Transcripts For CNBC Squawk On The Street 20240712

Says, comparing xoe ce ining cou once again as the death toll crosses 2 10,000 the white house is blocking new fda vaccine guidelines for the coronavirus and the eu is putting the Pfizer Covid Vaccine on a fast track. Shares of pfizer and bioand tech are moving higher ahead of the bell stimulus talks, maybe were stalled again. Theyre set to talk by phone again today. But well, who knows at this point. Hard to say. I wouldnt even try to venture a guess as to whether they make progress they did talk for an hour on the phone yesterday. Pelosi told Democratic Leaders today that talks are going slowly. Right well, look, gary kelly is one of the greatest executives that i have ever met. And he was on squawk and he is actually doing some shortterm furlough, get people back. When hes doing it, you go ta action. Gary is one of the foremost his record is the whole airline record to never lay people off i think thats a clarion call to washingt washington if gary has to do layoffs, there are others that do too i thought that was a seminole interview, very important and both sides should listen to what he had to say. Im sure theyre going to get right on it, jim thats it. Now it is going to happen. Dont be so cynical really . I wasnt born that way no, i just think if youre Speaker Pelosi or youre secretary mnuchin, you see, lets take it the other way. You see the unemployment number is going to go up pretty big and nobody wants that. I mean, i think in your heart you dont want it. And i just was shocked to here how much theyre losing. It just no comeback in Airlines Even though only 19 people have gotten covid since this thing started. People wear masks. But the president , you had to a major antimask initiative going. Well, jim, tsa screened 900,000 people on sunday that was the third time since the april low where we are had 900,000 people on a single day traffic patterns arent good but they arent getting dramatically worse right and, you know, im encouraged by that, but, again, i come back to the idea that even if things get better, and theyre adding routes at southwest, even if things get better, i dont know. The losses are so incredible that they have to take a meat ax to their own people. I think youll think maybe that was smart, but i think if youre an american with a heart, which i think is something, you know, youre not the tin man over there, it is really discouraging to hear about these layoffs and the layoffs need they need something from washington. It is not their fault. It is not their fault they need something from washington they have for some time. And any travelrelated industry or really any industry that is still involved, somebody walking in a door to do to create business, is still under stress. But, jim, we have been having the same conversation for months that house bill was passed in may. Look, there is there is a lot of discord, obviously. And i often think that the talks are not between Speaker Pelosi and secretary mnuchin. There are larger issues involved, particularly from the senate yesterday, senator mcconnell, this was something on the tape about him, i looked and i said, oh, my, maybe hell get on board and try to help get some money to the american people, but, no, it was prayer for the president , i think thats great, but i was absolutely shocked hes not saying anything and there is so many people who believe there is a vshaped recovery in the get those people to see that there are, as david said, whole industries being left behind and many Small Businesses i think someone has to speak for them yeah, the darker theory, jim, and im not endorsing this by any means, is that republican senators see the polling data, f fear a flip in the senate and now the calculus is why would you give an Incoming Democratic wave the benefit of stimulus, which would be hitting after the election at this point. Well, i cant disagree with that i think thats a very logical, sadly, but very very political as opposed to the people who are going to be thrown out the ppp is long gone were 14 Million People involved in the restaurant hospitality industry, incredibly hurt. The airlines are literally out and, david, i just think if it is that political, then were going to be sitting here talking about a very big unemployment number the next month. We may. Were also dealing with what has got to be one of the strangest runups to election in our lifetime with the president back in the white house but nonetheless not necessarily able to get back on the trail. I think it is on certain terms, i think october 15th is scheduled for the next debate. Not to mention, jim, you know, his continued comments that he might not actually honor the vote totals if he feels as though that it has been somehow tampered with. So, we have got a rocky road ahead of us to say the least as we watch the president , of course, after he returned from walter reed last night, going up to the balcony, and sort of giving a salute. Look, i think there is a lot of different polls im not sure which polls i watched 5 38 on twitter. There are a lot of people who feel this has been a breakout move for biden what are we seeing in 2016 i learned in 2016, carl, do not milwauk make a prediction. It is too fraught. So who knows. It is a fools errand a fools errand, thank you. Thats the right term. It is there is simply no way to know and we do, even with the caveat that it is down to a few battleground states, i know youve been taking a lot of incoming on twitter regarding the president s mask off yesterday on the truman balcony. As someone who worked so hard to advocate for masks, i wonder what you made of that moment last night well, we have the cdc talking about aerosol, theyre owning up to aerosol the only way to stop the aerosol, i dont want to say stop, to try to stop, is with a mask we dont have any other thing. Youre inside, it is hard to social distance, im closing my restaurants. Just closing them. One reason i dont like the restaurants is frankly unless you get the table so far apart, i think the air flow is such that you need what is going on at wynns casino, the cdc is saying, basically, look, youre pretty out there and dont have any defense against the aerosol. The only defense we have are the two aerosol professors in the country is the mask. But the president seems so proud about getting rid of the mask, that there is suddenly it is about pride. And then when you write a mask competition, as american citizen, i want to get involved. 15 to 24yearold, and i feel like, well, the president has killed our hope. But at least the rest of the world, because it is international competition, doesnt feel like the president of the United States no embarrassment of a mask, david. It is not embarrassing. It is not not at all now the aerosolization, the cdc, listen, their track record throughout the pandemic is not particularly great as we all know they did say poorly ventilated and, you know, it is not typical, but it can happen beyond six feet, in a poorly ventilated space with somebody who is potentially a super spreader or has a lot of volume of virus that it can happen. But the president wants to have football does he want the stands packed . Yesterday, a painful experience, the pats are playing kansas city, the kansas city fans are incredibly loud, but it was all phony, i mean, there is a lot of americans who are genuinely worried about getting covid. Now the president says, i know that 50 of the people will hate what im about to say, the president said we have the doctors and we have the science, stop focusing on it. And in the meantime, you go to regeneron, yes, they got a yes, they are committed to hundreds of thousands of their cocktails, because owned by the government, theyll give it out, they have much greater demand at capacity and thats not something the president can change david, it is absolutely true that we got you can presume that regeneron helped the president get out soon they want they need more people in the trials but you cant there is not a million doses. No. There arent they are up to 11,000 or more. We have spent a lot of time over the last six months talking on this program about the effect of antivirals, whether they be monoclonal antibodies that have to be infused or small molecules that can be taken orally and how important they would be. And it may very well be the president s prognosis is a reflection of what may be success broadly speaking once theyre available. Yes theyre not available now no. They are to the president. But nobody else unless youre in the trial and when it comes to manufacturing worldwide capacity, even if you stop pruing all other drugs, it is not enough to supply but we have been making the point, and the president s health may actually show it. That, hey, early onset if you we dont know, because hes on remdesivir and a steroid, but early onset, you take these antivirals, it may very much moderate the symptoms. Do it in a second we got to go to carl, but and ayman, but if you can take this drug the minute you got covid you take it period. No doubt about that and the president last night said the vaccines were coming momentarily, not the only thing the president has talked about, more tweets this morning lets get to eamon javers. The president returning to the white house on marine one, walking up the steps of the balcony and ripping off his mask publicly, showing his face to the crowd there at the white house. A very president anxious to demonstrate strength here, to demonstrate hes okay, standing on his own with feet and recording some video there, maskless, inside the white house, once he did return. Striking difference, though, in tone on masks from joe biden last night remember, gentlemen biden participated