Transcripts For CNBC Squawk Box 20240712

Markets with the best three months in decades. The dow saw the best quarterly performance since 1987 the nasdaq had its best gain since 1999 and ended the quarter up 30 take a look at the small cap up 25 since april 1 the best gain since the First Quarter of 1991. Because the First Quarter really stunk up the place the dow coming off the worst first haflt year since the financial kri sis. The s p still down 4 on the year yesterday was something to watch. We had all three major averages which did close for the month of june in positive territory you are looking at s p 500 closing above 3,100 and watching the nasdaq close above 10,000. Seeing a slight pull back. S p futures down about 10 points and nasdaq off by 25 weve been keeping track of the treasury market. The 10year has been below 0. 7 . Now sitting at 0. 684 . Crude oil prices were a huge point of concern earlier in the year up 40. Well see what could help the senate has voted to extend the ppp Bailout Program to august 8 giving companies extra time to access the remaining 1 130 million selling the committee there was bipartisan support to extend the house needs to pass that bill and send it to President Trump for his signature. The expectation is that that will likely happen on the krcusp of another job report that is tomorrow we were sure last month there would be losses. Now they are thinking there would be a gain. So what happens. I guess you could say the nasdaq is partying like it is 1999. That was a song. It was. A bad hang over p becky said it. We are coming off this terrible moment coming off this terrible moment and sort of on this crazy swing. It was a nice puppet that is reborn somewhere else, i guess. I was reegd before hand. The first time i read it about police dispersing people in hong kong i was ready to be somewhere here so around the world, weve got things happening it is just such a difficult time i dont know if we could have predicted wed go from covid to where we are 2020, maybe some good comes out of it. Or at least we are half way through the year are we . The police in hong kong announce they made their fis arrest Police Force Twitter account posted a picture of a man with a hong kong independence flag which prohibits undermining National Unification of hong kong with the mainland the person will face punishment of up to lifetime in prison. Hong kongs police used forcen and recordedly arrested up to 80 people a new report says apple is pressuring suppliers to cut production delays for the next generation lockdowns it says lockdowns put the giant behind schedule. They are expected to release four different models and three screen sizes they typically announce new phone models in september. Up 43 probably not a huge surprise to see any company dealing with delays given all the issues because of the closure and the pandemic that could be the reason. I will wait as i do. Havent gotten the ring yet. Im in. This year, im in. I know you are. I dont want to do it too early. I held off. Tell me how much youve used your phone this year because we are all at home. Mine is like a 7 or something. I dont have a ring either what was the ring reading this morning. All my twitter people want to know down. So yesterday, i was at 89. I was proud of myself. Today i went down to 83. This is not iq. I like you even better on these numbers because you are like chill, andrew i was so happy. I had a 95 on monday i had a 95 on monday, i just slid all the way down. You almost said, i actually like you when you are below 90 but she said, i actually like you better joe said last week, i have to admit i have a very small and then he paused thats what he said last week. I have a very little. We all filled in the blank. Meantime, the advertising boycott add these to your list until it quote takes action for hate speech. Announced it removed the Network Associated for the Extremist Movement for dangerous individuals and organizations. This is picking up steam the question is what facebook and Mark Zuckerberg have and will have to do in the face of it that looked to me like a huge signal wanting to appear before them. I dont know. This might be that moment i dont believe these are like the Business Strategy for the profit he believes what he believes you can disagree with his view but i dont believe it comes from a place of profiteering the idea that hes willing to meet with these organizers is a huge signal that okay, everything is on the table there is likely to be change that comes out of it ill go ahead and meet with them and that means change is on the way. Much more of the Small Businesses that rely on facebook and the rev you into harder for the sml businesses not to advertise and get to the hard of places it will be interesting to see the Pressure Point you said it, this is this feels like a shift calling on congress to pass reform before the recess announcing a nationwide campaign to push for reform heads the round table on justice. Released this morning saying Corporate America cannot sit this one out leaning forward and saying we have a problem you cannot watch the george floyd video and say we dont have a problem randa randa Randall Stevenson will join us hes been actively involved with brt. He used to be the president of the brt. Well hear from him. There was some unrest in dallas four years ago. Hes frustrated it is four years later and nothing done getting all hands on deck to pass Corporate Tax reform. Throwing your weight around in washington just seemed a little ironic this is july 1 passing today, so it is good we are having him on to talk about it he was on for an extended interview, that was only two or three weeks ago. The days all run together they do why we have dr. Gottlieb, i know that which is good. That we always have we it up next. Get your questions ready send them over twitter dr. Gottlieb weighing in on the jump in covid cases in u. S. And new lockdowns around the country and what it means. U. S. Equity futures are in the red on the first day of july well be right back after this