Transcripts For CNBC Squawk Alley 20240713

Brennan and jon fortt. Markets have been well off the highs. Dow was up 937, trying to hang on to about 400 points on the dow right now. Lets bring in mark mahaney of rbc, david lovevitz of jpmorgan. We knew 2700, 2750 would be a bit of a battleground and its turning out to be exactly that yes, exactly. One of the things thats occurred here over the past couple days really over the course of the past weekend is you finally saw consensus earnings system begin to come down and the narrative that had been in the Market Equities are looking cheap, the question we were always asking was cheap relative to what earnings . When you use the new estimates that are around 145 a share, you know what youre seeing is stocks are looking fairly valued not outright cheap and i think thats a big part of why were seeing things run into resistance at these levels mark, its a great opportunity, davids answer, to ask you how in the world analysts are coming up with any kind of estimates given the lack of guidance and anecdotal signposts from a small number of companies. What do you plug in to your models right now when youre trying to calculate earnings for the year well, the data points are piling up. You did have twitter prerelease a call and comments by facebook, a study that came out from the Interactive Advertising bureau this weekend that had two Interesting Data points. 75 of ad buyers expect the current environment to be worse than the great financial crisis and a quarter of ad buyers are putting in zero in terms of their ad spend for the june quarter. The data points are piling up and weve had to react to them a couple times already well probably have to keep reacting to them well get all the news from the company to start printing in about two weeks. You guys at rbc put out an Online Grocery report which is relevant now considering what everybody is needing and going through to get food. Youre bullish amazon still. I read this report and my takeaway was more that target and walmart are likely to give amazon more of a run for their money in grocery Going Forward because of the downloads theyve seen and the preparations theyve made and now people are noticing isnt that the case . I think theres a large truth to that. Another company i mentioned, instacart, but walmart is based on our survey work i dont think this is an Inflection Point weve done the survey for five years. It is an acceleration of a trend thats been building so they found about 55 of respondents in the u. S. Said they have purchased groceries online. Last year 35 . It jumped up a lot and we also found that almost 55 of respondents said that they thought that this covid19 crisis would cause them to permanently increase their purchasing of groceries online and amazon, im sure, is going to be one of the beneficiaries of that if they get the Customer Experience right theres an article in the New York Times this weekend that said amazon was seeing as much as 50x increase in grocery orders amazon needs to quickly catch up and hired the 100,000 new employees. This is one of the areas i imagine theyre deploying them to if amazon gets this right, the structural stepup somewhat Inflection Point of where people buy groceries Going Forward. Amazon can be a beneficiary and we think it will be. I want to dig into that a bit more with you, mark, but david, back to the point you made about stocks being fairly valued here, i mean certainly were seeing this rally, second day in a row, because there are these early indications based on the data we have so far the coronavirus pandemic is slowing in some hot spots around the world, but we dont know what earnings picture, let alone the economic picture, is going to look like for all of 2020. When you talk about fairly valued what does that sec ffact and could there be a leg lower given the fact we dont have those numbers . I would agree that riskses are tilted to the downside i think what markets have been focused on here over the past, you know, couple weeks is first off the policy response from the federal government and the Federal Reserve and then more recently as you mentioned the slowdown in the number of cases in major metropolitan areas, primarily in new york city i do think that the markets focus is going to begin to transition here. This has been a very headlinedriven, heavy beta environment where markets have been swinging up and down in a given day. I think to some of marks comments what the next couple weeks will tell us from an earnings standpoint will shift that to more of the micro and see greater dispersion and differentiation between winners and losers and then importantly were going to get a better sense of what the contours of this recession are going to look like i mean the key question remains, how long is this going to last and then what will be the ability of the Small Business community to reabsorb this slack which is currently being created in labor markets when we get to the other side we dont have answers to either of those questions its anybodys best guess and why the next couple weeks will be so important and we are cautioning clients against embracing too much cyclicality in portfolios. We prefer to play a defensive form of offense at the current juncture mark, three stories stood out to me today from a media standpoint the way that affects your business or your universe one, the masters was delayed but not canceled, tentatively schedule for fall. Mlb and the Players Union have a plan theyre working on to maybe start Travis Kalanick inia and the nfl will hold their draft virtually. Is there a hope within tech and social there might be content in the coming months that we maybe didnt think would happen . Well, lets see i certainly hope so. I think everybody else does too. It does lead to the point that theres a very little new content coming out and so the companies would have large content