Transcripts For CNBC Squawk On The Street 20240712

Whether its medical, some of these states posting some of their highest caseloads since the pandemic began, but then again optimism about the recovery at the same time. Right look, i think that we are all kind of thrown its governor to governor, yesterday in new jersey suddenly we get the you can have 100 people outside, 50 people inside. Versus six we are all kind of confused. With he see some parts of the country looking worse, other parts of the country that were so terrible its wide open and the confusion to me is what are the numbers going to be look like what are they going to look like given the fact that new york now feels like post wuhan and the rest of the country seems like, i dont know, maybe is it going to be italy, is it going to be spain i dont think it is. I think its going to be better, but i have to tell you, carl, that the stuff thats being bought is not in synch with whats happening, particularly the airlines, the hertz rental car, we saw a very good piece in the journal about the new young investors and what theyre buying and what theyre buying is very out of synch with whats happening in the economy. I think one of the headlines on our website is if you want your stock to pop consider bankruptcy or at least have somebody report that you are considering bankruptcy hertz meantime confirms today they got a d listing proceeding from the nysc thats moving ahead, theyre going to challenge that, but the commentary regarding robin hood, even their marketing, jim, the way theyre pressing Young Millennials to invest, its not fomo, theyre using yolo, you only live once. Yeah, yolo thats not an investment strategy. I was pushing last night for hertz to be delisted on mad money because there were 500 million shares that traded two days ago and there are only 140 million shares in the flow or 250 million yesterday. Theres a lot of people, young investors, who dont understand the capital structure, dont understand the common stock is the lowest, dont understand if carl icahn sold his 38 stake in the 70 cent area dont think that he is someone who throws in the towel, think that he is someone who knows what that common stock is really worth there was my friend David Portnoy was quoted saying you buy stocks, they go up well, they didnt go up yesterday and they might not go up today i think that david has just he has a great time, i love him on sports, he is enjoying himself, but, remember, these are stocks and stocks dont exactly what you think they do, which is that the more enthusiasm you have does not mean they go up. It can mean they go down it does bring out sellers at a certain point. So you think the dynamic of a Younger Generation of investors thinking they know better than truck and miller and carl and tutor jones who yesterday, jim, Economic Club of new york sort of joined stan and said humble pie. I did not see this coming in western ways. One of the things that portnoy did that was indicative of what someone away from the game sees is he thought that Warren Buffett can a pit lated and sold the airlines at the bottom, created the bottom buffett did if you listen to stan yesterday, stanley truck miller at the Economics Club he compared it to 1999 going to 2000, well, maybe it is, but in the interim there are people who made a great deal of money if you took things off the table. Dave tepper was negative, ive seen him go positive anding negative why . Because the facts change ray dalio made me feel, well, wait a second, in my 60s im listening to ray dalio, im playing with fire, Walking Around with all this stock the guys who really got people out were the people who we consider to be the most responsible people there are the guys who kept you in would be the people who are neophytes, but you can stay too long and i think yesterdays reversal said theyre staying too long interesting you know, another name that sort of fits into this framework is nikola, of course, now a company not troubled by any means, jim, but no revenue and a market cap that now exceeds ford and fiat chrysler, crossing the 30 billion mart inter day yesterday. I question nikola on twitter and my wife said, stop looking stop looking at your twitter feed people just they just hated me too much. When i did profile that i said, look, its going to shoot up and then its going to go down and the fact that i said it was going to shoot up was greeted positivity, but because i said it will cool off and go down i spent another day not on twitter. Ive been on twitter since 2009, but these two days were too vicious and i wanted to try to enjoy my life in a period that is very hard to get any enjoyment. I had to stop looking because i was so despised that i questioned there could be a top to this stock. These are not wise people who say things like that there are tops there are tops to stocks. Sure. Yeah were going to talk to the question of ford motor later on today about nikola and this new partnership, jim, with ford and vw, shared production of commercial vehicles, of evs and now the story out of reuters about elon musk and a memo, jim, where he says its time to bring the tesla semi to volume production so lots of moving pieces in autos today. Right now, i use a word that people wont like so hold your ears they were running ford the other day in robin hood, they were running it and running it means theyre taking stock from 5 to 7, it was not fords numbers it was the game that people play bag them, gun them, and then liquidate them you get in first, thats the bag, you gun, you say ford is good and then you liquidate into the people who were late bgl is an old style from the 1980s and bgl is back and ford was going up we may hear that ford is doing better but its more likely that the stock is doing better than the company. Bgl. Bag them, gun them and liquidate them thats what they called it in the 80s i wrote against it in the 80s i wrote against it in the 90s and its back. Younger people do t they figure out a stock to run, they ran hertz, they ran american air, they ran a Company Called Genius Brands where i have a letter here basically from the ceo that says, listen, we do exist. There is one for you we do exist. That is very advised so youre seeing stocks that are being run and you have to recognize that theyre being run. That hertz was being run that all of the Oil Tanker Stocks that were being run from a dollar to 2 thats just a process and its a bad process. Its a top process it is the ultimate sign of froth but its new investors i wish new investors were buying fractional shares in amazon, but, no, they love those stocks that are a dollar because they can gun them, they can bag them, they can gun them and liquidate them at 2 bucks and bgl is being played and bgl is something that the sec used to not like but the sec, i dont know, the question is will it be back on cbs im sorry, will it surface from washington where are they where are they where are they with hertz . Why didnt they stop trading hertz . Where they at chesapeake why dont they stop trading chesapeake jim, in your view how long can that process run and what finally brings it to an end other than financial pain . The canceling of the stocks that are worthless would certainly help a fourday decline in american air back to where it might be worth being in light of the delta number delta being cut by 90 certainly doesnt bode well for american and a recognition that some of these tanker stocks are worth far less if oil goes down. It does not end well it ends well for the people who get out yesterday, before they started going down and, carl, you know what it really takes, us talking about it saying they may not be worth what theyre worth thats what it takes because the government is absent. Thats what were trying to do right now, jim. You mentioned airlines certainly jpmorgan has a corresponding view when it comes to jetblue and ual, down grades today. Ever core had a dollar price target when american was at 12, they had a 10 price target before that and they just said, listen, take a huge amount of debt on. We have a lot of companies, the crews lines have taken on a huge amount of debt but havent had a huge amount of bookings at prices they used to have these planes were flying, there was a fantastic article in the New York Times about flying from germany being one of the few people on the plane and yet they gunned when i say gunned, bag them, gun them, liquidate it, the people who are uninformed or people who are early if you want to call them that now find that the game of Musical Chairs is over today will not be a day when i look at twitter, carl, other than if my wife is sending me some pictures of my beef steak tomatoes we can pop the balloon right here right now and thats what were doing. Theyre not the only down grades today, either chevron, you were talking about yesterday, rbc takes it to sell. Micron today bear on cisco do you see this sort of gathering steam . Yeah, but chevron downgrade was intriguing because what they were saying its obviously done better than the rest, time to rotate into lesser times i disagree with that i think that mike werth the ceo of chevron runs the company as if its not a wild cat company i want to compare that to the late and good friend Aubrey Mcclendon while he was actually more of a business type than a wild cat or did turn chesapeake into a great wild cat company and it never was able to recover. I thought the chevron piece was suboptimal in the sense that you dont put out a piece saying to sell chevron when it is the best run oil company in the company it also compared to International Companies was veiled that bp was i felt not that good. Why i like that downgrade. I dont like to downgrade great stocks and chevron i dont like the energy stocks, i think that their time has gone away, people ultimately from robin hood will run big money and wont buy chevron, but right now chevron and oil are here to stay you dont sell that. Thats the highest quality there is. Chevron right at 100. After a break we will talk about powell and what we might expect to hear from the fed chair today at the News Conference at 2 30 a statement coming out at 2 00 p. M. As well as jim alluded to, some corporate signs about the quarter, out of starbucks, delta and yum. We are back in a minute. 