in an nbc news town hall event with lester holt last night. Here is what he said on mask messaging yesterday. What is this macho thuning, m not going to wear a mask whats the big deal here does it hurt you take care of yourself, take care of your neighbors. Reporter so, carl, over the next couple of hours, we hope to learn more about how the white house is going to proceed. The president returning to a white house that now physically is a hot zone for the coronavirus. The residents now has two residents who are infected with covid, the first lady and the president of the United States both of whom we are told are recovering the president expected to get an additional treatment later on today. And then they say there will be about five more days until he might be out of the woods. Over in the west wing, a number of aides have tested positive over the past couple of days they do not seem to have the outbreak under control insipd t inside the west wing right now were waiting on testing results for a number of reporters who have been inside the west wing over the past couple of days as well all of that affects the president s ability to govern. Who hes going to have access to physically, who in his circle of confidants is going to be available to him, healthwise, over the coming days, all of that, for the president to struggle with as he deals with the endgame of this election, the outbreak of the virus, also a Supreme Court nomination hanging in the balance a lot at stake here for the president of the United States over the coming days back over to you with the election four weeks from today, jim, im curious to know your thoughts about the president s message, which seems to indicate a willingness to continue with the relaxation of restrictions, at the same time the batman film pushed back, Regal Cinemas closing, norwegian pushing sailings back a month. Where are we headed . I think the there is a false construct here there is no urge to lock down. Thats a straw man no one, i know, wants to lock down, other than certain blocks in new york city by de blasio, who is often questionable but the idea that there is either a lockdown or wide open is wrong i mean, there is risk involved you speak to the people at abbott, theyll tell you, hey, is our test perfect . No but if you are really worried about going out, you dont need to go out. Why not discourage that for people who are at risk i think the president just took away the at risk issue i think it would be terrific if he said, look, at risk people, please be careful, not at risk, lets go about our business if youre in a crowded room like at the bedminster at the trump fundraiser, youre very close to each other. We know that one person in Washington State gave more than 50 people in a choir the covid lets not minimize covid you cant get the regeneron drug and getting that steroid, and the really questionable remdesivir for its strength, then i think youre basically saying, hey, its catch as catch can. A great friend of mine for 32 years was in the icu, was delirious, able to get out after a month and a half, great, hes back well, you know what . Thats not, david, what is optimal. No, it is suboptimal. Something youve been trying to aindividual. Im losing. Spoke to four people yesterday, in the office, thats the highest total i can remember since the pandemic began so theyre trickling back at least. Yeah. Im looking forward to getting back to you guys, hopefully in the coming days. Well see how it goes. In the meantime, well get to a lot of sale side research. Lot of sale side research. Were watching closelyyy can go its time you make the rules. So join the two Million People whove switched to xfinity mobile. You can choose from the latest phones or bring your own devic, and choose the amount of data thats right for you to save even more. And youll get 5g at no extra cost all on the most reliable network. So choose a data option thats right for you. Get 5g included. And save up to 400 yr on the network rated 1 in customer satisfaction. Its your wireless. Your rules. Only with xfinity mobile. 9th. Yyy last night, joe biden was asked about President Trump and his supporters branding him as a socialist. Take a listen to how the former Vice President responded do i look like a socialist . What i want to do is just make sure everybody starts paying their fair share ordinary people, if you call it socialism, it suggests that 91 fortune 500 corporations dont pay a single cent in tax and they should be may be the minimal Corporate Tax, i call that fairness. That is one of the biggest legislative accomplishments of the Trump Presidency the Corporate Tax cuts what we went down to 21 i think bidens team is talking about taking it back up to 28 if i recall at least there are a lot of different tax plans out there. Thats one of them was higher than that remember the days when versions, when i would report on all the companies that were looking to invert this is way back until treasury under obama just killed it, with that pfizer deal that never happened. Yes, yes. Brent saunders got us back managed to sell his company finally, not to allergan, but to abbvie not to pfizer, but to abbvie. Abbvie is having trouble abbvie is doing great with the franchise. Botox is still elective. So it is a lot of people dont want to go to a doctor i think the dividend is fine i like the company very much my travel trust owns it. The inversions were not what we expected what i dont understand is this, if you think that biden is ahead, and you think hes going to win, then every single strategist has to cut numbers for the s p 500. Is that a day that you want to buy stocks well, i dont know im surprised a lot of the analysts havent come up with an alternative view of what the earnings are going to look like under biden. Thats what i want to see. I believe that youre going to be surprised at the pes and how high they are under if biden comes in so you dont think you dont think that cost, david goldmans theory is legitimate, where he says the rise in taxes will be offset by lower tariffs and higher fiscal spending people are saying the 30year today is a one of the best election polls we had so far. Yesterday was kostins day, really, really, you had all the china stocks, people in the administration, and it is really interesting. The china stocks were on fire and what do i Mean Companies that have been really beholden to china, a lot of the a lot of the semiconductors, but almost all the heavy machinery companies. Yesterday was caterpillar people were saying, jim, how come you hate caterpillar . I dont hate caterpillar theyre back with china. China wants to have biden elected, david. Believe that. Yes, i do not to the point where theyre going to do im not saying that the peoples republic is going to intervene in our election im pretty sure, i had a number of people in cybersecurity who said thats not going tohappenit 28 versus 21 does that slow the pace of buybacks yes but a lot of the supply of stock has really shrunk. The dividend boost will be lower. And if those who want incomes are going to be struggling a lot of our viewers are fixed income struggling for along time, given where rates are. It is not a change. 7 on the tenyear is not helping anybody. Im cutting the numbers yeah. Hes one of the greats. I love him i do hes very thoughtful. We cant wait to check in with david once again. Quick break here, guys quick break here, guys wemy name is henry. Working within amazon transportation services, i really saw the challenge of climate change. We want to be sustainable, but when you have a truck covering over 300 miles, or you have flights going hundreds of miles, its a bit more challenging. We are letting the data guide us to the best solution. Its inspiring to try to solve a problem that no one else has solved. Thats super exciting. Seaworld,y pry 9f fcky september. 1yyy the split in futures here as some of the longterm growth some of the longterm growth names get challenged perhaps by taking california for a ride. Companies like uber, lyft, doordash. Breaking state employment laws for years. Now these multibilliondollar companies wrote deceptive prop 22 to buy themselves a new law. To deny drivers the rights they deserve. No sick leave. No workers comp. No unemployment benefits. Vote no on the deceptive uber, lyft, doordash prop 22. One ride california doesnt want to take. Hmms and ahhs heard incall. Morning. 6s wellyy yy prtg n cpthey g time for a mad dash. Get you ready for the opening bell a few minutes from now. Never a bad time to talk nvidia. Not sure why you are this morning on the mad dash. New analogy the prometheus and prometheus is now unbound. Theyre looking at i love this piece it is succinct nvidias pace of innovation appears to be accelerating and execution is going to overdrive as it fin continues to expand i ecosystem and open up a much larger tam in the compute landscape. Theyre doing emerging Artificial Intelligence with the data center and for the first time, david, i Read Everything they had and i just decided i got to call jensen why . This is so over my head, i said, you know what, i cant get this, david. He is in a class of his own. He himself theyre reinventing the data center it seems like everybody else is going to be obviated. People moved on from the questions about the arm deal and whether theyll get it done and what will be left in terms of the Competitive Landscape if they do own it and theyre moving on to the fact this Company Keeps innovating. Right, if they get it, fine you can say, this is what i saw, i want a degas sea scape, i wanted a monet, it gave me a sea scape that looked like monet it did . It did. I thoughtda vinci, i thought you would want the mona lisa. It is how i was just thinking, jim, open hype e oppenheimer from 550 im not sure it is a street high, but not far. This is the game that analysts have been playing you have a stock that goes up and then overruns the price target bed, bath, by the way, talk about a stock that has overrun the price targets. Nvidia, a lot of people, bma to 650. You go to an auction and people get caught up. And they startbidding wildly for a stock. They say 650, 700 . 