databases like netflix benefit from this environment. I want to be clear, i think there are few companies that benefit from this environment, very few and the question what about the second order impacts all were doing is looking at the impact and people being forced to stay at home, all of the companies i look at, even amazon, if unemployment rates rise to 20 that will impact amazon theres no escaping that the question is whether were going to get that. If we do all of the companies will be materially impacted. In the near term with the dearth, the dearth of alternative entertainment, in the homes, you want content, all you have is netflix, ozark season 3 is out, thats the one i can recommend. Mark, i want to go back to your thesis around amazon and Online Grocery, though. I live in Westchester County you cannot get a delivery slot you cant get it whether its amazon, instacart, if you are lucky enough to get one, it crashes and gets canceled, grubhub, last night, tried to put an order in, 30 minutes later canceled with the restaurant at least from a logistics and transportation standpoint there are a lot of hidden costs associated with some of these companies . And the challenges you talked about, if amazon and other companies dont solve this, they will have missed an enormous opportunity. If enough consumers like yourself have frustrating experiences in terms of getting groceries delive groceries delivered at home, the bar is low the first time youve had to do this theres about a twomonth period if amazon and instacart and walmart dont get this right and walmart may be best positioned because they can do the click and collect which is very popular now, so if amazon, the real Home Deliveries dont get this right they will have missed a huge opportunity and im sure amongst Senior Executives at amazon this is panic issue number one this is a chance to take lions share and market share and if they cant optimize Consumer Experience they will have blown it im sure thats why they hired 100,000 new employees off the bat when the signs starteded hitting. Yeah. Fascinating. Mark, david, thank you as always, for your guidance and intelligence well talk to you both soon. Thank you, carl. Take care we just heard the latest numbers on covid19 from new york from governor andrew cuomo. Heres what he said a few moments ago. Total number of newly hospitalized is up from yesterday, but when you look at the threeday averaging of these numbers, the threeday average is down, which is good news. This is a threeday hospitalization rate we tend not to look at any oneday. Day to day its up some day, but if you look at the threeday average, its moving down, which is good news we talk about the apex and is the apex a plateau and rit nghto we are projecting were reaching a plateau in the total number of hospitalizations and the growth and it starting to flatten this is a projection it depends on what we do and what we do will affect those numbers. This is not an act of god that were looking at its an act of what society actually does. Change in daily icu admissions is way down and thats good news the daily intubation number is down and thats good news. The discharge rate is right about where it was the bad news is 5489 new yorkers have lost their lives to this virus. That is up from 4758 that is the largest single day increase and we talk about numbers, but thats 731 people who we lost behind every one of those numbers is an individual, is a family, is a mother, father, sister, brother, so a lot of pain again today for many new yorkers and theyre in our thoughts and prayers many people across this country. The discrepancy number of deaths up, number of hospitalizations dropping, the number of deaths, number of losses is a lagging indicator to the number of hospital zagsz, right. What happens is a person goes into the hospital, if theyre treated most of them are then released, theyre discharged some stay, some get put on a ventilator the longer you are on a ventilator, the less likely that you will ever come off that ventilator, and thats why youre seeing the number of deaths increase because these are people who came in at the peak, they were not successfully treated, theyre on a ventilator the longer youre on a ventilator the less likely you come off a ventilator. New york is still the most heavily impacted state in the nation new jersey, which is on the curve, a little bit behind new york, is suffering and again, our thoughts and prayers are with them. Of course that is new York Governor Andrew Cuomo with the latest numbers here in new york, which is continues to be the epicenter of the coronavirus outbreak here in the u. S you dont want to see those death numbers. Its heartbreaking to see those numbers, but it is the shape of the curve and the fact that that curve could potentially be flattening based on the last couple days worth of data that is so in focus right now guys, the other thing i would note, the governor did call on the u. S. Military to convert the usns comfort, the hospital docked in new york city in manhattan, to start taking covid19 positive patients and the u. S. Northern command, the department of defense lead for the Covid Operations did announce last night they were, in fact, going to start doing that that adds more hospital beds and more facilities and capabilities in new york city yeah. We will take those encourang gnceaiy. And after the break, dont miss the ceo of intel, bob swan, on how they are handling this ongoing crisis well be right back. Stay with us welcome back intel ceo bob swan announcing this morning that the company is stepping up efforts to use technology to help combat the novel coronavirus. I spoke with him late yesterday about those efforts and what impact hes seeing to demand and how long he expects that to last and what he expects to change when we come out of it. We announced today a 50 million mentpledge, in essence,o