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. Why dont we put capital into the neighborhoods i could come up with a project that is not a project, but something that willover haul the system i get infrastructure that allows for Vocational Training and technology and i get capital 1 less than 1 of 70 trillion that then helps me create that helps me create more wealth which goes into the community. So there are a number of tangible things that can occur, that we can that we can invest in. Citis ray mcguire there, i know you tweeted about it when he was on squawk this morning and the keyword it tangible in terms of the solutions we are hearing from some of these executives. Right ray is a great friend of mine, he was in my Law School Class, candidly the smartest guy in my Law School Class he was going for law doing the j. D. am. Ba, glen hutchins, too, who is on a lot, he was just on a different level. Its like the academic iron man. Yes he was just ray is a different level. Hes always been at a different level and always the greatest guy. We got a change and we have to have the dialogue and ray could have come on and talked about the m a and he did at the beginning, but ray has taught a lot of us, but we are not doing enough we are not doing enough. We have to change. When ray comes on and says this stuff, ive heard it and i say to myself, okay, ive heard it, what have i done and the answer is not enough everyone who heard ray heard the story about his family and we have to get our act together and we have to change. Thank you, ray thank you for coming on and talking the truth. Yeah. That was good. Certainly the momentum not slowing down by any means. Jim, one more break here when we come back we will talk to the ford coo about this new Production Partnership with vw and what that means for the Auto Industry on a very busy wednesday with the fed decision this aeron ckn miteftno i love these fries. You know, the chef here trained in france. Mmm, it shows so good. Oh hey, did you say you needed help with investing . Because i know someone whos really great. And you trust him . Totally. Yeah. We went to school together. Ill check him out on investor. Gov. So, whatll it be . Ill just have the burger. Before you invest, get the full report. Check out an investment professionals background for free on investor. Gov. Before you invest, investor. Gov. Find a stock basedtech. On your interests for free on investor. Gov. Or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. 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. Our phil lebeau joins us this morning with the coo of ford good morning, phil. Good morning, carl. Lets bring in jim farley, coo of ford. Lots to talk about including this deal with volkswagen that you finalized this morning lets start with a status check. How do things stand in terms of ramping up production and what do you see in the market in terms of consumer demand for going back out and buying vehicles good morning, phil. Were seeing great very Strong Demand we have for more than a month now. Actually, some of our model products on retail were up year over year like f150 very Strong Demand on production were adding second and third shifts now. By july 6 we will be up to full north America Production and by the end of this month almost all of our plants will be on three shifts or overtime. Jim, you are entering a crucial stretch where you will be unveiling the new f series, give us our first look at the bronco that you will roll out over the next year and the all electric mustang coming out later this year. How much did the covid19 pandemic set you back in terms of your Product Portfolio . Not much, but, phil, you will see i have my bronco shirt on today. Look, the launch is really critical for our north america profitability and for our customers. The macme and bronco are brandnew products, it will be incremental to us, brandnew customers, we are really excited. The f150 is our key launch this year the team during covid, the lockdown, made a lot of progress on the software verification, a lot of the technical items for our launch as well as supplier readiness. But until we get into those facilities and Start Building prototypes we cant progress the launch we dont see any delays to the launch at all outside of, you know, the covid shutdown of the plants and, in fact, during the break our engineers and supply team made really Good Progress that we feel great about our new launches, the f150, we have bronco coming, as you said, and we also have a new small utility, offroad utility coming which we are excited about and the mache with lots of reservationes. When does the ford restructuring take hold . Youve heard the critics who are saying ford is not moving fast enough this seems to be a perpetual restructuring going on for the past couple of years when do we see that pay off in terms of restructuring this company in a new direction great question. You know, the bottom line is our new lineup comes out later this year in the third and fourth quarter. Thats the high leverage opportunity weve been waiting for. Weve worked for three to four years to get this new lineup to market were going to have the freshest product lineup in north america, its our key market, our profit standpoint, north america is our key opportunity. Were also working on costs. We have a new coo in north america, lisa drake, shes been working on our warranty material costs. Between the cost progress of the new vehicles, we have an unprecedented opportunity to really create a lot of shareholder value. And also get a lot of new customers to the ford brand with this brandnew product lineup. Jim, its great to see you, jim cramer hi, jim. Youve done a great job in america, ive bought the 350, the super duty, excuse me, its incredible truck, just lasts forever. I think that you are that whole series is amazing. I want to know when i see elon musk do a pickup that is, i dont know, kind of fanciful to me and then i read that hes selling a tremendous number of cars in china, i think why in china is the f150 not the biggest seller and what happened in china and why do you really need do you need vw, say, to get into china they sell a lot there. Because to me i just dont get the disconnect the 150 may be the greatest vehicle ever made and i dont get why that isnt the biggest seller in china. Yeah. So good question first of all, phil, i have to say, you know, there is a lot of attention to electrification and new companies, but ford in the next 24 months will launch an all electric f150 and an all electric transit van we are number one in the pickup and the van market in western europe and the u. S. And this is our chance we are electrifying and we are a brand that people trust. On china, you know, our products got old, phil, and we didnt invest in new products now we are were launching four new utilities and the transit is really strong. We gained retail share in china for the first time in several years the last two months, more than half our sales are transit vans, we do offer pickup trucks to the gmc brand, but really our version of the pickup truck and f150 in china is the transit van and it is selling like hot cakes, more than 48 of our sales last month were transit commercial vans. So the commercial industry is hot in china right now and its more almost half of our sales. Wow okay thats news to me. So i always want to say when something is news rather than just yawn about it thats terrific. It makes me think of one thing, jim, what would happen tomorrow if you went into ford, you went into ford and said we are profitable in the following four markets, lets close Everything Else and put up big numbers. What would happen . Well, weve been working through that, you know, scenario we have lots of unprofitable product lines in south america, weve stopped focus on fiesta, weve stopped the fusion in the u. S. Hard decisions hard decisions to get out of legacy name plates that people love, but, you know, we saw no future and no profitability and, you know, with the pandemic, phil, we are looking at every part of our business if we are not convinced its going to be profitable in the long term, you know, were not going to allocate capital, were going to restructure, were going to do whats required to set the business on the right path we have doubled down on our really profitable businesses now. Thats the new name plates and were growing in new places, you know, were the number one crossshopped brand with jeep, key contributor to the revenue and profit for fca, they have had that market largely by themselves, we will have a whole new lineup of broncos and its about time but i would say, phil, you know, basically, jim, bill would say what you need to do. Hey, jim, i hate to cut you up but were running up against the opening bell quick question, if you could give us a quick answer what do you think when you see a company like nikola, no revenue, no products and yet the market cap surpassed fords market cap in the last couple of days i think of an electric f150 and an electric transit, customers who trust us, fully connected vehicles with connectivity, were more than 50 of existing market, were electrifying our lineup. Im thinking opportunity for Ford Motor Company jim farley, coo of ford not shying away from the question when it comes to nikola we appreciate you joining us updating us on where things stand with ford as it restructures operations. Carl, we will be watching to see what happens with ford over the next two months or next two years. Carl, back to you. You got that right, phil. Thank you so much. Our phil lebeau. Take a quick break here, we will get et opening bell in just about four minutes as we are ainghe f decision this afternoon. Dont go away. Announcer the opening bell is brought to you by nuveen. A leader in income, alternatives and responsible investing. Welcome back opening bell in just a few moments on this wednesday. Its a pretty busy one with the fed decision coming up in afternoon, jim, and then a lot of medical news, nih sort of playing out a timeline for phase three trials, md earn in a in july, astrazeneca in august, j j in september those comments from fauci yesterday, jim, saying the virus in general is his own Worst Nightmare the way it sort of decimated the world in four months, but said on a vaccine its going to take more than one and i guarantee, he says, that were going to get one. I was with some guys to celebrate the reopening of jersey yesterday and i was saying First Quarter for for the vaccine. There wasnt a soul who felt it was going to be that