Transcripts For CNBC Squawk On The Street 20240712

Weekend. Our roadmap begins with the record setting week. What are the risks to the rally . Plus tesla on a tear, set to open at record high after topping 2,000 for the first time. And democrats demanding answers, the embattled postmaster general testifying this hour amid a political furor surrounding policy changes ahead of the november election guys, its going to be an interesting morning to sort of take stock of where weve been over the past couple of days the s p all time high, apple 2 trillion, scott, tesla 2 k even though b of a this morning says that weekly outflows look like they may be the biggest in about 15 weeks despite some of these new highs. Maybe this is the week, carl, where technology said, do you know what, wait a minute, not to fast, growth, not to fast, value. Ever been has been coming out of the woodwork trying to make these calls that there is going to be this great rotation, carl, from growth into value stocks and these cyclical and epicenter names as tom lee has coined them nasdaq new record high, nasdaq 1 New Hampshire new record high, tesla reminding everybody how we got here in the first place with hyper growth, Mega Cap Technology stocks like apple hitting 2 trillion in week. Its a reminder of growth leading the charge in whats been a fairly narrow breadth market and a reminder of how we got here in the first place. There was a note out from fwaks, they sift through the 13f filings every quarter which showcase the long positions for hedge funds and said the tilt away from value toward growth was the most extreme in the Second Quarter that they had seen in about 18 years since they started tracking this, the 18year history that goldman has started tracking those two factor tilts so i think youre right, its fascinating when you look at, you know, all of the uncertainty, all of the volatility that we were expecting during the Second Quarter amid what was going on with the pandemic, all the shut downs, all the questions surrounding what this country, what this economy would look like hedge funds at least were piling into growth names, away from value, Short Interest was the lowest they had seen in 15 years, so its clearly the environment where people are really, really taking risks, carl. Its true, and if cramer were here, leslie, we would probably have our daily discussion about how the market is not a true indicator of the overall economy, weve been talking about i guess were calling them the awesome eight, thats what Liz Ann Saunders called them, netflix, google, nvidia, tesla. At the same time mortgage delinquencies, jpmorgan with an alarming rate went from 4. 4 the delinquency rate on mortgages to 8. 2, the biggest ever quarterly increase, claims, scott, back above a million. So anyone looking for the stock market to give them a report card on the economy is going to have to use a very big caveat. Its got very large blind spots as we said this week because its not taking into account household pressure and certainly Small Business pressure which we hope to get some movement on in congress this weekend. No one wants to hear it, either, carl when you try to have a conversation with investors as weve been doing on halftime and you guys have been doing in the morning, about all the risks that allegedly are out there, whether its, you know, this morning on squawk, gottlieb talking about this resurgence or what he calls the third act of the virus, and even more pervasive in parts of the country, or Steve Liesman yesterday with his exclusive data on cnbc describing the intense pain on main street. Or the jobless claim numbers back over a million or the Economic Data that you just cited, nobody wants to hear it because you have got the awesome eight as you put it as Liz Ann Saunders coined on twitter this morning thats been carrying the load for the market, you have the fed underneath the whole thing and there is no reason to believe at least the bulls dont want to believe that anything could stop the market from going up despite all of the risks that may be out there. The fact that this market is so narrow in terms of how its risen no matter what, leslie, risks you bring to the table its hard to convince people that this market is going anywhere but either where it is now or even higher from here. Whats fascinating, too, is the two best performing Asset Classes this year, the nasdaq and gold so if you look at that you see the nasdaq you see those awesome eighttype companies, growth companies, tech companies, you know, that stay at home trade that we continue talking about, but then also gold has been a stellar performer, while off today, you know, it surpassed that 2,000 mark and thats considered historically at least a safe haven for people that are concerned about too much equity exposure so its clear that there are a lot of risks out there, you listen to all these learnings calls and people say, yeah, we had a better quarter than expected, again, you know, a lot of companies did away with guidance so the actual estimates and what was actually priced into the market is a little more unclear than it has been in the past, but, you know, looking ahead they say we are not exactly sure what the future holds, a lot of companies havent reinstated dividends that they have, you know, scrapped for the year and so i think especially as we look ahead to the election there are a lot of question marks, carl. Yeah, youre right, although foot locker did reinstate the dividend today. Thats right. And deere did up their guide. Its not black or white. You mentioned the election, leslie, and even as the president continues to tweet repeatedly about nasdaq all time highs, nominee biden now did talk about the economy in somewhat broader terms as he accepted the nomination last night. Take a listen. My economic plan is all about jobs, dignity, respect in community. Together we can and will rebuild our economy and when we do we will not only build back, we will build back better. We will talk more about some of the take a ways from the convention this week and what we can look forward to out of the rnc, scott, next week. Weve talked so long about at what point would the market start pricing in election risk, whether or not thats tax risk or policy risk, but within 75 days now that conversation is going to get more acute. And maybe it begins after the beginning of next week, carl, after the republicans hold their convention and then the markets can be hyper focused now on whats really at stake for the market, what the polls are showing after the conventions are over you know, the big deal from investors that i talked to is, okay, if its a democratic sweep, then youve got a whole different story. Mark lazry was on with us the other day, he is a democrat, he is the supporter of the democratic ticket. When i asked him what it would mean for stocks if there was a weep in november by the dems even he says it wouldnt be a good thing for the market. The flip side of that is you say biden want to take the corporate rate back up to 28 . Ive heard from pig money investors to say, okay, thats obviously not great for earnings and thats going to be a hit for earnings and a hit for stocks, but you also may offset that by not having the kind of tensions you have had and the tariffs with china so maybe thats a bit of an economic offset. Thats whats sort of the money view, the big money view is of the current period but maybe it becomes more acute once the conventions are over and you really have a good look at where we stand towards november. And i think theres such a bifurcated Economic Policy within the Democratic Party right now that its unclear exactly, you know, what a biden presidency would mean for the economy, would mean for taxes because you have so many loud voices on the Progressive Side calling for, you know, additional stimulus, calling for taxing the rich to pay for additional programs, but then you also have whats traditionally seen as more of a moderate candidate, a moderate Vice President ial candidate and so people arent sure exactly how aggressive he would be right out of the gate in making some changes with regard to the economy, with regard to tax policy. You know, the other thing, carl, is this whole thing about stimulus you said at the top of the show, i think, if, you know, if claim were were here you would be having a conversation about how the stock market is not representative of the economy, but we sort of talk in the context of what would get d. C. Off of their back sides and actually get something done for more stimulus and you keep hearing, well, as long as the stock market is high, its going to reduce the impetus for lawmakers in washington to fast track some sort of stimulus effort, but yet we say the stock market isnt representative of the economy. So which is it i mean, we know the economy is in bad shape, but if even if lawmakers in d. C. Need the stock market to fall out of bed to push them to the table, maybe were looking at the whole thing wrong. I dont know right this goes back to the remember tarp and the tarp tantrum and how that built the fire in the living room that got congress to act back during the crisis thats not happening this time and we know why, because the stock market is being held up by these enormous pillars of mega cap tech and so were not going to get that tantrum and maybe thats why the speaker yesterday rejected this idea of passing a standalone unemployment benefit package this weekend because it would narrow her leverage on other issues down the road its very complicated and as for taxes, scott and leslie, youre absolutely right, its not just corporate taxes its also the degree to which a Democratic White House and congress would try to raise taxes on households and income and that is something biden also addressed last night. Take a listen. We dont need a tax code that rewards wealth more than it rewards work im not look to go punish anyone far from it. But its long past time the wealthiest people and the biggest corporations in this country paid their fair share. All right so were definitely going to hear echos of that next week. Its been a common refrain that weve heard, you know, from senator Elizabeth Warren for quite some time, representative ocasiocortez, senator bernie sanders. This redistribution of wealth has been a key theme in the Democratic