700 in the back . Right side, 800. 800. Thats what it is like with nvidia. Look at bed, bath 340 billion market value. Becoming quickly one of the Biggest Companies in the country. Market cap wise. Make its move. Not quite back to the highs little bump up there there are a lot of charts like that. Thats softbank. Yes thats the softbank option buying almost every stock yesterday, on on lets say i saw awe series of charts yesterday, all day, melissa had it i think it was a guy, im sorry if im wrong, maybe tim, whirlpool, the chart looks like a major biotech that just discovered a cure for lung cancer. These things are crazy what is going on with anything in the home whirlpool, black and decker. You look at that thats just thats a washer and Dryer Company i spoke to what about fedex . Talk about look at that move. I see you fedex, and i raise you u. P. S. Yeah. Bring them both up i spoke to the ceo of whirlpool recently. Fedex, we were talking it is over there. Look at that. Look at that thing. There is a lot of stocks like that a lot of stocks. Even though, david, were headed into an election, were in allegedly a recession, unemployment might spike and look at this u. P. S. Is also not as good as fedex up 72 . Not as good as fedex. Well, then, fine, david, ill take that. Thats my hand. Im with you on a new one im working on ford motor. I see a turn dont smirk at me. Dont you dare smirk at me, david. I was looking at ford f150 used, these things are carrying their value. Maybe a turnup there but, you know, look, autos are on fire. Used look at carvana. It is called carvana you see carvana, you have nirvana. Thats what this market is about, finding the next carvana. Peloton, carvana, it never stops. It doesnt. Can we see the chart of carvana . It is scary. Look at that thats a beautiful chart, jim. Thats a thing of beauty. I find a lot of carvana and not very many oil companies. No. Oil still uninvestable let me know when it isnt. How about small banks regional banks talk about dogs. Holy cow not to just rant, but, carl if youre bed bath, over 20, if youre a growth stock hound, this has got to be the greatest time you had since 1998. And it is incredible given how many things are going wrong that people just will pay up for lithium motors, lithium. If they call that thing, i dont know, detroit motors would be great, lithia is a little town in oregon where my daughter lived, so i know lithia, car max, autonation, the used car market is so hot, why . Work at home and theyre not going back well, they are going back. Theyre trickling back. People will eventually go back to the office we said many times, there will be a percent of the workforce that is at any one time at home. But the idea that people are going to be staying home forever is not you werent saying that. I have pay chex on tonight. They reported a disappointing quarter, the numbers are down, but they have a work at home program and if you have a work at home program, youre not going to lag if you look at the crowd strikes of the world, talk about disappointing, look at crowd strike as a company that is just at the forefront o cybersecurity for work at home these are the stocks that are just, oh, wow. Carl, this doesnt this is once in a lifetime yeah. No, i know i think goldman yesterday went to 176 on crowdstrike, jim, and speaking of good looking charts, youre probably watching costco today, barclays to overweight. Theyre talking about pretty not easy comps, but doable comps. More room for margins to expand. Potential for membership fee hike maybe another special dividend in the near term, all the positives that paid off over the years. That conference call, rich galanty, the cfo, hes fabulous, he gets the question about special dividends like hes going to announce it on the call hello. I like the fact that theyre going to open a couple in china. What i really love about costco is the wide aisles and they were the first ones to say masks. They were very worried when they said, you know what, were going to make the people who work here and the people who customers, david, wear masks, okay . Well, you know what happened they ended up gaining share. Those people like to shop in a healthy environment. Yes you know, david they do let me show you something ill show something. Look at this see this dont cry for me i wont you wear it everywhere except that set, i should let people know all around the building. We all do. But do you at your desk as well . Yes. You do . If there is anyone that comes into my office, i put it on instantly. When youre alone in your office, you might keep it off. Thats the one time you can do that. When youre absolutely alone you can you dont need a mask, right . Thats not when youre alone but when anybody comes in your office of course i put it on when todd comes in, regina, executive producers, immediately put it on. Todd comes to visit you periodically. 7 47 typically i put the mask on is fast, it would make your head spin. I keep it here and bring item. I have respect for the other people the newness honeywell sports mask, i think it helps you got to get honeywell sports mask every time it is in stock, it is sold out instantly. Ill keep that in mind. You probably wear a flimsy one. I war my squawk on the street mask two layers has this nice little thats very good. Very good. I wear the n 95 on the plane, and another mask on top of it in order to protect other people. I wear goggles and gloves. You wear goggles . David, some msnbc guy got it through his eyes youre going on a plane yes i know a lot of people who have worn goggles on a plane, jim it reminds me, we have this upgrade of seaworld today, Credit Suisse to outperform, at 13, now at 30. What do you think is behind that theyre talking undervaluation, is there a sense if everybody behaves, the way you are just now describing, that we can gather in large places like that yes further reopening on the slate, air traffic trends as you mentioned, carl, looking better. There is an understanding renewed potential for incremental cost savings a lot of places, dont be too cynical or david will think this is cynical, a lot of companies are using covid as a way to be able to trim labor okay and when covid is beaten, you think those. Will come back you put them back . No. A point we made a few times, youre right i heard it yeah. Thats seaworld. Yeah. It is not shamu. Theyre in the giving shamu a break. Shamu saves. They see a way to cut their cost structure and realize that people are very productive, that they dont need as many people as they previously thought, and there are layoffs that have taken place and i dont think you can expect those people wil. More dolphins, fewer people. More dolphins, fewer people. It is a very interesting upgrade, it is called changing tides. I like that. Prince of tides. A lot of people are saying people are starting to travel again. There is no business travel. Most people do not want another person from another company to get into their ecosystem and that Still Matters you dont want the other thing that is happening, if you look at the New York Times compiles a list of colleges, and covid, and do you want those people coming back from thanksgiving i think that is going to be at the crux of what we have to worry about, there are many of these are asymptomatic, like the Tennessee Titans i remember the titans. Yeah. I think thanksgiving could be problematic with all the kids coming back from college. Youre at the front line, david. Well see well take it a day at a time. I dont want to jinx tufts. No, theyre doing great theyre doing great. So far, so good. I thisnk all the parents dont want their kids back like heisman, stay where you are. Love you, love you there are some themes that are working. Ill tell you one theme really working is increasingly plantbased. All the big food companies, it is a plantbased moment. No matter how many times people cut numbers beyond meat, it doesnt quit it just doesnt quit beyond meat, plantbased conagra is endorsing plantbased. The millennials are the main shopping people these days and they like plantbased. Look at that. Yes the meat piper today, 130 to 178 on beyond meat. It is not the first price target increase in recent days. Oil, again, leading, sector up 2 to bob pisani. Good morning, bob. Good morning, guys. Happy tuesday. Nice start to the day. 5 to 1 advancing to declining stocks modest move in the s p it didnt look that strong the ad line really looking good these days down to about 3 to 1 as we open a few days and as carl mentioned, Energy Leading nicely here, banks, these are all associated with cyclicals, reopening to a certain extent materials great month in september. Industrials strong and tech is lagging. If you look at the megacaps, obvious reason for this, the u. S. Release of a u. S. House antitrust report here that was negative on big tech and alying more investigations are coming you see modest declines here i dont think thats the really big issue here i think the reagan rel big issu the markets is the stimulus package and what is going on with that. Theyre starting to get concern here Christine Lagarde was out this morning saying there is a second arm to the recovery in europe, meaning the v recovery that were having is turning into a w because of the second wave that were seeing over in europe. Shes concerned about that shes calling for more stimulus. Powell