Transcripts For CNBC Squawk Alley 20240712

I think you charge more for insurance when your car is black. So people are on that zoom plant form weeping they recognized it yes they have been drinking your drinks, buying your shoes, yes everything we get penalized for a color that you love. Yes, june 19th for everyone, all of the overs, we need that we deserve it, it is the right thing to do. We certainly appreciate you taking time and your strong wordest and powerful words it is something were going to follow closely to your point we nose those corporations well. We look forward to you potentially join u. S. Us again to update us please,please, im not a huge interview fan, but when it come thost this im right here, im at attention, im in service, and i would love every other company to match our pledge thank you Pharrell Williams joining us, carl over to you thank you, david. Good morning, welcome to squawk alley. Interesting market set up this morning. Had a lit of an early test as the nasdaq was down about half a percent. We have recovered back positive. There is some love with kohls, pvh, all up 4 or 5 yeah, it is hard for me to discern a story line here. Micro soft and amazon are fractionally lower of course it is still early. Yes, it is. Lets talk more about what lies ahead. Creeping risks regarding covid we have not talked a lot about china today, the election lingers just about four months away what is the general play book in the next three to six months thanks for having me, guys. Oakmarks play book is really unchanged for the next several months just like it is for the last 40 years. Businesses that can have significant discounts and intrinsic value. That is the name of the game for us okay, so tactically what does that mean for terms of what youre looking to buy or not buy in the near term if you look at the market today it looks like the normal end of the range if you look deeper there is something really interesting going on value stocks have led the indices for some time now and it really created a by fur cased market we were in ranges way outside of the bounds very reminiscent of the late 1990s when you had expensive stocks and cheap stocks and that creates great opportunities for a Value Investor like that so, were seeing right now and we have seen a real dislocation between health, the real economy, and over the weekend, the conversation that i saw and was having was about the potential for, i guess, an intensifying of the first wave of the virus and what the impact will be on local communities, does any of that matter to the market is the assumption that it will all be fine and as long as we have a big national shut down the details on the health and the real economy dont so much matter it depends really on what stock youre looking at. A look at something that has stocks in the low 90s. It will be less here e elective procedures. But if you look out over a long period of time the company has grown its top line roughly 5 or more. Bottom line faster than that so it is a Good Management team that owns over a quarter of the stock, and if you look out a couple of years, it doesnt look like the market is discounting normality. You know they should be earning 12 or 13 a share in 2022 or 2023 and it usually trades around 15 times earnings it is probably worst something in the high teens. You do the math on that and that is more than double the current share price. There are pockets of the market that dont look like the discounts normality. But those are the anomalies, right . You look at airlines and travel and things like that. But overall the markets have held up pretty well and were up so far today on the dow and the s p. Almost 1 on the s p at a time when people are concerned about whether or not these spikes are being contained. What im wondering is from a overall market perspective is all of that still being just put aside. Its really hard to say other than the market is in a normal range of markets, but it is important to do the home work on names, and it is really a tale of two cities in the market today. There is a nice opportunity despite the market having being uncovered very significantly, but a lot of companies have been left behind in that rally. Finally we mentioned the top. What is the likelihood of any change in administration translating into policy change you know people pay us for our opinions on stocks, not our opinions on politics we have owned stocks through many different regimes you know were going to own them in the future through different regimes. So were more focused on what is the business value, and act accordingly for our clients. Tony, thank you for that. Talk to you soon thank you, meanwhile the business round table is looking at the economic round up survey. That is right the new numbers just in to cnbc. One number really stands out here in this latest quarterly s survey this is 27 . Most thought their businesses would recover, but 27 dont expect to see the recovery until after 2021 so many are seeing a long enentreneneand entrenched program what they saw for their own companies, ceo sales expectations about 45 expected an increase in sales 43 expected a decrease in sales, and look at the Decision Making their taking away from that expectations. Capital spending, 18 said they would increase 43 said they would see a decrease employment is a similar picture there. All of that adds up to the expectations Going Forward the growth estimate is negative 3. 