Party so it was interesting to hear it from the nominee, joe biden, last night with regard to his plans. No specifics with regard to how he plans to do that, per se. I know that, you know, historically they have looked at various taxpolicies and as a means by which to do that, but the research out there says that, you know, its not clear exactly how much revenue you can drum up from raising taxes, say, on capital gains, you know, changing changing the taxation of capital gains, changing the taxation of carried interest in order to pay for some of these programs and then, you know, when you look at 2020, this economy, you know, by and large has been propped up by stimulus this year so when you look forward, you know, how do you pay for that in the future when we do get a vaccine, when things do hopefully resume some sense of normal normalcy i think thats going to be something that, you know, whoever is in the white house will have to tackle. I think you also have to temper it, carl, with a view of are you are you really going to be able to raise taxes in the face of a pandemic, which is still going to be ongoing in january . Were not going to be past it yet. We will hopefully have a vaccine. The economy is not going to be even close back to what it was you got a view from the fed this week that its going to be a long road ahead. Not to mention the fact that, you know, nominee biden can say whatever he wants. If the democrats dont take the senate then a lot of the tax talk feels moot to me because you are not going to be able to pass the kind of legislation that he may, you know, think that he wants to so we have to wait and see how that unfolds and really where the economy is, you know, is he really going to press forward and try to raise taxes in the face of an economy that is, you know, standing on one leg . Right i think thats a great point and, leslie, i mean, American Companies have raised 1. 7 trillion in new debt those are debt obligations that are going to start to crowd out their ability to spend money on capital spending, on r d, on wider employment so to pile taxes on top of those obligations, i dont know, could be a stretch not to mention the fact that 28 might be an aspirational number, maybe he settles for 24 as some have suggested on our air this weechblngt its complicated and anyone who tells you that the policy picture postnovember is clear isnt being honest. Thats a good point, the debt levels are a good point and then also just the tremendous amount of bankruptcies that every bankruptcy expert you speak to says, you know, the third quarter, the Fourth Quarter of this year are when the chickens are really going to come home to roost because a lot of the stimulus plans that have been put in place have kind of filtered through at this point, youre seeing the giants of the market get bigger, youre seeing the little guy get squeezed. Weve talked about this daily here on this network, but in terms of chapter 11, chapter 13 filings, you know, those are something that we should look forward to throughout the remainder of the year and how that impacts policy in washington will be something to keep an eye on as well all right, guys really quick on tesla, as scott mentioned earl err why, the rally continues to roll on a day after the stock surpasses the 2,000 mark for the first time today is the record date for that five for one split with split adjusted trading set to begin august 31. Scott, we now know that musk is the fourth richest man in the world. We have had analysts like adam jonas seem to get religion the question is is this about battery day . Is this about trying to get in front of an s p inclusion . Lots of Unanswered Questions on tesla. Carl, the stock is up 40 in august just do a mic drop right there thats incredible in and of itself of course tesla tops 2,000 a share because thats like i said at the beginning of the show thats sort of representative of where we are, where these kinds of stocks continue to rise almost unabated. Is 40 in august fundamentally driven you decide i dont know of course, so you get the record date, you get some of the delivery information, you know, musk, et cetera, but 40 in august, just chew on that for a second. And even elon musk himself in may, you know, he tweeted out, you know, tesla stock too high imo, which, you know, according to, you know, millennial lingo means in myim told less at that stock up 156 so, you know, if you sold shares that day which if i recall on may 1st the stock went down when, you know, the ceo of a Company Tweets that they believe that their stock price is too high, you know, then you say, okay, what do they know that i dont know, im going to sell. You would have missed out on 156 gains, thats just a couple of months i mean, you look at this chart and it just defies gravity. Its amazing. Remember we used to watch the horse race of market cap between tesla and gm now its a horse race between tesla market cap and the entire auto industry. One of the most Amazing Stories probably of the decade right now, guys, u. S. Postmaster general louis dejoy is testifying before the Senate Homeland security and Governmental Affairs committee of course, lots of debate about the usps this week were going to watch developments on that. In the meantime, quick commercial break as futures are red, but have come off Early Morning lows squawk on the street is back in a men omt. vo elevate your senses. The audi a6. Get exceptional offers at your local audi dealer. When youre miles from home. Your bank should help you check on your account to see whats free to spend. Henry. Virtual wallet® is so much more than a checking account. Easily see whats free to spend. And put money aside for your next big purchase. Like a trainer for henry. Stop it. Carl, do you have those figures . Yeah. Henry sit . Its carl. Virtual wallet® for Digital Banking from pnc. Its time to get more from your bank. Pampers cruisers 360 fit can ftooDigital Banking from pnc. With a stretchy waistband and adaptive 360 fit so they can move the way they were born to [music] born to be wild pampers cruisers 360 fit Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Uber and lyft wont Halt Operations in california for now. A state Appeals Court paused a Lower Court Ruling that required the Ride Hailing Companies to reclassify their drivers as employees, the temporary reprieve gives uber and lyft until 5 00 p. M. Pacific on tuesday to file written statements agreeing to expedited procedures stating in the order. You can see uber and lyft down a little bit today, but yesterday when this news broke, guys, the shares definitely were solidly in the green its interesting because its kind of a kick the can down the road move and california, of course, represents a relatively small proportion of those two companies rides, however, its a remarkable ruling and it definitely calls into question what they have been able to accomplish in terms of their Business Model so far, scott. And, leslie, i think youve said it well, it seems to me to be just a matter of time before uber and lyft are going to have to make some significant changes to their Business Model,whethe its in california or elsewhere, you know, these companies are under pressure, more uber obviously because of the International Presence relative to lyft, in international markets, where these issues have been, you know, debated for an awfully long time. You said kick the can down the road, i think thats the right way to see it if you think if you are an investing in these stocks and you think its just a matter of time before they are going to have to make significant changes what, carl, do you do with these shares if you think that they are going to have to do this and then you pile on top of it the unknown behavior of what consumers are going to be like both now and in the pandemic and on the other side of it, whether you are not going to want to take Public Transportation so you are more willing to get into somebody elses car or if you dont even want to get into somebody elses car whether that continues to hurt these businesses on the other side of covid. Yeah, scott, i always come back to your interview with chanos about uber, it was april 2 and he made the point that because they havent paid benefits for unemployment those drivers were never, you know they never paid into the pool is how he put it and he said that parties Political Parties would look hard at that and he was right, however, the prospect of having no uber or lyft service, especially in covid where Public Transit has completely turned upside down, maybe these companies have a little more leverage than we might have thought back in april. Yeah. I agree i think the timing is really important here that if we saw this ruling and then the Appeals Court ruling maybe a year ago or so we would be having a totally different conversation, but uber and lyfts businesses are already under tremendous pressure, they saw uber, i think, saw ridership decline about 70 during the Second Quarter as people stayed home, they were, you know, very reticent about getting into someone elses car, they dont know where that person has been or who they have been exposed torques the cleaning measures while they say theyve improved, you know, its up to the driver, of course, and so you as a rider put your fate in their hands you know, i think it will be interesting to see how this impacts them, but clearly they are fighting hard to keep this Business Model alive. All right, guys, take a quick break here, get ready for the opening bell in a few moments. We will dig down a little bit on the earnings that we are getting on this summer friday from foot locker and deere and ross stores plenty more to get to regarding ge and facebook and tesla and delta. Back in a moment right now, switch to tmobile and get four lines of unlimited for just 25 bucks a line. With access to americas largest 5g included. Thats right. Unlimited and nationwide 5g for the whole family for just 25 bucks a line. Only at tmobile. Watching some premarket gainers on the dow apple on top today means there might be some support on what is likely to be a lower than normal volume day given that its a friday in august we will watch the opening llbe when we get it in just under five minutes some see a Grilled Cheese sandwich and ask, why . I see a new kitchen with a grill and