late. Everybody feels its going to be q4, its going to change the countrys face i dont know i think its too optimistic, but if dr. Fauci is there and all these Drug Companies are saying its really risky to say it and not deliver wow, it would be amazing it took four years to develop the mumps vaccine, that was the fastest ever, we have ai now, great stuff when it comes to just to the genome and what jensen wong told me from nvidia, graphic user interface chips that are so fast that you can run a lot of Different Things and discover whats not working. Maybe the idea that you can get rid of a lot of the bad does ak sell rate. Boy, it would be incredible. It just would be incredible. As weve said as weve said before, jim, i mean, no one is out there man dragt that he say this out loud, the fact that hes voluntarily talking about a q regard, q1 timeline is interesting. Another record high on the nasdaq, i think that makes it three days in a row for an inter day high i have to tell you that some of these moves in the major in the majors now, they are acting like small cap. You know how hard it is to get apple going like this. This is not a bag them, gun them, liquidate them that is a group of people that realize 5g is here going going to be explosive. Nvidia winning big business that people are talking about, winning some apple business maybe with amd, theres every everyone is speculating and everybody is winning business. Things are just better in the stock market than they are in the real world, but i guess if they think theres going to be a vaccine in q4 the numbers for everything are too low yeah, jim, i mean, headlines like there is a couple in Chinese Media this morning, sort of speculating that the chinese could limit qualcomm chips, apple chips in Government Agencies or in areas that are involve national security, headlines like that completely getting ignored right now. Any discussion of chinese tensions is getting ignored. Look, a few weeks ago we were worried that taijuan semi might be deeply hobbled by taiwan saying they are us so lets go buy the rest of the semis. We are in such bull market mode, remember, we are the most overbought in the history of the s p oscillator the most overbought. It is showing no signs of dissipating. Now, theres two overboughts hertz might be worthless, but there is the overbought of facebook there is an article facebook saying theyre losing ads. The stock is only una dollar now, maybe it would be up 5 if they were not losing ads. The times talks to advertisers and say some find in morally impossible to advertise on the platform. Jim, to your point its not just records, its records on volume, its 6 billion shares of the nasdaq a day, numbers we went ten years without getting 5 billion. Its dbewildering, but its people believing in the v, its a belief that, lets say, the fed talks today and they are not going to take the foot off the gas pedal because we still have 13 unemployment, its one of those moments where because the numbers aggregate numbers are so weak, the fed feels its supposed to do step on the gas pedal but look at the housing numbers, housing numbers are very strong. What i find interesting is that the recession stocks are doing well and the stocks that signify a dramatic increase in activity are doing well you typically do not get both of those doing well one group is supposed to be losing, but its not so im baffled like other people, im used to the idea that if j j goes up you have to expect were going to see declines in the industrials. Were not. Im used to seeing if mccormick the Spice Company goes up then any industrial should be getting completely hammered and thats not happening. I think we all have to kind of marvel this is a very different market from what weve had in since maybe not the 90s, you have to go before that, you have to go before the beginning of the great bull market in the 80s when you see this Overall Group move this is not as fanciful i know i know stand druckenmiller what he said and i know the comparisons to 1999 but if you get the second half rebound led by europe by the way because europe is incredibly strong and their banks are Getting Better then you can see that this rally is not fanciful. It is, like i said, its a little baffling because we are not used to everything going up, but thats s p money coming back into the market after pulling out of the market because a lot of the Hedge Fund Managers that have come on air have been so negative and they had great power. Right speaking of which, jeffreys today puts a three handle on amazon thats six firms now, jim, according to bee spoke that have targets on amazon of 3,000 plus. Theres two schools of thought on what powell how powell might come at this, if he comes at it at all one is explaining why theres 20 what, 20 billion in purchases a week when the markets appear to be working just fine. The other is that the fed what do they really care care if some robin hood traders are making double, triple their money on. I think they can ignore that but can they ignore the numbers of the airlines which are so horrendous, that was bag them, gun them, liquidate them group but the numbers are just horrible will they get better i dont know look at the numbers that blinker put out today with chilis, the numbers are bad but chilis is cash flow positive that means a restaurant thats big, a chain, can close half its tables in order to be able to stay within the socially distant rules, but if independent operators did that theyre just going to close their doors and they cant pay the rent. I mean, i just dont think the economy is as good as the market says it is Jeff Gennette comes on, gets its money from macys, what happens, the stock does it go from 10 to 12 no, it goes from 10 to 8 i continue to look at pockets of the stock market that are signaling dont get too ahead of yourself when the ppp money runs out, we are going to have another setback. If we have another full outbreak we will have a setback right now the market is saying, shut up, jim, will you just get on board what the hell are you doing there . Why are you stopping the hertz who do you think you are to take away our money were trying to make some money in chesapeake, why do you hurt us im not trying to hurt anybody but im regarded as being someone who is trying to make it so people make less money and i dont know what to do, carl. Look, the starbucks, i was thinking that was a decent number, people obviously say its not starbucks is not a bag them, gun them, liquidate them stock i accept the markets judgment if you come on air and you say the following Oil Tank Company is not worth anything, well, then you better, you know, check under your car before you go home yep jim, it has big implications for ipos, we will talk about vroom and some of these other headlines on snowflake and airbnb in a minute but also m a. We will bring in even on his day off, again, david faber to talk about uber and fwrub hub good morning. Good morning, carl. Yeah, i had a feeling that, in fact, you guys might hear from me again two big stories, of course, one we talked about for a while and we will get to that, no need to look forward than taught mans stock price, simon says theyre going to terminate that agreement. I want to share some news on on uber, grub hub and grub hub and those European Companies that cnbc reported on over the weekend. Here is what we can tell you right now, whats going on uber appears to be moving towards exiting their talks with grub it was not about price, the two companies had agreed to a ratio of 1. 925 weeks ago, but as weve been indicating and reporting for weeks now, the two really have not made progress, significant progress on agreeing on how they would deal with the antitrust review that would come their way and what remedies uber was willing to offer grub in order to deal with any potential opposition on the antitrust front. So it does appear likely from what im hearing from people close to the situation on both sides that uber is moving towards exiting those talks. They will have a Board Meeting im told fairly soon and there may be a decision made there the decision may be made for them and thats actually maybe the more important part of the story which i should have started with which is that grub hub does appear according to people familiar with the situation to be moving much closer to doing a deal with one of the two european delivery companies, i dont know which one, though. Thats part of the problem with being on vacation, take away or delivery hero, but im told that within days grub could reach a deal it would be fairly interesting to see how that deal is structured given neither one of those companies has a u. S. Listing for their stock and it wouldnt appear that the synergies available in grub hub and uber are available in the same way because the overlaps in the business are not nearly as significant for those two companies. But it would create obviously a Global Player or a larger Global Player on the delivery business. So thats kind of where we stand on that. We will see whether uber officially xits, perhaps on this point they will see theyve been slow rolled because grub hub is engaged in talks with one of these European Companies and appears to be getting close to a deal, guys wanted to update on that now, jim, i mean, you asked me about this numerous times, taught man and Simon Properties. The lawyers i spoke to always indicated how tight this contract was but it does not appear to have given pause to mr. Simon who has decided to try to exit the deal as we heard a few moments ago when we learned theyre exercising their contractual rights to terminate. They can say they have those rights, jim, and they seem to be taking in a quick read borrowing from a number of books, maybe the forced out plan but also the sycamore plan where they say that the company and taubman did not do enough, did not make make essential cuts in operating expenses and Capital Expenditures so failed to take steps to mitigate the impact of the pandemic all i can tell you is right now this is going to be a war. Its interesting, its a michigan court, as opposed to somewhere else a delaware but its going to be a war, jim. Perhaps this should not have been unexpected except that the titans of this contract from everybody i had spoken with think in their minds a reason why simon was stuck. You can always try dow tried. They closed on terms but it was a war. We can