deal with deploying the technologies to accelerating the deployment of technologies to combat the coronavirus, and were really deploying the money in three individual ways first, what we call a response and readiness initiative, which is, in essence, dealing with our customers and our ecosystem partners to help accelerate the development of a diagnosis and treatment plans to deal with the virus, so thats one big effort for us the second one is really online training, and its working with nonprofit to really focus on the deployment of technology and devices to help access to technology for underprivileged children to be able to continue their learning experiences and that weve started with firstbook. Org here in the u. S. By committing 5 million and the deployment of 10,000 units the third area what is we call an innovation fund, and this, jon, is meant to tap into the ideas of our ecosystem partners and our employees who are very committed to try to help out in this very dynamic environment. So 50 million commitment across tease three different initiatives, really all geared towards the role that we play in Technology Today and that is to accelerate the deployment of technology to enrich the lives of every person on earth at a time where we have a real issue that we have to contend with. Yep bob, that sounds great i wonder, to the extent that you can, a macro question, with economies being effectively shut down for this period of time, there are lots of questions about how long its going to take to get back to normal, whatever the new normal happens to be. Do you yet have a sense of the viability of your customers during this period and coming out of it and how long it might take for them to be ordering from you for demand to return to levels where it was before yeah. Its a great question, jon, and i would say that i dont have great clarity into how this plays out, but what i do know is, for our technologies and for our partners and customers technologies, for the most part, everywhere we operate around the world weve been designated essential services think of it, essential services are people need access to their pc, their phone, they want to connect to the internet, the technology thats deployed through hospitals, through industrial facilities, through diagnostic imaging equipment, all these things are, in essence, compute devices and those compute devices need essential Services Like the technology that intel and intels partners develop today our focus in energies in the last several months and we expect Going Forward is how to do we ensure those essential services get into the hands of those who need them most importantly to help keep employees safe, but the economy continue to operate for Critical Services thats a lot of what todays announcement is about, is stepping up our commitment to help effect getting intel technologies out to those who need it most. Bob, does this change the nature of the consumers relationship, and by the consumer i mean not just people at home but people at work as well, the relationship with the pc itself . I know for me personally, i use a lot of mobile devices, but a good old high powered laptop, desktop computer has become an essential tool during this time in a way that i might not have realized that it was day to day before do you think that the demand Going Forward to at least have a modern pc in reserve is going to be different yes, i do, jon. I think the pc has been an essential component of our everyday life for a long time, but our expectations is in this new normal, whether its access to technology 24 7, whether its at work or in the home, the needs of compute today is just at this particular time, i think is as intense as it has ever been the need to have one at your disposal to be always on, always connected, is increasingly important and our challenge and the need for us then is to ensure that were there for our customers and our customers customers so they have access to that technology. You are active in m a, you have billions of dollars that you invest as intel. Does this change the way that you invest and the technologies that you see as being key for the future you know, i think right now the last youve heard us talk quite a bit about the market that we see today, the market that is much bigger for intel than its ever been, the in a world where we characterize everything increasingly looks like a computer and again, whether its the network in a 5g world, whether its our connected devices, whether its in the office or working from home, whether its an automobile or whether its a factory, increasingly everything to us looks like a computer so the needs and the investments for us is weve expanded the market that were serving and investing across a multitude of architectures and platforms so that we can bring commute technology to more and more devices in an increasingly interconnected world. Finally from the position where intel sits and as you said youre all around the world, youre seen as essential in a lot of places, do you yet have a sense of what it is that youre going to tell governments in terms of advice, perhaps in terms of lobbying to put the markets where you operate in position to be in a better position should we face a crisis like this again . Yeah. I mean as you might imagine with a global footprint, not just in terms of where we sell our technology and deploy our technology, but where we make it and design it, were a very Global Company and therefore, to deliver our essential services today, it requires us to very proactively be dealing with all the governments where we have a role today so that everyone appreciates the importance of the essential technologies we provide. The commitment that we have to our employees to ensure that were deploying the best practices so that we can keep them safe while also delivering for our customers, so its the engagement with the