery and how it will hold up and that there is tremendous uncertainty going forward. Finally, i want to get your thoughts on the debt picture we have taken on trillions of dollars in debt in this country to try to fight this crisis. Corporations have issued a boat load of debt as well you guys at the imf have warned about this for a long time when does that become a problem and how should investors be thinking about it . As of now, actually, this year debt is projected to be at the highest level it has ever been, even past the world war ii peak this is for im talking about public debt. This is for advanced economies and for emerging markets. The point you made is right. We are in this world with incredibly high levels of debt that was probably debt but corporate debt too as of now, this is a crisis that requires substantial policy interventions and support, and that is what we are seeing right now. That is absolutely needed, but going forward, there has to be a medium term fiscal framework that wrings the debt down in an orderly fashion. Countries like the u. S. Have fiscal space they could do more they have the ability to do that but i would worry more about emerging and developing economies where debt levels can pose a bigger problem. Gita, thank you for joining us fresh off the downgrade to Global Growth from the imf morgan, back over to you sara, thank you great to see you it is time now for our etf spotlight. Look at the vanguard consumer d discretiona discretionary. Bolstered by the top holdings including levi strouse that jumped more than 30 from the april lows well have levis ceo about that at the bottom of the hour. We have a big show of squawk on the street thats going to continue in just two minutes in this down day for the major averages stay with us you should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Cool . Drop the taco. Get in the car. Does this sentra feel like a compromise to you . Wait, what. . The handling is good, right . No compromise there. Nope watch this. Umm. Bbrie. Brie brie rear automatic braking. So if this Nissan Sentra isnt gonna compromise, why should you . Youre right atta girl. The allnew Nissan Sentra. With more standard safety features than any other car in its class. 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 but a resilient business you cacan be ready for it. Re. A Digital Foundation from vmware helps you redefine whats possible. Now. From the hospital shifting to remote patient care in just 48 hours. To the university moving hundreds of apps quickly to the cloud. Or the City Government Going Digital to keep Critical Services running. You are creating the future on the fly. And we are helping you do it. Vmware. Realize whats possible. Its totally not the same without you. We miss your lets do this look and cant wait to get you back, so weve added temp checks, face coverings, social distancing and extra sanitizing to get the good times going again. Were finally back. And cant wait until you are too. Heres your news update. The new york marathon has been cancelled over health and safety concerns related to the pandemic the running event was scheduled for november 1st now the white house, Appeals Court judge ordered dismissal of a case against Michael Flynn now to the International Battle against covid19, india is reporting record numbers of new cases and deaths the World Health Organization says the pandemic is still accelerating with the last million confirmed cases coming in one week. Go to cnbc. Com for the latest on all hot spots. Russia held a parade to celebrate the 75th anniversary of the victory in world war ii its one days before russians vote on constitutional amendments that would allow president putin to stay in power for 12 more yes. Ar squawk on the street continues after this were going through a really tough time right now, all around the world. And covid19 is still impacting so many people. If youve survived it, then youre the heroes we need. The plasma thats in your blood can literally save lives. But we have to act fast. So please donate. You fought for your life. Now, lets Work Together to take down covid19 to donate plasma go to thefightisinus. Org unveiled a Diversity Initiative to address the systemic racism he sees in this country. Levis pledged to have at least half of the candidates for jobs be people of color the ceo of levis joins us, charles bergh. Great to be back. You have been up front about the lack of diversity. 5 of corporate staff, 2 at the executive level. No black people on the board of directors. How long ago did you identify that problem, and what do you do now to address it . Well, it didnt really take the day to identify the problem. Look to your left and your right, but as a company we have a very long track record in standing for racial equality, and social justice back in the day when we had factories in the u. S. , we desegregated our factories ten years before the civil rights act. And as i said, we have a long track record of working for social justice and equality. The foundation in the last five years has contributed over 37 million just here in the u. S. I would say largely in the bay area to organizations that fight for equality and social justice. And the vast majority of those organizations are led by black and brown leaders. So after the George Floyd Killing and the string of racial issues, externally, on the