even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. Swithout even on yoleaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. New covid19 cases in the u. S. Rising by more than 47,000 in the biggest oneday spike with 19 states pausing or rolling back reopening in some form texas reported a new daily total case load of more than 6, 900 and the governor suspending elective surgeries another eight states have been added to the tristate quarantine list. Travelers from 16 states including georgia, california, iowa, idaho, louisiana, m mississippi, nevada and tennessee. Dr. Fauci testifying before a Senate Committee yesterday he gave a stark warning about the path to reopening. We are now having 40 plus thousand new cases a day i would not be surprised if we go up to 100,000 a day if this does not turn around and so i am veryconcerned. Saying that the u. S. Is not in total control of the pandemic and we are going in the wrong direction in terms of the curve. Joining us now with more is dr. Gottlieb former fda director and cnbc contributor. Those were stark words from dr. Fauci yesterday. Perhaps even more stark than i expected i know the numbers are not great but getting to 100,000 a day is something. Is that realistic in your mind hes talking about 100,000 diagnosedcases the reality is, we are more than 100,000 cases a day right now. We are probably diagnosing one in 10 infections nationally. The 40 to 50,000 infections we are diagnosing really represents 400 to 500,000 infections. Not all cases because not all of those are symptomatic. We are well more than 100,000 cases right now. Whether or not we could diagnose and get them tested and confirmed, thats not clear. Even though we have a lot of testing, we have more than 500,000 tests a day. That will grow states like texas and florida are falling behind on testing because that isnt evenly distributed. It might be hard to diagnose the cases where we are well more than 100,000 cases a day right now. I want to ask you about the reopening of disney. Talking about what will be required for employees the fact that disney is not going to be testing employees. They have a very strict regimen. Ive looked at what they plan to do all employees will be masked guests will be masked. Theyll take temperatures at the door there is a questionnaire they have to have fill out. You mentioned in march and may and about big employers doing testing on a regular basis would you go to disney world does that concern you . The right approach, wrong approach is. I think the decisions consumers will make is will they go to parts of the country where the pandemic isnt controlled. I think the answer will be no. States that thought they would reopen, especially businesses that are not necessarily local businesses but global and national businesses. Local businesses will be harder pressed. You have one location of a business in florida, you want to keep it open it will be harder to travel in and out of these states right now. It will take some time to get things under control states like florida, california, texas will see things grow much larger before they start to see things come down you may not see disney world or land close down or see a lot of travelers coming out of state but there are people instate who have season passes who would probably glo to the park in that event. If you were advising governor in those states, would you tell them to shut close parks down. Is this a situation people need to wear masks, do the best they can . What would you sd advise governors . Id be telling governors. I had a number of conversations to preserve these things that are most important to keeping the economy going. I priorities schools and businesses that make significant contribution Small Businesses when you are talking venues that are higher risk inside that are purely entertainment that would be top of the list for closing. That is the higher risk. You are seeing states close the bars things like casinos and amusement parks, sure, a lot of things are done outdoors a lot of shared surfaces and settings in doors where they are operating in parks i think this is lower down on the list i dont think this is a priority this is contributing in florida. Theyll have to worry about getting the epidemic under control where theyll see the biggest impact people will stop going out and stop integrating with the economy. Back to the question about employers testing, i remember we had a lot of conversations early on that employers would be the ones leading the way and youll hear about employers ramping up testing. Youve heard about universities doing that we havent heard about massive testing in schools would that be a way to make this work we have two months to get our act together ifs that going to be the case . An interesting question a lot of conversations going on right now. Ive been in on some of those conversations, you are right that you havent seen widescale deployment of that i think there are hurdles and challenges about how to do it. Employers want to be the ones getting the results. There has been the reluctance to leap you havent seen the widescale adoption the inflection could be the advent of home testing where if you are an employer, you could ask your employee to go on an app and go through a symptom check and see who they were in proximity with in the work place. If they dont pass that test, you can tell them they have to get tested hook them up or have a home test delivered. The employer never has to take possession of the test employers are reluctant to bring testing on the site. Cvs offices a service to come on site and take control of it. Theyll get the results and report results so employers want to offer testing but not take control of it it is understandable, they are not health care companies. Should schools do it . Im talking k through 12 i think so. You are looking at governors that are looking at doing that good to talk to you hopeful well have an opportunity again tomorrow thank you. When we come back, the money moves you should consider before july 15. We are just two weeks away from tax day. We have details next right