ask, why not . I really need to start adding less to cart and more to savings. Sitting on this couch so long made me want to make some changes. Starting with this couch. Yeah, i need a house with a different view. And this is the bank that will help you do it all. Because at u. S. Bank, our people are dedicated to turning your new inspiration into your next pursuit. Welcome back on this friday morning as we get the opening bell in about a minutes time. Scott, you know, its been a remarkable week for retail, the blowout numbers from the walmarts and the targets and the lowes and the depots of the world, but then we got a different picture from others like estee lauder, if you are in specialty or categories that have been structurally hampered by the lack of travel or dutyfree or what have you, the bifurcation in retail continues to astound. Yeah, im reminded also with ross stores, right 33 drop in sales. Carl, they are a big reminder this week of the haves and have nots when it comes to retail. Walmart and target and lowes and home depot, the real winners in that space, versus, you know, the ones who are struggling and who are going to continue to struggle some of the numbers that we got in the big box blowout if you want to call it that are just astounding in terms of where profits are for those companies relative to everybody else you truly understand the pain of the have nots, i dont know how else you say t leslie. I mean, you have companies that are doing freight and then those that are not foot locker today beats their guidance, hard to give guidance obviously in the environment, comp 18 and, again, the backdrop against ross with a 33 drop in sales. It tells you exactly where we are. Right i think you said it perfectly when you said the word bifurcati bifurcation because you look at businesses like home depot, lowes, walmart, target, all of which were deemed essential oh, and here we are with the opening bell already just 5 seconds away. Lets take a look at it guys. As brett fills in. Nasdaq and s p shooting for four weeks up, this would be the longest weekly win streak for the s p of the year. Nasdaq of course 35 records so far in year and the dow is trying to play some catch up here, but needs about 191 pounds to go green for the week itself, leslie to your larger point, about retail and, i mean, we sort of knew this picture going in im not sure people counted on the degree to which the favorability would differ between large and small players. I was going to say im looking right now at foot locker, if you want to continue this retail conversation for a second, foot locker is up almost 7 , carl, underscoring the point that were making. As i pull up ross stores, ross stores are flat, maybe the view there is, you know, how much worse can it possibly get for a stock thats down 10 over the past few months. Leslie well, i think thats true and it also comes down to kind of what youre selling if you are a retailer if you are under stayathome orders during the Second Quarter, i mean, i think the ceo of estee lauder said youre not going to be wearing lipstick under your mask, i for one can attest for that, there is no point of wearing lipstick and it makes the mask all messy then youre also not going to be out there buying a bunch of new clothes because you have nowhere to go. You have no vacations, you have no, you know, cool ibs fram pictures to be taking in your new clothes so i think just the state of the consumer and what theyre spending money on. Weve heard this from ceos on earnings calls especially with the home renovation trade, people are spending their discretion naer money on home renovations, spending it at these diversified big box retailers but they are not spending it on traditional discretionary items, clothes, purses, makeup, things like that that are, you know, seen as luxuries during good times and theres just no point for people could to be doing that right now. We will talk more about that even as were getting more signs today that there is some marginal reopening in various parts of the economy, Movie Theaters for one were getting breaking news on amazon, a personnel change we will get to deirdre bosa on. Good morning, dee. This is a big one jeff which will key he is currently the ceo of worldwide consumer plans to retire from amazon in the First Quarter of next year. This is according to a filing that amazon made to the sec. Dave clark who is the senior vp worldwide operations will be succeeding him now, jeff which will key has been at the company for i believe more than two decades, he has been described as only the second most important jeff, of course, jeff bezos being th first one, he is one of a handful of direct reports to bezos, i believe there is about nine or ten of them. In his current role he oversees many of amazons core businesses, including retail and operations the filing doesnt give a reason for the retirement and i believe he is still relatively young, but there is no reason to believe that there is anything more to this than his retirement jeff bezos has done a good job of surrounding himself by veterans of the company, many who have been there for a very long time. Dave clark is one of them who will be succeeding wilke back to you guys all right deirdre, fascinating not an overstatement to say that this is an executive who one day might have been seen as a successor to bezos himself i think thats a really good point, carl. Bezos is still young, wilke was seen as the number two, so it is interesting. There are other people who could take that hole, however, including dave clark and of course theres andy jasse who spearheaded aws. There are a number of other candidates, although it is certainly a big loss for the company because he does oversee so many critical businesses. You can only imagine for someone who has been at amazon that go how much his Stock Options would be worth at this point. Seen a tremendous run up in those decades that he was there. Deirdre, thank you. Absolutely. You know, guys, the other point i want to make about the market, its interesting if you look at various stocks and sectors and how theyre doing, its notable that, you know, youve got this as we are talking about retail and reopen and things like that, you have had, you know, pretty decent vaccine news this week, pfizer and biontech regarding their i had effects, then the j j news with a big trial of 60,000 people and theres little movement, excuse me, in those stocks j j is down just a touch this morning. Kind of surprising i would think that you dont have a little more of a lift from those names in particular. Maybe particularly j j where there is a lot of promise around what theyre doing and a stock thats only up 3 over the past few months, carl its true i mean, remember when the market went bananas just on some anecdotal evidence on remdesivir we are a long way way way from that, have been conditioned to take these things with larger grains of salt jim would probably around j j is not promotional, to repeat the message they see a screen in early 2021 is encouraging, but we get a little less bang for our buck these days on that news. Thats the case and seems like the market is is that you go aring off a lot of the mac troe news in general as well as the micro news in general. The lack of fiscal stimulus, when when that used to move the markets, these days people are saying, well, we will see it when we see it the fact that we still havent really gotten, you know, too much from washington seems like its no longer as much of a red flag considering we still dont have that and yet we saw the s p 500 blow through, you know, the record highs this week, that it set in february. I was joking with my husband at the dinner table that its almost as if the only thing thats different between now and february is that its currently Pumpkin Spice latte season you know, that wasnt the case in february, that was over, but now that we are in august, we can drink our Pumpkin Spice lattes and thats the only change according to the markets. The other thing we havent discussed is we are looking at the s p right there, im looking at the heat map, you know, over my shoulder and there is obviously a lot of red on the screen as it relates to the s p even though its only down a few points carl, half the s p is negative year to date, right . More than half i know theres been this intense focus on the fact of the amazing eight or the big five, you know, whatever you want to call it, but half of the s p negative year to date just speaks to the breadth within the market which raises flags at least in some corners, but as i said, when you raise those issues everything always comes back to, look, were going to get to the other side of the virus, you know, if things get even worse youre going to get more stimulus somehow out of d. C. And then overriding everything super seeding the conversation of course is the fed. What you just said, scott, is exactly what mohammed olarian tweeted, same price action he says playing out in futures where you get disappointing economic news, pushes stocks down, triggers a buy the dip based on liquiditybacked, teixeira, the economic market disconnect grows even more thats sort of sums up where we are at large, right . The macro data is not all that encouraging unless you want to call the recovery from q2 gdp encouraging, but theres this inherent buy option because of what we believe central bankers and to a lesser extent congressional authorities will do in response. And the buy option in a particular place within the market which remains you see it again this week with technology, with the nas and nas 100 hitting new highs. Thats why we raise this level of skepticism that the value trade really does have legs or whether its yet another head fake in a litany of head fakes that weve gotten over the last many years when people have said now is values moment and its turned out to work for a week. Well, here is a statistic on the antivalue trade for you, going back to that goldman report the most popular long positions held by hedge funds in the Second Quarter trade at a pe multiple of 28 times, guys thats versus 19 times for the s p. Huge premium, they say its the largest valuation premium on record so, you know, the socalled smart money is really piling into these names that we talk about, they say its the eighth consecutive quarter with