go through a lot of the wars weve seen, maybe theres no harm in giving it a shot as we see taubman shares down 35 when i look at the things that simon is talking about, the idea that perhaps the taubman did not do well and mismanaged its business during this period, it was disproportionately affected versus other malls, i think thats going to end up being a little subjective, david, but if i understand it according to that february 9th agreement that there was an out if taubman did a poor job im a little surprised, but then again simon stock went from 55 five days ago up to 90 momentarily. So i think people must have been thinking that perhaps they could get out of it. Do you know what, the mall business, i mean, how do you do a good job during the mall business youre closed. I think everyone did equally bad, but, david, youre right, its going to be a war i do want to point out that david simon is a businessman that people revere in this industry, hes paid out 33 billion in dividends, hes a good judge of who is a good operator and who isnt, but it is surprising why did you like taubmans operation and then when all malls are closed not like taubmans operation but, yeah, i think this is going to be one that were going to be talking about a long time. Yeah, its going to be a lot of conversations with lawyers here who have perhaps different opinions i mean, again, it will come back to things like disproportionate because the merger agreement or at least according to the simon side says that they have the right to terminate in the event that the pandemic disproportionately hurt taubman. Right. Im not quite sure what that means. We pointed out there was a carveout in the material adverse effect clause that gave them the right, said you cant terminate because of a pandemic. Remember the pandemic had already kind of begun a bit, hadnt turned a Global Pandemic yet when they signed this deal, 250 in cash by the way not a stock deal in any way, Simon Properties has been responded positively recently although down now jim, this is just going to be a war. David simon is a tough guy. Oh, im glad you said that. Not unexpected in some ways they were getting closer and closer to having closed this thing, they were on the clock so by the end of the month potentially, but still a shock in some ways as well. Do you think its been a shock that david is suing gap stores i guess, yeah, that should have been a sign maybe that hes willing to take anybody on you know, i dont know, but this is going to be ugly, its yet another deal in a long and you know, a quickly lengthening list of deals that we have watched fall apart, whether it be l brands and sycamore, add this one and weve discussed tiffany in the past, in terms of at least focused on trying somehow to get a price cut this comes back to lawyering, this comes back to contracts, this comes back to courts and in this case michigan courts apparently not delaware courts but, jim, its going to be a fight. I do want to emphasize, again, david simon a revered figure in the industry, a person who has paid his shareholders a great deal definitely a tough person, but a person that people feel is above reproach that may not matter in court but i think our viewers need to know this is a man that is not a scoundrel. This is the best operator out there, maybe don wood of federal reality, but, wow, i want to follow this one. Everybody has been to one of their malls. Everybody. They just may not have known it. Right right. Well, yeah good im looking forward to you following it and i am as well and go back on vacation, will you . This is the hardest time on earth and youre calling in. Its okay. Maybe i will just give up and come in tomorrow entirely. No. Its not that hard to turn a camera on and sit down at my kitchen table. Your kid is going away to college, i hope. Yeah. We hope, too. This should be the time that do what you want, but i screwed up i screwed up i worked thanks for the advice, old man. Appreciate it. Yeah all right. Guys i will probably talk to you tomorro tomorrow i will tell you the news never stops, jim, but theres always more news so its like a city bus, you can take your day off because theres going fob more news when you get back. Oh, yeah. Never ends it never ends. Today was a day, by the way, when there werent that much earnings but the analyst notes are really driving things. Look at all the down a lot of those are because of analysts saying Different Things yeah. Micron, cisco, chevron, jetblue, united, some of the down grades today. Jeffreys actually took the entire tech sector to market weight on a downgrade there. I know you talk about the starbucks with the squawk guys before the hour, comps down 43 in may, they did say 90 of corporate owned would be open by june 1 and thats essentially what they did, jim but then the preliminary adjusted loss for the quarter of 55 to 70, how does that match with what expectations were . Yeah, when you hear that its within the range, so to speak, its not within the top of the range and thats why they will be selling i do think by the way the second half is going to be stronger, they are going to open up a lot of stores, china will be open, theyre going to take advantage of the vacant storefronts, move in, have walkin starbucks this is a fits and starts story. It wouldnt shock me if starbucks creeps right back as kevin makes it clear that the second half is going to be stronger than you think and thats what we should be trading on starbucks is a company thats here to stay and i say that because as you listen to us talk about david simon, Simon Properties, not everybody who is in a mall, not everybody who is in brick and mortar is here to stay a lot of outfits wont be with us a year from now, starbucks will be. Yeah. Then ipos, jim, axios says that airbnb has resumed internal discussions, snowflake eyeing 20 billion in valuation according to the ft today and vroom who we talked to on squawk alley yesterday take a listen to what the ceo said. When we first got the early days of covid we were kind of evaluating obviously that didnt seem to be the right time, we saw some interesting momentum in our business through the later half of march and into april and then we actually saw that there was a great opportunity for us to move the business forward so we got into testing the waters, got into the road show and were obviously well received this is the time. Any argument, jim, window is open no, at the beginning of the ipo one of these periods where we are going to have an ipo train coming through, the first cars they give away. Youre going to make money put in with your broker right now for snowflake if you have a broker because flank absolutenen is the ceo, he built service now which well, right now its run Bill Mcdermott runs it, sap and he does done a remarkable job but he is incredible, he is one of the toughest ceos i have ever seen when he retired i remember him telling me, listen, hes sick of sleeping on a cot when hes trying to be in there building a company. He is the real deal. Hes tough he makes david simon look like a real sweetheart. So bank going to, the Enterprise Software sector is very hot and sluten, mark benoff would say its someone to fear and respect. Snow flake good point well watch for that. Were holding 3200 Holding Nasdaq 10k Rick Santelli brought us cpi a little over an hour ago. Good morning. Cpi roughly as expected. No market moving implications at least at this point in time. Tomorrow is ppi. What is important today is how we continue to see yields come off after spiking on unemployment friday. Lets bring all the charts back to friday. The 5th of june. Look at twoyear note yields they spiked up to 23 thats the High Water Mark theyve been drifting. If you look at tenyear notes, theyre drifting under 80 base points this means the jobs report was to many, just a mathematical calculation. If the worst is behind you, and you start turning things on, jobs are going to improve. And we saw the nervousness leading up to us as every day leading up to the jobs report saw higher rates and higher equities the point is once that was out of the way and whether it was the last blast on friday or new longs, almost doesnt matter because now the fed and we know jay powell is not enamored with the economy in many ways thinks its going to be a long slog the drift is lower this is important. Maybe yield curve control is something youre going to talk about heaven forbid, but its out there. Lets look at ten minus twos spiked up to 72. Its lost a dozen basis points if you are really thinking yield curve control, think about where a two year note have been and the long end its basically all about the long end its about the ten year. I cant imagine theyre going to pick any maturity longer than ten at this point. And the dollar index today is a big day yesterday was the second day in all of 2020 the dollar index closed down on the year. The other one was march 9th. Well, its below 9640 again today. Pay close attention nrmt for the month of june weve lost close to 3 on the dollar index. Carl and jim, back to you. All right another one to watch, rick thank you. So market being led lower at least on the dow by energy and industrials and financials, and thats despite apple, another record high above 350. Were back in a moment why bother mastering something . Because when you want to create an entirely new feeling, the difference between excellence and mastery is all the difference in the world. The lexus es. A product of mastery. Experience amazing at your lexus dealer. Find a stock basedtech. On your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Top to gainers are tesla and zoom video not a coincidence. Those names are the same names that have fled the nasdaq 100 since december 26th. Thats the last time the nasdaq hit 9k back in a minute can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Its time for jim and stop trading. Jpmorgan does it again. Talking about how 5 below would have a great number. Bingo. Stocks up 10 on 8 comp numbers. This is a company that most of the stores are being closed. Its a fun store for kids, and its back. And i think you can have very large run. So dont think its over when its up 10 the loss really likes it says it goes much higher, 150. Yeah. Interesting. Jim, today on long island, its phase two, beginning today Outdoor Dining hair salons. Phones going to be ringing off the hook at a lot of nail and hair salons