now, take a look at biggest premarket drags on the s p 500. Were going through a really tough time right now, all around the world. And covid19 is still impacting so many people. If youve survived it, then youre the heroes we need. The plasma thats in your blood can literally save lives. But we have to act fast. So please donate. You fought for your life. Now, lets Work Together to take down covid19 to donate plasma go to thefightisinus. Org welcome back pushing this years tax day to july 15 just two weeks away. That is the deadline to make a few other money moves as well. Well hear more about all of this good morning good morning. July 15 is also the last day you can make contributions to accounts that could translate to nice tax savings you can contribute up to 6,000 to an ira and 7,000 if you are 50 or older and get a tax deduction. If you have a High Deductible Health plan, you can stash, 3,500 and up to 7,000 to a family plan. Those hsa contributions are tax deal ductable. Extending the filing deadline in response to the covid crisis there will be no more delays but if you are not ready, you can file for an extension giving you until october 15 to file you still need to make those july 15 ira and hsa contributions. Here is a reason you want to find youll be paid interest from april 15 until the date of the refund it was 5 . Now 3 until september 30. An annual rate compounded daily. It changes quarterly how nice to get some extra cash at this time you didnt expect if you waited on that, you could have gotten 5 gotten 3 percent e on your money. That is better than any Checking Account . It is still considered a delayed refund they have to pay interest on it. Yep. Wow a lot of people may have delayed filing the first time around because they owe money i realize you can file for the extension but that doesnt mean you cant wait if you owe money. You want to make sure you pay what you can when you file that return or file the extension look at irs. Gov payments they understand people are having a difficult time. There are many options making sure you come up with a way that will be visible for you. Thank you it is good to see you. Coming up, stock futures pointing to a slight pull back around 90 points we had 800 points on monday and tuesday. Well talk strategy next new data in polling data from voters in battleground states and what it could mean foi the markets and a look at yesterdays s p 500 and winners and losers announcer carvanas had a lot of firsts. 100 online car buying. Car vending machines. And now, putting you in control of your financing. At carvana, get personalized terms, browse for cars that fit your budget, then customize your down payment and monthly payment. And these arent madeup numbers. Its what youll really pay, right down to the penny. Whether youre shopping or just looking. It only takes a few seconds, and it wont affect your credit score. Finally a totally different way to finance your ride. Only from carvana. The new way to buy a car. We were paying an arm and a leg for postage. I remember setting up shipstation. One or two clicks and everything was up and running. I was printing out labels and saving money. Shipstation saves us so much time. It makes it really easy and seamless. Pick an order, print everything you need, slap the label onto the box, and its ready to go. Our costs for shipping were cut in half. Just like that. Shipstation. The 1 choice of online sellers. Go to shipstation. Com tv and get 2 months free. Good morning, u. S. Equity futures down 81 points first day of new quarter and all of this stuff guys have to do to dress up their portfolio surprisingly after two mornings where we had no idea where the stock market would end up. Pretty solid closes and actually added 800 points to the dow. The november election looming over wall street change research and battleground states looking at voters for the race for the white house eam eamon javers now with what we refer to as the states in play. We call it states of play because these are the six battleground states. He won all six of them in 2016 we are watching what might happen there come november it is early days but this poll has more bad news now. Two weeks was the first time we saw joe biden take a lead in all six of those battleground states tood today, extending his lead to plus three to plus six we are seeing the president is losing all six of these to joe biden. In arizona, negative 7, wisconsin negative 8 florida down five. Florida is the only state where we are seeing President Trump catching up. He was down more than five earlier. Still, the president under water there. So crucial to the elections now. Why is this happening . Take a look at the bread and butter issues. You see the president losing traction here. Under water on immigration by 5446 among likely swingstate voters 54 disapprove of the way hes handling immigration 52 disapprove of the way the president is handling the economy. Helping your pocket book, again, 52 disagree with how the president is handling there. And the stock market, 50 50 thought this would be their calling card going into the reelect. You do see peoples concern in these swing states ticking higher from 62 of concern on may 31 to 71 on the latest survey joe, if you look at all of this, you see it is the virus in those key issues moving the poll numbers where hell have to fight back behind in those crucial battleground states. A lot of time here between now and november back to you. Early days but covid19 we are supposed to be reopening and there are questions in a lot of the country. That throws everything into the unknown territory. Even if it is not a second wave. God forbid in new jersey and new york, we dont want people traveling here because we think we dealt with the first wave that continues in a lot of parts of the country where they cant reopen completely. You dont know where theyll be. Covid and george floyd some of those numbers im surprised. That is the hard core base that doesnt move from 45 to 44 with what is happening in the world, i dont know. It is like how all occasion does form against