outside world, we posted a public letter decrying racism, and basically saying we need to channel our emotion of the moment into action and it really forced us as a country i think to look in the mirror and say, you know, for all the progress many of us think have been made, the real sad reality is that there is systemic racism in this country. And it forced me as the ceo to take that same hard look in the mirror and a same hard look at the data of our company and face the same brutal truth, that what the data says here in the u. S. Where weve got racial diversity numbe numbers we have a diverse company, but its driven by our distribution and Retail Organization if we look at the corporate Head Quarters as you said, the diversity picture is a problem ill sea it straight up. We have an issue and we need to address it thats what led us to publish our diversity data publicly. Its on levi strausss web gapae were starting to put into place an action plan to really drive the more Diverse Organization in our corporate Head Quarters. I guess the other operational go ahead. I was going to say, chip, operationally, within hr, what kind of adjustments need to be made to get half of your candidates be people of color . If the job is open and youre not at 50 , the job remains open until further notice theres no question, carl, we are able to prepare candidate slates that are 50 people of color. Thats not an issue. Well be able to do that weve been doing it the last couple months. For us to make the transition this starts fundamentally, deep inside you have to believe a Diverse Organization, you have to believe theyre going to outcompete ho moj nous organizations organizations. If were not actively fighting racism and putting as into place to do something about it, then were come police it and the best place for us to start is inside our own house. That is first and foremost our focus. And theres no doubt we will not have to compromise to make progress, and i believe at the end of the day, were going to be a Stronger Company when we make that kind of progress how quickly beautiful you can make this progress within the company, and does that mean youre hiring right now . We are actively searching for the black director we committed to making, and we do have some positions that we are hiring for right now. And we havent set a concrete date ortimeline or metrics at this point, but we will. But our commitment right now is we will make progress. We will post our data a year from now, and we will have metrics in place to measure, and those metrics are going to be allocated down to Business Leaders and people will be held accountable to make progress chip, i appreciate the efforts and your willingness to join us to discuss it. I want to ask a business question i know youre chairman of hp at the beginning of the pandemic, quietly xerox walked away from the hostile bid, but you were involved in the board im curious about your thoughts, particularly about the strategic merits of a transaction between xerox and hp, and if its something you could see hp bringing Something Back to the table. I think its in the midst of the pandemic right now, whats happening in those two businesses, especially with printing in the office today, is a very tricky dynamic. The concept of xerox buying hp and whether they had the lever up to make that happen if the deal had happened two or three months before the pandemic, my guess is the company would be bankrupt right now. There was no room for Something Like a pandemic to happen. So they took the deal off the table arguably because of the pandemic, but it was not the right approach for sure. Industry consolidation is perhaps inevitable in a secular, declining category like printing and perhaps someday consolidation there might make sense. I dont think its xerox acquiring hp, but it was a wrong deal at the wrong time, for sure it was the right thing they walked away. Well see what happens as time goes by, but right in the midst of a pandemic, i dont think anything is going to happen. Finally, chip, with your quiet period in mind, i wonder if you can comment on store openings and closings generically. Youve given us good data in recent months but are we at a point where youre thinking more about the possibility of reclosing than reopening . Well, it is kind of tricky. We said right at the beginning of the pandemic, carl, that our top priority is the health and safety of our employees. And we now have close to 90 of our stores here in the u. S. Open and its the its our front Line Organization that im most worried about i would say on a global basis today were at about 90 of all our stores being open around the world. With health and safety concerns and the growing number of cases in the growing number of states, were looking at, and a couple retailers have closed stores again. Were watching it every single day in a couple of states. And theres a possibility we may have to close more doors we have not at this point. The other thing i would say about the pandemic, though, is this is going to have its going to accelerate what might have happened in five or ten years, and compress it into a short period of time the fundamental change in consumer behavior, the shift online everybody has been talking about, thats going to be sticky. Its changing the retail landscape in the u. S jcpenny declaring bankruptcy, closing a number of