has repeatedly called for more fiscal support needed hes going to be doing he was doing congressional testimony a while ago. Central bankers seem very worried about this cliff effect from any end to government support. Pelosi, mnuchin supposed to talk again this morning the traders are getting nervous about this the markets are holding up on several themes several subthemes out there, besides stimulus there is this idea that there is less chance of a contested election that may drag on for months afterwards. Thats holding up the markets. If you look at the vix futures, we noted for a long time, a spike going into the elections the vix futures are flattening out a little bit in the last couple of weeks. That lends support to the idea there is less anxiety post election out there this is the vix futures curve. You see it spikes up in november, a little bit, and then moves down this is, again, a little flatter than it was several weeks ago. So maybe some less chances of a contested election, calming things down a little bit there is also another one out there, what i call the post election chatter there is this meme out there of this vague hope for rotation going into small caps, going into value names, if after the elections you get a democratic sweep, and there is a big stimulus package, post the stimulus package were talking about, this is a vague hope that exists out there, there is a mini rally in the last week in this group, the small caps and the value are modestly outperforming the growth and the big caps, the s p 500. I would not call this terribly statistically significant given how noisy this can be on a daily basis. Right now, this whole idea that maybe well get some big stimulus story out there is a little bit of a pipe dream now for the moment, i would say that the key thing that has happened here is the do nothing investor is winning the day we are in the middle of the trading range in the s p 500 think about this, for the last three months, we have been 3200 to 3600. Where are we right now were exactly at 3400, in the middle, growth is still generally outperforming value. But large cap is generally modestly outperforming small caps, but i wouldnt say any of that is terribly dramatic. Overall, i would say the do nothing investor simply staying right in the middle, holding a broad portfolio of stocks are the ones that have done best so far. Certainly picking value over growth, small caps over big caps, none of that is trbl lyte outperformed back to you. Bob, thanks s p now slipping into the red. Watching yields as well. To Rick Santelli this morning. Hey, rick. Good morning, carl before we get to yields, very quickly, we had a 67. 1 billion trade deficit for the month of august, the second worst ever to 92 when Record Keeping began. August 2006 is the worst level, minus 68. 27. It merits looking at this. The service surplus was the smallest in eight years. Merchandise deficit all time record we moved 6 higher than last month on this particular deficit. And imports were just through the roof almost 240 billion, up over 3 now, lets go to those charts. Look at intraday of 10s. We have come off a bit we briefly very briefly touched these 78 level really the key is junes close of 90 basis points lets look at twoday of 30s, reached as high as 160 Pay Attention to the june high close of 166 in the march i hhih close of 180 you see both 10s and 30s, you see the yields im talking about and some of the significant highs of the past. Finally, 10s minus bunds, i like to monitor this, well over 200 before covid however, with our yields moving up, 10s minus bunds moved up close to 130 as you see on this midmarch chart. We havent been that wide since covid. Threeday of the dollar index, one would think it would do better considering what is going on rates it isnt as to the motivation, buying stocks or seeing yields go higher, bob has his theories many believe when you consider the age of the president , how quickly it seems to have recovered, thats pretty optimistic carl, jim, david, back to you. All right, rick, thanks talk to you in a bit Rick Santelli. Were watching some of the components on the dow here boeing is in the lead as Credit Suisse ups its target to 184 apple is the laggard and with that dow holding on to 64 points if we dont get the support, were just going to have to borrow that much more money an we just need to get from here to there. We have not asked our employees to take any pay cuts or do any furloughs, any layoffs, in our history, so im proud of the fact that once again we can be different, avoid furloughs, avoid layoffs, and you know, cut pay rates, which i dont like to do, but its a shared sacrifice, and this is the kind of company that i think is up to that task. Southwest gary kelly this morning on squawk box. Hes being modest, jim not only have they got furloughed, theyve never furloughed or cut any jobs in their 50 years of flying, and he is foregoing his base salary for the next year. There are very few executives that people should not be cynical about. I think that what hes done is remarkable his predecessor, too i mentioned to david earlier, i know that people in twitter said i got a beatdown from david but i hes my friend, but when gary kelly says that things are bad, then secretary mnuchin and Speaker Pelosi should focus on it, because hes the best of the best and its bad for him you can imagine what its like for the other phil lebeau often speaks to . Jim, without a doubt. You know i was in no way impugning his credibility or the fact you said its important to listen to him. The question is whether or not he will be listened to, because this is not new. And there i agree with you. I guess i got excited because when its so cut and dried, and carl, when its so cut and dried and gary kelly is so good, you kind of feel theyll unite in washington, but, and the stocks are up in large part i think because there is a sense things are Getting Better and traffic, but when it comes to actual employees, theres got to be someone, got to be some people in washington who just say lets put aside our differences. We dont want airlines to go under. We dont want these people to suddenly be fending for themselves, because thats not our countrys way, but i think that in an election year, i guess its every man for himself and woman for herself . I dont know its discouraging. Yep well the International Trade group today has some numbers, jim, about cash burn in the second half of this year, at 77 billion, that would be about 300 grand a minute grand a minute woo for the International Industry inyy prtg n [o just a stunning amount ofy thi leveyy s p gainers this morning levered to a grad uld economic reopening. You have some casinos in we made usaa insurance for this season. And the veterans that never quit on their team. When being a fan gets tough, and stretching your budget gets even tougher. Our agents put in the time and legwork for you,. So saving on Auto Insurance is easy. Because saving a little extra goes a long way. Usaa. What youre made of, were made for. Energy,y thats why Td Ameritrade designed a firstofitskind, personalized education center. Oh. Their awardwinning content is tailored to fit your investing goals and interests. And it learns with you, so as you become smarter, so do its recommendations. So its like my streaming service. Well except now youre binge learning. See how you can become a smarter investor with a personalized education from Td Ameritrade. Visit tdameritrade. Com learn visit tand sweetie can learn coloryou just be. Gentle with the pens. Okey. Okey. I know. Gentle. Gentle new projects means new project managers. You need to hire. I need indeed. Indeed you do. The moment you sponsor a job on indeed you get a short list of quality candidates from our resume database so you can start hiring right away. Claim your seventy five dollar credit, when you post your first job at indeed. Com home. Back in just a moment. Lets get to jim and stop trading. B of a piece, top picks for the holidays bed bath, tapestry, target bed bath, can you imagine how backed they are . Mark trenton was the show last week and his vision is a brilliant one. David, im willing to take you the one at wachun this weekend, both wear masks. It will be a blast we havent done it yet. Now we cant, because i dont want to be that close to you eight feet is the new rule 30 feet, whatever this is so anyway, carl, when you hear bed bath one of the ones you want to buy, this is the shorted 60 of the float is short. What are people going to do . I mean, theyre going to buy sheets and hang themselves pipers got a new survey of teens. Im sure you saw this, jim, nike dominates close, ulta dominates beauty and amazon no competition on shopping websites mary dylan of ulta made an incredible move in staying alive versus the sephoras versus everybody, look at the department stores. Shes remarkable and doesnt get nearly enough credit for what she accomplished its abamazing company by the way their stuff is good i ordered online how about tonight, jim . Generac, you can give power back making it so that you get the money back and making more power through solar. It is the future its the way kind of carbon free im not, its better than coal, im just putting it out there. Its better than coal. Yes trying to make some cases here i see, yep, jmp initiated outperform 285 i know, incredible. That will be a good one to watch. And david see you tonight, jim. I threw my mask at david, i didnt mean to [ laughter ] mad money 6 00 p. M. Eastern. Good morning, everybody. Welcome to squawk on the street. Im Carl Quintanilla with david faber. Seema modi is with us watching the markets vacillate between the red and the green. Our roll back begins with the return to the white house, the