today. Look, i had guys over last night. People over for my house, and outside because it had been limited to six, and look, we have no illusions. Its not over. We didnt shake hands but its nice to at least see people and have kind of a normal life as close tonormal as youre going to get yeah. Thats true. How about tonight . The mayor, timeshare, an interesting, people, its different than airbnb, and i have a Company Called cerus. Its blood remember, were trying to figure out exactly what plasma means for people who have covid so some chinese study says it doesnt matter american studies say it does lets find out i think the american studies are better all right well see what happens today our point about the engine overheating is documented every day. Not that everybody is listening. Bgl, bag them, gone them and liquidated tough to see yeah. Jim, well see you tonight. Good morning, welcome to squawk on the street. Im Carl Quintanilla with sara eisen and mike san tolely. Waiting for the fed decision at 2 00 the News Conference at 2 30 despite a slew of downgrades nasdaq is holding in at 10,010 and mike, 3200 the levels at least at this point remaining intact although traders on alert. Yeah. The levels are intact. The big cap indexes are Holding Together for now its a second day in a row when most stocks are down and actually down appreciably. Its an unstable moment. Agree, came into the week, things were looking stretched in terms of field position and sentiment. Thats getting sorted out right now. And obviously some of the recent kind of speculative names coming off the boil hard to know exactly whether its going to be one of the situations where the indexes themselves get fatigued and we have to have a pullback or we just flatten out but youre right. So far the s p 500 has not really gone much below 3200. Each of the pullback days. I think the fed is going to be key obviously its been key for this huge runup weve seen, the 45 runup for the s p since the march lows and unprecedented amount of stimulus were looking for the language from chair jay powell. Nobody is expecting big action, but will he still sound dovish will he still talk about the great uncertainty facing this economy, the risks that are out there and say the fed is still strongly committed to using all available tools and even more action if necessary . Thats something, for instance, the market probably would like to hear. If he sounds any rosier about the economy, about the surging stock market, i wonder if that could be negatively interpreted. Also the lending facilities. The fed has stepped outside of its perhaps comfort zone or traditional zone in terms of lending to mediumsized companies, municipalities, corporations including junk. And what will he say about that . And whether how effective its been and whether it defuatdef deviates from the mandate are huge questions you have to assume chair powell is going to acknowledge the improvement in things like the jobs number, but probably not extrapolate that out of course, recent comments of his have been all about the risks down the road. We dont know how this virus is going to go. We dont have our arms around the implications and hes in Risk Management mode it would be unusual for him to strike a tone that things are better and maybe we dont have to do as much when so much in terms of the capacity of their existing programs have not even really gone into effect. There hasnt been all that money actually utilized yet. You have to imagine i would think that hes still going to be giving a nod clearly in the collection of we just dont know how this is going to play out from here, carl. Right finally and also the uncertainty factor yeah. We spend so much time this week talking about essentially an echo of the day trading game in the 90s is question is it related to the population that would ordinarily be at work and once those people go back to work, mike youve tweeted about this, does the activity subside its going to be a fun test to see that. I think theres a chance of this a lot of things, though, came together as everybody has been talking about. Including zero commissions, including brokers allowing you to trade in tractifractional sh and people being idle at home when there was a move to the downside, and one could say maybe this is a time to find a lot of completely obliterated stocks that are cheap and i can buy them now a lot of specific circumstances. Its tough to say how it plays out from this moment on. But a pretty good test of whether this is going to be a new strain, a new driver of this market, or a little bit of a temporary side show. I think the other interesting dynamic is the fact that a lot of these retail traders and many of them robin hood because were able to track the data now are going against the biggest, most reputable investors in history Warren Buffett, a number of the big Hedge Fund Managers that have been bearish. Pu paul singer and Stan Druckenmiller who have had to come out in some ways and capitulate i think we, with our tools, we could be empowered to know better or at least have a little bit of an opportunity to make some hay here. One thing different from the late 90s in the last round, aside from something about nikola, if you look at the penny type stocks going up, its not like the late 90s where people were saying this is the future this company can go to the moon. I believe in the trends and new innovation im going to pay any price for it now these guys are maybe going to live a little longer and maybe the credit markets keep them afloat or maybe its a Lottery Ticket on survival thats a different feel in terms of what the intellectual overlay on this activity right the other interesting story lets continue the conversation now with our market panel at the top of the hour to talk about what to do next omar aguilar and Brad Mcmillen join us now have how do you see this retail frenzy what would you caution, omar its interesting to see how the market is taking over the optimism for reopening and clearly the support provided by central banks, i think as was discussed earlier. A lot of the focus has been on what the fed language will be today. I would probably say a lot of these activities related to the labor market i think any comments that had to do with the labor market will translate into what is the key part for the oreopening, the consumer activity. I think the consumer activity on how much the consumer is spending and confidence starts to play out into the potential future earnings is what the market continues to hold on. Brad . How would you interpret some of the retail activity were seeing in the market . The world isnt coming to an end. I think this is a similar reflection of people going out and shopping and people going out to clubs and casinos theres a sense that weve been pent up. Weve been locked down and this is just one more way thats coming through. We saw the market come down. We saw the market come back. And people are voting with the dollars they have because theyre not spending it on other things i do think this is a consequence of the shutdown, but that means it will probably fade when the shutdown opens and people have other stuff to spend their money on how are you looking at the Federal Reserve today in terms of what could dictate about the direction of trading well, theres only one way to go with the fed. If jay powell says were pulling back, not that he will, then all of a sudden i think the market panics but if this is more likely, powell comes out and says were going to keep getting behind the market and pushing, were not pulling back, then the party continues. Were not looking for it to for the fed to knock the market off, but were alive to the possibility. Omar, an investor who has pu off what to do with the portfolio up to this point, if you had a balanced allocation to up a year, should they be thinking about taking any off the table or reallocating in other directions based on how different parts of the market have done . Well, our advice continues to be to reassess risk. What we have lived through so far is being a great example of how people need to understand the level of risk tolerance they have i think if you close your eyes at the beginning of the year and open it right now, to your point people will say it was not a big deal i dont think that was the case right at march 23rd, with market down significantly and even the subsequent rally i think reevaluating the level of risk people have taken is always a way for us to realize whether or not you have the right ol kagallocation the second point is related to rebalancing. Even though you may be already flat or slightly up for the year given how the dynamics are, most likely your underlying allocations have been distorted. Going back to the longterm objectives to figure out the trades you need to make to get back on track is always a good place. Right now its probably the best example as we continue to have stability in markets lastly, it is probably the diversification. Theres a lot of rotation of possibilities that probably we didnt have before that i started to open up as we start thinking about the potential recovery of the economy. Brad, that idea of reallocating based on where we are in this emerging recovery cycle has been a big one obviously a couple of weeks, pronounced performance by value and cyclical areas now its staticy the last couple days, but how would you treat that relationship . I tell you what weve done. The commonwealth, we manage a fair amount of money the past several weeks has been a testament to the necessity to rebalance when it feels most uncomfortable. We rebalanced into the equities, close to the bottom because we looked at the allocations. 