Transcripts For CNBC Squawk Box 20240712

Welcome to squawk box. Im becky quick along with joe kernen and Andrew Ross Sorkin. Futures are indicated higher this morning, triple digit gains for the dow up by about 167 points but yesterday was a big down day for the markets. Dow was down by over 400 points, 1. 4 the s p and nasdaq done evz nasy even more. This morning s p indicated up by about 25 and nasdaq looks like it would open up by over 100 points fairly significant obviously everybody watching what will be happening with the stimulus talks with the deadline that nancy pelosi has said for later today. Lets take a look at the treasury markets ahead of that, you will see that the ten year looks like it is yielding 0. 777 so a little stronger yields for the treasury markets right now but andrew, obviously washington is where people are watching and that is exactly where well go because House Speaker nancy pelosi and Steve Mnuchin are saying that they are making progress in their latest stimulus talks with time running short of course to reach a deal before that 2020 election and ylan mui is joining us with more on all of it and today is the deadline democrats have set but as the white house put it, nobody is popping shachampagne t yet. Nancy pelosi and Steve Mnuchin were on the phone for 53 minutes yesterday and will be talking again today. The white house says that they are narrowing their differences and that lawmakers and their staff will be working around the clock to resolve them. But she also said that the divide goes deeper than dollars. The democrats and administration dont have the same values she said and white house chief of staff mark meadows agreed with her. Right now again, it is not a number as much as it is the underlying policy that is a problem. And if there were areas that we could invest in that would provide Growth Opportunities for the economy, for example monies in infrastructure, money in bringing back manufacturing from china to america the other problem is that the white house and Senate Republicans may not have shared values either. The senate will be voting toda on a very narrow standalone extension of the Payroll Protection Program this measure is not expected to go anywhere, but it is something that republicans can sort of unify around and rally around before the election because, guys, right now it is not clear how many if any republicans would support a deal if President Trump stuck with the democrats. Are we really expecting tha well hear something today, i mean really really or will this be, you know, were making progress and maybe we should do it another 48 hours . Weve been burned before on many different deadlines so im hesitant to say that this is the absolute final day. But clearly lawmakers want to get back to the campaign trail they dont want to have to take their members, you know, bring them back to washington in the final days before the election the senate is in session this week so it makes sense that if something is going to happen, it would happen this week they are still talking so that opens that little window of hope for them to reach some sort of agreement. But you know, this is not just a negotiation between the white house and between democrats. Senate republicans are also Major Players in this and there has not been concerted effort to reach out to that chamber so far. So there would still be quite a heavy lift to be done even if mnuchin and pelosi were able to reach some sort of deal today. Did i hear that correctly, did mark meadows actually say that they want to ram an infrastructure bill into the middle of this, the infrastructure bill that nobody has been able to agreeon in th last ten years in washington i think his point was that there are places where they feel that they can spend money and have it be spent wisely in a way that does help the economy they do sort of agree on that. The point there i think he was making is that exactly how to do it, that is where they are getting bogged down. They have come close in terms of the top line number, but it is the language that is tripping them up. And did nancy pelosi just realize yesterday that there is a difference in values in these two parties, that they have different objectives that they would each like to agree like no kidding. Right so i think that initially the stumbling block was just you they were so far apart in the money that they couldnt even have the conversation about the language you could also argue however that as the white house does, that she has been moving the goalposts, is it about the money, is it about how it is spent, in a bill that will span hundreds of pages, certainly there is always language that you could quibble over so is there really an interest in the part of the democrats in finding a solution here or is this more of a political gamg bit a gambit and that has been frustrating both members on both sides and also obviously voters. Well of course be coming back to you a lot i imagine throughout today and well see what were all talking about tomorrow morning along these maybe same lines or maybe there will be resolution who knows. Joe. A point of how close we really are so i want you guys to come back, but it is empty here basically so byom, that is bring your own milk for me if i want coffee so i went to get some yesterday and now i moved the front milk and go into the back where the Expiration Date is later, you can do that. And you know what i got yesterday . November 2 i have december which makes me a little concerned because you have what i have a december i just looked at it this morning. How is that possible . That ive never seen i thought i was really getting sounds like powdered milk anyway, november 2 and when i got it yesterday, i was like oh, rmy god, there is a election the next day. Lasts until the election. So we are close we are as close as milk souring. Byom anyway, in other political news, President Trump and former Vice President biden will at times have their microphones cut during the next debate when one candidate is given a chance to provide a two minute answer, miss opponents mihis ml be muted the debate set for thursday at 9 00 p. M it will be moderated by Kristen Welker and it will run 90 minutes. And i momentarily thought that i would ask to do our shtick where one of us starts talking and i he pretend but people get confused and it looks like we had technical problems we dont need to look like [ muted i think it is a good policy by the way i do i thought for us it is a great policy i actually think no, but for the debates though, during the keeping it real where there is not really supposed to be a debate, where they are supposed to give a presentation, both sides should be quiet and let the other one talk and then when there is a debate, leave the microphones on i agree and i think this is enforcing the rules that already existed i think that is where the frustration has come in from the debate people to begin with is that the rules are set in strans and then the candidates have cho st c chosen the rules and they did it to us no, i was just pretending do we not need a sense of humor in this world . Exactly lighten it up. We get some funny things happening in the news. Anyway, go ahead im not going to touch that one. Maybe youre not. But any way stocks to watch, intel has reached a deal to sell its flash memory Manufacturing Business to sk hynix for about 9 million. That unit makes flash memory primarily used in hard drives. Thumb drives and cameras and prices for flash memory slumped back in 2018 and they have been a little slow to recover. What kind of memory oh, flash memory all right. Go on. Flash sticking to the theme. Ubs reported a jump in net income to 2. 1 billion in the Third Quarter, that is a 99 increase from the same period a year ago ubs described it as the best Third Quarter in a decade that they have seen and the outgoing ceo told cnbc that visibility is limited, sometimes that is a fortunate thing, but the bank is staying agile. Joe. You know, i cant imagine i mean, you know, my wife, hey, honey anyway, coming up, ibm shares are under pressure. Well dig through the companys Quarterly Results next and on tap today, reports from travelers, proctor and gamble, and lockheed martin, all to look forward to stay with us i feel like were forgetting something. Let me check. Xfinity home gives you peace of mind from anywhere with professionally monitored Home Security built around you. No, i think were good. Good. So when youre away, you dont have to worry. The tent. We forgot. The tent. Except about that. Xfinity home. Simple. Easy. Awesome. Hey look, i found the tent get xfinity home with no Term Contract required. Click or call today. Ibm reported its Third Straight quarter of revenue declines in line with what analysts expected. At one time, ibm was the biggest name in tech representing 6. 4 of the s p 500 that was way back though in 1985 no company dominated the index more until apple reached 6. 5 this past summer ibm weighting steadily declined and now represents 0. 39 of the s p 500. Joining us now to talk about how were calling it big blue ive renamed it, alex, i called it i said medium blue i think maybe that is generous at this point. Founder and writer of the Big Technology newsletter and also a cnbc contributor i dont take any satisfaction here and the landscape is littered with stories like this. You remember digital equipment maybe you dont. Youre a young guy but i just remember novel, data general, edson and all these companies black theack then at leaooeeast i bmpt bm we stilt it but it has fallen a long way is there any future really for ibm . It must be a niche, wouldnt you think . Yeah, i like the medium blue. I would even call it two blue now that it is about to split off, basically one company that will focus cloud and one that will focus on consulting so if you are looking for hope, it would be in the Cloud Business ibm has been talking about the fact that 80 of Enterprise Computing hasnt moved to the cloud yet the and that is an opportunity that they could get into of course but it is probably not the core fwrukand that is an opportunity that they could get into of course but it is probably not the core fwruk infrastructure so youre right, ibm started a century ago and still kicking. There is some hope, but it is not what it used to be, that is for sure weve heard about the move to the cloud, that was the last ceo was in the process of trying to do that. And weve also the declining revenue story has been i mean, it is not just quarters now. It is probably more than five years where basically it has been an outlier when there was a gain in revenue and the buybacks to try to get the eps up a little bit it has been difficult to watch a once great name struggle with not being in you know, even microsoft didnt do social media. So there are always new names that seem to take the place of the stalwarts. Just the Way Technology works. I dont know why young people i guess well, microsoft by the way, it committed to cloud five years ago and has had an amazing revital staigs algttalization revitalization and i share your skepticism of ibm, it might be too little too late and so at this point, who would you say that ibms competition is, who can they learn from, who do they have to take share from, do they just really have to hold their own, and what are the prospects for it would you buy the stock at 121 . Much cheaper, market cap smaller than it has been in quite a while does that represent an opportunity for investors . Yeah, they are in such a weird position because again, they are coming into this cloud world after microsoft and amazon have really staked their claim on it. But if you imagine that were at the beginning of the move to the cloud, maybe there are multiple billions of dollars to be made in working as a layer on top which they call like the multicloud so that is interesting i think right now the stock doesnt seem very appealin because they will spin off the money losing part and this new company will be a better buy but the question is like is the stock going up once that happens. I personally wouldnt do it right now, id wait until the spinoff and make a decision then there is hope for the company. They finally got their strategy right. But you have to be an optimist in order to invest in them right now. And we have all of less than a minute left, but as a savvy tech watcher, if either facebook or twitter said will you come in here and fix our regulatory problems, where would you start . After the most recent incidents weve seen yeah, i dont know. Facebook and twitter, they seem to get in their own way all the time the fact that they were interfering with the New York Post article last week hasnt really turned out very well for them i mean, look at the ftc right now. It is totally underfunded. They make as much they have as much money in a year as facebook makes in a day and a half so if im facebook and twitter, i stay the course. Im not too worried about government regulation. They are coming for google first. So id wait and see how the google thing plays out and try to go from there so is that really m 3 e 1, u. S. Version of m 4, what is that the pillows. Behind me yeah. Honestly, im up in steelgeae this is a house that i stayed in when i was reporting out for my bo book, i was cat sitting and back here for a week, just like to split my team good the bay area and seattle. So you dont know what the heck it is anyway, im scratching my head i like it. Im thinking einstein, i dont know what the hell it means. Thought you wrote a book so you dont know either great. Thank, alex. Sorry, i cant answer it. It is scrabble. E is only worst one and m is only jaw, i know im not supposed to do this, but it is home oh, okay. All right. Home sweet home. We digress sorry. Im curious are. Thanks, alex becky. You didnt know that, did you . I was saying it was scrabble. Im beingmuted like the debates. When we come back, how struggling restaurants have faired and right now, lets take a look at the biggest premarket gainers in the nasdaq 100. Moderna getting a boost after its ceo says that ivaccine coul gain emergency useutriti in december. Before we talk about taxsmart investing, whats new . Well, audreys expecting. Twins grandparents we want to put money aside for them, so. Change in plans. Alright, lets see what we can adjust. Wed be closer to the twins. Change in plans. Okay. Mom, are you painting again . You could sell these. Lemme guess, change in plans . At fidelity, a change in plans is always part of the plan. Aflac now tell me, what does aflac do . Aflac pays you money directly to help with unexpected medical bills. And is Aflac Health Insurance . No, but it can help with expenses Health Insurance doesnt cover thats right. Are there any questions . Coach yes . Can i get one of those cool blue blazers . You know i cant play favorites. Alright lets talk coverage. Its go time get help with expenses Health Insurance doesnt cover. Mmm hmm get to know us at aflac. Com 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. U. S. Restaurants continue to struggle as the pandemic continues and as Speaker Pelosis deadline for stimulus deal is approaching. Kate rogers is here. What can you tell us this morning . Well, restaurant recovery is continuing its very slow march forward. Black Box Intelligence reports that comp sales were down 7. 