governments, local, state, national, around the world has been imperative to keep our essential technologies available for our customers and for their customers. And i did press him on that last question, again, and he said, well really what we wants from governments is to be prepared and more engaged so the next time theres a crisis the world can respond quickly and he said he does not have great clarity into how demand might rebound but the pcs up front again, and, quote, the need for compute is as intense as it has ever been. Morgan, thanks to bob swan for joining us with that. A great interview thank you to bringing that to us stock is up about 10 week to date and its only tuesday european markets meantime are set to close in just a moment and seema moody has the breakdown. Seema . Morgan, stocks in europe continue to get relief even though there was a slight uptick in the death toll for spain and france were seeing gains of around 2 across the board, led by germany. Since the march lows, Global Markets have outperformed. Europe is up about 21 since it put in its lows but many strategists from jp morgan writing that the bottom is yet to be put in for europe. In regard to stimulus, europes finance ministers to debate a half a trillion euro worth of economic aid and whether that will be enough to support the 19 european nation bloc in the meantime were seeing more European Companies suspend their dividend today sin naworld, updating investors, cutting its dividend and salary deferral for executive directors and that stock up over 40 . Over 100 companies in europe have cut or suspended their dividend, much more than weve seen in the u. S. So far. Jon and carl, back to you. All right seema, thank you very much. Dow is up about 445. Lets get a news update with our sue herera hi, sue. Good morning, once again, carl, good morning, everyone secretary of state mike pompeo says america comes first when it comes to masks and other protective equipment for Frontline Health workers right now, given the great need for ppe in our own country our focus will be on keeping critical medical items in the United States until demand is met here the United States continues even as we speak to provide highquality, transparent and meaningful assistance to our partners all across the globe. The navy telling nbc news a crew member aboard the usns hospital ship has tested positive for covid19. The ship was originally sent to new york to alleviate the pressure on the Hospital System by treating noncoronavirus patients but it will now be taking some people with covid19 the crew member is in isolation and the diagnosis is not expected to affect the comforts about to receive patient. The International Air transport Association Says airlines cannot afford to refund canceled tickets, despite the governments demand that they do so many carriers have been issuing vouchers to customers rather than refunds for virusrelated cancellations. For more information as always on the coronavirus head to cnbc. Com. Morgan, back to you. Actually, sue, ill take it thank you very much, sue herera. Were going to get bank ceos at the white house today. Lets get to eamon javers on that and eamon, looks to be the allstar lineup. Yeah, absolutely, carl. Although theyre not actually going to be at the white house as were learning. The president of the United States always works from home in a sense because the west wing is next door to the residence but he is going virtual like so many of us and the president is going to have a Virtual Meeting at 3 00 p. M. With the banking ceos to talk about the Small Business lending programs a list we have confirmed who is going to be attending quote unquote this meeting including alfred kelly of visa, Michael Corbat of citigroup, Brian Moynihan and gordon smith skyping or zooming in or however theyre going to set this up at the white house. Im sure we can expect all the ceos will find a way to keep their pets and children and Everything Else out of the shot. Back over to you all right im sure they will were all working hard to do that i guess eamon javers, thank you for the latest on that well hear from the ceo of the insurance giant allstate a look at the markets off the highs of the morning but the dow up 2. 3 and the s p also up 2 stay with us well be right back. Issues facing our world,k al what do you see . We see a billion more people breathing free. We see access to fresh food being the global norm, not the exception. We see homes staying cooler, without the planet getting warmer. At emerson, when issues become inspiration, focusing core strengths to create a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Stocks trying to hold their gains for a second day today lets get to bob pisani with a market check. Carl, giving up about half the gains but still pretty impressive banks, energy stocks, reits, all the stuff that has gotten most beaten up is bouncing. Be careful about saying this is an enormous move up given whats been happening the stocks are cut in half want to show you the retailers, go through a couple of these everybody likes to say what a great move weve had, some of the stocks up 40 or so, but let me point out nordstrom was 40 four or five weeks ago and now with the rally, its half of what it was and we consider that a victory. Bear this in mind. The daily charts do not do justice with whats going on the same with the travel stocks, carnival and royal caribbean, theyre all up nicely. Caribbean was 110 five weeks ago. 110 its 36 weve talked about an enormous rally. Look at these charts ona threemonth basis, it doesnt make sense at all to look on any kind of weekly basis the same with the reits, talking about kimco, 18 six weeks ago and now had this enormous multiday rally, sorry, Simon Property group, had this enormous rally and the stocks have been more than cut in half essentially. Kimco was 18 five or six weeks ago. Just keep in mind the longer term perspective curious dividend news announcements. At t took the step of saying were going to pay the dividend. Normally they dont make those announcements but this is the phone company, of course, theyre going to pay the dvds, but they announced it. Exxon said theyre cutting Capital Spending 30 and said one of their objective is to preserve cash for the dividend thats a hint, folks theyre not going to cut the dividend or the last thing theyre going to be doing. Its important to know what dividend yields are for some of the Energy Companies right now exxon is up there quite near the top at about 8 or so, but some of the other ones like american paint are high 16 for heierich and payne. The question is how much longer are the other ones like schlumberger and halliburton exxon at 8. 