60 40 portfolio is closer to 50 50. We reallocated into equities in the past week or so, weve reallocated to fixed income. Again, thats 60 40 portfolio looks like a 7 0 30. If you stick with your allocation and rebalanceon a regular basis, thats the purest fom of selling high and buying low. Its worked out for investors pretty much the past couple months omar, do you think the market whether it knows it or not, wants to hear from congress . Weve done enough or wants to hear from powell, weve done enough because the recovery appears to be on track enough well, i think the the market seems to be very comfortable, you know, so far by thinking that the fed. I would not necessarily say they think its enough, but they certainly thought it was timely. And i would probably agree with that consent the market has enjoyed the fact that the fed did not hesitate on when and put the stimulus in place right off the bat the market itself will continue to just look into what the future holds, and i think the opportunities and the tools that the fed has is still has enough runway that the market will feel that its possible i think on the fiscal stimulus side, the challenge will become how strong of a recovery we have and if the Economic Data is soft without further stimulus from the fiscal side, the market may take that as a need for further monetary stimulus. So i think the connection between the two needs to be avoided going forward. Omar, we havent really mentioned the case numbers in the u. S. On covid which are ticking higher and economically states, especially like texas, the hospitalizations are back over 2000, actually, its a record, theyre over 2000. Its a sign that reopening might not be going as smoothly where is that . Why are investors not more worried about that and more optimistic about the future and the reopening . Well, a simple answer is the fed. Thinking investors right now, and this is a typical Behavioral Finance behavior looking at the last trends that we have gone through, and thinking about the actions the fed stability has provided if you look at everything that lines up against that theory, theres enough reason for the market not to be up. Whether its the number of cases. Ive always discussed the fact this is a Health Crisis its not resolved and were not going to know the impact to the economy until we have a clear path to the solution of the Health Crisis it has not been there yet. We have a number of bankruptcies continuing to go up. We started the level of debt in the market continues to rise the Balance Sheet of the fed continues to grow, and et cetera, et cetera. Theres enough things that the market continues to ignore in terms of the hard data that is affecting the economy, that is all going back to the liquidity and program inputted by the Central Bank Even though the fed cant fix the virus. Jay powell would be the first to say that, and they cant create economy when things are shut down how do you hedge yourself against the reopening risks and the fact that cases are rising in the country first, i want to agree that cases are rising, but theyre Holding Steady at about 20,000 a day. That hasnt gone up in the past couple weeks it hasnt gone up since we reopened if you look at the case growth rate, its ticked under 1 for the first time were at a sustained status quo. I think thats what the market is seeing. I think thats what the fed is going to be reacting to. Certain states are getting worse, but the fed is saying weve bottomed out were not going to pull back but at the same time, were not going to jump ahead and provide more support either. The healing is going well. Now, that said, i think the market wants everything. They want the economy to recover, and they want the fed at their back. And i think thats what theyre going to get until we get a much better happenedl on the medical. Were not out of the woods yet, youre right brad, omar, well leave it there. Thank you both very much thank you thank you dallas mall and Restaurant Owner is up next on how reopening is going in texas. Dont go anywhere. Were back in two minutes. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Our next guest is the owner of a Shopping Center in dallas as well as over 40 restaurants in the dallas area as texas continues forward with its path to reopen, ray washburn is the chairman and ceo of thanks for the time today. Appreciate it very much. Sure. Thank you for having me on so paint a picture what shopping is like in dallas right now in terms of capacity, levels of demand, how does it feel when you arrive at the store and so forth . 95 of our stores are now open in our Shopping Center. Its about a 250,000 square foot Shopping Center. Its a highend center the state of texas on friday is going to 75 occupancy right now were at 50 and the stores have had to make due. They meet you at the front door if you want delivered to your car, they do weve seen a robust return of the customer to the center is it so much that youre waiting in line . I know its its open air right . If im not mistaken. You have some advantages on some other malls still waiting. Yeah. Were an open air spot very Little Common areas theres nowhere really to collect. Its parking store front you see the video on the board, and you see. So customers like it they can pull right up to the front of the store, get their goods and go back out. A few stores still havent opened back up which we wish their would, but its been were in a neighborhood. Were not a Regional Center in the sense of being tourist driven or travel driven. So its local people have come back out, and so were very encouraged by the return of the customers. I think starting friday, right, restaurants can go to 75 capacity now youre getting somewhere in terms of a semblance of normal whats your projection on that number outside of restaurants alone, and is there any concern or attention being paid to some of the case loads that were seeing in states like texas and arkansas well, what we do at our restaurants is we file cdc guidelines everyone has to sign in before they go into the restaurants we havent had an issue whatsoever with any of our employees or our customers and now the city has been very helpful both city of dallas and the suburbs on allowing whats called popups out into your parking ot so people feel comfortable being outside, and so weve taken over pieces of parking lots to drop tables in, because outside you can have people within six feet of each other. Inside the restaurants we can go up to as of friday, up to 75 its over 100 degrees in dallas. So we need to get people inside eati eating where its cool our business is up to 80 of where it was last year at the same time. Were encouraged by that during the pandemic, i mean, previous to pandemic we were doing about 10 of our sales to go theres a fundamental shift in the Business Model in restaurants where it went to 50 . Were still around 35 takeout but our kitchens are all bistro kitchens its not a manufacturing operation. So weve had to refigure our kitchens and on the go for it basis, we have to ourselves as well as every other restaurants or all restaurants have to orient more for a takeout model for about a 30year business versus today when before it was about 10 of our model biggest news in your industry, 3 . 6 billion deal cancelled raising questions about how much pain the retail landlords like yourself are facing and dealing with and how much of a longterm sort of structural issue this is going to be. How do you react to that whats interesting about that is i saw simon also sued gap a couple days ago because gap hadnt paid their rent in any of their centers for the last three months theres going to be winners and losers out of all this i think open air centers like ourselves are going to be big winners out of this. People are hesitant to go to the malls. We have restaurants in some malls as well. Foot traffic has declined in going in so what happens on that merger, i dont know i mean, we had issues. For example, its wellknown that starbucks sent a letter out trying to get 12 months free rent from tenants. They pay a billion in dividends. Why are they paying dividends but not rent to landlords. I think as we go into this fall, the ppp money is going to be running out on a lot of people, and right now a lot of our small shops, thats the only lifeline theyve had is the ppp money business doesnt come back by august, september, i think youre going to see another hard fall if f for restaurants and smaller independents theres the Public Companies with access to the public markets. You have the small independents, the guy on the corner with his pizza shop, and then you have the mid sized which our company falls into were privately owned. We started it 29 years ago we never took on any private equity the private equity groups that bought out all these restaurant chains that are heavily indebted, i dont know what they do come this fall, because the banks arent going to be loaning money, and its hard to refinance a debt i think youre going to see a heavy closure of restaurants, primarily, i think the private equity backed ones this fall i mean, theres also everything you talked about, the rent, and the finances and the stimulus money running out, theres a question of Consumer Behavior totally changing as a result of the pandemic and speeding up a lot of the trends we have been seeing. People buying clothing and accessories and basics online. People cooking at home in a way they havent been doing, and wondering how much of that is expected to be permanent, and therefore, shifts the whole economics of mall, centers, and places like yours. Well, one thing i dont know if youve heard the term geo fencing around the Shopping Center, but i think centers that can do it will that means basically well sign a lease with the tenant and well be able to capture a percentage of their sales been a geographicalarea, lets say a three to fivemile circle around your Shopping Center the argument is you have somebody like a William Sonoma no one goes in and buys 12 plates and take them home. They go in there and look at them like a showroom they order them and theyre delivered online but the Shopping Center doesnt get the benefit for the things they offer as a showroom so higherend centers and centers that are strategically located, i think youre going to see going into this geo fencing. That means we capture all sales whether theyre online or held in the Shopping Center, because a lot of things you might buy online, theyre the wrong size or color, you dont necessarily want to ship them back if youre in close proximity to the store, thats where you make your exchange. But the Shopping Center gets no benefit from that. I think geo fencing is something youll see a lot of people talking about in the shortterm. And as far as the restaurants go and the geo fencing deal, the argument could be from a tenant, why would i do that . Its like well, if you want to be in the premier centers and you want to make a sale there versus being an independent building, you can be an independent building, but if you want to be in a Community Environment that a Shopping Center provides, i think thats something youre going