him there is no political guru in history of american politics who would want to run in these conditions with the Global Pandemic and the economic collapse millions of people out of work some real racial and cultural tensions on the street in the country. All of that is just a very tough back drop for a reelect, which is why you are seeing these strong numbers from joe biden. We are not seeing the whistle stops and the rally. The president has been trying to get back out there on the campaign trail that hasnt worked the question is what can he do between now and november to turn this around. All of the big arrows are pointing in the wrong direction. Thank you how often are we going to do these . Every two weeks well keep an eye on these we looked at the National Polls in 2016 that can be misleading bidens lead in the National Poll is greater than in the battleground states. We have to keep an eye on the battleground states and the electoral college. We have to watch that path to reelection this time around. Thats why we are paying attention to these six key states this time around. To the markets, becky i just have to say i love you because you are a renaissance man. You can quote hamlet while you are dancing. Thats the jesuit education meant a lot good or bad. Turned me into an atheist for a while. I came back in the fold. Good. Glad to hear it. I got a lot of jugs justice under god. If you did something wrong, anyway lets get to the market as weve mentioned, closing at the best quarter in decades. Closing now Third Quarter and beyond, director of global allocation yesterday, my mom asked me why the market continues to push higher when we see these continuing cases spreading across the country i said, well, i think investors are looking past this. They think this will end at some point. Business will come back and youve got the fed and the government there to backstop nirg that hands. I was listening to Worldwide Exchange and he had the cio of calstrs on he said he thinks the day traders are Holding Things up. He said hes not very optimistic about what is going to happen next it is very important to figure out how much of these things matters. Why is the market continuing to hang on here there are a lot of cross currents right now i was writing down all the pluses and minuses it is almost a page full of stuff. A few months ago as the market was bottoming, the tape was extremely oversold sentiment was oversold the rate of change on the economy was starting to bottom and there was a peak in italy at that time, knowing we were a couple of weeks behind that was the bottom of the market since that time, the market had a good underpinning the economy is getting less bad. Keeping it removed and keeping it a floor under the market. We had a very, very strong take. 45 gain, 75 retracement. 98 of stocks you dont want to ignore that. Part of the moves really in the last month were exaggerated or emphasized by the day trader effect that is hard to quantify people are trading with small amounts of money that would influence the markets from midmay to june 8 that was an important peak through that time, kind of a retail basket of stocks rallied at 45 that has been cut in half since then i dont think day traders are part of that story right now as we have seen the markets going side ways and rotation going back to the secular growers and more Stable Companies away from that cyclicals i dont see the market declaring itself in one direction or another until at least earnings season the earnings estimates have been flat lining for weeks now which either suggests everyone knows what earnings will be or no one knows and analysts are updating their estimates and im guessing it is more the latter than the former we were hearing from fedex and the stock took off fred 134i7b8g said they think they are well positioned you anticipate youll be hearing tla from more companies . It is too early to tell usually estimates will fall into the quarter and will start rallying weve seen this very flat line in estimates that could mean they are either too high or too low. It means with little guidance that analysts dont have information to update their numbers. If you look at the market, the market is down 10 from the peak 2020 earnings estimates. So two years from now is what the market is trading off of if that turns out to be too conservative because we are having a vshaped recovery then that will be the fuel for the next advance in this market. Again, it is going to be a really important earnings season well be getting the announced share buy backs for the second half of the year the buy backsto the buyback story is an important piece of the puzzle here great to see you. Thank you, becky. A lot more on squawk ahead take a look at this mystery chart. This company is up almost 24 . Adding to those gains this morning in the remarket, can you guess what it is dont say it, well show yound a touk talk to an analyst who sees those shares going even higher after the break. Welcome back before the break we showed you this mystery chart the company fedex. Looks pretty good there. I want to know whats been going on in the last five years. Earnings and revenues Beat Estimates as people ramped up shipping during the lockdown well talk to analyst. Anyway, weill wbe right back to talk about fedex apps are used everywhere. Except work. Why is that . Is it because people love filling out forms . Maybe they like checking with their supervisor to see how much Vacation Time they have. Or sending corporate their expense reports. Ill let you in on a little secret. They dont. By empowering employees to manage their own tasks, paycom frees you to focus on the business of business. To learn more, visit paycom. Com stayathome orders have been good for fedex. Residential delivers surged in the latest quarter as people shop more online fedex topped expectations on both lines and the stock sharply higher in premarket trading joining us now is ken hoexter. Ken, i dont know if we showed the premarket trade but its up quite a bit. Analysts didnt really have a very good feel for the company