2 carl, this issue isnt going awaypoint want to know that payne announced a week or two ago theyre cutting that dividend thats the main reason some people remarkably still own Energy Companies guys, back to you. Morgan yeah. Bob, ill take it. Continental resources suspending its dividend today as well pain in the oil patch in focus millions of americans, though, sheltering in place amid the coronavirus outbreak and insurance giant allstate announcing its paying back its Auto Insurance customers more than 600 million in premiums since people are driving far less during this pandemic. Joining us is the chairman, president and ceo of allstate thomas wilson. Tom, thank you for being with us today. Good morning, morgan. In terms of this shelter in place payback youve announced to start off the week to pay back some of these returns, some of these Auto Insurance premiums to customers, how did you arrive at that 600 million number and what does that mean for allstate customers that are going to start receiving these checks it means were going to treat them fairly. When you look at whats happened in driving, we kind of began the month in march and everybody was driving about the same amount they did and then you got to the third week of the month and boom, it went down it went down and almost doubled until down between 35 and 50 by state and so as a result of that, youre having fewer accidents and what we concluded was you know what, weve been in this business a long time, you have to add quickly and put people first so based on one weeks worth of data we said lets go, less than two weeks later we have a plan in place to give everybody back who is an Auto Insurance customer 15 of their premiums in april and may and they can have it on their credit card or in their checking account, and so we worked to give them money back because they need it at this point in time yeah. Youre doing payment relief, free Identity Protection which really got my attention. What are you seeing that prompted allstate to offer free Identity Protection, to offer a service like this for your customers through the rest of the year well, when you look at our lives have become virtual whether a third grader going to School Online or working from home, and as a result of that, hacking opportunities are up and so if you look at the coronavirus phishing attempts up 600 right now and so we thought you know, people are more at risk and so lets just give them free Identity Protection we sell it to customers, we sell it at the work site and were making it available to all u. S. Residents. Free is free like we dont get you to sign up and if you forget we keep billing you. In this case weve said its free for the rest of the year. Come to our website and sign up and well help protect you we hope over time some people will find value in it, but we did it because we believe being in good hands means protecting people and we all have to buddy up and do this together in this crist. Yeah. Insurance Companies Like yours, some of the biggest, most advanced repositories of data and data analysis, what does the information, whether its in autos, whether its in Identity Protection, whether its in homeowners, all these different areas that you cover, what is it signaling about how this outbreak is evolving right now and how does that compare with some of the other disasters, catastrophes that weve seen in past decades its a really good question of course this unlike weve been in the financial business for almost 90 years, whether thats the earthquakes, wildfires, this one, of course, is those are much more concentrated and this one has a longer period of time, so the data is a little different here and so what we do know is that people stopped driving pretty much on the roads, even when you look at shelter in place rules, versus nonshelter in place, driving still went down a lot because people drive to go to work about a third of the time, a third of the time is for errands and to see friends. At least two of those got cut back substantially as a result of this. So what youve seen is driving go down precipitously. We accessed the driving data on 23 million cars a day and you can see it everywhere. So people are driving less interestingly, the people who are still driving, are driving faster maybe because thats nobody is there, but we dont know whether they will have more accidents. We dont know what will happen when we come out of this and whether people will decide, you know, i kind of like working at home a couple days a week, still want to go to the office so will driving be down two fifths instead of five fifths we dont know on that part of the driving yet, but what we do know is that if we treat our customers fairly well get through it together. Tom, good to see you. Its jon fortt i got a question about claims overall. With more people home, weve heard that crime has been down i imagine other types of claims might have been affected too, maybe personal articles, less personal loss. Is there any time of claim that youre seeing thats up at this time or generally are people being less risky and are you seeing fewer