4 year on year and traffic fell by 13. 5 . The numbers, they are not as strong as the week prior october 4 which was the best week for sales and traffic since march. Trends recently do show an uptick in Consumer Spending for full Service Restaurants and remember that fast food and pizza have been the big winners during the pandemic. And turnover continues to rise and Staffing Levels are consistent now with precovid levels while casual and full Service Restaurant levels are more reduced and more consumers may be opening their minds to actually eating at a restaurant a Research Polling of likely voters show that 45 of customers say that they are now comfortable dining out at this point in the outbreak, that is off the highs that we saw in september, but still much higher than it was over the summer. And how attitudes shift as cases continue to climb around the country remains to be seen back to you. And kate, i have a couple questions. My first is, we look at restaurant sales, but if so much of the dining sales that they have seen have been people who are getting takeout and taking it home to eat, how does that cut into their margins for the restaurants, for the sitdown restaurants that maybe had a lot of the margin coming from alcohol that they would serve if you were eating there . So you can see a lot of the higher end restaurants have started to sell alcohol when they can, but it is just simply not enough to do that and also offer these takeout and delivery offerings to keep you afloat when so much of your business does come in the form of people actually coming in and sitting at your restaurant so that has been one of the Biggest Challenges and a lot of the restaurants are not set up the way a more casual chain would be to serve people with delivery and takeouts. So the answer is that that is really not enough moving forward. What do you think the biggest challenge is it is getting colder, maybe people less likely to go sit outside and eat. What is the big egest challenge you think the restaurants face the coming months . Certainly winter is on its way. Places like new york city saying that you can continue the outdoor dining, a lot of people looking for heat lamps to use outdoors in their restaurants. But as we mentioned, 45 of people say that it is safe it dine out, but the other half of the voters that we polled said that they are not quite ready to do that. So not only winter, but i also think changing attitudes and perspectives about people feeling comfortable to actually go sit inside even if it is just 25 or 50 capacity will be another big headline kate, thanks. Good to see you. And a lot more to come on squawk box this morning. A surprising update from wework. Company said that the consults contract with adam newman is over well explain and bring you all the details. Plus well tell you about revlons threat to its bond holders, take a haircut they say or risk getting wiped out. Well talk about that next as well as we head to the break, take a look at the yesterdays winners and losers as business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. But inside. Theres advanced research, modeling and refinement. Constructing funds that dont simply follow an index. But explore new terrain. Helping you fill portfolio gaps. Connect to client goals. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Good morning and welcome back looking at u. S. Equity future, green arrows across the board. Yesterday we saw some of this too and yesterday turned out to be not so strong for the markets. It was down across the board with the dow off more than 400 points on growing concerns about whether there would be a stimulus deal that actually gets accomplished this morning looking a little more hopeful, but im not sure why. Pelosis camp saying that there was progress in a phone call between pelosi and mnuchin s p 500 up by 31, nasdaq up by 21 but these headlines can move pretty quickly revlon is out with a stark threat to Bond Investors saying that their holdings may be in jeopardy if they dont take part in a proposed debt exchange. They are seeking to buy back 345 million of 5. 75 bonds due next year at a steep discount to face value so far investors arent biting revlon extended an early participation deadline after receiving just 11 of those bonds. Investors who turn in their bar thursday are eligible to receive 325 in cash for every 1,000 notes that they submit if revlon cant convince 95 of the boond hobond bond holders participate, it would risk the secured debt coming due. Stock up by 9 cents this morning. But this may shed a little light on why we have seen ron pearlman selling so many of hassets yeah, and robert frank has been reporting this for weeks and months now and there has been all of these questions and speculation about ron pearlmans empire and what it means but this may be one of those moments. The empire at one point, he could have that 345 billion, he could have just easily wrichb written a check for that at one point he was worth 21 xwld suppo build supposedly and it is mounting problems down around 4 billion now. And so who knows what that 4 billion really means and you are talking about 350. So it was hard to imagine that there would be any typely liquidity problems that robert was talking about at the time. But i think that were starting to get at least indications that, you know why you would sell your artwork and your yacht feeling a little better about ourselves, arent we all that money, it just causes problems, guys then you got to make sure that you dont are you willing to take your chances, sorkin . What do you think . It is not the money it is never the money. Just keeping score. It is always the leverage it is the leverage not the money unto itself, it is the debt the debt lights the maam tch oe fire every time. So if you overleverage yourself, the risk is real but nice to feel good about ourselves statement when were talking about billionaires and think goods, th think that seems like you must be losing sleep and you never want to see anybody i like ron. But ive never been to that party out there. You havent either, i dont think. And they dont have it anymore, right, afternoon drew . You. Youre talking about the charitable effort for the apollo that he used to do every summer. I have not been. He has been a great supporter for areas of new york and i hope that for his economically sanity i hope it works out. 33 cents from some of those bonds. When you get to that level, it is not looking, you know right lets tell everybody about a different story about another one time billionaire, the companys executive chairman of wework, and not this fellow, but the companys executive chairman of wework saying yesterday that at a wall street journal event that the consulting agreement that had taken place remember we reported all the time with adam newman, the founder, is over saying i think adam may have violated some parts of the consults agreement so that is no longer in effect he didnt elaborate on how the agreement was violated saying that it was part of a continuing litigation and neumanns exit did you remembif you remember included 175 million for consulting and he did not receive the entire amount, but he received a huge check when part of the company was taken over by so softba softbank so im not sure the public may be crying for adam either. But i dont know if you feel better or worse for yourself this morning and when we come back, well talk about the markets, yesterdays decline and well discuss what you should be watching ahead of this mornings opening bell use a single hr software . Nope. We use 11. Eleven. Why do an expense report from your phone when you can do it from a machine that jams . I just emailed my wifes Social Security number to the entire company instead of hr, so. Please come back. How hard is your Business Software working for you . With paycom, employees enter and manage their own hr data in one easytouse software. Visit paycom. Com for a free demo. Hon . First off, we love each other. Welcome back between the election, earnings seen, the la season, the lack of stimulus package, many investors are uncertain of their every step. Here to help us take some of the guest work out of it, barry knapp. There are so many questions about where we are right now, just weeks away of course from the election every day has been a bit of a roller coaster ride after yesterdays down day we looked like we might have an update, maybe we get stimulus, maybe we dont, maybe biden wins, maybe trump wins how do you even begin it play it right now . Well, i would start by saying thatit play it right now . Well, i would start by saying that one thing we can bank on is that there will be stimulus in early 2021 and that stimulus the way, you know, the way the stimulus has been constructed thus far, the magnitude of the stimulus and the fact that the fed is effectively monetizing it, were very much back in the post world war ii environment where they will have to coordinate it with debt management. The market is convinced and i think rightly so that this is going to lead to reflation initially and perhaps a more inflationary environment in the next business cycle. So, you know, and you can see that in the performance of material stock be s and industrial stocks. They have been the drivers i would tend to think that some of the more well call it hyperbolic expectations of a blue wave that leads to massive spending probably wrong. Them be limited by reconciliation and i would assume that the democrats would only hold control of the government for two years at most and so if they want fto do healh care or stimulus and tax policy, they will start to run out of room so that should limit them to some extent. By the same token, if we wind up with a split government and i think the race is probably a little closer than most people think because of turnout proceed intensity differential which still favors the incumbent, a split government you dont spend quite as much money. So i would think okay, were still in the early stages of a recovery, Economic Data has still been good, claims are falling, retail claims made it looks like any pause that we thought we had in august was a matter of back to school being pushed out into september. And so the momentum is strong and that that and the fact that one way or another, well wind out with additional stimulus that is monetized by the fed barry, here is the question the question is, where would you put your money today recognizing that there is a whole bunch of people who i think are sitting on the sideline s, waiting to se what is happening with the elect bs and we havent talked about the continued rise of covid cases in the u. S i dont think that i cani dont think that well see necessarily a shutdown or any kind of lockdown, but i do think that Consumer Behavior could be affected for a couple months this winter. What that means. And do companies that have liquidity problems today have solvency problems later. So what would you want to own today and then on the other side of course we have the potential for a vaccine and that will be a binary event for a lot of people right well, if you follow the typical recovery playbook which we did, we recommendied people do, you really need to be in discretionary Consumer Companies early on weve tempered that a little bit recently and some of the points that you just made argue that it could be a little rocky through the Holiday Season stimulus is unlikely to come preelection, more likely to come early next year so there could be some patchy spots in the spending. But the argument that i would make around the industrial sector in particular is that well get additional spending, that will help but more than anything, we have an industrial and manufacturing recession that stretched all the way back to the middle of 2018 it was related to disruptions from the trade dispute between the u. S. And china inventories were extremely low we have what looks like to be an exception is alley strong restocking cycle coming. And that from both that trade, you know, issueis alley strong restocking cycle coming. And that from both that trade, you know, issue means that you will have a heck of a recovery in the manufacturing and industrial sector and well get industrial spind iending so they could benefit almost under any scenario from here so those are really good spots to be. Tech, i would be market weighed in, that is a much longer discussion well, barry, im sure well have that discussion with you. But well focus on the Manufacturing Sector for now it is a good one and a good thought this morning barry, appreciate you being with us talk to you soon thanks. When we come back, well be talking about netflix results which are out after the bell tonight. And that stock is up 65 in 2020 and a continuous run or have expectations finally caught up that discussion next and take a look at shares of logitech are soaring more than 20 after reporting a 75 jump in quarterly sales. Yeah, everybody working at home has bought a bunch of this stuff and the company he raising its full year outlook, that stock up by almost 21 this morning at calvert, we know responsible investing is hard. If youre concerned about the environment and climate change, how do you find companies that are driving the right outcomes . If you care about economic equality and social justice, which firms are addressing it in their workplaces and their communities . For nearly 40 years, calvert has delivered competitive returns by investing in Companies Making a difference because we see value in doing good. Talk to your Financial Advisor about investing responsibly with calvert. But when i started seeing things, i didnt know what was happening. So i