i dont know why but can you explain how you can miss that the stock is up 10 this morning. Thats a great question usually with such a great growth of residential volumes you would have such a negative impact on margin because its more expensive to go to the home because you have much lower density. So given that, a super size growth we saw in the quarter, we were all expecting to see greater pressure on margins. They did a phenomenal job of increasing density and being able to counter the negative be impacts of increasing b to c deliveries and surprised on the margin upside because whether its automation, increased density, all of the above helped them really to outperform on the ground and that was really the upside surprise. They had to watch expenses and capacity and Everything Else, ken. Havent built out as much this time are they leveraged to return to old highs in the stock what happened . Do you attribute it to amazon or competition . You got to remember there were a couple of things that happened in the last couple of years. Whether it was their acquisition of pnt which they bought for 4. 5 billion and had a billion and a half of integration part they lost their amazon business which was 900 million of revenues they lost to u. P. S. They rolled out saturday and sunday delivery so adding two more days you can imagine their increased expenses and lose the density there. A lot of things worked against fedex over the last three to five years and now our starting to see that test the bottom and thats why youre seeing a positive reaction the state. When you have the i was the out of the way and lowered numbers quarter after quarter we up graded back a couple of months ago and this is the after effect of seeing that, pass that bottom and seeing the upside swing. Transportation average hasnt fared quite as badly does fedex still represent everything that we should consider goes into what moves that average, or do we need to think of it differently now because of digital and new age, just the realities of 2020 its a really interesting question because when you think about the rails, trucks and air freight, the trucks are certainly a leading indicator by about six months and then the rails a couple of months, given the the raw material moves, the trucks move the last mile. The u. P. S. Took it a little bit deep near to economic down turns because they still run a fixed network. They have to run that network and promise you that delivery. So when that disappears you lose the operating leverage when that comes back you see the leverage theres still a bellwether when you think about the economy. But switch to more ecommerce now its 75 of what fedex moves is type of goods as you make that change you have to solve for that lack of density issue and its taken a while and u. P. S. Has seen a couple of quarters ago and were starting to see that reaction with fedex in this quarter great ken, thank you well be right back. More squawk box. Good morning welcome back to squawk box right here on cnbc im Andrew Ross Sorkin along with becky quick and joe kernen. Futures right now were in the red on this july 1st, beginning of the new month, and well see where things head. July, is there a rule about july, joe . You know, may, obviously, has its thing, october july, anything i think our minds are elsewhere. I know that much july for me is like thursday, you know its like were too close to monday july is too close like september. Right inis it not . Its like just enjoy it. Every day. Enjoy it every day because it will be the dog days of august before you blink, you know, and you know what it means after that i hear that song see you in september. I start getting butterflies in my stomach i dont know why back to school back to catholkat catholic sl midsummer, things happen a lot of people have a lot of money that arent focused necessarily. July is a good month to get away so that may exacerbate the moves. What are we down 200 things are happening its more important its a new quarter. People have no idea how they want to end the quarter, right yep am i right . Isnt july like the summer is passing too quickly. This summer we seem to want it, a day closer to getting out of this mess, hopefully no wonder everybody is sitting there look at me new developments out of the Airline Industry United Airlines is updating its august schedule. Phil lebeau . Gets hot in chicago. Chicago in july, phil. Reporter it is hot and muggy right now, joe and this schedules for the airlines, how is this for a transition they are getting hotter as well. United airlines is updating its schedule for august. United of all major carriers has been the most conservative in terms of adding back flights that will change in august total schedule is 48 compared to last year in month of july that schedule was closer to 25 , 28 the domestic route, 48 versus last year. A substantial improvement compared to july and june. Adding 25,000 flights. As you take a look at shares of united over the last three months they are also adding or resuming 50 routes remember united, all of the major carriers there were a number of routes they said in may and june, were just not going to fly, not enough people or demand. They are adding 50 of those in june in territorial of the try overall were seeing an improvement in terms of passenger levels its about 75 right now in terms of how much its down compared to a year ago but this is perhaps a slightly troubling trend. Look at each successive weekend in terms of the passenger levels its not growing by the same amount it was 27 growth weekend to weekend at the beginning of june by the end of the month it was up just 7 well see if that trend continues in july. As you look at all the Major Airline stocks keep in mind these guys are flying about 27 or their capacity is down about 27 . So this is when they got make hay. They have to head flights. Summer time is the high season come september its really going to slow down especially with the lack of Corporate Travel phil, just looking at these flights, the additions they are planning to put back on, how much of