doors. Macys closing a number of doors. The retail landscape is going to change dramatically. We believe we are well positioned because of the strength of the levis brand to come out of this pandemic a winner we have a strong Balance Sheet we were still investing in the brand. We believe this is an opportunity for us to accelerate our position in the marketplace and to gain more share of closet, if you will, with the consumer were looking at it as an opportunity. Weve been doubling down our economy, building new capabilities like buy online, pick up curb side or well put it in your car even, and those kind of capabilities are really working for us right now we havent had a chance to talk about how fashion will change as more people work from home well save that. Good to see you again. Good talking with you guys. Thank you very much morgan, dow taking a lag after the numbers in florida which are no good. Thats right. Keep ang eye on that later today on the closing bell, do not miss an exclusive interview with slack ceo stewart butterfield. They are expected to unveil a new product. Tune in at 4 00 p. M. Eastern this afternoon meantime, as you heard carl say, the dow dn 5. Isow49 back in a moment ss to research. Yep, td ameritrades got that. Free access to every platform. Mhm, yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. Now offering zero commissions on online trades. We charge you less so you have more to invest. Opportunity in one foreign economy. Find out which one on trading nation more squawk on the street coming up welcome back just taking a quick look at the major averages right now dipping to session lows with the s p down 1. 7 . 3077 is the level. And the dow industrials down nearly 500 points. These are the biggest losses for the major averages since the selloff an june 11th meantime a new study shows deficits will continue to average about 2 trillion a year through 2030 if washington continues to provide Coronavirus Relief webreak down another version o what well call the new normal morgan, remember when a trillion dollars sounded like a lot of money the fiscal pain of fighting the coronavirus is going to be with us for decades it comes from the center for a responsible federal budget it finds the u. S. Deficit will average 2 trillion a year through 2030 as for the u. S. National debt, that reaches 27. 7 trillion this ye year by 2030 that number would swell to 40. 9 trillion or 131 of gdp by 2050, it would be more than double gdp this report does make a number of Key Assumptions including that washington eventually does pass another round of Coronavirus Relief it bakes in a trillion dollar bill with aid going to state and local governments as well as extending unemployment benefits. It assumes the tax cuts that were passedin 2017 get extende as well. But even if none of that happens, this report also finds that several federal funds are in danger. The national Highway Trust Fund would be exhausted a year earlier than projected because of lower gas tax revenues because no one is driving anywhere meanwhile, the Medicare Hospital Insurance fund is defloated three years earlier than anticipated and the Social Security trust funds would have to start paying reduced benefits a year sooner. The report acknowledges all the borrowing and spending is necessary and appropriate, but david, this is just one more reason why some lawmakers are getting cold feet about another round of stimulus. Back to you. All right thank you. Those numbers are staggering when you think about them. Coming up next, arbor realty trust, the stock up. Its a read, as you might pick up, about 20 recently were going to talk to the companys ceo about what its like right now to try to give mortgages and loan origination for mmcicoeral and multifamily Properties Across the u. S. My name is christine payne, im an associate here at amazon. Step onto the blue line, sir. This device is giving us an Accurate Temperature check. Youre good to go. I have to take care of my coworkers. Thats how i am. I have a son, and he said, one day im gonna be like you, im gonna help people. Youre good to go, maam. I hope so. This is my passion. If i can take of everyone who is sick out there, i would do it in a heartbeat. With the pandemic forcing millions of americans out of their offices and apartments, the key question, of course, remains what is the path forward for real estate markets here in the united states. Both residential or commercial and, of course, in major u. S. Cities our next guest, well, hes certainly familiar with these topics and questions joining us now to discuss, arbor realty chairman and ceo ivan kofman nice to have you with us this morning. Lets talk about debt availability we know the fed has, of course, tried to come to the aid of debt markets throughout but is there a scarcity of financing available right now for commercial and even multifamily developers . So, david, i could address the multifamily sector very well thats primarily what we do, one of the bigger lenders in the united states. And because of the support by fanny and freddy, providing multifamily financing to this nation, theres been no dislocation and normal liquidity. And they served their purpose. They really filled the gap and theres been no dislocation. So its very fluid very active. And what we have seen is a ton of refinancing because rates are extraordinarily low. And