kept it in. He started believing things that werent true. I knew something was wrong. But i didnt say a word. During the course of their disease around 50 of people with parkinsons may experience hallucinations or delusions. But now, doctors are prescribing nuplazid. The only fda approved medicine. Proven to significantly reduce hallucinations and delusions related to parkinsons. Dont take nuplazid if you are allergic to its ingredients. Nuplazid can increase the risk of death in elderly people with dementiarelated psychosis and is not for treating symptoms unrelated to parkinsons disease. Nuplazid can cause changes in heart rhythm and should not be taken if you have certain abnormal heart rhythms or take other drugs that are known to cause changes in heart rhythm. Tell your doctor about any changes in medicines youre taking. The most common side effects are swelling of the arms and legs and confusion. We spoke up and it made all the difference. Ask your parkinsons specialist about nuplazid. Krooirz. Welcome back, everybody, streaming giant netflix reporting Third Quarter results. With a look at what we can expect, lets welcome tom rogers, former nbc cable president and cnbc contributor tom, its great to see you this morning. Thanks for having me, becky. What do you think you know how these streaming worlds are working right now, netflix has risen sharply. Can it keep up with expectations well, i think its going to become increasingly clear that with all the talk of streaming , netflix really isnt in that war. Netflix is really in a category by itself. It was in this state before covid but over covid, its really established itself as the default streaming service. Theres a war going on between the other services as to what else subscribers are going to have particularly as day cut forward. But netflix increasingly in a category by itself maybe a bit of a nod to that earlier last week when the company said it would no longer be offering free subscriptions or free trials to people to get them you only do that if you dont need to, if youre not in this to try and win more subscribers. Im guessing theyre going to have Strong Subscriber growth. They had huge subscribers growth last quarter. They had about 2 million, 10 million subs they guided to a much lower number this quarter suggesting that a lot of those subs were pulled forward the sub number is much less an issue of netflix as compared to the other Services Netflix has already added in the first half of the year, 6 million subs all of 2019, they added 29 million subs, so in 2020, theyre going to blow out last years number. With netflix, its much more of a story of how much engagement they have going on how much more time people are spending watching their service. Their total engagement is the same as the legacy streaming company together hulu, disney plus, hb organo, pk show time. Theyre way out there in terms o. Ti of the time spent. The reason is so enormous compared to the legacy streaming Company Services theyre out there today with a 15 billion programming budget look like its on it way the next two years to a 20 billion programming budget, which will probably allow them to be introducing one new movie or series just about every day, and thats just something that none of the other services, the engagement is huge and to your point, no more free trials the Pricing Power that brings is also critical. They just raised price in canada, bringing to 14. 99 for the core package that people take i would listen very hard on this call to hints of price rises here they really have such an enormous price to value relationship, huge value perception among consumers that Pricing Power is something that the other streaming Services Just havent established yet, whether you look at disney plus, you look at hbo max, so many free as you said promotionally out there still. Tell me quickly the decline of Movie Theaters at this point, we had the ceo of amc on yesterday. I dont know if you think that this is going to be a perpetual decline or if things change quickly. If they can hold on through the pandemic how does that impact netflix, and not just netflix, but the other streaming services too well, i think thats another thing to really listen for on this Earnings Call because netflix started to catch hbo, which they did then they wanted to become the whole cable bundle which they have been, and now theyre after becoming this huge movie industry power house, and while the Movie Theater industry has basically been closed down the and the major theoretical releases are delayed to the second half of nekd year, axt yo the studios have been selling their less than block buster movies to netflix. Netflix has original movies coming out they have become the place to go to for new original movies now, and thats going to have further impact coming out of covid on Movie Theaters being able to reestablish themselves i think what Movie Theaters should do is begin to have some kind of broader relationship with netflix so that all the Netflix Original movies can have some broader Theater Opening for some short period of time because the legacy Media Companies are increaseingly going to be looking to their theoretica theoreticals thee tom, great to see you this morning, and well talk to you again soon. Thanks for having me. Procter gamble results are due out around 7 00 a. M. Shortly. Cfo, and vice chairman john moeller is with us and a wide range of companies will reports their results this morning, ngding lockheed martin, Phillip Morris, and albertsons, youre watching squawk box on cnbc ok, just keep coloring there. And sweetie can you 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. To a world that must keep turning. The world cant stop, so neither can we. Because the things we make, help make the world go round. They make it cleaner, healthier, and more connected. Its what we build that keeps things moving forward. So with every turn, well keep building a world that works. Before we talk about taxsaudreys expecting. New . Twins wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. The election, earnings and stimulus, the focus for investors this morning well take a look at where you should be putting your money to work thats straight ahead. House Speaker Nancy Pelosi and treasury secretary Steven Mnuchin inches closer to a deal. Emphasis probably on inching here well get a live report from washington. Has the tide changed for Procter Gamble we will hear from the companys cfo after they report Quarterly Results. The second hour of squawk box starts right now good morning, and welcome back to squawk box right here on cnbc. Im Andrew Ross Sorkin along with becky quick, and joe kernen after a tough day yesterday, it looks like were going to open higher on the back of maybe were going to get some stimulus or at least hopes of stimulus. Dow up about 219 points right about now. Nasdaq looking to open 121 points higher and the s p 500 looking to open about 30 points higher, but both sides seem so so so far away, joe. Yeah, seems like that i guess we dont really know but House Speaker nancy pelosi, treasury secretary Steven Mnuchin, making progress apparently on stimulus talks, ahead of a soft deadline ylan mui joins us with more. Good morning again reporter good morning, joe well, the white house and democrats are narrowing their differences as we count down to the deadline for reaching another covid relief deal before the election House Speaker nancy pelosi said that by the end of today, we should have some clarity on which way the stalemate will go. She is scheduled to speak with the treasury secretary once more after the two of them had a roughly hour long phone conversation yesterday now, some of the issues that democrats were still raising ahead of the phone call included the language over testing, liability protection, state and local funding, as well as tax credits. Now, whether or not the two of them can strike a deal, the senate is moving ahead with two votes of its own on other covid relief measures. One will be a stand alone extension of the Payroll Protection Program that vote will happen today. And then on wednesday, theyll vote on a 500 billion package of targeted aid. American families deserve for us to agree where we can make law and push huge amounts of money out the door while washington continues arguing over the rest. Its common sense. Its what the country needs. I hope our democratic colleagues will finally let it happen. Reporter in essence here, guys, Senate Republicans are hedging their bets in case a deal that they can support never actually materializes. Back over to you thank you very much in the meantime, revlon is looking to coax investors to trade in their bonds at a steep discount or risk losing their value entirely leslie picker joins us with the details, and this is a pretty hairy situation. It is, and becky, you know the saying, putting lipstick on a pig. In some ways, thats what revlon is doing in this Bond Exchange to stave off a debt crunch investors dont seem to be budging though the 88yearold Cosmetics Company offered 325 in cash for 1,000 worth of notes tendered in in the next few days. The cash payment declines until the next tuesday deadline, in exchange for the senior notes due in 2021. The situation, though, appears dire revlon says without 95 participation from bondholders, most of the Companies Debt will accelerate and become payable next month in which case the bonds could be worth next to nothing. Given the companys quote very weak financial performance, moodies does not believe revlon has sufficient liquidity to repay or refinance the notes if the exchange does not go through. The trouble stems largely from the pandemic few people are opting for makeup under their masks, especially from whats seen as a stayed brand. The pressure has sent revlon stock down 73 this year, and it bonds into distressed territory. The company is owned by billionaire ron pearlman who has been selling town homes, yachts and even his Art Collection as of late, guys. We were talking about that in the last hour. It kind of raises new questions at the time those around pearlman said he was doing it because he wanted to simplify his life, but maybe this is a more direct reason reporter right well, its unclear we dont know exactly what his exposure looks like aside from the equity theres a theory based on news reports that he has debt coming due at his holding companies, mcandrews and forbes no one really knows how much or how the various complexities lie. But youre right he told vanity fair that the reason for selling off all of these various assets is because he wanted a simpler life i mean, who could argue with that yeah. Look, i get it myself in the middle of the pandemic, wanting a simpler life having debt like this due, and having your company be in a situation like that might explain a lot of the fire sale that we have seen take place leslie, thank you, it was good to see you. Good to see you andrew. Thanks, meantime, we have earnings down from Procter Gamble, beating on the top and bottom lines the company raising it full year sales outlook. Cfo john moeller is going to join us after the break. In the meantime, we want to get a quick check on the markets p and g up 2 . And were looking at the market more broadly looking to open higher by 226 points higher on the dow, s p 500 up about 30 nasdaq up about 120 points we are right back after this short break. So youre a Small Business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Procter gamble out with First Quarter 2021 results just a few minutes ago, beating on both the top and the bottom line, and we always talk about this, sales forecasts, joining us now john moeller, vice chairman, chief Financial Officer and chief operating officer of Procter Gamble and a member of the cnbc global cfo council, and john, its episodic, thats what we like to say. We talk to you a lot, and many of the times were talking about the Sales Guidance for a company the size of Procter Gamble that sells all over the planet, so youre raising guidance could you go over that, tell us what the previous guidance was, where you are now, and why youre able to do that in this environment . Our business really has strong momentum. You know, we were growing our top line about 6 precovid. We managed to maintain that through the First Six Months of the calendar year despite significant challenges and now the quarter that we just completed, 9 organic sales growth ill get to the guidance flin js a second the 9 sales growth transferred to 19 22 on a Constant Currency basis. All in one of the most dynamic and challenging environments we have seen in a long time that performance, though, gives us confidence to raise our guidance at the First Quarter of our fiscal year. Were raising Sales Guidance from a range of 2 to 4 to a range of 4 to 5. Were ranging, excuse me, were increasing earnings per share guidance were increasing our Free Cash Flow productivity guidance, and increasing to shareholders, good all around. The environment were operating in, its been very sort of entlinteresting to watcd clear who the winners and losers are in the environment we find ourselves in what do you attribute the better sales to at Procter Gamble, john, and geographically, what do you attribute it to and how does it make sense during the pandemic its clearly a heightened consumer need for health, hygiene and a clean home, which our portfolio fits right into. Theres also a flight to brands that i know and trust that are going to do the job for me and my family. And so thats yielding share gains on a global basis. We grew in every region, both top and bottom line. We grew in every segment, both top in line, so the strength is broad based and its driven by some of those things i just mentioned. Im not actually being a smart ass, i dont know if im allowed to say that, but i just did, but okay, i can see why your house needs to be clean, but for example, you know, gillette, a lot of people, i cant imagine that youre selling as much shaving stuff, deodorant, soap, people are at home theyre just with themselves are all of those products showing the same type of sales gains . It seems like i would even think shampoo, people that are, you know, maybe at home, and arent quite as clean as they were before. Is that wrong . Our grooming business grew 6 in the quarter, our shampoo business grew 8 in the quarter, and thats not only due to externality, thats due to a strong portfolio of brands and an integrated set of strategies in categories that are daily use where