8 on gdp and that is down from plus 2 in the first quarter. They are seeing a sharm traction here over a quarter of ceos see it going in here. Looks like theyre just about as looming as other people are, john yeah, those are important numbers, thank you for brings us those. Up next, star bubucks is the las company to pull their ads from facebook it is not just facebook. So is this a boycott or a maetg ient cut in rkin spend . Yeah yyeah yeah hey, hey welcome back, the list of Companies Pulling their adds is growing. So what does it mean julia breaks it down well, good morning to you, John Facebook shares are trading about 1. 5 lower today this is as the amount of ad revenue grows. It was facebooks sixth bigger advertiser last year it joins honda, cocacola, verizon, some of the brands are committed to a onemonth pause some of them including star bucks and cocacola are pausing spending globally while proctor and gamble says theyre reviewing spending on all platforms. Now there are 150 Companies Participating in the stop hate for Profit Campaign organized by the naacp. Theyre calling on facebook to crack down on racism and hate speech the growing number o participating indicates that Mark Zuckerbergs promise didnt go far enough. They say they have facebooks planned product placements dont seem good enough bank of america saying it could slow the rate of digital add recovery right now advertisers are deciding whether or not they they should boycott cloglobely. And as brands are looking to cut costs overall, it will be interesting to see if they find they dont need to spend as much on facebook as they were planning that is one of the things that im wondering for sure if is a good first topic to discuss with our next guest. Kara switsher, happy monday there is no unified message, carol. No time period, no specific brand. A lot of them seem to be stepping back from facebook and twitter. And snap, which is entirely different from both of those so i mean is this just a convenient excuse to cut a tough market i think they would just cut it if they felt like cutting it. I think it is a little bit of virtue igsignaling. I think they are sending a message that they have to clean themselves up. This is not good for these brands what is interesting is that, you know in an effort to maybe hurt facebook, theyre really going to hurt twitter more facebook can sustain this, so can google this is just a drop in the bucket to them a lot of these are symbolic. I dont mind symbolism here. I think is says that advertisers are fed up with it and consumers are the ones that have to really start to get fed up for a shift in the wallet and the usage. And again the stock is up like crazy and it is actually useful. One advertiser said to me, literally, i hate them but im going to keep advertising with them that is interesting, if it is symbolism, it seems like it is bad symbolism because theyre not being specific about the change they want to see. Usually when Companies Take a stand on something theyre very specific we would like to see x, y, and z. They are not all doing that. I dont understand why their specifying social. And not you tube theyre all over the place, kara i agrew with you. I think some of them are joining. Theyre not part of this particular boycott, like adl and others so i think they want to signal they have a problem, and maybe theyre talking to facebook behind the scenes. So there are some discussions that were not privy to. It is clear that facebook has been embracing letting the Trump Administration off of the hook the Washington Post spoke about it today so i think theyre signaling that facebook needs to back off, and i think theyre worried about a change in the administration, that facebook is not going to look the best in that example so they may be saying that we like this platform, we like using it, some being so incredibly irresponsible and i think that is more of the communication. The lead in that piece, kara, said that after one of his tweet s he called zuckerberg directly. Is he trying to hedge a biden win . I think he has been letting joel caplin decide on product issues many people find that pretty reprehensible to let policy people dictate products. These decisions told be made away from policy in many ways. I theyre, you know, like i said in the previous column, facebook plays the long game. But a lot of the legislation is coming down the administration has it coming down the pipe, if either of those people you will see real change happening, and real regulation and action that it has a lot of muscle behind it. Well see. Stay put for a moment meanwhile today is the 10 Year Anniversary of teslas public debut going from 17 a share to over 1,000 we have been there the entire way and looked at teslas wild rise a great outcome from the smarter investors in the world welcome, everyone, to the model 3 unveil we have an amazing product to show you tonight what goes into making the model 3 . Belle in production hell. Welcome. Welcome. It blows my mind, i think it will blow yours. He is thinking about taking tesla private. 