claims . Well, jon, you were going into the homeowners space. The data on that is not conclusive yet as to whether there will be more or less thefts as a result of people being at home because as some people are home, theyre also getting their Families Together so some places are empty and so you dont find out about those claims until people go back. If somebody comes from their the child goes to their parents house and their apartment gets broken into they wont know for a month. Too hard to tell yet on the homeowners side on the auto side, there are a lot less accidents and there will be a lot less accidents as long as you stay off the road. That obviously has a benefit and were trying to give back to our customers. Tom, its carl. Two questions, one is, what do you say to customers who are asking their own insurers, geico, state farm, progressive if theyre going to match the move that you announced yesterday, and number two, you must be doing some longterm modeling on auto ownership, if people realize they can work from home what does that do to demand, the number of vehicles per household in this country over the long term well, on the first one, i think every company has to treat their customers the way they want if you call and youre not happy, calls us. As it relates to the longterm trend on cars, there will be fewer cars used. If you look at the amount of money we spend on personal transportation in the United States, its about 4 billion of hardware and 2 trillion a year, and we use that even at peak hours, only about a third of the time, so weve been investing in things like telemattics, car sharing, to help people figure out how do we bring that cost down for our customers obviously as we bring down the number of cars, then there will be less need for Auto Insurance so thats why weve been expanding into things like Identity Protection and Product Protection we ensure cell phones and computers and stuff like that. As a company we think our goal is to help protect people if they got car protection, for cell phone or Identity Protection, but there will be a longterm trend. Whether this will accelerate it or not im not sure. But the world is going to be different. Tom, theres a lot of focus, a growing debate on Business Interruption coverage right now and, of course, after sars in the early 2,000s we saw many Property Casualty insurers start excluding infection diseases from those policies because it was too hard to model, the risk was considered too great now in the midst of coronavirus, we have some lawmakers and regulators on the state level here in the u. S. That are pushing back on this right now and looking to step in how is allstate navigating this and more broadly for the industry, how do you think it shapes the way policies are written in the future . Morgan, thats that is a big issue and its complicated you can see it on both sides we dont ensure a lot of Small Businesses, so we have maybe 50,000 policies out there that have Business Interruption insurance on for us theyre all important but the issue is, of course, its not covered by the policy and but people say, you know, i didnt read it and i didnt think a pandemic would happen and so you get caught into this where regulators are saying to companies, you should go back and change and give them something that they didnt pay for and then, of course, the businesses are saying i need help i think in the end, we have to stick with what contracts say, but that said, that doesnt mean that should be the end of the conversation we really have to figure out how do we build not just an efficient but resilient economy so we can take into account these things happen. Weve been trying to do it, weve been lobbying on Climate Change for over a decade and actually over 25 years but really hard for ten years to get things like same thing on hurricanes, if a force 5 hurricane goes up to long island theres huge amounts of damage and people are not protected enough, the government is not protected enough so we have to figure out how to build a resilient economy. The Insurance Industry has to be part of that, but i would do it Going Forward, not in the Rearview Mirror. Yeah. Its definitely a conversation i suspect were going to have more of. Tom wilson, ceo of allstate, thank you for joining us today. Thank you, morgan and before we take a quick break, lets get a check on the markets. The major indices were falling during the 10 00 eastern hour. They have been rallying during the 11 00. Not at session highs, but getting back more than half of what they gave away. The s p up 2. 5 . The to you up 650 points well be right back. Welcome back lets get to Rick Santelli in chicago. Hey, rick. Thank you i would like to welcome jim grant of grants Interest Rate observer thank you for joining me today the best way i can think of to get into this is to quote something in your news letter that senator pat toomey said, this is an opportunity, leverage t unlimited Balance Sheet of the fed and the reason i think that is interesting, i admire the herculean effort of the Federal Reserve to help the u. S. Economy after it was intentionally shut down, but while its shut down, theres a lot to learn about the fragility of this economy. What do you think about that quote from senator toomey, jim well, i think it speaks to the moment, to the times and the conviction that the fed is, in fact, a limitless well of liquidity for us all whatever that may or may not do to help in the present moment, it raises questions about what follows this moment. Are we ever going to have the type of market where theres true price discovery, theres true compensation to take on risks and there is a moral consequence to taking on too much risk . Are we ever going to go back to that or is that pretty much a game that is now in the Rearview Mirror forever i think not if the fed can help it. You know, i think that the city of chicago in a way