performance drives brand choice, and we have been investing in that performance to build a superior consumer experience, and thats generally been positive across the portfolio both geographically and by category. So you have been youre always, and whenever youre on, youre talking about ways that youre trying to be more efficient with suppliers and distributors and shelf space and all the things, new products and innovation, and getting rid of some products that arent perhaps growing the way you would like so all of those initiatives have been ongoing as well and i guess youd say those are bearing fruit as well. Yeah, i mean, you mentioned both innovation and productivity, which generally together are margin accretive. We saw that in the quarter gross margin up 380 points, its all these are not stand alone strategies this is a highly integrated set of strategies that together produce the kind of results that were seeing were doing it in a year ago, they have done it through the calendar year this year, and this quarter is a good proof point which gives us confidence to increase our guidance. Given the varying responses to the pandemic around the world, geographically, do you see any differences between regions in terms of your results . Yes yeah, our two biggest markets are the u. S. And china the u. S. We grew 16 china we grew 12 . Were seeing some more challenge in southeast asia, the middle east and africa. Thats probably our most Challenging Market right now latin america grew very nicely europe grew very nicely. Weve gone back and forth between these niche millennial type foo foo brands that they want, and whether theyre still going to buy, you know, the big well known brands. Theres been, you know, less of sort of a, i dont know, theres an aura about some of these, you know, whatever trend you want to identify are you still youre laughing, i know hey, this is the world were living in, right are you not on social media . Anyway, are you still confident that these big Global Brands that you have are the way to go or are you dabbling in a lot of these other brands its a combination of both. But as i mentioned at the onset of this discussion, there is a bit of a shift in the middle of the pandemic to brands that i know and trust, and a little bit less experimentation, but thats on the margin, and, you know, we want to continue to serve consumers with both types of offerings and well do that. So where would you be looking to make acquisitions to bolster, you know, either bolt on or get into some new markets. Do you still need to do that you have to. If you dont keep changing, i figure youre standing still i mean, clearly that change point is absolutely right, which is why one of the pillars of our strategy is something we call constructive disruption. We need to be constructively disrupting the marketplace, the ecosystems in which we operate and our own brand portfolio which we have done fairly significantly over the last several years. Right now, as we sit here today, its a difficult environment from an m and a context. Just imagine the operational challenges of diligence and of integration at a time when we need to be physically distant from each other. Well continue the work and were open to all sorts of opportunities and of course there are Digital Tools that can help us overcome these challenges but it, to be clear, is a challenge so how about advertising . You like social media idea, you like the streaming, you like i have an idea for you i mean, when i watch peacock, you know, theres like a free version, and instead of like six minutes worth of ads, theres like 45 seconds or something, and you can see when its over so i dont mind it at all. You ought to be advertising on peacock, moeller. I will follow up on that, joe. Its a promise. How are you advertising now, is it all digital . If you changed it that much to cater once again to those millennials . It changes all the time depending on whats most effective and efficient at any given period of time, but, you know, the one constant is, first of all, the amount of media thats being consumed currently across all challenges as we try to entertain ourselves in our hopes with our families has never been higher. This is a time when advertising is at its most productive and effective, and we are stepping forward and increasing our investment on advertising across the channels and venues that you mentioned. Not stepping back. This is not the time to step back all right thats good to hear. Thank you. We appreciate it you know, we always end with a little cincinnati sports 22 innings without a run 22 innings 22 innings without a run and then you didnt like the cowboys. I was just about over that. Jyou shift andy dalton to dallas now hes taken the bengals ways to dallas. See how that works out. Andy dalton, good lord. Anyway, john, thank you. Good quarter, it seems like, raising guidance, and the stock looks like its trading haigher today, good luck back to the salt mines to work, john, well see you, no more fun. Well do. Thanks, joe. Youre welcome. Andrew. Were going to have a lot more fun coming up throughout the hour coming up when we return, investors paying a lot of attention to the stimulus talks which havent been much fun. Well talk about the election and earnings jason trainer is bringing us the fun on Strategic Research joining us right after the break with invesing ideas. As investing ideas theres still time to sign up for the faa summit, bringing together the top Advisory Firms to explore the state of markets. Visit cnbcevents. Com fa summit to learn more and register wow, i wish i could get a deal on a smartphone, but im not a new customer. 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Still to come on squawk box this morning, what traders need to be watching ahead of the opening bell, jason will join us to auk about the election, stimulus, the markets and the forgotten man in american politics. And we works adam newman denied his 495 million consulting deal, remember that deal, it stirred up a lot of controversy after he left the company last year. We have the details straight ahead. Check out the futures at this hour. Things are indicated up. Dow futures up by 220 points after losing 410 points yesterday. S p futures up by 28, the nasdaq up by 103 well be right back. At calvert, we know responsible investing is hard. If youre concerned about the environment and climate change, how do you find companies that are driving the right outcomes . If you care about economic equality and social justice, which firms are addressing it in their workplaces and their communities . For nearly 40 years, calvert has delivered competitive returns by investing in Companies Making a difference because we see value in doing good. Talk to your Financial Advisor about investing responsibly with calvert. Welcome back to squawk, if you are following the soap opera that continues to be wework, we got news late yesterday. Wework executive chairman saying at a wall street journal conference that that famous consulting agreement you might remember with founder of wework adam newman, he says its over saying quote i think adam may have violated some parts of the consulting agreement so that is no longer in effect. He didnt elaborate on how the agreement was violated saying it was part of a continuing litigation effort. Newmans exit package included 185 million for consulting. The wall street journal reporting that newman did not receive that entire amount, though its worth noting given the shares that he had in the company he took, youve got about a billion dollars in stock, 500 million refinanced, lost, now, looks like the 185 million i should also mention, guys, he is back. I dont know if youve seen that, he invested 35 million in alfred, which is involved in the dog walking business, i believe, just about a week ago. So hes putting does that make him a major investor or hes just kind of riding along back on the peddle. What did you say, becks . Does that make him a major investor that gives him say in the game or is he riding along i dont know. Thats a good question he invested 30 million. Its the alfred club, part of his realize effort that sort of is a white glove helping service of sorts im not sure what his role is. Hes not operating the business. Thats for sure. But hes investing in that and hes invested in a number of other buildings in new york and other places i dont think adam newman is going away quietly how about that meantime we want to take a quick look at some of the premarket movers this morning. Dom chu is standing by with those. No Butler Services this morning on the premarket movers on my end. We have a mix of earnings and corporate headlines. Were going to start with late breaking stuff weve got Like Philip Morris International which is up around, call it just about flat right now, 2,000 shares of premarket volume after the Global Tobacco giant reported better than expected profits and revenues Phillip Morris was helped out in both the traditional cigarette business and heated tobacco line of products. Those shares up fractionally right now. Then youve got shares of travelers, which are up around 3 premarket. Roughly 2,000 shares of volume the Insurance Company and dow component reported profits and revenues that both Beat Estimates and that o out performance is driven by higher shares. And those up 3 1 4 . And were going to end on shares of amc entertainment, down roughly 3 right now, almost 4 at this stage premarket 100,000 shares of volume after the owner and operator of Movie Theaters disclosed it is going to raise capital through a stock sale of up to 15 million shares. That disclosure, remember, comes a day after amc said it would resume Theater Operations in certain parts of new york state later this week. A bit of positivity yesterday, negativity today, becky, two ups, one down, ill send things back over to you no white gloves for me though. Thanks for the score card, dom. You got it. In the meantime, markets are watching stimulus talks and the election closely, our next guest wrote an oped called the forgotten man, which he cautions in the midst of a Global Pandemic that has reordered society to the detriment of the little guy, its remarkable how many have forgotten the lessons of the upset of 2016, and the people that made it possible joining us is jason trenard, chairman of Strategic Research partners did make me kind of reconsider things it brought us back to four years ago when elites on both coasts did not see it coming that President Trump was going to walk away with that election whats happened since then that gives you some reminiscing about what happened four years ago i think part of it is i would say theres a couple of things, one is that at least among the, i make the mistake of watching Cable Television at night. Bad idea. Very little doesnt make me feel better. I find theres very little humanity on the chattering classes, the talking heads like myself and others about the fact that there was an upset four years ago, and that very few people saw it coming and that people had missed a big portion of the country one would think after that, this being someone thats been in the Financial Markets for a long time, you know, we make mistakes all the time, theyre painful, and you try not to repeat them yet, it doesnt seem like thats a big part of it i also, i just think given the country, President Trump probably under polls and probably pretty significantly just to the extent to which it doesnt seem socially acceptable, and so those are two things that are on my mind, and i just remember, though, that trade and immigration were very very big issues in 2016. I think the lockdown will be a big issue this year, which in my opinion, has been harder on the forgotten man than it has been on people like me or you or people that can work remotely. Right people who have been on the front lines whether it be delivering packages to everybodys doors, working in the grocery stores, working on the front lines on any of these issues jas jason, the one big difference this time versus four years ago, and im not sure how to calculate that, this time, the forgotten man and woman can look at washington and say what are they doing, they havent given additional stimulus. Theyre arguing over this, playing politics and not caring about us once again. Theres plenty of blame to go around you can blame both sides on this. Listen, i think youre right, and i make that clear in the piece that theres been, you know, i tend to think democrats do their social engineering at home, and republicans tend to do their social engineering outside the united states. You know, like make kabul look like greenwich, connecticut, and a lot of people in the middle are saying, im trying to get from one day to the next, and why cant you guys figure this out, and also we dont want to be called names if we dont agree with you we dont want to be called something thats we dont want to be seen intolerant if we dont necessarily have the same view on trade or immigration. I think theres absolutely an element of truth, this is more of a bipartisan issue, but again, just given the experience four years ago, i would think more of us should be prepared for surprises. Just my own, you know, view. How does that view translate into what you are advising clients to do in the markets right now . You know, becky, its interesting, right since 1928, theres only been three times where the market was up in the three months prior to the election, and the incumbent party lost thats about 87 so the market itself would be telling you that donald trump should win if you look internally, though, at the industry groups, theyre clearly discounting a biden win. Wind and solar, infrastructure stocks, those things are doing very very well because theyre expecting much more money to be spent by the federal government should Vice President biden win. On the other hand, the trump stocks, you know, for profit education, for profit prisons, defense stocks, financials, engineering, financials and energy, are doing rather poorly. My view is people should hedge their bets and maybe trim a little bit of the things that have been working so well, like wind and solar and maybe some of the infrastructure stocks. Just as a hash, because again, i think its my own opinion for whatever its worth is that its going to be very close we have in our shop, a fellow by the name of dan clifton, hes, in my opinion, hes the best guy on the street. Hes very much of the view that biden is the likely winner but he also recognized