the same top five stocks as the most popular positions, amazon, microsoft, facebook, alibaba, alphabet, in fact, amazon has been either the one or two most Popular Companies for hedge if under to own going back about three and a half years this trade its been painful for hedge funds who have ignored them, painful for hedge funds who have shorted them. At this point you kind of have to low in the towel and say ive learned my lesson, i cant avoid to not own these names and completely underperform the index and so if you cant beat them, you join them. Yeah. Its true. That said, though, guys, fundamentally at least on headlines there is some interesting action today deere is leading the s p as we said, 257 beats 126 pretty handily, they did raise their guide. The casinos, scott, responding pretty well to at least tiny signs of stabilization in areas like macaw i dont know if you noticed it, but in philadelphia september 8 theyre bringing back indoor dining, Movie Theaters and performing arts and then amc although the stock is down is bringing a lot of theaters back in north america, even with extremely discounted ticket costs. Its all about the food 15 cent tickets gets you in the door and as contessa shows us yesterday youre going to spend 5, 10 on popcorn and drinks all that. Right. I think thats their goal there. Maybe you have a little bit of a window as well, carl, you know, if philadelphia is bringing back indoor dining, i know that, you know, the mayor of new york city has been sort of hesitant to do that, but maybe you start to have a window here of opportunity until you get later into the fall, maybe into november or such, where you get those predictions from a gottlieb who say youre going to have this resurgence, the word he used, the third act i just wanted to quote him directly this third act of the virus. So maybe you have a window to get some Economic Activity going and help these businesses, these Small Businesses, which, remember, restaurants only got like 10 of the ppp, theyre struggling intensely in philadelphia at least restauranteurs, mark vetrihe i a huge name down there, he is to what a Daniel Baloud is to new york city and people like that have been arguing that you need to get this activity and this economic engine, carl, back going, youve got to do it sometime so do it now. Yeah. I think some schools have that same philosophy, lets get some inclass, inperson classes rile we can knowing that the fall may not give us an extended chance on that. So most sectors are, in fact, negative, financials eking out a small gain lets get to bob pisani this morning. Hey, bob. Good morning, guys. Happy friday modest weakness at the open. I would say were flattish for the week overall, again, tech dominating i think the important tone was set, though, overseas. Lets just take a look here because asia had a very good session, nikkei was up, all of china was on the upside, it was europe that had a problem when they announced very early on after the open the flash pmi numbers. The manufacturing and Services Numbers were much weaker than expected calling into question, again, the extent of the new rebound thats going on over in europe and they have had a nice rebound and you can see germany, spain, in fact, all of europe sort of weakened a short time after the pmi numbers were announced here. Here in the United States of course we still dont have any progress on the stimulus bill, not sure whether thats going to go into september and who knows how long, i think thats weighing on the markets a little bit. Again, you see tech dominance here and communication services, but industrials, energy and banks, the usual story here, lagging the overall market mega caps are sort of on the mixed side, apple just keeps moving every day its up 12 this month, 12 this month amazon is up probably 5 or so this month, Everything Else is up in the mid Single Digits here these are the engines for the movement of the stock market we keep struggling with ways to describe how sort of narrow some of these vans have been. This largely still tech oriented stocks and to a lesser extent health care dominating the market i want to show you another way you can slice and dice these of how many stocks are lagging. The s p is at a new height right now but if you look at the number from 52week highs, 35 of the s p 500 is 25 or more off a 52week high thats one way of looking at it. Another way is more than 60 of the s p 500 is 10 off of new highs. So think about this, with the s p at a new high essentially 60 of the s p is at least 10 or more away from a new high now, its not unusual for stocks and sectors to lag when you hit new highs, that happens all the time what i think is a little unusual here is the numbers lagging and the very, very wide disparity that we are seeing, the dispersion is very wide. Here, look, energy is 40 from its high and historic highs for energy were years ago. Banks are a third off of their 52week highs, even industrials which have done comparatively well as cyclical stocks are 11 , reits 15 off and russell 200010 off of its 52week high. Its not the fact that there are laggards, there are always laggards when you hit new buys its the dispersion its really, really wide and getting higher may not be the all time historic dispersion but getting close you mentioned tier i read the press release and this is what caught my eye we talk about furloughs leading to layoffs the company has announced broad employee separation programs that will be completed during the Fourth Quarter in support of its strategy to create a leaner more agile organization. They say they have save 175 million doing this employee separation . This is the new term for layoffs that were hearing here. There is a historic high for deere. Guys, back to you. New reality. Some creative ones this year. Yeah. Yeah sorry, scott. Into worries. What would George Carlin say . What would carlin say. I know what he i would is a say, okay, everybody, you guys separate over here, you guys stand over here. I have to get up to Rick Santelli we do have pmi data due out in moments. Rick yes, and, scott, some very solid pmi data as well these are the preliminary august reads from market on the manufacturing side, 53. 6, that is the best reit since january of 2019, on the Services Side and thats the biggest part of the u. S. Economy, it came in at 54. 8 54. 8, that is the best reit on Services Since february of last year finally lets put it all together in a composite number which is 54. 7 that follows 50. 3, so this is super solid and that is the best number since february of last year as well. So even though europe may have had weak pmis that isnt the case here. Now, as far as our Market Conditions go, it hasnt been a great week if you were looking for treasury yields to move high why are, maybe getting some type of endorsement to some of the questions regarding why the stock market is so strong. Here is an inter day of tens, you can see we briefly were trading around 62 basis points, weve rebounded a bit so were getting closer to unchanged but a oneweek chart will reveal at the lows today we were down 10 basis points on the week, we have come back a bit and if you want to know the all time low yield close halves in early august, lets start the chart there. You can clearly see that we werent able to hold some of that selloff that pushed rates higher when it seemed as though the auction demand started to waiver, we also saw some prices do a uturn. Finally very quickly look at the threeday chart of the Euro Currency really losing ground, its got from 119 2 3 to 117 1 2, thats almost a 2 drop in lee sessions, leslie, back to you. Rick, i think youre right to point out there were some concerns among traders over here that the weaker pmi numbers in europe would translate to u. S. Pmi numbers but as you mentioned thats not the case and now we are looking at markets moving somewhat sideways, but going from a mixed session to now in the green. You can see the dow is up about 30 point s ft r s, plaforight now. Were going to take a quick commercial break stay with us as business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. The u. S. Postmaster general now testifying before senate lawmak lawmakers. Ilan moye has the latest good morning. Postmaster louis dejoy taking questions from senators in the Homeland Security committee. Hes committed to the nonpartisan mission and also defended himself against accusations of conflict of interest and he said that he believes the post office is ready for the election i want to assure this committee and the American Public that the Postal Service is fully capable and committed to delivering the nations election mail securely and on time this is a kred dduty is my numb priority reporter that would represent a 6 weekly increase democrats however came out swinging the Ranking Member of the committee senator gary petered questioned whether dejoy should remain in his job. Your decisions have cost americans their health, their time, their livelihoods and their peace of mind. I believe you owe them an apology for the harm you have caused and you owe all of us some very clear answers today. Reporter this all comes before the house is set to vote tomorrow an a bill that would reinstate Postal Service operations to the level they were at back in january. It also includes 25 billion in funding for the Postal Service theres a bipartisan bill in the senate that would provide usps extra money. Carl, i would point out postmaster general louis dejoy supported the extra funding for the post Office Despite its longterm financial strain back over to you well continue to monitor the hearing, ilan, with your help in advance of whatever news we might get from congress this weekend. Coming in the next hour of the president and ceo of the naacp Derrick Johnson will be here, saying the president s attack of voting by mail is another form of voter suppression. We got good numbers from the flash pmis as rick told he you an existing homes in a moment as housing continues to be on fire. Dow has gone green come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. We knew going in it would be a big week for retail. S p gainers led by a target of 13 for the week, l brands, id wh rngsf s own. More squawk on the street continues in a moment. Former trump adviser steve bannon as you probably know by now has pled not guilty to federal charges accusing him of defrauding donors in a border wall fundraising scheme robert frank has a closer look mike check, one, two, three, four hey, robert became a multimedia millionaire but recently benefitted in the large loophole in the notforprofit world. He used one profit to siphon off more than 1 million from the we build the wall project the indictment doesnt name the notforprofit but the description matches irs filings for his l. A. Based charity called citizens of the American Republic that Group Brought in 4. 