latest on the president s health condition, after leaving walter reed, and how todays trade might be impacted. The news there, progress being made on a stimulus bill. House Speaker Pelosi and treasury secretary mnuchin met for an hour yesterday. And bidens tack plan, why hes drawing the line at 400,000 and what it means for your money well begin with the latest on the president s health. Eamon javers is in washington this morning some headlines crossing today from the New York Times that the white house might consider a nationwide address well have to see. Yes, we will have to see, carl no confirmation of that from the white house just yet but were going to see how the president manages to govern while still suffering from the coronavirus the white house says theres going to be an additional round of treatment medically for the president today. He wont be out of the woods they say until monday, so ihes going to be monitored by the medical unit the president has to figure out how to deal with a staff thats been hardhit now by the coronavirus. He himself and his wife suffering the effects of the coronavirus today. Theyve told us, the indications are that he intends to continue to release some of his videos and communicate via twitter, which weve seen this morning but a National Address would be something new. Were going to monitor that and see if we can get any confirmation from the white house thats whats going to happen eamon, its david curious what your sense is in terms of the work that will take place in the west wing, what can take place given how far the virus has spread there, and whether theres any sense as to when the president s actually going to be able to get back out on the campaign trail. In terms of travel, we just have no idea at this point, but it is sort of a Virtual Campaign from the white house, over the past 48 hours, what weve seen from the president s twitter feed has been emphasizing those Campaign Points to his millions of followers, so hes not totally sidetracked in terms of campaigning. In terms of inside the west wing, a lot of statuffers are working from home as many as can but there are certain functions that have to take place inside the white house, including security on the first part, and then also some National Security classified information that happens is handled inside the white house. That stuff cant be taken back to peoples houses in the suburbs or their apartments in the city that has to happen at the white house, so there are staffers who do have to be there. One of the Big Questions is going to be whether the president leaves the west leaves the residence and goes over to the west wing. Remember, the oval office and the president ial offices are in the west wing, which is a separate building almost entirely from the residents itself theyre connected by the colonnade, but the president would have to walk down the colonnade out of doors effectively to get to the oval office in the west wing, where the rest of his staff are working. No indication thats going to do that we are told that he might hunker down in the residence. All plans are subject to change without notice eamon, are we expected to see the president after his Home Infusion of remdesivir, any expectation that we could see him and how will we get an update from his medical steam . Theres nothing on the schedule today yesterday the medical team, they brought the White House Pool reporters who travel with the president over to walter reed for a couple of hours, the pool reporters had no indication whether there would be a briefing or not and they did announce that 3 00 p. M. Briefing that we had yesterday. We might see Something Like that again today from the medical team, but the pool is not at walter reed, the pool is at the white house so well see if the white house physician will come out and brief reporters at some point today. No indication well see the president at all today except for the report from the New York Times theres a possibility of a National Address. Those possibilities have been floated and not happened in the past, so were going to need to get some confirmation thats where theyre going. Eamon, thank you. Meantime, still no deal on a possible fit pandemic relief package as Speaker Pelosi and secretary mnuchin failed to come to terms ilan mui has the latest. Reporter the good news is they are still talking and the bad news, we are still waiting the treasury secretary and House Speaker are scheduled to have another phone call today, as you mentioned they were on the phone for an hour yesterday, and they appear to be getting into some of the details of what exactly a deal would look like, still unclear, though, whether there is time to have a breakthrough before the election. On the other hand, when it comes to the Supreme Court, Senate Majority leader Mitch Mcconnell said that republicans are full steam ahead. Th Amy Coney Barrett are scheduled next week for four days and two of the Committee Members who contracted coronavirus say they are feeling better and expecting to be ready to go. Democrats are raising objections over health and safety concerns but republicans argue anyone who doesnt feel comfortable being there in person can still participate virtually as they have able to do since the start of this pandemic look, we have months, months of experience governing this way while protecting health and safety here in senate. This body will not cease to function because democrats are frayed they may lose a vote. Reporter mcconnell has said he is committed to ensuring that these confirmations are fair, thorough, and dignified. Guys elan, a couple days ago the speaker put out a list of basically five areas of disagreement with the treasury secretary. Can we say that progress has, more progress has been made in one of those areas than the other four reporter yes, we just dont know, carl there has been sort of radio silence other than to say that they have speaking about specific numbers, so that does give some hope that there is some progress being made i will say that this is the strategy that mnuchin and pelosi have taken before, and successfully this is what they did when they were negotiating c. A. R. E. S. , this is what they did when they were negotiating the second round of ppp what they did negotiating the government funding bill that would keep the lights on through december 11th. The two of them get on the phone and feel like they can hash out a deal the question here is, are they the only two who matter in this case we have mark meadows in the mix, the president newly back from the white house perhaps feeling emboldened and wanting to take on a big challenge, whether its the Supreme Court or whether its stimulus, so well have to see how that changes the dynamic, but we do know that mnuchin and pelosi have a good working relationship, and that should serve them well, if these talks progress ilan mui with the latest on stimulus, thanks more clarity on joe bidens tax plan and the 400,000 line in the sand he intends to draw on defining rich robert rich explains good morning, seema joe biden is saying the wealthy would pay more of their new share, those who earn more than 400,000 a year. By National Standards people who make more than 400,000 a year are an elite group, represent the top 1. 8 of house holds, they earn 25 of the nations income now they would face several tax increases from a higher income tax rate and new payroll taxes to wiping out the business income deduction, but in high cost states and cities, 400,000 may not be considered all that wealthy. The campaign hasnt said whether that money will be combined in total Family Income or individual income, and whether its going to be adjusted for inflation, so over time, that could capture more taxpayers to be in the top 1 of earners nationally right now you need about 515,000 in income in new york and new jersey you need at least 700,000 a year, and california its 660,000 and in connecticut, that is the highest, you need 827,000 to be in the 1 . An analysis by financial samurai, a Financial Planning firm, found that a family of four with 400,000 in income in a major city would be able to afford a 2 million home, a Toyota Highlander or similar car and two staycations and one road trip per year, and they would only be left with 36 a year in cash flow. Guys, back to you. Robert n comparison to past candidates or politicians, how does joe bidens threshold compare . Is it low or high . Reporter its higher than the most recent comparable which is then candidate obamas plan, which was 250,000 in income, so this is quite a bit higher and thats because he had a lot of pushback, back then in 2008 for 250 being too low. You had professors saying look, thats what we make in Household Income were not rich so its quite high relative to history. The question is, is it too high to raise enough revenue . And robert, a completely selfinterested question, although one thats important to residents of high tax states you know where im going if they go to 39, 6 on the top rate will they lift the tax rate on the salt deduction . Bidens plan specifically lifts that cap so that is a giveback to the high earners. Question whether other democrats particularly in the senate decide to say look, its going to be a 20,000 cap or something a little bit higher or somehow adjust it for the very high earners not to give them a break because they may need that revenue but for now, david, he repeals that limit on deductions for salt robert, thanks. It will be a topic for the next four weeks at least as we get into the election. Robert frank on tax policy well talk a break here. Markets trying to hang on to some gains and build on e th onemonth highs that we got yesterday. Yesterday. Nasdaq jus yeah, thats half the