the fact that with the market being up so much this year, you know, generally speaking, that tends to bode well for the incumbent party. Yeah, what happens if biden wins the white house and the republicans maintain the senate . I mean, what happens to the plans to any of these sectors that would be moving one way or the other when it becomes much more difficult in any sort of a split or if trump were to win the white house and the democrats take the senate. I dont know anybody whos kind of played out any of those things. To me, the most dangerous, and i say this with all due respect to the viewers, i think the most dangerous outcome would be a blue wave, and i say that because the plans to increase taxes across the board, income, dividends, capital gains, corporate taxes, i think is a very inopportune time, if theres ever an opportune time to do it, this is an inopportune time i think if you get a biden win and a split congress, the market will probably like that in the shortterm listen, well get all the spending without many of the tax increases because they wont be able to get through congress i think similarly, you know, if trump were to win, in my opinion, its a bullish sign for the market, probably much more bullish for cyclicals because people would think the lock downs would end sooner, and you would definitely not get the tax increases that you might get under a biden presidency i think the regulatory environment, too, is something that the two parties are pretty far apart on jason, theres a lot of different issues that the democrats have said they have wanted to focus on its not just taxes. Youve got health care, wanting to change the things that have been undone for obamacare. Youve got the Supreme Court do you think, i mean, its pretty difficult to do that sort of heavy lifting and especially to do it in two years, and get things passed. What do you think is their top priority would taxes come first or Something Else i dont know. And just for purpose of full disclosure, im republican, and so im not quite sure what the First Priority of the democrats would be it sounds like tax increases are a big part of that and more spending on the republican side, its just more spending, and i also think there would be some tax cuts just based on the people i know in the administration that they would actually look to sort of supply side tax cuts to spur Economic Growth and grow ourselves out of it. Thats not going to happen if they dont have the house. No it would only happen if you really had a sweep thats definitely the attitude or at least, you know, the direction that they would take it in. But you know, becky, i dont know you might have to ask Jason Fuhrman or, you know, someone else on the other side what the primary focus would be jason yes, sir. Jason, can i ask you as somebody who has supported the Republican Party for a very very long time, is your sense that a i appreciate that spending without taxes would be good for the markets at least in a shorttermish way, my question is actually whether somebody like yourself whos often talked about being a conservative and has often talked about the debt in this country, would actually support a policy like that you know, andrew, my own personal feeling, i know this might be controversial, but i think the best stimulus for the economy is to reopen the economy. I think its to keep the Vulnerable People safe, and to reopen the economy as much as possible this is not sustainable, what were doing right now, the deficit as you know last year was 3 trillion, and if you keep a good portion of the economy locked down like new york and california, or large parts of it, that is just for openers this is not something, even past this stimulus package, youre going to need more stimulus packages after that if youre going to continue to pursue this are you advocating what dr. Scott atlas at the white house who has been telling President Trump to pursue a herd, almost a herd immunity approach, which obviously there are a lot of critics of that approach. Yeah, and listen, i think my own opinion as an economist or someone that runs an economic shop, the one thing i will say is you have to balance the costs versus the benefits and i think now seven months into the lock down, there are significant costs that were finding to the lockdown not only economically, but in terms of socially. Also from a Mental Health perspective, and thats all i would urge everyone says im not an epidemiologist, so im not a doctor, but from my perspective, the things that i feel like i know about, i feel strongly about balancing costs and benefits, and i think theres been a very strong focus on the benefits of the lock down which have been clear but there are also a lot of costs as well, and i think those need to be factored in. Jason, thank you. Great to see you today, and well talk to you again soon thanks a lot. Thanks guys. See you, jason coming up, operation hope and shopify are teaming up to empower black entrepreneurs. Were going to speak to John Hope Bryant and harvey finklestein. Spain is considering a temporary curfew, and germany reported a test Positivity Rate of just under 4 squawk box is coming right back and unmatched overall value. Together with a dedicated advisor, youll make a plan that can adjust as your life changes, with access to taxsmart investing strategies that help you keep more of what you earn. And with brokerage accounts, you see what youll pay before you trade. Personalized advice. Unmatched value. At fidelity, you can have both. More than this this was the theater i came to quite often. The support weve had over the last few months has been amazing. Its not just a work environment. Everyone here is family. If you are ready to open your heart and your home, check us out. We thought for sure that we were done. And this town said not today. Akeeping your oysters growing. While keeping your business growing has you swamped. 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 when you post your first job at indeed. Com promo dont settle for silver 1 for diabetic dry skin 1 for psoriasis symptom relief and 1 for eczema symptom relief gold bond champion your skin stock stories this morning, first up goldman sachs, its agreed to pay 2 billion to solve a Justice Department probe in a scandal involving Malaysia Investment Fund 1 mdb. Goldman had agreed to pay 2. 9 billion in malaysia in return for having charges dropped. Parsley energy, according to people familiar with the matter who spoke to the wall street journal, the two sides are said to be discussing an all stock deal that could be completed by the end of october but again, adding to these additional deals that weve seen in the oil patch including that deal from yesterday with conoco. And moderna ceo says the covid19 candidate could receive emergency use authorization from the fda in december, depending on results expected next month from a large clinical trial. Re jrnwathe comment at a ll stetoual conference squawk box will be right back. I feel like were forgetting something. Let me check. Xfinity home gives you peace of mind from anywhere with professionally monitored Home Security built around you. No, i think were good. Good. So when youre away, you dont have to worry. The tent. We forgot. The tent. Except about that. Xfinity home. Simple. Easy. Awesome. Hey look, i found the tent get xfinity home with no Term Contract required. Click or call today. Welcome back to squawk box this morning operation hope and spotty, theyre teaming up to empower black entrepreneurs, the initiative pioneered by operation hope aims to help create 1 million new black businesses in america over the next ten years shopify committing 110 million, joining us is john hope brian, chairman and croeo, his annual gala is taking place as we speak, and shopify president Harley Finkelstein is with us as well john, you know the thing i love about you most is youre working not just to help people but come up with concrete plans to change the dynamic, and this is one of them tell us about this, and how its going to work. Well, this is Community Based stimulus from the bottom up. Powered by the private sector. In a model that can be replicated by anybody, maybe even our governments this came from an idea i sp introduced on squawk box a few months ago from the new marshal plan, and its very tangible and, you know, its a desire to check all the boxes, to deal with the economic crisis, to address the impact on black Small Businesses from the Global Pandemic thats affected us all, to deal with 400yearold social justice reckoning in a way thats positive and aspirational, and stimulates aspiration at scale. We thought black business is the way to do that, and im just so empowered and hopeful, my middle name, to be partnering with shopify on this. Harley is a cool dude, as you know he even shows up looking cool on your show. And this kind of confidence backed up by commitment is what we need to see in this world today, and this program will take somebody, andrew, from an idea, all the way up the ladder, so Small Business training, hope is in a box. Entrepreneurship training. Business plan preparation, 700 credit score training. Graduation into the shopify world. Shopify has a very elegant model that takes you from domain name to web site to e store front, to fulfillment, payment systems, your first sale, i love this part your first sale, you get a credit line. Its unbelievable. And then were going to wrap professional advisers around that, andrew we have Accounting Firms providing cpas and Business Management firms and law firms, First Horizon bank in tennessee, the first bank to offer volunteer bank support its holistic, thats what i like about it the most, and its at scale. So harley, talk to us about the project. Theres 130 Million Investment by you what does that mean . As john mentioned, historically black communities have faced systemic barriers that have prevented their participation in this journey. Black businesses represent like 9 1 2 of all u. S. Businesses which is really really low what were trying to do here is we want to create more entrepreneurs. We want to help give them the tools in which to do so, and do so in a way thats really lightweight, where the barrier to entry is low. Not only are they going through a program to learn about financial literacy, and get education, but as part of the program theyre going to get shopify stores, and whistleblower committed were committed to helping them get education. The second they launch the businesses the entire identity of the particular entrepreneur changes, and were super happy to do that with john and hope. Frankly, entrepreneurship is a proxy for independence, and we want to be part of that change, and we think a future with more entrepreneurs is a much much better future. Harley, what is the Customer Base or clientele of shopify look like right now in terms of if you were to look at the diversity of those entrepreneurs. We dont actually ask our merchants what race they are when theyre signing up. It does reflect generally what we see in america, which is a much smaller percentage of entrepreneurs, our black entrepreneurs and a lot of it is lack of role modelling, lack of mentorship, and partnering with the hope foundation, and getting to know john and one of the things we have absolutely noticed is we can actually help change this entire thing we can actually be part of this solution john, how much of this is about funding, though . Is a funding problem we have talked about this for a long time. I mean, look, funding is a real problem in the black community, but its not the only problem. You have different kinds of capital, as you know, andrew youve got emotional capital, relationship capital, mental capital. You have to have the right mindset to win you also have to have the right support system to win. I can give a homeless guy a million bucks because i feel sorry for him. He may be broke in six months. If we dont change a lot of other things in his or her life. Empowerment is a skill, teaching men and women to fish at scale, and giving them the ladder, and not just boot strap themselves its capital, andrew, its just different types of capital, that volunteer accountant, banker, Business Management firm, lawyer, thats capital the entrepreneurship training, thats capital, the mentoring that shopify is going to provide through their d and i group. The coaching, theyre going to make sure people are successful on the back end, thats capital. Every step of this, actually, is capital. Its just that the credit line is the fuse. That ensures that success can be replicated i just love this piece that they do that if your credit, credibility, assuring that they can go in a business and make a sale, they get a credit line its beautiful and thats a scaleable model and that should give people hope and believe their works are not in vain bankers and others will follow this lead and want to rally behind to fill some of the other gaps that are here john, you are on now day two of your global summit that you do every year. People are catching it online. Youve got dan schulman, Doug Mcmillon of walmart, the nfl commission commissioner, Roger Goodell, where are you hoping to go with those conversations . Well, we want to be not a me to talk, a me to do, a me to understand, we need bridges. We need the color to go from red and blue and black and white to green for all. And we need the Free Enterprise system and capitalism to open up to be available to all of gods children, and folks to realize that black people and brown people are not a sympathy case we are the future for this country. Demographically, we have all got to win you can take no pleasure from the fact were all in this together and if we see black and brown people and poor whites, my brothers, and sisters in the rural areas, as Economic Energy on the sidelines that needs to be rehabilitated and prepared and brought into the game, gdp pops, thats what i want is this to be viewed as markets, as a business case. Harley and shopify see this as not only the right thing to do they smartly see this is all a future business segment for them that they need to grow thats the kind of respect that i think is deserving of africanamerican and other entrepreneurs in training for the future thats our goal for the whole global forum is to inspire folks to want to lead with their actions. And andrew, remember, entrepreneurship, and what comes from its success has so many different definitions. For some it will be building the next great company, creating