4 million in revenues in 2018 but spent 4. 3 million on expenses, including loans to bannon and payments to his son. It made grants of only 15,000 and spent over 1 million on management fees. Payments from other notforprofits over theyearold include the Government Accountability institute that paid him 380,000 between 2012 and 2016. He was paid 450,000 in fees by the notforprofit arm of Citizens United and more than a half million from the Young Americas Foundation his biggest recent project is in italy undergoing a criminal investigation. He launched a religious group that leased a famous monastery to house a school for populist leaders. The group is charged with making false statements to get the lease and filed criminal charges. Bannon and the group deny any wrongdoing and carl, of course he pled not guilty to those fraud charges yesterday. Back to you. You know, robert, the president yesterday used the words showboating to describe the efforts, which led some people to wonder why bannon would need to do Something Like that, given his wealth from goldman, and then the old saw about his royalties from seinfeld. Its a great question as i mentioned, he was already very wealthy before he really got into politics, but what is interesting is this Large Network of notforprofits had been paying a lot of expenses, making a lot of loans to him and his family, and that will be one of the Big Questions for someone so wealthy, why did he need to do this, and thats something maybe well get more of as this case proceeds. Robert, thanks, on bannons arrest and indictment yesterday. Robert frank good friday morning, everybody. Welcome to squawk on the street. Im Carl Quintanilla with kelly evans, the hardestworking woman in showbusiness. Good to see you again lets get to diana olick on existing homes home sales in july, positively spiked, up 24. 7 month to month to a seasonally adjusted annual raised of 5. 86 million units, well above expectations of 5. 39 million units, up 8. 7 annually. It is the strongest monthly gain ever, going back to 1968, when the realtors started tracking this, and the highest pace since december of 2006 and you remember that was during the heady bubble years of the housing boom now, inventory though, thats the problem, down 21. 1 annually to just 1. 5 million homes for sale at the end of july, the lowest inventory for july ever, so a lot of records being sent he set here whats that doing, it ispushin prices higher. 304,100 was the median price of a home sold in july, up 8. 5 year over year, an alltime price high, even when adjusted for inflation. In fact, if you adjust for inflation, and go back to the housing bubble of 2006, were still up 3. 4 on prices and that again is because of that very low supply and supply is lowest on the low end, which is where prices are gaining most. Youre seeing homes basically fly off the shelves 22 days on the market youre also seeing investors coming back into this market strongly, 15 of home sales in july were to investors thats up from just 9 in june, first time home buyers strong at 34 , down a little bit from 35 the previous month but again, you have first timers, you have investors, and you have the high end of the market also coming back in here and the realtors say they expect this to continue into the fall, bringing home sales higher than they expected for the year were still not higher year to date, given how much we lost in march, but these are incredible, 24. 7 . John wow, diana, our viewers who have been paying attention to your reports wont be surprised by the trend, although the numbers are still pretty amazing. Diana olick, thank you amazons jeff bezos netted a massive 80 billion windfall during the pandemic. It may be the stocks are near alltime highs despite whats happening on main street, but in part also because of it, and it leads us to question what is the government doing, what is the government not doing Steve Liesman joins us to explain some of that steve . John, thank you many Big Companies prospered in the pandemic because theyve been able to Leverage Technology like amazon, taking market share away from smaller businesses amazons gains come in part because investors believe the existing trend towards Online Shopping is accelerating tom lee from fundstrat says its like throwing gasoline on the fire of the trend toward going online massive liquid doesnt help Small Business and Government Programs may be widening the advantage of Big Companies helping drive down their cost of funds in this crisis the Paycheck Protection Program aimed at the Smallest Companies awaits new funding but that money required companies to hold onto their workers Big Companies, theyre getting help from the Federal Reserve and the treasury with no Strings Attached the feds Corporate Credit program has bought 12 billion in public corporate debt it backstops the broader corporate debt market and helps stocks its helped stoke massive debt issuance at low rates. Corporate debt issuers pay nothing for the aid but the feds main Street Lending program is aimed at medium sized companies. Its booked just 470 million in loans so far, though it is growing. Though interest is free initially, they carry a 3 rate over time and banks have to keep 5 of the loan takeup has been slow because critics say its too expensive and banks dont want the risk, so the biggest companies, they enjoy a much lower cost of capital, in part because their outlook is better and their risk is lower but they also enjoy a broad and free fed backstop for their debts, Mediumsized Companies have to pay interest, small companies, kelly, right now, the government aid chest is empty. Steve, theres one area where i wonder if the kind of main street wall street overlap exists on housing, in the olden days the fed cuts rates and helps the broader economic recovery i wonner er ider if thats an t link with the rest of the economy camping up with the markets . I think youre right. Hey, a lot of Small Business owners i talk to have portfolios, too. They love seeing the stock market go up for that reason even while the business underneath their feet is deteriorating. They own houses, so that helps it could be a potential source of liquidity which i think is what youre hinting at there, el canny, in the sense they could borrow against their house to help the business if the banks maybe the loans. Unfortunately, when you look at the senior loan officer survey, you see bank standards for loans tightening across the board. Public companies they can go to the stock market to raise capital, they can go to the public debt market to raise capital. Small businesses have to rely on banks or their father or motherinlaw, which is as you know kelly, not the best way necessarily to raise money lots of Strings Attached steve, we appreciate it thank you, sir thank you the nasdaq is continuing to set record highs on pace for its first fourweek win streak since january. Jim, let me just start with you on these housing numbers just a blowout existing home sales report i think the median sales price is now above 300,000 for the first time so low rates are certainly sparking, and the pandemic is sparking a lot of demand can this be a housingled recovery its a really good question i dont know whether or not it could be a housing lend recovery but clearly in the housing market, we have a lot of homerelated data this week suggests this is a marketplace in solid shape due to as you noted a high demand and still ongoing low inventory, although the existing home sales we may be seeing the overall trend of people decityify, moving out of the city and looking for suburban compounds where if they have to ride out covid19 for more than a few months to come they could do so and raise their family in relative safety. We have perspective from hawaii which we dont get often. Im curious where you sit how you see valuations in the market, if youre concerned about froth in some areas like tesla and some of the tech names. Whats your advice yes, i mean i think in general not necessarily for the fund, but for me, personally, im really bearish on the go forward looks for equity markets. I think were ripe for another downturn in the next couple months in terms of what that means for us i mean, as i said last time, we cant take ourselves out of the equity markets but we can make some adjustments around the edges to the type of strategies that we look at. You know, i week comy colleagues comments but its really interesting gdp is globally at 4 based on history, going back to the 1880s and we have caseshiller index 90 . Im not worried about a denominator effect bass on portfolio. Were on our ramp hmp up period to private assets still but im concerned about protecting our existing portfolio, should the markets experience another selloff jim, that sort of raises the question of how are you processing right now some of the more cautionary data points were getting on the possibility of stimulus running out, the end of forbearance, the more delinquencies, obviously the continued picture of perspectprv layoffs. What does that offset the strength we see in housing we have yet to see what degree it will or will not offset is. We have an election year, likely contested no matter what wins, lending volatility to an already volatile landscape and we continue to think that medical data is the key to everything, both to our economy and to how the market reacts and right now we do think that investors may be ahead of the medical facts. All that said and done, the data that weve seen so far, the fundamental Economic Data weve seen this week suggests while the Overall Economic pace in the u. S. May be slowing, still slow recovery is not no recovery, and the fed has some tools left, and i would say that i agree that one ought to be concerned about valuations in the tech sector