to see like i said, in shortterm happening. Youre offering protection to some businesses in some way. This dark picture we paint when ppp money runs out and so forth, when you say its going to be wor worrysome unless businesses come back do you need they need to improve from here . Well, for example, the Restaurant Business, were back to 8 0 sales. We are basically breaking even you make your money on the last 10 of your sales. Were at break even right now. And we can go for a while, but after a while, especially the Indebted Companies that have debt outside of ppp, because ppp will be forgiven as long as you hire people back thats when the banks show up and how do you refinance your debt and get expansion capital and things like that the customer at 80 , i think well see customers coming back. Who knows what happens if the pandemic comes back in the fall. You get another shoe that drops for all of us. But i think this fall is going to be very, very challenging time for everyone in both the Restaurant Business and the retail business. I would and the other thing is on the hotels which we havent spoken about on this show, but their ppp money, i mean, its been extended to 24 weeks, but theyve had no business come back so thats another bomb thats going to blow this fall. Anyway, and i i was going to say were all praying for some good luck, good fortune. We hope youll come back its great information for our viewers. Thank you very much, ray sure. From dallas sara time for our etf spotlight today were taking a look at the tech sector. Ticker xlk hitting an alltime high along with the nasdaq amazon, microsoft, facebook, nvidia and apple hitting highs facebook is the only notable outlier there. Look at amazon up another 2 if you bought apple 20 years ago and held on to the stock, youve had a gain of more than 10,000 . Just as one example. Were going to take a quick commercial break stay with us on squawk on the street. S p is lower despite the nasdaqs new record high a grandfather of 14. A newlywed. A guy who just got into college. Thats why behind these masks, Johnson Johnson scientists are working to accelerate development of a covid19 vaccine, drawing on decades of experience responding to Public Health emergencies like ebola and hiv. For the life behind every mask, the clock never stops and neither do we. You should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. 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. We thought you can help ray bring hiwhat . S to school. Kelly, do you know him . Hes a new friend. You ok . You know you can tell me. Im ok. Oh, i trained her in the car. Shes not gonna break. [ laughing ] welcome back and good morning, everybody im sue herera heres your news update. Some of the barriers near the white house are being removed this morning the National Park service has said all the new fencing would be taken down by today as well but the secret service says discussions on the fencing are ongoing. New cases of the coronavirus are surging in many states as reopening efforts ease restrictions in arizona covid19 hospitalizations have hit a new record they are up 49 since memorial day weekend. In georgia, one of several states that suffered election problems creating massive lines. These atlanta voters were online after 10 00 p. M. Several precincts reported issues with in the new Voting Machines if youve ever wondered what a quarter billion dollars of costain looks like, here you go this represents about 5 of the countrys estimated annual cocaine production you are up to date ill see you in an hour. Carl, back to you. All right sue, thank you when we come back, Richard Fisher is going to talk to Rick Santelli about the fed, the meeting today, the economy and markets and a lot more stay with us welcome back dow is down about 250 points lets get over to Rick Santelli with Richard Fisher on a fed day, rick. Yes thank you, sara. Id like to welcome Richard Fisher richard, thank you for joining me on this fed day thank you, rick, for having me all right lets get right into it. Leading up to the big jobs report, many including myself thought it would be more optimistic than many of the surveys more from a mathematical reversal that was the case. And yields moved up and equities moved up going into the number after we have to look forward to jay powell and company, which to put it funny, i guess, hes been a Debbie Downer with regard to whats going onin the economy. He hasnt been the most optimistic and rates start to go down how do you see us going into the meeting and do you see anything big happening after the meeting . Well, rick, ive never heard the fed or anybody at the fed being described as funny, but a sense of humor, i think were looking for clarification. Again, theyre buying about 20 billion a week now if you look at the amount of treasuries held over last year, its up almost 2. 6 times on the Balance Sheet. Its now punched through 7. 2 trillion i think there is a need to somehow get further along the curve of when he talks about the future and what were going to do after, as you put it. It would be a good thing to Start Talking about the afterward now. Well see. There probably should be more coming out about the issue of Forward Guidance there may even be a reference to, although im not sure how effective it is to somehow capping rates. Im not sure how that works. The feds job is to be as realistic as possible. Theyre not to be either happy nor sad but conduct themselves like the only remaining adult in the room and i expect that will continue. Now, when it comes to capping rates, everybody, of course, that i seem to communicate with, think the shortest distance between where were at and capping rates is yield curve control. Yield curve control, anybody who watched it over the last several months realizes the action has been on the long end shortrates and the feds zoom close to zero. Steeper is considered better if youre going to cap Interest Rates, you want a steep curve and you want to hold it there, but arent all the benefits of a steeper curve, the Natural Organic way they develop, not when theyre placed there by the central bank yeah. I agree with you and it inhibits price skroefdis. I dont feel they can control the yield curve. We see how the market has buffetted the tenyear down to 40 basis points in march and back up to 90, and now in the 70basis point the yield curve is steep now doing what its supposed to do rates have risen the 30year bond, used for Liability Management im a skeptic as to whether or not the fed can control the longlon longer end of the yield curve, and i think it will inhibit price discovery. Its important as we discover the setbacks from the covid19 youre right i think the the train may have moved out of the station lets get to another area that is a price discovery inhibitor, so to speak. And that is today i wake up and i do a lot of prefed meetings with stories about negative Interest Rates this story hit the st. Louis fed Research Group and said theres a lot of positives with negative rates. You have to stay a while good things can happen well, the problem i see is that i dont agree. But i see the ongoing nudging going on theres stories coming out whether its within the Federal Reserve system of research or outside the system of research, the nudging continues. And whether you call it stimulus or subsidies, like negative rates, these arent transient issues they recalibrate markets markets learn. They grow over some of the changes, and they become permanent no matter what anybody says it seems as though researchers kind of forget this one point. So once you recalibrate, to think youre going to remove some of the programs in any short order seems illogical. Yeah. Rick, youve been on this theme for a while. A couple weeks ago we were looking at what was happening shortterm, and the markets were forecasting negative Interest Rates at the shortest end of the yield curve. I think the feds been outspoken about this theres always going to be Research Within the fed with different points of view im not sure st. Louis is advocating for this, but the negatives outweigh the positives. I think powell has been articulate on that they dont want to go there. It didnt work in europe or japan. Its done nothing but crimp the financial sector, particularly the banking seb or the, and given our highly developed Funds Available here, plus our powerful banks that cannot make money on a negative yield environment, i dont believe theyre going to go there, and i would firmly resist it if i was at the table were about out of time give me a real short answer to the following. Everybody sees dollar weakness thats been pervasive in the last ten trading days. I see it as euro strength. Weigh in on it you have to look at the whole index. Its down for the tenth day. Out of the last 12 its roughly where it was a couple years ago, and i think thats a real shift, because before i really felt strongly that we were seeing a lot of hoarding of dollars and treasuries from around the globe. As the situation changes here and as weve had some disturbances and the president ial election is approaching, i can see this continuing not forcefully, but gradually as it has been over the last 10 of the 12 stritrading days that should influence the yield curve in terms of liabilities for dollar holdings. Excellent Richard Fisher, its always a pleasure to talk markets with you. Thank for joining us today sara, back to you. Rick, thanks. David faber reporting earlier uber is likely to pull out of the merger talks with club hub th grub hub confirming theyre in advanced discussions Just Eat Takeaway confirming theyre in a deal with grub hub. Well keep an eye on that. The stock trading in europe, down about 8 squawk on the street will be right back ever since weve gone mobile on the now platform, somethings gotten into the office. I hear you. Feels like theres no barriers between departments now. Do you think everyone appreciates it . I do. Huh. Forgot my glasses. Serivcenow. The smarter way to workflow. Makes it beautiful. State of the Art Technology makes it brilliant. The lexus nx experience the crossover in its most visionary form. Experience amazing at your lexus dealer. We will set external goals for the u. S. By 2025 for the overall percentage of African Americans and hispanic americans at our company and in our leadership it makes business sense cough inclusion. The problem with not saying anything is you are implicitly allowing the current state of the world to continue, and that, i think people are coming to realize is unacceptable. This is a 100 billion company. 