an incredible leader in their space. For others, its a matter of putting food on their table and a roof over their head thats the value of entrepreneurship, it democratizes so much, provides independence and equality, thats what were going for with this Partnership John and harley we want to congratulate you on the partnership, we will watch and follow your progress with it we should also mention to viewers you can watch what is now day two of the Hope Global Forum. It includes a lot more from john and harley, and includes so many other guests as i mentioned before, Doug Mcmillon from walmart is going to be with them today, nfl commissioner Roger Goodell will be there as well. You can follow it on the Hope Global Forum page on facebook. Joe. Thanks, andrew. Coming up, maryland senator ben cardin gives us an update out of washington on the latest progress, were calling it, in stimulus talks well see. Thats next. And then later, killer mike joins us to talk about his newest adventure, Digital Banking to uerrvndseed communities. Squawk box coming right back were carvana, the company who invented car vending machines and buying a car 100 online. Now weve created a brand new way for you to sell your car. Whether its a year old or a few years old, we want to buy your car. So go to carvana and enter your license plate, answer a few questions, and our technowizardry calculates your cars value and gives you a real offer in seconds. When youre ready, well come to you, pay you on the spot, and pick up your car. Thats it. So ditch the old way of selling your car, and say hello to the new way at carvana. music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. Good morning markets look to bounce back from losses futures are green across the board. Of course that was also the case yesterday at this time before stocks tanked mid afternoon. Could a bit of optimism on stimulus talks in washington be playing into this mornings premarket gain. House speaker and the treasury secretary will keep negotiating but apparently only until the end of the day and a summer of social activism spawns a new way to help black entrepreneurs a special interview with the rapper known as killer mike joining us to describe his Innovative New banking concept the final hour of squawk box begins rightnow. Good morning, and welcome to squawk box here on cnbc. Im joe kernen along with becky quick, and Andrew Ross Sorkin. Elections are on tuesdays, arent they . So today is a tuesday. Two weeks all right, as i said, i got some milk with an Expiration Date that drove it home to me, too. So stimulus, well see not a lot of time. U. S. Equities futures are counting, maybe on some progress here well see. 400 point loss yesterday, but were getting back, not quite half of that on the premarket so far today the nasdaq indicated up about 70, and the s p indicated up 23 and change here are a couple of the stories that investors might want to take into account. Be talking about today earnings out just a short time ago from dow component Procter Gamble, the company beat annual assessments for sales and profit, also raised its full year sales, elevated demand for household products during the pandemic, playing into the move. P and gs cfo, john moeller joined us last hour. Its clearly a heightened consumer need for health, hygiene, and a clean home, which our portfolio fits right into. Theres also a flight to brands that i know and trust that are going to do the job for me and my family. And so thats yielding share gains on a global basis. On that raised sales growth forecast, p and g now expected revenue to increase 3 to 4 during fiscal 2021, up from the previous 1 to 3 , and you know, guys, i really thought i was on to something you know, like about soap, you know shaving cream. Projecting a little youre there by yourself now i was projecting from andrew. We cant smell you from here. I cant smell you from here. But people that are at home, i mean, you know, deodorant is like, i dont know, i get a rash shaving, why shave why wash your hair. If youre going to be around your spouse all the time, you better start using deodorant. I really thought we would see like some products doing better, the Household Cleaning Products doing better, but maybe some of the products with just being a slob at home, i figured some of those might not be growing as much the entire country is not on lock down. People need this stuff people arent going to work theyre not on lock down, but just the stayathome. Like i said, if youre spending more time with your family, you better make sure youre clean your wife will out you. Thats my old joke. I was glad to get married, i could stop dating, you know, stop exercising, you know, stop, hey. Pick a winner, penelope right anyway, the second dow component out with Quarterly Results is travelers, the Insurance Company topped analyst efforts on the top and bottom lines results were helped by higher net underwriting gains, and an increase in net Investment Income and another quarter of following revenue for ibm. This is the companys third in a row, but if you went back, even six years times four, probably ten, probably 40 quarters, ill bet you the Revenue Growth quarters were outliers in this case, Third Quarter sales slightly topped assessments while adjusted earnings per share came in line and it was higher demand for cloud services, ibm sales, the shares came under pressure when the company declined to issue a Current Quarter outlook because of the pandemic. Becky. Joe, i did hear an analyst this morning say if you were looking at organic Revenue Growth in Constant Currency numbers, you could go back almost a decade. You can go back almost a decade yeah, yeah taking any staatisfaction. Its tough. They have worked hard to mix it up and bring more Cloud Computing in its difficult as we have seen these big changes. Main frames i mean, i know theres super computers, massively data farms. Data centers. But its mostly distributed at this point, obviously anyway, medium blue. Another reason im glad im not sitting next to you if youre not using deodorant. Im talking about people at home i have been here since april i told you that. By yourself mack is here. And i dont think hes showering. Mack give him a sniff. I dont think just in the hair stuff, hes keeping some company in business. Anyway, becky, go. Later today, the senate is expected to vote on a funding bill to help Small Businesses that were hit by the pandemic, and tomorrow, the chamber is going to be voting on whats called the skinny Coronavirus Relief bill. Its a far cry from the broader discussion with nancy pelosi and Steven Mnuchin the House Speaker and the treasury secretary did make some progress on a call yesterday, and they are supposed to talk again today, but today is the deadline democrats have set to get any broad deal done before the president ial election. Joining us now is senator ben cardin, serving as the Ranking Member of the senate Small Business company, and senator, its good to see you today thank you for joining us. Good to be with you, thank you. Lets first talk about those two bills that your house will be voting on, the senate i know these are not bills your party brought, even if they pass, it will be republicans, its not going anywhere because the house will not put this up were focused on whats going to happen in the talks between nancy employee and mnuchin, whats your best read of whether or not were likely to see something done before the election youre exactly right in regards to the votes on the senate floor theyre not helpful, you look at them as cover goes for republicans rather than trying to get a bill signed by the president. And its not a bipartisan bill, it has no chance of being enacted. We are very much interested in getting a bill done. Its desperately needed. We need the next round of covid relief democrats and i hope republicans want to get to the finish line, so were rooting for the negotiations between secretary mnuchin and Speaker Pelosi thats the only way were going to get a bipartisan bill, the only way were going to get relief done before the election. Its not going to happen as a result of the action taken by leader mcconnell today in the senate. I would say theres plenty of blame to go around on both sides, and that average americans are probably getting pretty frustrated to see politics played out and that to take priority over whats happening in their lives youve got to hear from a lot of Small Business owners as the Ranking Member on the senate Small Business committee what is happening and why cant something get done why is there no compromise well, its certainly not because of the Small Business provisions senator rubio, the republican chair of the committee, im the ranking democrat we can reach an agreement on Small Business provisions. Thats not the issue the issue seems to be the broader issues related to the state and local government, related to how were going to handle aid, unemployment insurance, some of the other issues, the major issues that are in disagreement. In terms of Small Businesses, they needed relief months ago. The original c. A. R. E. S act, the idle they are important and we need a second round for Small Businesses, and we need to target for Small Businesses that desperately need the help, particularly in the under served communities. We need to get that done, and i am convinced that we can get that done if theres a broader agreement on the size of the package. And frankly, help me try to understand what really is at play here, and where the differences are. For so long it was about the numbers, is what we heard. That there was just such a divergence in numbers. Now we hear its ultimately about values, about what the language of this bill looks like and you rattled off a list of issues and parts of that bill where you think there are distinctions and its not one or two, but it sounds like many can you speak in a very plain way so we understand what those distinctions are because i think as the viewers look at it, some people say, why dont they just do various skinny deals then, as quickly as they can, where they agree. Theres others that say obviously the democrats and pelosi have said we need a much bigger bill. The president has said we need a bigger bill. Explain the distinctions if you could. First, a small bill wont deal with the issue. Small businesses are not going to be able to get back on track unless we deal with getting covid19 under control unless people who are unemployed have income so they can be consumers, unless we have our schools that can open safely in either inclassroom instruction or virtual or hybrid so all of this is interconnected thats why we need a major comprehensive second round of relief for covid19. The differences, first the size. I think that can be resolved language makes a difference. Theres certain areas that are considered to be poison pills, and we need an agreement between secretary mnuchin and Speaker Pelosi as to how those policy issues need to be developed. So that we dont get into an agreement on the size of the package, but we can agree on the language thats what theyre working on now in several areas we know some of them have been reported publicly as to the differences in regards to the help for american families, as it relates to safety in the workplace, as it relates to those types of issues. If the secretary and speaker can agree on the parameters of that, i am confident that the negotiators could put together a package, a complete package within a week. Senator, if the deadline that nancy pelosi has imposed comes and goes and if it looks like there will be no deal before the election, would you then decide there should be a smaller package that takes care of Small Businesses, at least releasing the ppe money that hasnt been used yet well, i think we need to talk about what we can do in a bipartisan manner. I still hold out hope that we get a comprehensive package. I can tell you, Small Businesses are not going to do well unless we deal with these other issues. Im very hopeful we can have a comprehensive package. Lets hope today we can get there. I think democrats would be interested to make as much progress as we possibly can. So were always open to discussions, but lets get the broader package done were very close hopefully that will be worked out today. But if it doesnt get passed would you agree to just pass the ppe funds, to use the existing ppe funds that havent been used in that regard, we need a second round of ppe, but we have to make sure the community is treated fairly and the idle program, is critically important for Small Business, and those were supposed to be up to 2 million. The administration put a cap of 150,000 on those programs theres no Funds Available for grants under the idle program, we have to make sure we take care of those needs as well. Senator cardin, thank you for your time. Its good to see you thank you weve got some breaking news for you just crossing the tape the Justice Department expected to announce today that it is suing google for antitrust violations dow jones reporting the doj will allege google engaged in anticompetitive conduct at least ten state attorneys generals expected to join that suit the Justice Department has scheduled a briefing for 9 45 a. M. , without specifying the topic. Of course the expectation is that google will be the subject of that case something that has been long in the making and we have been reporting on for quite some time well of course follow that story throughout the day but on the other side of this break, another view of the stimulus negotiations, youre going to want to hear. This from the other side of the aisle. Senator ted cruz is going to be joining us dont miss our special interview with rapper and activist, killer mike, encouraging patronage of black owned banks has 100,000 wks ups in just twoee stay tuned, youre watching squawk box on cnbc so youre a Small Business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Coming up nerxt, a summer o social activism, strengthening black entrepreneurs, the rapper known as killer mike with his initiative new idea. Stay tuned, youre watching squawk box on cnbc ok, just keep coloring there. And sweetie can you 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. It is your duty not to burn your own house down for anger with an enemy. It is your duty to fortify your own house so that you may be a house of refuge in times of organization and now is the time to plot, plan, strategize, organize, and mobilize that was rapper and activist