with specific regard to a handful of high flyers but all that said and done, well continue to let our tech winners run, bar belling it with some cash to minimize the overall risk of doing so the reason were doing so, and its fairly uncharacteristic of us to be that growth oriented at this level, is that we just dont see the covid19 tech trends breaking down any time soon so we think it will continue to be a boone for demand in that sector eliz wet, good morning. You say youre personally bearish and looking to mitigate risk where do you go for protection in a market like this . Well, i think one avenue is placed not necessarily protection but looks more interesting than it has in recent years is convertibles i think ideally every pension wants to be structured like a convertible rate, protect on the downside, dont participate as much on the upside, although they had a tough march, like everybody else, they did exhibit protection about 50 on the downside and when things rallied in the equity markets, again they lagged a little bit, but issuance is up, as you know, and that improves Liquidity Position of the convertibles market so i think that could be an interesting addition to the portfolio. I also think that we are looking broadly for Liquidity Provision trades, so buying things in secondary markets and that sort of thing we didnt have to sell anything. We protected on the downside in march. We lost about half so were looking to be in a powerful position to capitalize on those sorts of opportunities Going Forward. Elizabeth, then what is the next either catalyst or milestone perhaps that youre looking for to determine what next move you make, whether it is back toward equities a little less bearishness or doubling down on the strategies you were just talking about yes, thats a great question. I mean, i think last time i came on, i talked about inflation the last two readings i guess, youve seen it starting to tick up a little bit. I think you really need three or four more indicators that show thats happening to start to make any real adjustments based on that measure. I guess in general, speaking to the data question, what kind of data do we want to see, at least from the medical data, its hard to draw any conclusions. I spent a couple economy as an economatrician by excluding or including data you can make it say whatever you want i might be kicked out of grad school if i made conclusions based on six months of limited data, nine months of limited data so that mostly has to do with data coming out of the coronavirus. Its hard to have any hard and fast indicators. This is just a crazy environment. In a lot of ways it looks great, right . Incomes are up, savings are up people are paying off their credit cards my house had six offers above asking in three hours, but on the other side, winter is coming, right . This isnt really sustainable and youre getting flashing warning signs in the cmbs and valuation levels i think youre fooling yourself if you dont think that something is headed south soon data can tell you whatever you want it to say i think about that all the time and yet the stakes for this data in particular are so high. Something to ponder. Elizabeth and jim, thank you both very, very much appreciate it this morning thank you thank you carl . When we come back, what a morning for news, between the pmis, home sales, Management Changes at amazon, and of course lots of news involving uber and lyft while the tesla rally rolls on, stocks almost to 20. 50 well get reaction from an early investor in all recoans, ene me back. Ie traded goods. Tools, cattle, grain, even shells represented value. Then currency came along. They made it out of copper, gold, silver, wampum. Soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. Thats why its time for Digital Currency and your investment in the grayscale funds. Go digital. Go grayscale. Uber and lyft making headlines this week, both companies averting a shutdown of their california business after an Appeals Court agreed to let the Ridesharing Services avoid classifying their drivers as employees but just for now lets discuss with managing partner even ham al husseini good to see you, and thats a different back drop than im used to. Where are you joining us from . I came to beirut, lebanon, to help my wife assist in the recovery after the bombing so thats where im calling from, beirut this is my hotel room. Yes, important story, and recovery that were following there as well. For a moment, i want to talk about the gig economy situation in california. With this stay that lyft and uber and some others have got here, and the ballot measure in november, how do you think investors should think about maybe that period in october where theres quite a bit of uncertainty right now . So, october 3rd, theyre either going to kick the can a little bit further down the road, and hopefully get this behind them on the november 3rd ballot initiative, which is proposition 22 that will create a new classification for these gig economy workers. As you know, theyve raised the 110 million instacart, doordash, postmates, everybodys in on this they want to create it and i think it will pass personally, because theres a, it gives these drivers a little bit more benefits, and allows them the flexibility that they want i think you know, dara and the crew are doing a nice pr Campaign Getting on every show in my opinion, you know, have a lot of great sound bites how are we supposed to hire 50,000 people overnight . Its been over a year. Its not overnight, of course. Theyre trying to i guess, they need these drivers right now, but at the same time theyre racing to get rid of them. Ironically yes, so does this either vote or whatever the resolution is this fall, does it clear up the uncertainty or just take it to a different level . Because it seems that those who want certain protections for gig economy workers are not going to give up on that fight, regardless, so for the investor who is wondering about the risk around the stock and when the story might clear up and give them some room to run and grow again, when should they look to . So i think it will be behind them at least in california. California makes up 16 of lyfts entire business obviously uber is international. They have a lot more legs to that stool lift doesnt have that option, and these companies have become part of our life, especially the food delivery pieces of them now were all locked in at home. We are surviving because of these services, so i think if i was going to say who has the upper hand, id say the companies now have the upper hand partially because of the food delivery piece of their initiative yes, that was sort of our point earlier this morning is covid changed the way we rely on them, gives them extra leverage. On tesla, ibrahim, we had an explanation for prices weve seen this month, is it about rewarding them for maintaining supply and demand . Is it about the promise of battery day . Is it everyone trying to get in front of an s p inclusion day or are some combination or something im not thinking of . No, i think its, you know, what you know already, which is that, you know, the robinhood added 3 million new users in 2020 alone and were only twothirds to the end of the year half of those are firsttime investors and tesla is a very sexy futuristic stock. Elon has this legendary status and with this coming stock split, it will be more accessible to more investors, and they want a piece of this historic initiative. It has nothing to do with the fundamental value of the company. In fact, as ive said on your show before, the margins of the company are manufacturing margins, not technology margins. I still hold the shares, you know, im not going to be holding them much longer personally for whatever thats worth because these are valuations that are related to 2040 revenue projections thats a long time yes, thats a generation literally. I wonder, there have been some debates about whether you can really say that the robinhood investor is driving this, but if robinhood investor is, do we have to also be skeptical of apples market cap hitting 2 trillion, which is now, foodness, more than 350 billion above amazon is that about the story behind apple and if so, why are they so much more enthralled with apple and tesla than with amazon amazons got a story yes, well i think again, amazon actually has a better case for being worth more than apple today especially with speaking of amazon the fact that the world now knows that apple only charges amazon 15 commission on their purchases on the apple store, while they charge everybody else 30 . Now pour publishers are asking for the same and thats 46 billion from apples revenue that if enough pressure happens, especially with the lawsuit from epic games might be under threat, and thats, you know, those are the types of margins that you want that might be shrinking in the near future, and were all curious to see is the world ready to pay 1,000 for an apple, what is it an iphone 12 pro max . I who knows whap s what happens china. With the u. S. china relations so poor im curious to see myself phenylfinally, it is politicl convention season. You have a lot of investments in i dont know whether you want to call it environmentally responsible initiatives, things like to th like that. Do you see one way or the other, whoever wins the Election Party wise and president wise an impact on those types of investments, and what do you expect it to be . So as you know, my private and public portfolios is based on a thesis that Consumers Want value aligned relationships with the right companies. Thats the future. Thats what the millenials and gen z want thats where i see things are headed my fund full cycle only invests in or only accelerates technologies that are climate critical, but also dont depend on subsidies to be profitable. They stand on their own two feet, regardless of who is in charge, what regulation is supporting them, even with the price of carbon is or isnt. Were not dependent on a Carbon Market if that happens our irr shoots up another 8 to 10 , so all of that is great. We dont rely on it because weve been around long enough, that we dont want to jeopardize our business based on who is in charge and what the mood is. All right, i guess well just have to see how all of that works out. Ibrahim al husseini joining from us lebanon, thank you. Thank you far having me fascinating lets turn to our etf spotlight before we go look at the select industrial etf the xli, up today about 0. 