100 billion company . Because t solving the biggest problem, decarbonizing transport fuel thats the biggest problem honestly, thats the hardest thing to do. So the next 100 billion is going to be this t a company that solves the biggest problem. Its not door dash its like amazon. Its nothing without their logistics. Amazon is logistics. Its not retail. Itslogistics. This is a complete eco system. Nikola along with chesapeake, tesla hitting 10,000. Investors increasingly turning speculative as they look for value in this market Brian Sullivan is here not clear if theyre looking for value or just the price action very good question. You know, i heard nikola, i thought ricola i dont know if weve been here before its a bull market in bankruptcies whether its hertz, the latin american airlines, pier 1 imports, all of them are favorites right now of traders particularly on the smaller platforms like robin hood. Lets focus on hertz were not going to pick on it. Ill get to nikola in a second hertz up despite the fact not only that its bankrupt but it has a delisting notice from the new york stock exchange. It will fight it if youre a bull on hertz, you can make the case the economy is coming back. They have to sell their fleet. The government now owns junk bond etfs, so hertzs debt is in some of the etf mike, youre going to love this. Have you been following faang dd its a the ticker is duo. Its not bankruptcy. Its a chinese Real Estate Firm nobody had heard of a couple days ago it went up 1100 in four years yesterday. Yesterday. Because somebody thought it was a faang stock. I dont know it trades on the nasdaq. Faang dd, and there you go its down now 38 . It was halted. Its come back they say its all about the benjamins. Its all about the georges check this out Citadel Securities ran a Research Report and found that stocks trading under one dollar, literally the price is under a buck, the George Washington had an average gain of 79 the five days coming into yesterday mike, it does appear that people are not just buying nikola but theyre also buying stocks with i mean, just cheap low prices i guess you can buy more right . You can buy more. What do you think zero commission you have a small account size. Its frictionless to do that i think the big question is is this just like the e runruption cannabis speculace and crypto, or does it Say Something about the Market Sentiment i think theres a couple things here. This is probably a great piece for your next piece, mike. We need the Retail Investor to get back in the market we had someone on squawk box and we got into it jj is a great guy and got friend the Retail Investor, we moaned, oh, the Retail Investor is gone. Now the Retail Investor is back and were moaning the Retail Investor is back under bankruptcy, remember, equity can often be zero not always, but zero because you yeah. Its in the hands of the courts. Thats right. Most Lessons Learned the hard way. Well see how that plays out thanks a lot coming up next hour, how to regulate social media when there is no good answer. At nt. N rs joins jacquus to expi whsex a newlywed. A guy who just got into college. Thats why behind these masks, Johnson Johnson scientists are working to accelerate development of a covid19 vaccine, drawing on decades of experience responding to Public Health emergencies like ebola and hiv. For the life behind every mask, the clock never stops and neither do we. Take a look at shares of tesla. On march 18th, this stock was 350 today its 1,009. From 350 to 1,000 in less than 90 days as musk comments to employees about the semi were back in a moment can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Because when you want to create an entirely new feeling, the difference between excellence and mastery is all the difference in the world. The lexus es. A product of mastery. Experience amazing at your lexus dealer. Welcome back racial inequality both at a societal and corporate level in focus this morning as protests around the country continue over the murder of george floyd our next guest has long worked with communities and businesses to invest in education and help provide equal opportunities to all regardless of race or gender joining us now is shot foundation for Public Education president and ceo john jackson thank you for joining us john, obviously theres a lot of attention being paid right now to the inequalities and inequities in our society, education front and center what is the scale of the problem were looking at now thank you for having me i think that we recognize that the Public Education system provides plays a significant role in our democracy and our economy. Having a high school and postsecondary degree is an economic stimulus. And as the only mandatory institution for children and families, our american Public Education system is the lifeline for opportunity for urban, suburban and rural children and families so, what we saw in covid, covid ripped off the band aid in our countries in the inequities that exist, inequities around health, inequities around transportation, inequities regarding livable wages. In 2018, the Schott Foundation we published a report, the loving cities report and in that report we highlighted the needs for local cities and states to begin to address the supports that are necessary for all students to have an opportunity to learn soon thereafter because of the significance of addressing those disparities, we launched a Loving Communities Response Fund and made grants to families and grass roots organizations in 17 states and puerto rico in order to address some of those food and learning gaps. But the damage thats caused by these inequities is significant. John, you know, here on cnbc, business channel, we talk to ceos all the time and share a lot of the corporate statements that have come out pledging change and support and for instance, changing their hiring practices and wanting to add more diversity to their management teams what would be your message to them how can business be a part of the solution starting at a young age in education well, i think what we have seen in the markets if you look at the dow, the markets have relatively bounced back from the impact of the virus. However, we are yet to feel and the market is yet to feel the impact of the sickness of our economy. You know, we have over 30 Million People unemployed. The largest wealth gap that weve seen in our countrys history. Individuals who are working fulltime jobs still living in poverty. We see black businesses who were devastated by covid. 41 recent study, 41 of those businesses may not open. And last month we saw the Unemployment Rate increase for whites, decrease for whites at 12. 4 but it rose for africanamericans at 16. 8 . So this means were talking about increasing the wealth gap in a country where africanamericans only have one tenth of the wealth as white americans. That plays a significant role in our ability for our the ability for our democracy to grow, our economy to grow. And while i think its good that we have Companies Like jordan brand that made 100 million commitment and visa that made a 10 million commitment to support black students who are College Bound and even bank of america with a 1 billion commitment i think its good that companies are leaning forward with their resources and their cash, but we also need to address this problem with using corporate cache. Its cash and cachet a group of black executives through the association of black Foundation Executives pulled together a document that can be found on schottfoundation. Org that lists ten imperatives for philanthropic foundations in addressing this particular moment and those imperatives are relevant to the moment for Corporate America. We have to see more representation at the highest level of Corporate America you know, alexis o han ya did and gave up his board seat on reddit, a company he founded makes an impact. If you dont think so, think back when Vernon Jordan joined the board of xerox and american express, soon thereafter you saw black ceos in both of those companies. And its surprising today that we only have four africanamerican ceos in fortune 500 companies. Having Marvin Ellison at lowes makes an impact. It made an impact before covid and makes an impact in this moment after covid and in this social justice movement. Ken frazier at murk and Roger Ferguson at tia. But the fact that we can name the black ceos in fortune 500 companies is part of our challenge. So, i will say while Corporate America has made investments in diversity and inclusion, to use a term that your viewers im sure understand, theyve made investments but they dont have a lot of equity in the space because those investments have been too shallow or too sporadic in response to damage control. And when black communities look at the leadership of those companies and they look in the board rooms, they dont see individuals that look like them. And in fact, these corporations too often are not investing in the very communities and the grass roots organizations that are out in the streets right now protesting and led us to the moment that many of them are responding to. And that has to change john jackson, thank you for joining us and raising awareness on this issue. Thank you for having me. The Schott Foundation. Market is losing steam, dow down 300 even though the nasdaq stays positive over to you. Yeah. About twoday low on the s p, sara well see you this afternoon good morning, everybody, welcome to squawk alley im Carl Quintanilla with Morgan Brennan and jon fortt. Across technology, this sentiment, nasdaq continues to touch new highs, above 10k a moment ago for the firsttime ever yesterday coming off its 18th record close of the year. Names like apple, tesla leading the way, the ladder hitting 1,000 for the first time today. Is it too late to join the rally or still time to get in . We have a power panel to break it down for you this morning allen patrickkroft is with us as well as steve wesley founder of the wesley group good morning, guys good to see you. Good morning. Good morning here. Allen, lets start with you because youve seen chapters like this over and over again. How does this one feel is it sustainable . Is it worrisome . Or is it just another era in which its easy to make money on