michael render, also known as killer mike. A few days after the death of george floyd this past spring in an emotional speech that is worth watching if you have not seen it before, a little more than a week ago, render and several other entrepreneurs took that social organizing principle digital with a desire to help a black entrepreneurs, as they announce greenwood, a platform with a name that pays homage to tulsa oklahomas black wall street of about a century ago. The banks platform has now attracted more than 100,000 sign ups since october 8th. And joining us right now is killer mike, greenwoods cofounder, and we appreciate you being with us, and mike, i will tell you that that speech, i watched it over and over again it moved me in so many ways. I want to talk about greenwood this morning, and understand where it came from you are an artist, but you are also a Small Business owner, an entrepreneur, and an activist and what you hope greenwood can become yeah, well, let me say i have been an activist for 30 years, since i was 15 years old i was mentored directly by people likes james orange who worked directly with dr. King, and andrew young a friend and mentor for 30 years. Ryan glover is an extremely brilliant businessman on the ground here in atlanta he and paul judge come from the tech world andy young went to india, he saw a card that young and poor working class people, heavy taxation, he saw greenwood as something that would make sense for poor and working class communities, or middle class communities. Brian understood the need for black banks institutions on a daytoday basis we were left with the Check Cashing places and the liquor store, and understood like my 13yearold daughter, banking is going digital. Greenwood in tulsa was a magnificent place, as auburn avenue and edgewood avenue in atlanta are. As englewood, california, and harlem used to be, and we believe we have the potential here to recreate the spirit of greenwood in multiple cities and places throughout the country, help people become financially literate, take control of their dollar, and like greenwood 100 years ago, if the dollar turns 36 times in the community, it empowers and has a greater chance of empowering 36 people who get the dollar, and the people who work with them. We also know in capitalism, competition breeds good opportunities for the customers, so we decided to bring Banking Digital to your hand to do it directly for black and latino x. We wanted to target communities that banks were ignoring, in terms of home loans, in terms of lower fees in terms of checking. We wanted there to be a resource, and it seems as though the community is responding well can i ask you, do you think the big banks in america, and we can name them if you want, do you think theyre fundamentally racist organizations i think that racism is fundamentally ingrained in america but that does not mean racism cannot be exited out. Right, so you take a country, i was reading a quote by Benjamin Franklin that talked about the negro, and you dont want to bring in those people to overpopulate the country, which is going to be filled with white people, so i understand that even in the inception, because racism mythology created 500 years ago, in its inception, we have had this entanglement of race and what we have is the ability to unwind that, you can unwind on a social level about proper education, history, and about our proper relation to one another. You can undo racism systemically in banks and undo things like red lining, refusal to give gi loans, and things of that nature, we can undo that by creating a fair place in which people who are comparable, i might be black, another person might be white, we go into the banks, and i have a 21 greater chance of being turned down for a loan, yours is 8 . We level that ground, the first accrual of wealth is home ownership, make sure more blacks can step into the middle class, and then black bids, small and medium like mine and my wifes have an opportunity to get capital and growth, we create a market in which the need for racism is now no longer needing to be used and you have a group of people that be participate in the greater economic strengthening of this country. Racism is bad for money. When racism is bad for money, it cripples the community and does not allow the community to participate in the greater economic community, thus hurting the greater community. I believe that once desegregati desegregation ended, we desegregated our dollars and we have to reverse that trend. Mike, in terms of the business youre going after, are you going after the big banks or the Check Cashing shops right now. You got to win the First Quarter before you talk about winning the gamement we want to win the game, and the game is to definitely be a competitor to, and to make the big banks step up ill give you a perfect example, four years ago, when rappers decided to move money into Citizen Trust bank and take other people and encouraged them to do the same, millions of dollars got moved to places like one united but what happened was wells fargo, who was in trouble at the time for skimming out on peoples accounts, popped up with a 60 million black loan program, not minority, not mixed income, not any of the plethora of people of color, they said black because i understood the direct competition was coming. On the first wave what were going to do is give people the ability to save 0. 20, check cashes and Liquor Stores are going to lose the First Quarter. The big banks have to know kwoo were going to compete the long game is to win the big game the First Quarter is to make sure working class people, poor people have the ability to keep more money as they become financially literate and start to improve things like housing in the first level of wealth mike, we are just two weeks away now from the election you have been involved in politics for a very long time. I want to ask you about this, 50 cent was watching power lunch on cnbc as it happens there was a tax report about the different tax regimes under trump and biden, and the marginal tax rate at the highest level goes to 62 . He tweeted out yesterday, i dont care if trump doesnt like black people, 62 , are you out of your blanking mind, and said he was voting for trump. Where do you land . Where do i land i land below 50 cents pay grade, but im working hard to get there. I land with black people are financially more sophisticated than theyre given credit for. You have people like michael b. Roberts, robert smith, that have made hundreds of millions of billions of dollars. These men are brilliant men. I dont know if they grow with 50 cent but the goal of wealth is to keep more money than you give away ch this is not an endorsement of a candidate for the regular person at home, if you have 100, and someone is saying theyre going to tax you 62, that leaves you with 38. So even though you want to say 50 cent is crazy, i dont like black people that dont like black people, you have to start to say on a defensible matter, im not saying dont vote for joe or vote for trump, im just saying people who make over 400,000 a year are probably going to be thinking differently than people who make less than 400,000 a year. The question becomes for me, if i am taxed and im one of those people who has money willing to pay slightly higher taxes. I pay about 45 . Would i be willing to pay 10 . Only if the guy i wanted to be president wanted to be president , because i knew the social programs i support would have been supported out of my tax dollars, and not necessarily out of my woife and eye feeling robbed of giving in terms of michael, i would have been willing to pay slightly higher taxes or 10 increase if the guy i was voting for would have been in, the social programs would have created a better america for the next 20 years. I asked a person of means, did they care about a gubernatorial race, and they said all my business is in the city of atlanta. I dont care who the governor is of georgia mike, we got to thank you we got some breaking data thats coming across the tape we appreciate your time this morning. And we wish you lots of luck with it. Talk to you soon. Thank you very much. All right. Well, our september read, coming out under expectation, 1,415,000, seasonally adjusted annualized units, up 2 from last month we were expecting a number a bit stronger, closer to 4 the permit side, a different scenario, a bit better than expected at 1. 553 million. 1,553,000, up over 5 from our last look. And that indeed is better than expectations theres sudden revisions on both of these numbers if you look at starts. Starts drop from 1. 416 to under 1. 4 million, 1. 388 on the permit side, a subtle upward revision of 6,000 these numbers are a bit mixed. Whats coming down the road looks to be better all things considered, when you look at where permits were, where starts were, in february and march, we have made some significant progress especially since march and the housing sector remains one of the bright spots in this covid affects economy. Becky, back to you. Lets bring in diana olick and Steve Liesman for more instant reaction on this steve, well get to you first. Ill be short here because i want to hear dianas take on this first real quick and to me, im sure rick has thoughts on this this is an area of the economy that is working relative to what the fed is trying to do there. I dont know if its too much, too little, and certainly theres a boost that this gets from people wanting to move and move out of cities into suburban housing, but when i look at this, i look at this from a policy point of view lower Interest Rates have sparked a rebound in the housing interest its one of the main bright spots that were looking to. And im sure shell talk about this is the split between what is multifamily and whats Single Family diane . Yeah, steve, and i hate to disagree with rick, i dont think these numbers are mixed. I think these numbers are incredibly strong. The big drop we saw the month before was in multifamily and thats the bounce back, but what were seeing in Single Family is incredibly strong numbers. Were seeing the permits up 7 nt 8 monthly 24 annually this is where we need the construction, we are short many many thousands of Single Family hoebs. Thats where the demand is we dont need the construction in multifamily nearly as much. We have a shortage of existing homes on the market. We have an incredible shortage of newly built homes on the market in fact, we had some really crazy numbers from the National Association of Home Builders which showed us the number of new homes that have been sold but havent started construction yet, they just sold that plot of land is up 69 from a year ago these numbers from today are enkoujie encouraging, very strong on the Single Family side the multifamily side, we could see a little more affordable multifamily housing. Rilgt now we need to see that on the Single Family, and thats what we got. Rick, i would some good news. Thank you all for your time this morning rch. The dow is indicated up by a hundred points, i saw it up as much as 232 points remember this comes after a down day of over 400 points for the dow yesterday, and all of wall street continuing to watch to see what happens in washington whether we come back senator ted cruz joins us to tell fus he thinks theres still kim to get to tell us if he thinks theres still time to get a deal down youre watching squawk box on cnbc big tech coming under fire in washington. The Justice Department is expected to announce later today that its suing google for antitrust violations ylan mui joins us with her reporting on this. And we have been watching for this, but this is the clearest signal yet that google is going to be first in the cross hairs. Thats right, becky this investigation by the Justice Department has been going on for roughly a year. I can confirm now that the Justice Department is planning to file that antitrust complaint against google challenging its dominance in the industry, and the way it uses its advertising revenue to maintain that position im told that one of the things the lawsuit will look at is the way that google has struck agreements to make sure that it is the preset or preloaded Search Engine as well as the barriers that google has erected that make it harder for users to change that default setting. Im hoping to learn more about the scope of the complaint later on today one of the open questions has been how many states might join in a federal complaint im told that we are expecting some state ags to participate in this suit however, two sources also tell me that states are required to sign a good faith commitment before they could even read the full complaint i expect that means we will see many if not all democratic ags not signing on to this, and so that could spell trouble for google down the road because that could mean they continue their own investigation. Perhaps it ends in their own lawsuit even as the complaint from the doj winds it way through the court system for now, i can confirm the Justice Department now planning to sue google. We have reached out to google for comment and have not heard back yet, joe. Joining us now, senator ted cruz of texas, author of one vote away how a single Supreme Court seat can change history, senator, thank you for joining us you have argued many times before the Supreme Court an honest question, if you had to either represent google or represent the doj, do you think you could do either effectively. Im looking at the monopoly aspect of this right and i think as a good lawyer, i dont see consumers, its a great company. Consumers arent being harmed, however advertisers might not be getting a fair shake if they have o pto pay googles prices how would you argue it both sides will have amazing lawyers. And any competent lawyer would be able to present either side in my point of view, i think the department of justice is going to prevail in this case. I think google is a monopoly, bruci brucing their monopoly power there have been previous investigations into google before that, they were investigations into microsoft that ultimately resulted in a lawsuit in a settlement, but todays big tech is different. Doolg is google is a trillion dollars company. The degree of power that has been concentrated in Silicon Valley by any level, big tech, dw dw dwarves, standard oil. It dwarves, a and t when it was bone by the antitrust laws, and i think big tech is using its power in a much more abusive way so im glad the department of