25 but still down 6 on the year one name leading it higher this morning is deere, this one beating only the top and bottom lines in its earnings this morning and raising its outlook for the year the company did say plenty of uncertainties remain regarding covid19s impact on its business Going Forward deere shares hang on to a 4 gain an hour into the trading session. Take a quick break much more squawk on the street on the other side. It is a busy friday morning. Lets get a news update with sue here herera youre right. Heres whats happening at this hour the czu august lightning wildfire is burning still in northern california. At least 40,000 acres and 50 structures have been destroyed and it is just one of dozens of fires in the state and that is producing a haze in places like santa cruz the particles in that haze can cause serious respiratory problems german doctors now have access to the comatose russian Opposition Leader in the siberian hospital. Supporters who accuse the kremlin of poiseening to him want navalny to move to germany and minutes ago word from rush aias Health Ministry a police lab found a chemical substance of industrial nature on navalnys hair and hands it is unclear if that is related to his sudden collapse yesterday on a flight to moscow. A story thats still developing and we will be watching it all day for you. Back to you, john. Sue, thank you. When we return, the postmaster general moments ago telling a senate panel the usps will prioritize ballots above first class mail and he plans to vote by mail himself well talk to naacp ceo Derrick Johnson who says the president s attacks on the us spand mailin voting are another form of suppression. Stay with us 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. Welcome back keeping an eye on the markets this morning, the dow hanging on it a 57point gain so a turnaround from the selloff that we saw earlier this morning. Existing home sales rocketing higher the median selling price over 300,000 for the first time here you can see the weektodate gainers on the s p 500 target leading the way up 13. 5 . Were backn o. Itw this is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. With airbnb filing to go public our traders break down what this could mean for expedia and booking holdings adgniocn. Cor on trinatn. Bcom more squawk on the street coming up. Our Retirement Plan with voya gives us confidence. We can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Im good at my condo. Well planned, well invested, well protected. Voya. Be confident to and through retirement. It remains another eventful day for retail in general. Theres a look at footlocker and ross stores. Comps up almost 19 , kelly, and they reinstate the dividend. Weve been watching all kinds of retail all week long especially earlier in the week with the big boxes and Home Improvement interesting to see a story within specialty though that is rewarded, and the dividend of course raises a lot of eye produce brows. Shares of buckle are up today. Similar earnings beat. Whats nice is were seeing a pivot from the Big Box Stores that have been winning and taking market share to the more mallbased players like a footlocker, john, and of course like deere this morning, totally different category, but at least a part of the economy that were not usually talking about in terms of solid performance lately that is true. Still big. Perhaps showing some hope for a slightly different part of the big retailer economy i got to wonder how much of this niche plays into people needing to get out, maybe replace those Running Shoes as well. Well see how these numbers continue to come in. I got some new sneaks lately. I had to get orthotics, carl, on my feet all day. I had to get a walking shoe. I feel like an old lady. I cant remember the last time i put on actual dress shoes, so what youre saying, kelly s not gender specific at all. Thank you, very reassuring. Maybe footlocker is a unique situation. Lets get back to ilan moye with the latest on postmaster general louis dejoy testifying on capitol Hill Reporter dejoy is pushing back against criticism hes too easy with the Trump Administration hes been a top gop donator and fundraiser. He said hes never spoken with the president about the Postal Service other than a call to congratulate him for receiving the position dejoy also said he was not the one responsible for closing any post office pranchz but thbrance process would be halted until after the election hes not curtailed overtime of postal workers but said when it comes to the mail sorting machines, there are no plans to bring them back because they are not needed democrats however have been skeptical of all of these claims senator tom harper saying the president wants to get rid of voting by mail, the president wants to see the degradation of the Postal Service and that is why democrats are sounding this alarm. Still dejoy telling lawmakers that the Postal Service is well positioned to handle not only the surge in election mail but also the upcoming Holiday Shipping season, and even mothers day guys, back over to you ylan, thank you very much ylan will continue to following that hearing for us this morning, carl. Well take a short break. We should point out that apple, by the way, responsible for the lions share of the dows gains as the market cap growth in that one name in particular continues to astound market watchers around the world rba ia nute apps are used everywhere. Except work. Why is that . Is it because people love filling out forms . Maybe they like checking with their supervisor to see how much Vacation Time they have. Or sending corporate their expense reports. Ill let you in on a little secret. They dont. By empowering employees to manage their own tasks, paycom frees you to focus on the business of business. To learn more, visit paycom. Com Movie Theaters around the country are slowly beginning to reopen Contessa Brewer has more hi, john. Take a look at the stocks of these Movie Theater Companies Since the beginning of the year. Now we see five months after they close major chains like amc, riegle and cinemark are reopening this weekend in limited numbers. Comp. Score says about 1,500 movie locations will be open today compared with 5,200 that were open this time last year. Amc theaters which i visited yesterday is limiting capacity to 30 it plans to open 400 of its 600 theaters by september. Regal, which is owned by cineworld, opens about a third of its 550 u. S. Locations today and the rest open by next friday amcs ceo adam aaron told cnbc people are tired of being cooped up and yet of course as the economy reopens, weve seen rising infections in many states so moviegoers will be required to wear masks, except when theyre eating and drinking, which for me is the whole movie. The theaters are understanding that they need to do constant cleanings and that reservations are now required before you go to the movies with social distancing in place. Though many blockbuster releases have been postponed, today a couple new releases. Words on bathroom walls and the most widely distributed new release, Russell Crowe in unhinged which may be how many of us are feeling right about now. Carl thats fair to say, contessa. Question on the strategy around this reopening its just a fraction, like you said, of what was open a year ago. Are they just trying to get moviegoers back into the habit of coming to the movies without regard for Business Model at this point well, john, i think that was the thought behind offering these old movies, many that have been out for decades at reduced prices, so yesterday we saw a special 15 cent ticket at amc, regals also offering reduced pricing on some of the old movies, so that if say a 15 ticket is too steep for to you think about bringing your family back and youre a little nervous about coronavirus, maybe paying five bucks a ticket would coax you in, but then again, you know, look, youve got these big blockbuster movies and i think the thought is, from the ceo of amc, among others, that the pent up demand is there and when i talked to these people yesterday, they told me we are so excited to get back to the movies the fact that you can pick your seat, the fact that youre wearing masks, the fact that everything is cleaned reassures them that its safe to do it yep, especially with the logjam of new releases that have been waiting to go into distribution, contessa its a fascinating story Contessa Brewer. Our next guest with the c oh, of alamo drafthouse, Shelly Taylor joins us this morning on the path forward for the industry shelly, good morning happy friday hey, good morning, thanks for having me. Where is your strategy right now . Ive seen some reports that you could, for instance, rent out the entire theater for a couple hundred dollars, now amc is doing 15 cents where are we in terms of at least the Pricing Strategy once reopening becomes possible our strategy is thinking of how do we create the safest environment for people to come back to the theaters people really do want to come back, and so we have a couple different approaches, depending on their needs one is the private theater, but the second sorry . Go ahead. For example, yes for example, we do have the private theater for those who want to come back with their group of friends and that might feel better, and then for those that want to see either the repertory films or the new ones like unhinged or cutthroat city weve got that available, too. Are you thrown at all by the degree to which trolls worked in home for our parent comcast or the way mulan or the hamilton film works for disney . Do you see interest in the traditional cinematic experience eroding for the longterm . I think that people want content at home, on screen, but people also want content in the Movie Theaters they want to go out, have that big screen experience, opportunity to have dinner, and so i think that theres room for both, and i think that were really well positioned to capture the incinema experience shelli, a question from kelly here kelly so shelli, but my main concern when it comes to going to the movies, certainly eating indoors in the restaurant which were still not allowed to do around