fun of a new house. Seeing what people left behind in the attic. Well, saving on Homeowners Insurance with geicos help was pretty fun too. Ahhhh, its a tiny dancer. They left a ton of stuff up here. Welp, enjoy your house. Nope. No thank you. Geico could help you save on homeowners and renters insurance. Neverzadavid fo costin go away many Small Business owners never plan for who could own or manage their business if theyre able to do so. Only half who do have the plans in place are highly confident their business will be able to survive. Is your plan documented somewhere . Have you expressed your plan to other people make sur im a physician, but my dream is to help young women feel empowered. Id like to have online courses teaching them body positivity and selfconfidence. But when covid hit, i needed a Financial Plan to make it a reality. Without andrea, my Financial Advisor from northwestern mutual, it didnt feel possible. She really put me at ease. Andrea has my best interests at heart. She protected my dream. Things iny short. David is bidens tax policy the dow is up 89 points. David kostin is with us to talk about it good to see you. Carl, thanks for inviting me. You have approached this question a couple of different ways and even this week you say the biden tax plan would cut earnings by about 9 but there would be some offsets and some caveats. Can you just explain where youre coming from sure. First of all, i just want to underscore the fact that ultimately a vaccine is really more important than the election its a medical problem that has disrupted the economy and society and ultimately there needs to be a solution and a vaccine really is the most important issue. But if we want to move to the subject of the election, which is where so many Portfolio Managers are focusing their attention now, the way i think about that is sequencing, carl thats the most important concept in understanding the various proposals, because the consensus expectation on the polls and the betting markets is that youre likely to get a blue wave result from the election. And the market basically is pricing that so i think the market trades around this level, if in fact that transpires and you get that kind of an outcome the reason for this is a bunch of offsets theres fiscal spending that is one area we can focus on theres the proposal and the likely tax implications, and then theres the trade consequences so those three things kind of have to be brought together, and when we look at that, actually the timing of potential tax increases becomes critical so give me just a moment for a second, if you think about it, carl, from a fiscal stimulus point of view, that is additive to earnings. Theres more revenues for corporations the taxes basically would reduce some of that, and the timing when that takes place. So one of the assumptions were making right now is that that may get postponed into 20222023, phasing in as opposed to impacting earnings in 2021. So that, carl, becomes a big topic of conversation. Interesting when you say that markets are starting to price in this blue wave, do you think yields are part of that do they reflect that right now and what do you make of Prediction Markets which dont necessarily agree with some of the spreads in the polls right, so theres a couple issues there yes, i would expect or i would attribute some of the backup in rates in the last couple of days, the expectation of a fiscal stimulus, very larg fiscal stimulus is certainly starting to creep into peoples earnings models and forecasts, including our own, and so that would be an upward push on the, on rates theres also uncertainty around the exact timing of this potential tax increase right, theres taxes and i know in your previous segment, theres proposals on marginal income taxes, Corporate Tax rates and Capital Gains rates, so all of these kind of interplay in the economics market all of these embedded Capital Gains part of a bull market over the last one, three, five, ten years, if you have an increase in Capital Gains that doubles, that does make it somewhat optimizing to be a seller of stocks obviously uncertainty when that may or may not take place, exactly what it will be. Thats one area on a personal level but in terms of individual ownership, but if you look at the Corporate Taxes which is really where most of the focus is right now, the impact as you said earlier could be as much as a 9 diminution reduction in profits, and on the other hand more than offset frankly in terms of the amount of fiscal spending, so put some numbers around this, baseline forecast for next year, assuming a divided government, basically the status quo, doesnt necessarily mean President Trump is reelected but rather a Different Party controlling the senate and the white house, that would be about 170 for next year of earnings but if you have our baseline assumption, assuming a blue wave election, and a layering in or a sequencing of the tax increases, earnings actually would be higher, about 179, and that actually would be increasing the growth rate for earnings next year the market is certainly 23focus a lot of attention on this issue. I wonder, david, whether or not you think the trajectory of buybacks and dividends is changing ill get to my next question in a second that was a big dynamic and you grew attention to it earlier in the year anecdotally were seeing changes but does it add up to much its an excellent point the buybacks are likely to be at a much reduced level. Basically they dropped dramatically from 2018 and 19 this year, of course, with the coronavirus reduction in cash flow, for so many companies, the Federal Reserve indicating on the c car that the banks for example precluded from buying back stock, things like that, have reduced the amount of buybacks which is a key issue, because in a world of demand and the flow of funds for u. S. Equities, the corporations and buybacks were the largest source of demand for every year for the last decade. This year, its actually coming from Foreign Investors the foreign buyers particularly in a weak dollar environment, that is typically associated with incremental buying by nonu. S. And Foreign Investors thats one area were seeing sort of placement looking out into next year, relatively muted from a buyback perspective. Dividends likely to arise in the payer of dividends are the tech companies, a good amount of cash flow and we are expecting increases in dividends really in those areas that some other areas across the market. Thats how we think about it real important is the demand from Foreign Investors at this junctu juncture david, part of that story includes the tax cuts that incentivize so Many Technology companies to repatriate back to the u. S. , capital some of it was on dividends and investment, hiring, jobs assuming biden wins the presidency, what happens to all that cash . Does it go back overseas to tax haven countries like ireland no, much of the cash as you indicated came back at a onetime chunk, some of it was used for capital spending, some used for buybacks, some used for dividends, different forms investing for growth not likely to necessarily go overseas the source of it is the Technology Companies generate nearly 60 of their revenues overseas so first of all, in order to have that, if you issue them on the Foreign Investment tax rates, you actually have to generate the revenues overseas, so theres also part of the proposals, if you break down the proposal by Vice President , former Vice President biden, one of them is to raise the actual Corporate Tax rate, sort of the statutory federal Corporate Tax rate, proposal to take that from 21 to 28 , but theres also a gilty, gold intangible tax rate as well, some taxes on that International Income so its not as though because you generate the revenues overseas youre no longer subject to the taxes theres policy proposals that would, you know, take that some of that revenue and tax. Theres different approaches i think its important to understand that the tax rate is not so much the statutory rate its the effective rate that is relevant effective rate. And the effective rate for corporations in 2017 and before averaged around 27 . By 27 and it dropped after the trump tax plan to around 19 so obviously all ofthat incremental revenue, all that margin in yours to the equity investor, that is one of the reasons for the bull market, in my opinion, or one of the reasons over the last several years its really much more revenue drops to the bottom line, in terms of earnings now under the proposal, from biden is to raise that tax rate to Something Like 28 , kind of reverse that statutory rate. Now, its unclear as i said at the very beginning with answer to carls question that actually there may be an intermediate, maybe it only goes to 25 . Maybe it isnt applying to 2021 earnings maybe that gets phased in to 2022 or 2023 a lot of uncertainty around this, and this is really an area of focus for many investors, and appropriately so, because that incremental revenue either going to the government or going to the corporations and investors makes a difference from a valuation perspective. Yes finally, david, you know, you talk about vaccine hopes, and weve talked about the creep up in rates both of those things are not necessarily bullish for longterm growth or mega cap tech or do i have that wrong no, i think the point david made earlier, the s p 500, use that as a metric peaked about a month ago, early september, at the same time that the probability, based on the good judgment of that survey of so many forecasters, the probability of a widely available fda approved vaccine, by the end of the first quarter, gone from 40 carl and climbed as high as 71 on september 2nd, when the market was, hit its peak, looking