420 is the price he would do it at it is legal, right . Welcome to the product unveil are you sure oh my god today surpassed 1,000 per share for the first time not just phil, a lot of elon musk. Tesla, this stock, this year even though the rest of the world may be going to hell, they seem to be holding up just fine. What do we frak that people like them some elon. This stock just keeps going up it is a hope stock it was like amazon was in the early days she in a lot of the places that people are going he is way ahead of things and i think people are relying on him. Some of the stuff, the 420, his pedophile tweets, i think it is all part and parcel to people believing is in this guy and the things he is trying to attempt. So from an economic point of view im not a stock person, but it has been a good bet, and pete that bet against him have had their hand against him what it means to me is a counter intuitive bet and there is a lot of money to be made, but he, more than anyone else, tackled a different kind of probl problem. Is that part of what this is he has to be doing things that are hard. I have lots of tussles with him. I might be in one right now im not sure i have a lot of admiration for someone that takes on space and does it well the tunnel thing, i think it is fascinating. Solar, it is all stuff that is anal analog, it is hard, i admire that when youre dealing with real problems in the world like climate change, dealing with issues, where the human race will be in the fuel. There is a lot of stuff where you just shake your head, and i think you just it is hard to resis a lot of this there are product thats are really tremendous at the end of it. You mentioned space and now autonomy last week musk tweeted that besos is a copy cat. Do you think he sees jeff on his tail they all dont like each other. I think it is just that kind of thing. I am waiting for besos to start a tunnel Digging Company it was just really funny and im sure it is both, you know theyre both competing in space. Theyre competing in cars now. Zuks is a really Interesting Company and a fascinating purchase i have ridden in that car. I rode in it for the pod cast. Im not surprised he bought it i think it was very interesting. And i think that was a very funny tweet on elon part and well see what happens between them it is not a bad thing to compete on, i will tell you that cara, thanks, good to see you. Good to see your eyes. Here are my glasses right here thank you bye well take a quick break here, were seeing a boujs in some retail and mall exemployee su exposure names second biggest gainer behind cody, dont go anywhere. 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 i hope my insurance pays for it. Can you tell me how much this will be . [cashier] 67. Sorry. Wait, have you heard about goodrx . Goodrx finds free coupons to help you save up to 80 on your prescriptions. Wow, i had no idea. [announcer] goodrx, stop paying too much for your prescriptions. Welcome back, lets get the european close were up about 1 in the uk travel remains a big focus the European Union is stoet is be in the final stages reports suggest that americans will be excluded starting july 1st. U. S. Travel issues a statement saying this is unwelcome news and it will have major negative news pressuring greece, croatia, and countries that generate 10 of more of gdp from travel. The drop in oil prices pushing some companies to diverse parts of their business. Bp will sell their petrochemicals business to a privately owned company for 5 billion. Some say it is a much needed cash injection back to you, john. Thank you, lets get to sue for a news update. Sue . Good morning, john, good morning, everybody sheer what is happening at this hour the white house will brief members of congress after a russian unit offered a bounty for killing troops in afghanistan. President trump says he was told sunday night that the intelligence was not considered credible israels defense minister says that Benjamin Netanyahu hees man for annexation will have to wait until after the pandempa determin determineic. And removing the con federal battle emblem from mississippis state flag mississippi is the last state with a confederate insignia on their flag squawk alley will return in two minutes time watching these markets this morning. We have a weigh in on what may be driving the action. Yeah, i mean theyre making the case that in the last few weeks they have pulled back internal weakness. Most stocks were down. Everything that happened last week, as we creatak as it was, e selloffs, it happened within the range of the prior couple of weeks. So just on a technical basis it seems like you can still dhaul a con sal addition are we going to continue to follow the kind of path defined by that 2009 march bottom. It siyncs up okay right now it could be something desightive like that but other things are not really capitol rating with that view. Youre not having a linear improvement in the economic numbers. I do think that youre sininsule a little bit because people are cautiously optimistic. This morning you made the argument that maybe markets could be at 2800 i dont think it is necessarily really tipping in that direction right now i feel like that would be in the bounds of a routine pull back. But going down and staying down probably needs something more to go wrong i think if you look at junk bond its is softened up a little bit. Im not suggesting that everything is lined up, but i think it is fascinating that we go between the june 5th, june 8th attitude we seed to have this thing licked the curves are flattening. That was sort of shortterm optimism interesting this morning that if that florida headline that you were sharing, the one they you were sharing, if that gets traction in terms of letting this market get a breather to the upside today, it is fascinating. The market was fading, and to me in is exactly like the trade war stuff. The tests that it created did not giadefine the trend, but thy said how much do you want it, how much do you want it . The bulls or the bears, and i think that is really the role that the virus news that kind of virus news is taking right now. What about politics normally, you know, post the spring were seeing an impact of that but can you make the argument that it is having a polling impact it is not in a direct way that we can