here is sitting in the same kind of recycled air for that period of time. Its one thing to pass through a Grocery Store or Shopping Mall but another to be seated there for a couple of hours. Can you quell my concerns at all . I think theres a couple things we thought deeply about the whole process, how do you minimize every single touch point along the way, create as many opportunities for sanitation, and you know, so things that weve done is we require people to wear masks the entire time unless they are eating and drinking. The second is in a couple of our theaters we have invested in the special types of hvac filters to help with the recycled air so were trying to create experiences that are as safe as possible and we believe that if people follow our procedures, that they will have a good experience, and then going back to the private theater, if you dont want to be with a broader public, that is social distance. We put buffer seats between each group. You can rent the theater for you and your friends shelli, do you think this is going to change the way Movie Theaters are designed and operated in the future you know, its hard to say, right. Its a crystal ball of whats going to happen. I think its an opportunity for all of us to get better and i think there will be ways that we do improve, and evolve and change, and i look forward to those. So when you think about the Movie Theaters that you expect to ideally open five years from now, is that plan even just for you about the same as what it would have been a couple years ago or are there features whether were talking about hvac or were talking about spacing between seats that are going to be different now yes, i think that the Safety Standards wont change over time i do think that new theaters will think about social distancing or distancing in a new way. Its just hard to speculate right now. Today our focus is creating the best experience we can, getting reopened, and getting back into a position where we can start thinking about the future. We had a conversation on our air earlier this morning with Cynthia Littleton from variety. The argument was movies like mulan more family oriented make sense for at home, where you can have popcorn with your kids and your movie room, which increasingly american households have its more the tenants and the top gun mavericks that will play in a traditional distribution channel. Does that make sense to you . You know, i think theres some truth to that, but as a parent, ill tell you what i still want to take my child to the Movie Theater, because i dont want to fix the meal and i dont want to do the dishes and i want to show up and have someone take care of me and give me the great experience. So i think that there will be some people that stay home and i think there will hill be a lot of folks that want to get out. So then shelli, whats the opportunity you think for investment, if you do believe that the consumer tastes arent going to change that much, there is still this desire to have a lean back experience where somebody feeds me and shows me something interesting. Is there enough capital now for you to make a move that might seem controversial during a pandemic but will pay off down the road absolutely. I think one of the things is that for the traditional cinemas, they may show 500 titles a year. We show over 2,000 titles a year, so we offer an experience that is much broader, and we are, you know, we have a team that curates movies that are specifically for our guests. They know our guests needs and desires and create those experiences, and then we offer great experiences inside the theater that augment those shows. Finally, assuming this works, right, and we can open theaters safely and there is consumer interest, i wonder if you think the expiration of this consent decr decree, the degree to which studios or other types of companies could own distribution own theaters is going to change Ownership Structure in the industry at least for the next few years. I think its early to speculate and again, i think that people are going to want to continue to have experiences with big screens and dining, and i think that were going to be extremely wellpositioned to continue to evolve, and capitalize on the industry as it changes. Well, i mean, its an exciting time and you got a lot of cinephiles like myself rooting for every part of the industry hope you come back thanks for the time. Have a good weekend. You, too, byebye as we head to break, a check on the major casino operators, wynn, mgm and Las Vegas Sands up about 2. 5 and 5 the stocks are still down around 30 for the year but theyve gained some momentum in august, all are up double digitse sdigis squawk on the street is back in two for any amount you choose instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. Means im responsible to every single one of my team members and all my patients. We went above and beyond regulations because i wanted to make sure that the community is taken care of. We owe it to them to be careful stewards of their health. So trust your people and take care of your teams and you will weather the storm. The naacp suing the post service over mail slow downs Derek Johnson joining us now good morning good morning. So last week President Trump and saying why he doesnt want additional funding for the foesal service said they need that money to make the post office work. So it can take all of these millions and millions of ballots. If you dont its because youre not equipped to have it. On the other hand the postmaster general saying ballots will be prioritized and people should not worry. We would like for them to restore the services that were disrupted. The taking out of the sorting machines they made changes without following their own internal procedur procedures the fact that it was destroyed on the American Institution with the express purpose of the outcome of the election is a folly. This is one of his largest donors to the president. He was put in place to make disruption for the election. And other important items. And we should not stand by as a society and allow an American Institution to be destroyed to manipulate the outcome of the flexi election now that they are saying that any changes in the post sal servi Postal Service will be delayed, that seems to be what he is saying does that address the issues that lead you to sue to say there will be no further changes does not mean they are addressing the past changes. Particularly the removal of the sorting machines and the tamping down of postal workers from receiving overtime pay when there is a backlog were in the midst of a Health Pandemic a federal crisis they have refused to proceed in a manner to protect our citizens it exaggerates the issue when you eliminate options for those that have this Health Pandemic and they have to choose between their health and their right to vote it is unbelievable what is taking place i hear you and i wonder, though, how are we to tell what the motivations really are im not sure that the motivation matters as much as the reality on the ground of what the Postal Service is really equipped to do are you looking for a specific oversight to be able to understand what the capacity is of the Postal Service ahead of an unprecedented number of mail in ballots what are the facts that we can get that would either reassure you and other people who are concerned about the state of the Postal Service or provide a bench more for the level of service needed in order to serve this election it is already in place. That is what were suing about they did not follow their own internal procedures to make the drastic changes. And the changes made need to be restored to get the Reliable Service at the Postal Service. And when his one of his key contributors were placed in this position, there doesnt need to be a conversation if is understood that there are many who are aligned with this president to try to do all that they can to manipulate the outcome of the election to keep him in office. That should not be the case. There is nothing more that can happen other than restore the services of the post office. It was not broken. There was nothing to be fixed. You are making something that was already efficient and youre doing it to make it efficient, that is illogical. Restore the service thats was taken away over the last couple of weeks, it is good youre not going to make any further changes, but restore the changes you already made mr. Johnson, this is kelly. All of this about how were going to vote goes back to how people want to vote in the election is the president making any inroads by points to how low the Unemployment Rate was before it went into the pandemic we are in a free fall in this country. Were in free fall because of this Health Pandemic we have yet to put forward a federal response we are free falling as a result of that. The economy, the Small Business across the country they are being impacted because of the social distancing that has to be in place i have not seen any proactive plan by this administration in 3. 5 years to address or work with the person community. There has not been anything that i can point to, and i challenge anyone to point to that was done to maintain the low Unemployment Rate in the africanamerican community. I think a lot of people would disagree with you on some of those issues, and bring up general Justice Reform on but i wonder how you expect an option like the naacp to operate differently leading up to this election to get out the vote what does get out the vote mean when you cant do it the same way. We regrekt that notion because we have africanamerican entrepreneurs. We need proactive positive look forward on how we improve on the lives of africanamericans and not the concept that we do something around general justice. We have a broken system around pass inars ration. No other nation on the lobe creates citizens the way this country does it they are insuring, there has not been anything for this, when it comes to voting it is our role to increase the presentation. Our goal is only to open up the access okay, the naacp president and ceo Derrick Johnson. Thank you for being with us. Thank you for the opportunity. Our thanks to kelly, of course, for the help on this hour after doing squawk this morning. It is 8 00 at lyft and uber headquarters squawk alley is live