back today its around 47 , its dropped quite significantly, and so part of this, my very first point i want to underscore again, this is a medical issue that has disrupted the economy and obviously markets, et cetera, in the bear market, that needs to be solved eventually, and whether that timing of that is so essential in terms of the economic path and the path for earnings, so thats sort of the vaccine and how that interacts with the ability of companies to renormalize the economy to get back to normal or to go on the road back to normal. That would be a beneficial component before supporting cyclicals and more value stocks, but in the absence of that, its the growth story that continues, companies that are basically pun intended here immune from the virus that have the benefits from working, people working from home or ability through the internet and various other things that theyre not as subjected to the facetoface parts of the economy, those Companies Continue to do quite well and likely to take place until theres a vaccine. So i think thats a key issue and the higher rate you reference is basically the valuation pushback, why you get the market trading around 3,600 at the end of this year, 3,800 by the middle of 2021. Right, a lot of those products were using at this moment, david, because in fact, the vaccine is not here yet. All good points. Great notes this week. We always appreciate it. Thank you. Thank you david kostin, Goldman Sachs dow up 111. Etf spotlight, ticker vcr on a bit of a recovery tear since the covid crash in march up over 60 , since april 1st, fueled by a rebound in although that sector remains under pressure even this week after norwegia incomparable design makes it beautiful. State of the Art Technology makes it brilliant. The visionary lexus nx. Lease the 2021 nx 300 for 359 a month for 36 months. Experience amazing. At your lexus dealer. Street still ahead. Eg n y its not too late to street still ahead. Eg n y hmms and ahhs heard incall. Involved in cnbcs were back after this. Welcome back, everybody. Im sue herera here is your cnbc news update at this hour. Near dallas, a white Police Officer has been charged with murder following the Fatal Shooting of a black man this weekend. Officer sean lucas accused of shooting Jonathan Price while responding to a disturbance call prices family members saying he was trying to break up a domestic disagreement and would not have escalated the situation with police. Hurricane delta continues to strengthen it is forecast to make landfall in mexicos yucatan peninsula tomorrow as a category 4 storm after that, though, delta is expected to come ashore again in louisiana on saturday, with category 2 strength. A britain and american and a german are sharing this years nobel prize for physics for their work on black holes, including the discovery of a super massive black hole at the center of our galaxy and new study shows american households with teenagers are more likely to have gotten covid19 infections. You can go to cnbc. Com to see how the pandemic has affected teen employment and also their spending you are up to date ill send it back to you, seema. Sue, thank you. The race for a Covid Vaccine continues this morning, as glaxosmithkline and verbaya announce their antibody treatment trial moves on to phase three. Here with unique insight mercks former head of vaccines, dr. Zoren christiansen, currently the ceo of sharps technology. Doctor, its a pleasure to have you on right now you spent 30 years at merck. Youve seen a number of vaccines successfully go from development to market. Your thoughts on the support of the white house is blocking the fda from new vaccine guidelines because it will slow down the time line, does that raise some concerns about the safety and efficacy of a covid19 vaccine so first, thanks for having me, and i dont think there will be any concerns with respect to the safety of a vaccine nor the efficacy based on what i am up to date on, several phase three Clinical Trials are currently ongoing, and just one example moderna has recruited and randomized 28,000 of the 30,000 patients they want to get into the phase three program and almost 20,000 have gotten the second dose, so we are, in my opinion, very close to have an answer if we have a safe and effective vaccine, and i say we will. But several of these vaccine candidates, doctor, in development require a twodose regimen. Does that create any logistical challenges, since you have to make sure that the individual comes back for that second shot . Yes obviously it would be highly preferred if we had one dose vaccine. Moderna and pfizer as well have the regimens so that will create some challenges and based on my experience, when you have to give more than one dose, you will always miss people that forget to come back or dont want to come back, or experienced a little bit of adverse events during the first dose and okay, i dont want the second dose. So that is logistics challenge definitely doctor, manufacturing where i know many of the top vaccine candidates and the companies behind them have already begun that process, but even more so, we hear a lot about transport, some of these will have to be transported at incredibly low temperatures is it a logistical or very difficult logistical puzzle to actually imagine getting this into the arms of billions of people yes, so i dont think it would be a huge challenge within the United States, but if you look at the global picture, there was some news i think it was yesterday where some airlines claimed that to get the vaccine globally, it would mean 15,000 747s filled with vaccines and for most vaccines, you have to have temperature control when you transport the vaccine, and that is sometimes a challenge as well, so it is a big logistics challenge. We talk a lot about vaccines, and i know you have an expertise in them, but id love to get your sense as well on the antivirals. The president obviously taking the Monoclonal Antibody cocktail from regeneron merck has a small hol molecule antiviral in phase three trials with how important are those going to be in terms of combating the virus . So i think obviously the preferred is to vaccinate and prevent to get the disease if that happens, i think its obviously great to have a couple of options where you can treat patients that are seriously sick from this virus, and the more options you have, the better you are off. So im really encouraged by what we have seen that we will see how it pans out in the longer term but do you think that President Trumps powerful cocktail drugs thats taking could that put more emphasis Going Forward on treatment over a vaccine, if this deems to be successful no i dont think any physician or Health Care Professional would prefer treatment versus prevention. Its good to have options when you get seriously ill, but to exchange that for a vaccine, i dont think that will ever happen all right, well a time line certainly in focus, dr. Christiansen, we appreciate you bringing your insight to us on this topic thank you getting some news on tiktok as we go to break. A u. S. Judge has set the date for a preliminary injunction hearing in that case stock slices. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. The dow is up 93. Fed chairman Jerome Powell speaking at the National Association for business economics meeting this morning Steve Liesman has the embargoed remarks from the fed chair he joins us now. Steve . David, thank you. Jay powell will say the recovery progressed more quickly than expected but say the u. S. Has a strong but incomplete recovery and say theres a risk that the pace, the rapid pace of recovery will slow, noting that the data has already shown signs of slowing from the rapid pace from may and june, all of that leads to what looks to be one of his main points in this speech, that theres a need for further support and specifically he seems to be suggesting the need for further fiscal support, noting that the fed has done quite a bit, but the recovery will be stronger he says if monetary and fiscal policy work together, and interesting point he makes about, to make this point before that theres more risk from doing too little than doing too much to the u. S. Economy, and his concerns echoe by the comments from Charlie Evans from chicago made the same point that the slowing pace could trigger recessionary dynamics on its own, where weakness feeds upon weakness, specific areas of the economy he pointed out, he said Business Investment is on a renewed upward path and Financial Markets have returned to what he calls normal functioning he says when you take the different factors about the unemployment out there, the decline in participation rate, some of the misclassification in there, he says the more realistic Unemployment Rate to look at is closer to 11 , not the official number of 7. 