necessarily quantify right now the market has definitely flattened out in the last few weeks as there has been, you know, betting oedds an the polls showing a advantage for biden. To me it is not so clear what the immediate stakes are for the market to be pricing right now and i keep going back to the fact that the market has been preoccupied with massive issues on where we are in this Economic Cycle will we come back wickquickly or slowly these things are such big swing factors that im not sure that swe ax policy will figure out how to handicap all of these facts. Well see how some of the coming data like jobs will impact the debate. Ill talk to you in a little bit. I appreciate that. Keeping us honest on levels here meanwhile, Orlando Florida has t the Fastest Growing covid numbers here talking about policy changes, good to see you. Thank you for having me we were talking to a real estate owner in texas that said the announcement about bars on friday, which took effect virtually immediately was confusing, yet again, how are you adapting to these fast changes . We had to adapt as fast as we can. Once the announcement came in we had to reschedule staffing hours. We had to just strictly focus on goto orders we knew that we were not going to get the people inside the Building People are scared. We understand that so were just continuing to do our beers to go at the home and food thats all question do and its not fair. Had you seen we have been watching open table metrics. Were you seeing that begin to roll over . Yeah, i did and it just dropped. We dont have any reservations at moment for dining and the folk thats do come in, once we tell them we cant serve beer or wine, they leave you said it is not fair, the situation that youre in with having to do carry out what would be fair in your mind . Were a brewery, we make our own beer in house. You know we just sell beer and wine and people come an eat. Beers to go is great, but thats not the majority of our business so how does a Small Business owner like myself survive in these times . It is very difficult what would be fair given your understanding of the Health Issues and concerns . What would you like to see the state and local authorities do as far as restrictions and communication . Allowing us to reopen, right . And we understand that we have to follow the cdc goouidelines. Allow us to have guest come in at 50 or have people even sit outside and serve them outside right now once that ban was in effect in florida, were all hurting and were all hurting together there has to be a type of resolution to this how long will this go . Is the government going to help us at the end in we dont know, we dont have answers. A lot of the states that were experien experiencing covid spikes, they said we trust people to do what they have to do. Now they are experiencing spikes people are even complaining when businesses are asked to do so. What do you think the solution is to that i dont know. We have to just continue to follow the cdc guidelines. Wearing a mask does help we have signs at our building to wear a mask. You kaentt wear them when you drink and eat, but were just leaning on the experts to figur it out for you guys ppe money did come in, right yes what is the status of that . Have you had to ado you mean late any debt or go into forbearance on rent. Yeah, it is run out, it is past the eight week mark the question is how long can you go now we are still in conversations about reducing our rent. Im still waiting to hear back from them on that. What do you do with Technology Strategy Going Forward . I imagine the imagine the hamt of takeout a amount of takeout, the grub hub, i imagine it has all gone up as you look hopefully toward a time after this, how will your Technology Platform strategy be different . So we have to continue to push on social media, but we cannot technically sell beer out the door in a delivery method. Question only do that with food. There is laws in lace that doesnt allow us us to do that so or sales dip if someone wants it but they dont want to drive here, there goes that sale we can only do food because of the laws in florida. Those laws need to change. It will help Small Businesses like ourselves finally, how long can you last how long can you survive and what would you do after this if you had to shut your doors for good can we survive, right as long as we continue to get support from the communities, they keep buying beer and food, if we can just break even, that will help. Sit back for a couple months we could figure out our next steps, but i dont want to shut down. I want to keep going i want to go for years from now and make this into Something Big in this touwn were the only brewery and we want to stay here. But the Million Dollar question is how long can you go no one knows the answer to that. Do you any words for desantis or policy makers in florida who some argue took this too lightly earlier in the year . I think they did a great job at the end of the day, but they have to look at the Small Businesses, how theyre hurting so bad with breweries in the state of florida, there is a threetier system we have to go through a distributer to sell our beer and that distributor to go next door that is just one part of this business, right . This this industry there is so many that need to help Small Business get out of this were the driving factor in this country. If Small Businesses dont survive we all have to shut down life blood of the economy is Small Business we hope you will come back, thank you. Thank you so much still to come, one of the few in the Music Industry thayot u know by name, pharrell. Dont go away. 