this is potentially tentative move you got situations where governors are saying they dont want people coming from other states and you have the eu saying they dont want travellers coming from the United States too. Governments can pretty quickly change any sort of potential demand for travel. Right i think domestically thats a bigger challenge because things are moving around as much as they are most flights that are being added or resumed those are going to be domestically the international, we know whats going on in terms of europe, transatlantic routes not really doing much at all china, yes, theyve added back a flight from San Francisco to shanghai via seoul, south korea. Thats very weak as well right now. Its the domestic flights, becky and youre correct if you are an airline and you have added, lets say five more flights down the state of florida, well what happens now if you start to see people pull back im not going there because of whats going on with the coronavirus. These schedules are not set in stone. This is what they expect but they are well aware because of the coronavirus things could change quickly okay. Phil, thank you. Good to see you. Fed chairman j. Powell and treasury secretary stephen mnuchkin told lawmakers they are committed to steering the economy through the pandemic but the recovery timeline differs. Steve liesman joins us with more a lasting image i saw after all of this was mnuchkin and powell both Wearing Masks and doing an elbow bump which does tell you they are working well together and in this together reporter certainly they are. The differences are modest at least and somewhat political when it comes to mnuchkin having more concern about the political side but powell and secretary mnuchkin did differ a bit somewhat on the Economic Outlook with mnuchkin saying he expects a strong second half rebound but powell a bit less confident and saying it depends a lot more on what is done a lot of hearing is about what more could and should come next among the things being considered extending unemployment benefits, renewing the Paycheck Protection Program and extending the Forgiveness Program into august. A return to work bonus, and a big debate about local and State Government aid thats hugely political. Powell appeared before congress for the first time while all 11 programs designed to address the economic fallout are up and running but powell will dont say those programs which are principally loans are not the answer for everyone or every single virus related problem more debt may not be the answer here. Debt doesnt solve every problem. You got people who cant service debt you have these inflectionible arrangements this is a serious problem that needs to get fixed and were racking our brains to see how it can be something we can do by lending. Thats what we can do is create more debt. Reporter so what happens next will depend on the mick data especially the jobs data we get a lot of that in the next two days adp in about an hour expected to come in at 2. 5 million claims tomorrow coming in. Nearly 3 million jobs expected to be added and Unemployment Rate declining to 12. 4 . Trouble with data it wont pick up whats happening right now to the economy. As a result of the renewed ramifications. Getting the right aid in the right place will remain guesswork for policymakers but markets stay pretty confident Something Big is happening probably in july are you confident Something Big is coming in july . Reporter yeah. I think so mnuchkin is saying that he is in favor of additional aid for the economy. They are going to have to get together on a lot of things. They are at different places compromise is always possible if thats what they want to do. You want us to ask you to play that, steve is that why its there please, please, would you play that reporter no, joe its there because it was the only thing we could think of to fill the shot. Play something soothing were selling off. We sold off more but maybe you can play something happy or not reporter music can calm the savage market beast i believe, yes. Market breast thats the actual quote. Never mind savage breast not beast. Commonly said. Anyway, andrew, go for it. Were going to continue talking well play the market banjo. First day of the second half of 2020 what can investors expect. Joining us is steven before we get there i just want to get your accepts of what took place over the past two days theres a cynical view there may have been a painting of the tame as they say in the business in terms of what took place do you ascribe the move in the past 48 hours to that or Something Else repositioning around having the best performing shares up in portfolios at the end of a quarter. And certainly some of the moments around end of quarter, where weve had 20 swings from quarter to quarter are not indicative of what were going to get now so i think very fundamentally, the economy across the world collapsed right between the first and second quarters, you know, is not going to be very indicative of what were getting from beyond this point yes some repositioning lets talk about the beyond perspective in terms of where we go from here theres a view in the market which is you cant fight the fed and if you think the government is both congress that is going to come with even more ppp loans which we think is in the offing and potentially what Steve Liesman was just talking about in terms of what the fed can and cannot do, whats the move, steve . I think its going to win out in the long run. That we knock the economy down to a low level its going be a hard recovery. Whats happening right now with the reacceleration of the virus threatens to tall the rebound. But as we see it happening nothing as big as the drop we had when we closed the whole World Economy down right in the marchapril period on the coronavirus, right now accelerating the americas, not the rest of the world. Again thats latin america and parts of the United States as you documented very well and that can slow us down. But as we look at daily data, we look at employment, credit card use, mobility, all