9 , and he notes that the downturn has hurt low income or low wage workers, minorities and women the hardest. Overall powell saying that the outlook is highly uncertain and depends on the course of the virus and the Public Health response david . Steve, thank you. Steve liesman. Good place as well to start with our next guest, former council of economic advisers chairman Jason Fuhrman joins us now. Certainly want to get to your editorial in the wall street journal about bidens tax plan, but just give me a Quick Reaction to what you heard from steve there in terms of the chairmans remarks look, i think its certainly the case that the economy is in better shape than we thought it would be in and also the case that the economy is in bad shape and needs a lot more than the zero fiscal support its getting right now, and so i hope pelosi and mnuchin come to a deal asap. You know, who knows, maybe they will, but do you really think they will . They can all hope for it, but they cant reason able to get there yet. I dont know what gives you the hope theres anything that can happen between now and election day for example. I think secretary mnuchins last offer was perfectly reasonable id love to see her improve, 400 a week for unemployment insurance, over 400 billion for states, 75 billion for testing. Democrats have already achieved a lot of their objectives, gotten the Trump Administration to move a long way to them now i think theyre going to need to move towards mnuchin to get this done. Yes, although do we think mcconnells on board already with the rest of the senate needed to actually pass something . I think if its passed the house with the support of President Trump, it will get 50 votes or 60 votes, whatever it needs to in the senate lets talk about Vice President bidens tax plan, which you wrote about in the wall street journal, and you reference the fact that gross revenues from taxes collected by the federal government right now are about 16 of gross domestic product. You think, well that is historically quite low you think it could go higher without harming the overall ability of the economy to grow [ muted ] yes, jason suddenly was unable to communicate well try to get jason back as quickly as possible. You saw his audio. Jason, youre back start the answer again got you. Go ahead im sorry about that. We were collecting 20 of gdp in taxes in the late 1990s, that was one of the best periods for Economic Growth and job growth, so i think thats fully compatible with a strong economy. Talk to us about timing, though, jason. I mean, an economy where were seeing an Unemployment Rate fall, but still around the 8 level, i mean, can it sustain a higher tax rate . Yes, absolutely, as long as its combined with a lot of effective fiscal stimulus at the same time. If you look at whats proposed in terms of things like unemployment insurance, assistance for states infrastructure, all of that is much larger than any of the changes to taxes thats why when Goldman Sachs economists looked at the plan, they said all in, including the tax increases, it would raise Economic Growth by one percentage point per year for the first several years after it was implemented. Jason, National Debt 27 trillion for the first time this week, up 4 trillion from the beginning of the year. When you say that you expect some of the gop senators to go along with a package that the president endorses, what happens to their concerns about the National Debt . The concerns about the National Debt are very variable and it depends on what theyre voting on, whether or not theyre concerned on the debt. I think some of them wouldnt vote for it, for exactly those debt reasons but if it passed the house, if it had the support of President Trump, i think youd get enough democrats, enough republicans that combined between them you would have support to pass it, and economists nearly universally across the political spectrum say right now is not the time to worry about debt right now is the time to worry about jobs and Economic Growth youre absolutely right we hear that from both sides, from the powells and the kudlows and you name it, but when does it i wonder, when do you think it does become a bigger concern . Is that a dynamic we get in the next 12 months opinion on that is more divided. I tend to be dovish. Im not as worried about im 100 sure well get to the debt this year. Im not sure we should worry about it a lot for the next five years. Id like to see whoever is next president paying for the proposal, not adding to the deficit and debt but i dont think deficit reduction needs to be a top priority in the world where Interest Rates are low i think we can take our time to deal with the issue. Biden talked about using extra income generated from his tax plan, jason, on infrastructure, but that will require the consent of congress, meaning hed need the democrats to take back the senate, yet the markets seem to be still working all of of this narrative youre seeing some of the infrastructure names like caterpillar now at a twoyear high your thoughts though on this plan i think there are, Vice President biden was, had great relationships with republicans he was often our negotiator on fiscal issues. If he has a Republican Senate hell be able to get less done than a Democratic Senate he could still figure out how to get things done and i think infrastructure would be very high on that list, if he has a Democratic Senate, that obviously opens up more possibilities for things like expanding investments and child care and preschool, which shouldnt actually be a partisan issue, but unfortunately has become more of one than Something Like infrastructure has been yes, thats funny its always infrastructure week. We never seem to get any infrastructure spending. Jason, what about Capital Gains . Ive heard Vice President biden discuss it, or at least i think i have where do they stand on that, and what are your expectations in terms of whether there will be an increase in Capital Gains taxes . Yes, the Vice President has proposed raising the Capital Gains rate to the ordinary income rate, which under his plan would be 39. 6 i see a strong case for raising the Capital Gains, im not sure id go all the way up to 39. 6, and my guess is i dont know, uhm, you know, a lot of democrats really believe in that, you know, others more skeptical, i think that would be Something Congress has to work out. And do you really believe that there would be a significant infrastructure bill passed in the early part of a biden presidency absolutely. Absolutely first of all, the Highway Program is normally a five or sixyear thing. A five or sixyear thing it just expired at the end of september. Under any responsible president or leader, we would be doing another five or sixyear highway now. Its a really Important Clean Energy component to our infrastructure as well something Vice President biden has long been passionate about i expect it to be towards the top of his agenda. And i would hope under President Trump, you know, we would do something about this too every week is infrastructure week you know, maybe we will get infrastructure during one of the weeks. Yeah. I just wondered, you know, you dismissed concerns over the deficit. You know, i wonder, does all the spending that is taking place this year, just numbers that we could never have imagined at the beginning of the year, carl mentioned what, 4 trillion added to the National Debt, does it make it easier to spend more money next year . I think in maybe some rational way it makes it easier to spend more money next year. A year or two ago, one of the arguments get against our debt level is it may be okay now. What happens when we gheetet in crisis and cant barrow to get out of it . That argument turned out to be completely wrong with very much more Borrowing Capacity than we realize yeah, i think thats going to to some degree create a permission structure and that will be a rational permission structure. You adjust your fiscal policy to the latest data. Jason, thank you. All right lets turn our attention to shares of beyond meat this morning. Piper sandler raising the price target thanks in part to a partnership with mcdonalds. Half of the teens surveyed eat plantbased meat o you may not expect the unexpected, but you can certainly take it all. The lexus es. Wow, this rain is bananas. Now available with awd. Lease the 2021 es 250 awd for 359 a month for 36 months. Experience amazing. At your lexus dealer. Toy yyy prtg yy right back. To welcome back to squawk on the street. Markets are flat on the day so far. You can see what the s p 500 flat on the day. Moving between positive and negative territory throughout the course of the morning. As we see yields continue to rise, with he see the more rate sensitive sectors performing somewhat in kind the ten year note yield right now 79 basis points or. 79 . The financials, for example, among the top performers again today, particular strength in the regional banks out there like Peoples United Bank and lincoln financial and the insurance kind of retirement side of things on the other hand, you have real estate again the big lagger. Now ill send it back over to you forrest of our program here. Dom, thank you. Were also keeping a close eye on the theater stocks which are bouncing to day. Lets get over to Julia Boorstin theyre planning to keep the 80 of the u. S. Theaters currently operating to keep them open cine where cinemark is up yesterday those stocks plummeted this after regal parent cineworld is shutting down all of the u. S. And uk theaters indefinitely the shares are bouncing back as well theyre up 10 after plummeting 36 yesterday. Carl, over to you. All right thank you very much. What a story in the entertainment business in it meantime, take a look at sonos and logitec this morning, getting crushed. They remove all the third party speakersy y pyy keeping your oysters growing while keeping your business growing has you swamped. py you need to hire i need indeed indeed you do. The moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base so you can start hiring right away. Claim your seventyfivedollar credit carvthat selling cars 100 online wouldnt work. But we went to work. Building an experience that lets you shop over 17,000 cars from home. Creating a coast to Coast Network to deliver your car as soon as tomorrow. Recruiting an army of customer advocates to make your experience incredible. And putting you in control of the whole thing with powerful technology. Thats why weve become the nations Fastest Growing retailer. Because our customers love it. See for yourself, at carvana. Com. Good morning it is 8 00 a. M. At apple headquarters