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. Gilead setting the price for their coronavirus drug this is a closely watched decision gilead donated their existing supply up until now. Now they announce there will be two different prices for the drug in developed countries. One for governments of developed countries including the united states, 390 per vile, or for the average court of treatment, 2340. That is 30 more they say that is because of the way the u. S. System works in terms of having two track prices they say their calculations are based on the savings of hospitals by 12,000 theyre giving a major discount to that. Drug pricing watchdog ices puts 2500 to 5000 as the fair price. Here is what they said about how they came to the price this medicine adds significant value and we decided to price this in this very extraordinary time in priced ite at the price that allows for access across the developed world. What we have done is we have one price for all governments across the Development World based upon the lowest purchasing power of the developed world countries. Wall street trying to parse through the implications of this the pricings remarkably low given the direct medical value not to mention the societal value. He says this will change all future expectations for the treatment of this disease and may influence pricing in other diseases hes saying this will be a benchmark for future drugs and even vaccines for covid19 back over to you i wanted to get your take on what fauci said last night he was asked about vaccine effectiveness. He said he would settle for 70 . The question was if only 70 of americans say they will take the vaccine at all, does that get you to herd immunity he seemed doubtful about that. He told us the same thing on friday he sad a good vaccine would have efficacy of 70 to 80 of preventing disease its true theres a lot of people who are he has tants sit vaccine in general or because they are concerned this process is being rushed. Fauci said a, the advocacy needs to increase and the communications need to improve around vaccines being helpful and he emphasized that safety will not be sacrificed he noted that having a vaccine wont be a binary event and we will have to be implementing Public Health controls in addition to getting vaccinated yeah, were hear a lot more on the advocacy front. Thanks well see you in a little bit. S p 3040 dont go away. You cant predict the future. But a resilient business can be ready for it. 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. Because now you can expewatch all your favorite hulu shows and movies on xfinity. Youre only a voice command away from Award Winning shows like the handmaids tale, to new hits like little fires everywhere. And fx originals you can only watch on hulu. Thats just the beginning of what you can experience with hulu on xfinity. Tv made simple, easy, awesome. Find a stock basedtech. On your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Ive spoken to the ceos and theyve all said yes theyve all pledged. They understand. If you want to know which way the wind is blowing because we are a nation, were a country. We operate like a company. Thats why every one tunes in to cnbc because they want to understand the metrics and the mechanics of whats actually happening out there in the american market. The way for us to understand is follow the money these corporations are doing it because they realize that they have a Consumer Base that not only votes but they have a Consumer Base that votes by what they spend these corporations understand that thats pharrell with us earlier in the morning talking about his campaign to get companies and ceos to make juneteenth a paid day off. Twitter making election day in my dr many countries a day off for their employees. Almost ties into the conversation with facebook earlier on Companies Getting more responsible socially instead of financially. Well, i guess well see if its more responsible socially not to take anything away from the push for a holiday thats one thing but i want to know more from companies, what their philosophy is behind these pushes we tried affirmative action, that was in a different era. That didnt yields the results, i guess, that companies wanted what are they going to do differently this time . Have they put thought behind it so they can articulate not only the social reasons but the business reasons behind it i think theres a lot of people who have those questions maybe now havent isnt a comfo tyke to have the questions id like to see more thaugful discourse behind the whys of the moves they are making. Motivation is key especially in this environment and maybe that will be a question for their earnings calls something we might not have imagined a couple of years ago market wise, today, pretty interesting picture. The nasdaq is trying to avoid its first twoday drop, con sec ti con sesecutive drops its the biggest day for the dow going back to june 16th as we trying to stay positive for the month and aware of everything thats coming. Thursday, well get claims the cbo forecast a and the jobss numbers. Apple, microsoft, amazon, alphabet and facebook, just one of those is in the red amazon downabout a half a percent. The rest are up. Well see how the day shapes up from here. Well look from some capital announcemen announcements. Lets get back to headquarters with the judge and the half. Welcome everybody to the halftime report. Our to story, the second half set up after a volatile six months in the market is your money primed for new highs. We debate that today we are green across the board