of these things, its unlikely well get a shock as severe as what we saw in the marchapril period. Were going get sustained monetary and cal stimulus. Rebound will be choppier were in this for a multiyear recovery those that have benefitted from covid, i dont see any negative catalysts for these big Growth Stocks but many of the industrials, materials, real estate, all of these things are fundamentally beaten down right now. In 12 months less so those are things that we can add to portfolios. Real quick, steve because we got to go. The real question i would ask, theres a lot of people sitting with cash on the sidelines having thought the market would not take off the way it has. The question is do you want to be in this market now . You talked about it being choppy do you say to yourself, stocks can only go up look, i think it can be choppy and you have to live with that the alternative here are negative real returns and most safe in cash if youre trying to time it perfectly chances are youre really reducing your portfolio return okay. Steve, we appreciate it. Always good to see you thanks very much we have a lot more coming up sothebys is breaking records with a virtual art auction then the ceo of fresh direct joining us to discuss their Business Plan and incredible growth during the pandemic box returns right after this r f. Its evident in good times, with decisions focused on the longterm. And crucial when circumstances become difficult. That continued emphasis on people our advisors, associates, clients and communities gives us purpose, strength and a way forward. Today. And always. Thats where i feel normal. S an hour, having an annuity tells me my retirement is protected. Protected Lifetime Income from an annuity can help your Retirement Plan ride out turbulent times. Learn more at protectedincome. Org. 58 million latinos live in the United States. If we all participate in the 2020 census, we can ensure fair funding for our schools, libraries, hospitals, and other public services. The census is safe, its confidential, and our community is counting on us to do our part. We know who we are and how vibrant our community is. Lets make sure our nation knows it too. For more information, visit getcounted. Com, and to participate, go to census. Gov. Sothebys breaking some numbers records for the first of its kind virtual art auction earlier this week. Robert frank joins us with that. Robert reporter good morning. Virtual auction, where all bids were by the phone or online raked in 363 million. That was way above the estimate. The big headline was francis bacons triptych went to an anonymous phone bidder now another one sold for 15 million again to an online bidder it was a big night for women artists. This one was expected to sell for 2 to 3 million went for 7. 9 million the art market moves now to christ ii christies which will have a big sale on july 10th. Bank of america saying in a report monetary and stimulus that was a barnette, him and rothco used to hang out. Reporter you would love this one. Barnette 30 to 40 million. That painting very much like rothco, two colors, very simple. Simple. Is that what it is elegant in its simplicity. Reporter exactly okay. All right. I can always learn i can always learn about these things lets bring in our next guest, joining us now sotheby ceo charles stewart. Tell me the truth, people get really mad when i sound like a creton how much time did he spend on that come on give me an honest answer an afternoon im not sure i can answer this but one great thing about the art market is these auction businesses, its a true marketplace. You can understand that very well i do. That was pretty much in evidence in the last couple of days at sothebys. Im sure robert has some really Smart Questions as well i will never forget the unmade bed with the cigarettes. That went for millions of dollars too. But it is. Its in the eye of the beholder. But does give us, the people that, you know, watch the Financial Markets so closely, can it be a rocksy or a harbinger, or a leading indicator of how speculation and how flush people feel in these trying times so you have to say this was like what a b plus or even an a for the type of interest in results . Yeah. I would definitely give it an a, as a matter of fact, because it stacks up the wholesale stacks up very favorably on any basis. We had a depth in bidding. We had bidders from 20 countries. Robert noted the bids from china which were very active on top of it, we saw we saw records for 14 different artists that, you know, over the course of two days. Amazing do you expect this to hold up . Is there anyway that i mean we always hear that art market is topping out it never really does top out because people that have a lot of money have trouble buying things that go up in value, in bulk and i think art will always represent that for a certain type of buyer. Well, i think that one thing we saw for sure over the last two days is that value for a plus masterpieces has held up very well. Thats always been the case in many categories, not just in art. But, you know, especially for artists who are not living, they are not making more of them. And so we had a lot of fresh work come to market and the prices very much reflected the quality and demand for masterpieces in particular what would you say about the way that it was conducted and the ability for all of us to operate in this Virtual World . What were the draw backs there were any positives we see some stocks go up because of the world were living in right now. What would you say yeah. We made this was a completely new auction format for us. It was, you know, a virtual experience you could only bid online or by phone as robert noted. And it worked incredibly well. We broadcast the auction for the first time we probably had the largest audience by a factor of four or five we ever had for an auction. So all the adapt jakes we made using technology really helped create the overall outcome that was so very positive so, you would even say that offset the was there slightly less excitement or adrenaline that youre not