now were starting to see a significant reemergence of purchase activity in the market. So, this particular asset class has been minimally affected on liquidity basis due to covid yeah. What about on an actual occupancy basis . We continue to hear people want to move out of the cities, out of multifamily structures, into homes they can afford to do so and by the way, those who are left behind, are they able to actually pay the rent . What about addressing both of those for us, ivan sure. So thats an extraordinary issue because when march came around, there was absolute panic amongst lenders. People going to pay their rent or not going to pay their rent if you look at the data, its remarkable that rent payments and a number of forbearances are minimal. Thats primarily due to the cares act and the supplemental payment. You heard it before and people keep talking about the fact that people are earning as much, if not more, sitting in their home. And theres another psychological factor, their home is their castle. Theyre working in their home. Theyre living in their home theyre there 24 7 right . And theyre keeping their home protected. So rents have been paid. Its really a remarkable phenomenon but, however, i think we have the perfect storm coming i think come september, october and looking forward, were going to have the discontinuance of the cares act and the supplemental payment you have backed up evictions, right, three months worth of evictions. So these are two really, really good factors that could lead to the perfect storm. Of course, the discussion of the reemergence of covid what happens if there is a reemergence of covid and people dont go back to work . Now theres a whole new issue because of the hib visas we have 500,000 people not coming into this country to work and occupy apartments. That could be the perfect storm. And the other matter you touched upon is whats going to happen in the urban, the flight to the subur suburbs. That trend started a while ago, its just being accelerated. So, none of that sounds particularly good for your business, ivan and i could add in antieviction in new york city where theres going to be for some period of time unability to evict people who are unable to pay rent how do you navigate this so, i think for us were primarily Work Force Housing lender we provide affordable Work Force Housing. That segment is not impacted that much. And the continued Unemployment Insurance should be sufficient for people and there will be a trend to go back to work our portfolio is fairly lly insulated. In the urban areas where we dont have a huge amount of concentration, thats an area youll have a little issue the urban areas i will be concerned about. There will be some softness. But the question how long will this be, three months, six months, nine months, 12 months i think its a shortterm issue. I think the real focus for us is what does the real market look like in a year from now . How much is Employment Base going to come back are we going to be 4. 5 unemployment, 5 , 6 all of that is okay. As a firm, were underwriting no rent growth and probably a drop in occupancy of 2 to 3 . But, as an asset class, multifamily is the number one asset class. And youre going to see because of Interest Rates and because of the ability for multifamily to with stand multiple cycles actually increases in value because youre going to see significant cap rate compression. Right finally, ivan, what about retail i know commercial is not a big a part of your portfolio, but im curious to get your thoughts there. We could imagine its not going to look particularly good for many of the streets in our urban centers in terms of actual people of the stores reopening i dont think youve had a Single Person youve interview talk positively about retail the trend is not our friend. The trend is already bad this is an accelerator and i think retail has to be readjusted. And thats a longterm readjustment. It was starting already. This is accelerating it. Its not a positive outlook for retail all right well leave it on that kind of dire note but appreciate some of the more positive things you had to share as well, ivan thank you ivan kaufman, ceo of arbor trust realty. Thank you that mood sort of permeating the markets right now. Dow is down 500 plus in what is the biggest selloff since that big june 11th selloff a few days ago. David, well see you later morgan as well. In the meantime, welcome to squawk alley were in various locations today we mentioned the market weakness a bunch of stuff working against the bulls today. Mainly covid risks highest in a month hospitalizations in florida. Theres election risk. Imf downgrades their forecast for 2020. Right now, jon, only 15 s p names are green and none on the dow. Is that all as usual a lot to factor in here with that, lets continue the market conversation bring in lori, head of u. S. Equity strategy at rbc capital markets. Lori, good morning we hope to have James Mcdonald as well. Were going to work on the audio there. Lori, you have recently done a survey of investors. You are picking up on some bearishness cropping up. Im not sure how to interpret that because on the one hand bearishness might imply that there could be pressure to go lower. On the other hand that might imply thats healthy after the kind of run we had,ed up

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