was founded upon the idea of price discovery, free markets, integral part of the city itself, certainly the ideal of price discovery is the basis of what we most of us do between the hours of 9 30 and 4 00 people that go into this business and what is so radical and, indeed, unprecedented about the events of the past three or four weeks is the central bank has swooped in and to exaggerate slightly, but to not so greatly, it has kind of instituted a leverage buyout of the United States of america. It has intruded itself into every nook and cranny of finance and, you know, one can argue this was entirely necessary for a government mandated of commerce its a precedent the next time theres a garden variety recession, why would the fed not do everything it has done now what would stay its hand what would the argument against that be . The question is, can a 75 basis point, tenyear yield peacefully coexist with a limitless fed intrusion and with money growth that is beginning to accelerate. M2 is up by 12 . Jim, were going to have to leave it there theres some breaking news its appropriate for this point in time but the futures what im concerned about. Thank you, jim grant carl, back to you. On that very point, Washington Post is saying the treasury is preparing to ask for an additional 200 billion in that Small Business loan program. Leader mcconnell now tweeting he hopes to have that further funding approved by unanimous con se consent during the next scheduled Senate Session on thursday squawk alley will be back in a moment walter, good morning its good to have you with us again. Thank you youve done some great reporting on stanford, berkeley, harvard, the way they jump sboog this race. The companies that will be Major Players and the way it will change all of our lives. What should our viewers understand one of the things that will happen is universities have stepped up to the plate with the centers for disease controls and others have failed they are starting to use their academic labs to be testing labs i think its a shift from the ivory tower to being engaged in Public Health and neighbor the environment. Also, what youre seeing is great researchers including those at berkeley who have come up with this Gene Editing Technology called crisper, thats what bacteria have been doing for three billion years to fight off viruses. How can we learn from that in order to detect the virus right away and chop up the virus, eventually youre going to see some new cutting Edge Technologies that will make this a biotech generation just like your generation and mine and john and morgans was sort of a digital tech generation. Optimistic in the near term or is this more of a generational play, something that will come to fruition over the course of years and not months in the next six months well be able to have very good fast, 15minute detection tests using crisper Type Technology to say is this rna from this virus present . I think that within a year, youll be able to use it to help destroy that virus if its in the system i think within a couple of years, if this becomes an ethical issue, we could edit the human genome to take out receptors that would make us susceptible to viruses that sounds like Science Fiction but just a year and a half ago, thechinese scientist did that by cutting out in the embryo receptors for hiv, the virus that causes aids and has crisper babies that had been edited. That will be much more dangerous. Even though its happened already on this planet, two or three years down the road before we figure out if well allow that sort of thing youre such an ace on history. I got to ask for perspective on this coronavirus were used to think about how wars and natural disasters change the course of history, who rises, who falls, how people plan do you have any sense of how this virus might either shift the balance of power, shift economy, shift the way people around the world think yeah. Youll see a lot of shifts that were seeing right now, including as you watch this show, which is that a lot more is going to be done remotely and after three or four board of director meetings that are done by zoom or other remote device, youll see companies trying to figure out to what extent do we need inperson meetings we have talked about the massive online courses and how it will transform education. It didnt happen now, by necessity, its happening. Well see things like that but mainly well see a period of the next 20 years in which biotechnology and specifically the use of rni guided enzymes. Things that can chop up the genetic code that will be new cutting edge of business yeah, that is just why i find this thesis so fascinating i really love the idea of this third great revolution of modern times. Adam brought in this era of fitness and this digital revolution and mow this life science revolution thats being driven by biotech. What are the societal impacts of that as well where theres so much focus on things like kids learning how to code and Digital Transformation of businesses right now. What does the billiotech area n know the people who learn how to code digitally are soon going to be surpassed by those who know the code of life the atcg, which are the letters of the genetic code of our dna as you look at companies, theres couple of companies that have been founded that are using Crisper Technology for detection and for therapies or treatment you see mammoth bio sciences that came out of Jennifer Dowden of berkeley. I think whether its companies or untrep entrepreneurs or start ups or kids in middle school, they will be starting to figure out how will i deal with do code of life, the genetic code rather than just the digital and binary codes see you soon. Lets get to the judge in the half stocks the rallying again today could pose their highest close in a month can you trust the move of the past couple of days. Tom lee is also with us today as he