justice is bringing this case. If youre really good at something, you can have a de facto monopoly, you think theres some things that arent quite ethical going on in terms of maintaining the monopoly at google well, what we see them doing, and one of the things that presses the edges of the law in terms of the typically categories is their abuse of power is not strictly monetary i mean, it is maximizing profits, knatheyve got 125 billion sitting around in cash i guess thats the money between the seat asks sofa its not just process max mization at the expense of consumers, theyre monetizing your prooiflt data, and theyre using, so google owns you tube and they use that to sensor free speech, to sensor political conduct. You know, this comes right on top of what we saw last week where twitter and facebook both decided to sensor the New York Post and to silence news report. The New York Post had two block buster stories of alleged corruption of joe biden, one concerning ukraine another concerning his being offered millions of dollars from communi communi communist china, and twitter and facebook prevented users wow cant tweet a link to the articles they shut it down, not only that, they have still shut down right now today the New York Post cant put on social media its own stories. That really crossed a threshold. It crossed a line we have never seen before. We have seen big tech try to sensor individual users. We have never seen them taking on one of the biggest and most respected Media Outlets around the New York Post is over 200 years old, founded by Alexander Hamilton and a handful of silicon billionaires are saying they can decide what the New York Postcan report, what cnbc can report thats a terrifying assertion of power. You stole my thunder because Emma Joe Morris of the post, the deputy ed sor said were still blocked. And you retweeted byron york this morning and said nothing to see her. So twitter does serve a purpose, and if you cant get on it, you are being harmed, i think. Thats a lot of responsibility and we know with great power comes great responsibility and how did they both know that this argue fsz so disturbing that of course theyre not the only ones that arent talking about it either. Its kind of across the board. You know, an antitrust law, theres a concept called conscientious parallelism. You have major plays in an olga, they are mirroring each others actions. We see that in big tech. Modern day owely galigarchs, thw is anything that is critical of trump, they will just silence. Thats the reason why last week i announced along with judiciary, to subpoena jack dorsey and Mark Zuckerberg to testify before us, before the election, because the election interference one book away, how a Supreme Court seat can change history. Theres an entire chapter on free speech and the efforts to take away your rights of free speech, my rights of free speech that book has become the number one best seller on amends. I think people care about how do we protect our rights and what are the threats to our constitutional rights, because they are hanging in the balance. Senator, how does that view, often times you have talked about the wonders of free markets, and also in the context of thinking about what a break up would do to solve the problem youre talking about you know, there are newsstands that carry certain newspapers and magazines and others there are other newsstands that dont, and i would imagine you would support that as somebody who owns those newsstands. Im a big believer in the free market. And how to solve this problem is complicated. It is very complicated and doesnt fit into neat silos. Nobody wants to see a federal speech police. If the federal government were suddenly deciding what speech was okay and what speech wasnt, that would be a terrible, terrible outcome there are at least, however, three possible remedies and, i have shared multiple hearings examining these in depth number one, section 230 of the Communications Decency act that is a special immunity from liability that big tech gets that nobody else gets. They cant be sue. It was a gift, a subsidy from the taxer payers to big tech theyre now the largest corporate behemoths on the face of the planet and section 230 was passed with a background and assumption that this would be neutral. They wouldnt be censoring users and the press. They long ago abandoned that mod. If theres no within, no reason she should have to immunity from liability. Number two, breaking up monopolies abused monopoly power has long been an authority and responsibility of the federal government and number three, theres a remedy that sounds really in breach of contract and consumer deception. And the basic argument is as far as, when you sign up to a social company and you follow someone, your understanding is your going to see what they post, what they tweet. If tla follhey follow you, they going to see what you post and tweet. Social Media Companies have decided to break that fundamental promise, to deceive consumers. If they disagree with what you say, they throttle what you say. They da hoban y its not for consumers benefits, its to collect more power in silicone valley i think this is the single biggest threat to free speech, to a free media, and to our democracy that we have in our country senat senator, whats going to happen between secretary mnuchin and man nancy pelosi today what do you want to happen i dont know hall happen. I have said for weeks, and we have discussed it several times. I dont believe nancy pelosi and Chuck Schumer want a deal. I think they have made the political judgment a maximizing economic pain is in their political best interest that the more people who are unemployed and broke and passed off, the better it is for joe biden im skeptical that well see a deal this week the senate will vote on a 500 billion package that is targeted at helping Small Businesses, that is helping parents whose kids havent been able to go to school that includes my legislation that is the most far reaching legislation on the floor they will block it this week they have done it previously, and their argument, it really is a crazy argument they say 500 billion is not enough therefore we incest on 0 that doesnt make sense. I get they want to spend even more but their refusal to move forward with even a penny before election day, thats not a policy disagreement. Thats politics, and its unfortunate. All right senator ted cruz, thank you very much we saw you last week good to see you again this morning. Thanks, and i dont know, go get something done i dont know what, but get anyway, thank you, senator and coming up, what to watch, ahead of the opening bell on wall street. Squawk box coming right back everyone wakes up every morning to a world that must keep turning. The world cant stop, so neither can we. Because the things we make, help make the world go round. They make it cleaner, healthier, and more connected. Its what we build that keeps things moving forward. So with every turn, well keep building a world that works. Its got all my favorite shows turn oright there. Boom, i wish my Trading Platform worked like that. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. Welcome back, everybody. Some breaking news this hour it looks like the department of justice will be filing a suit against google today against alphabet that alleges they have some anticompetitive problems they have been using to keep their monopolies in place. It is something we have been talking about through the morning. Lets get to jim cramer now and get his take on what this might mean for the stock the stock not down much this morning on that. You think this is because baked in or the market doesnt take this seriously one, it is baked in, two, it is not first rodeo they have been able to defend this over and over and over again. There is a huge number of documents in favor of google i dont know what happened lately i was listening to senator cruz talk about the tiein. Thats nice rhetoric, which has no bearing, even though i know hes a great legal mind. When it comes to stocks, hes not the man to go to if they broke the company up, there is 100 billion, what would you get, you get waymo, healthcare, fantastic youtube, and you get search what are they going to do . Break search up into what, like, a through m goes to facebook there is, like, kind of like a monopoly that is not easily attacked by the government theyre up against bing. Bing some more money i think it is another losing case by the government and the sum of the parts is worth more than 1500 ive been saying over and over again, they ought to break this company up to bring up value it is the doj taking it from buy to strong buy. In terms of the competitors out there, you bring up the right questions with bing and some of the other Search Engines that are out there, i was actually surprised to hear they have 80 of the search in terms of controlling that because as a consumer, it is the first place i go all the time because i think it is the best Search Engine. I think is it possible to argue that theyre really good and a lot of people use them so we ought to make them bad and hobble them like in the movie misery. I dont get it but they always try. It is a time honored thing to go after google and google has really good lawyers and theyll argue against it and ultimately google if they break it up, you own the stock if they dont break it up, you own the stock it is a pretty good situation. Im not making fun of the doj. Doj is terrific, as always. The idea of being hobbled from the film, my gosh its a james caan situation yeah. Thank you. Appreciate it. Well get more from you in a few minutes. Okay. Thanks, becky. We just heard this hour from two sitting u. S. Senators on the state of stimulus negotiations in washington. Were rooting for the negotiations between secretary mnuchin and Speaker Pelosi thats the only way were going to get a bipartisan bill thats the only way were going to get the relief done before this election. The more people who are unemployed and broke and the better it is for joe biden so i am very skeptical that well see a deal joining us now to talk about the bopotential market reactiono a stimulus deem al or lack therf lets walk through the two permeatations. It is very binary, and by the way, it seems like theyre farther apart than you would think and yet they say theyre close. What do you think the market is going to think i dont think the market is going to care that much. If you look at both sides, and you say, okay, no deal, then we know that potentially were going get a deal after the election if you the other side is if you get a deal, i dont know if there will be enough time to figure out what the deal is going to be. If you get the deal, and it is a different pa ert thparty that w, they look at the deal again. I think my expectation is you are going to get rhetoric and probably nothing done and the market is really looking forward to the next couple of weeks to see where were going to be with the stimulus but at the end of the day let me ask you about the timing, though lets say there is no deal preelection not clear that there is one immediately after election either in fact, some experts suggested you might not get a deal until february in which case there are Small Businesses in america that might be having a liquidity problem today that come february, theyre having a solvency problem. I agree and i dont think it is a good thing we dont get a deal. Think it is in the best interest of Small Businesses and consumers and the American Public that we get a deal. So i think, you know, either way you have to get money to the consumer, and thats really why you see the discrepancy in the stock market if you look at the covid stocks and the reopening stocks, there is a huge valuation disconnect because right now the market doesnt believe that money is going to get to the consumer and the Small Business and i think it is vital that we do because thats how you extend the growth for the next couple of quarters and then come back to some sense of normalcy. So, given the volatility in the market, given the upcoming election, if you have a little bit of cash on the sideline right now, do you want to be dipping in now, do you think there is going to be a moment you never trade, you know, you can never time it perfectly, do you think there is a quote unquote opportunity coming, you look out 12 months from now, think the market is much higher, a vaccine, the worlds materially better, what does it look like to you so, it is a good question i think if you have cash on the side, you wait, you wait for some opportunities for some really Good Companies that should get probably will get sold off in the next quarter and that could be you can play the reopening trade on that, Companies Like disney, in if it gets sold off or honeywell or infrastructure stocks, 5g stocks like american tower, qualcomm, i think you wait if youre allocated to it appropriately, i dont think you change your allocation the markets cant discount this pretty quickly a lot of this is baked in. I do feel that even if the latest is february, they will be stimulus and then a year from now to your question, i think the market is higher, i think there will be some internal movement in the market and we have been talking about this for a while. I think value does come back value with secular growth comes back you are to look at Balance Sheets and operating leverage. I do think that will be the discounted into the future and companies will come back. We want to thank you, of course, for your perspective on all of this. Quick final check on the markets before we hand it over to the folks on squawk on the street. Right now the dow looks like it opens up 118 points higher nasdaq up 53 points. S p 500 looking to open about 16 points higher. The big news today, 9 45, that press conference from the department of justice on the future of google and what that case may bring becky and joe, well see everybody tomorrow squawk on the street begins right now. Good Tuesday Morning welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber stocks are attempting a bounce after the worst day for stocks since september 23rd three big stories today. Q3 earnings, stimulus watch as the deadline approaches, and the dojs landmark antitrust suit against google does appear imminent our road map begins with big techs and antitrust head winds justice is set to file that lawsuit against google this hour plus, systtimulus hopes sprig eternal. Pelosi and mnuchin closing the