there in the same space seeing the person that youre bidding against . I guess theres a lot of phone bits that come in anyway even at a real auction we got enormous amount of positive feedback from collector, commentators, colleagues, about just how this production actually did recreate the tension of that accusation psychology it was a long auction, four and a half hours long and kudos to our auctioner. The tension was very much there. If you watch our website you can see he some of the bidding and get a sense for what im talking about. Great i always ask, if you can when we have someone on, if you see like one of those raw chickens hanging there, i always wanted, not sure why but wanted one but for under 1,000 if you see one in your travels would you pick that up for me and ill give you a commission or whatever it is that you get you keep me in mind . I heard you were a fan, joe, and we got one for you its actually on our website call me after the show and well have a conversation. Even though you heard how much im willing to pay . You traced it on a piece of paper. Anyway ill do that charles. Thank you. I appreciate it. Thanks and keep us, really, keep us updated. I think its valuable info for our viewers to have. Art definitely its interesting to talk about and its relevant for what were trying to do here. Thank you. Thank you for having me becky thanks, joe when we come back mortgage data out a short time ago diana oleck will join us with a look at the Housing Market futures have been under pressure first dave july, first day of quarter, first day of the second half of the year squawk box will be right back. Announcer time now for todays aflac trivia question. Which popular retailer was e swded in vancouver in 1998 thaner when cnbc squawk box continues y health insuranc. And this is the aflac duck who helped me cover it. Aflac. These are all the cab rides to my physical therapy. And aflac paid me directly to help. Aflac. What he said. And this unexpected bill is from. The twothousanddollar specialist. Thanks. Aflac. When youre sick or injured, aflac is there. We can help with Expenses Health insurance doesnt cover. Get to know us at aflac. Com some Companies Still wehave hr stuck betweenes employeesentering data. A. Cover. Changing data. More and more sensitive, personal data. And it doesnt just drag hr down. It drags the entire business down with inefficiency, errors and waste. Its ridiculous. So ridiculous. With paycom, employees enter and manage their own data in a single, easy to use software. Visit paycom. Com, and schedule your demo today. Now is the time to support the places you love. Spend 10 dollars or more at a participating Small Business and get 5 dollars back, up to 10 times with american express. Enroll now at shopsmall. Com. Announcer and now the answer to todays aflac trivia question which popular retailer was founded in vancouver in 1998 the answer lululemon. We got some breaking news on an important segment of the economy and that is housing. Diana oleck has the latest report on Mortgage Applications. Diana. Reporter andrew, we may already be seeing a slow down in that surprisingly strong housing recovery Mortgage Applications to purchase a home fell for the second straight week, down 1 from the previous week now volume was still 15 higher than the same week a year ago but that annual comparison is now shrinking. That was despite yet another record low for Mortgage Rates. The average on the 30 year fix fell from 2. 59 refinance demand also fell down 1 for the week but 74 higher annually rates have been below 3. 5 since march. As for that purchase weakness buyers are coming up against record low supply of homes for sale and thats pushing Prices Higher you can see that in the average size of a purchase loan application last week. It hit a record high a sign of how pricey this market has become okay before you go, just a question how are record low Mortgage Rates playing into home prices right now . Well, low Mortgage Rates, of course, give you more purchasing power. We expected to see housing prices soften. There were expectations we would see prices down 4 annually. But we just got the kay schiller numbers yesterday and gains dont increase its getting hotter because of low supply how much of that is market by market we keep talking about new york its local. Yeah obviously youre going to see it differently in places in manhattan where youve seen the market hardhit because you dont have buyers coming in, you have buyers leaving. In other areas like in d. C. , prices very hot and home selling very quickly you look at las vegas, another trouble market because the economy is based on entertainment and hospitality. Its all market to market as it always is in real estate. As it always is diana oleck, great to see you. Still to come on squawk box, counsel for Foreign Relations Richard Haass will come to talk to us and the eu decision to ban american travellers a grocery game changer ceo of fresh direct joins us to discuss the companys amazing growth during the pandemic and the nations crazy food supply cin whahich held up pretty well. Squawk box will be right back. Welcome back to squawk box Hong Kong Police announced today they made their first arrest under the new chinese law. A man with a flag which prohibits undermining unifiy unification. He faces a lifetime in prison. 180 people have been arrested. Joining us now to discuss this and so many other issues about the u. S. China relationship is Richard Haass. Hes author of the new book the world a broef ief introduction. Whats happened in the last 24 hours and what do you think it means in the u. S. China relationship i dont know if were having a little bit of an audio issue maybe its mine. Richard, can you hear us well try one more time. I hear you perfectly. Threw i hear you perfectly. Now i hear you perfectly. Okay. Lets start offer. The floor is yours once again. Thank you, sir. The mainland authorities have died they dont much care how the world reacts they may even think the world is too distracted by coronavirus and other issues so there may be some opportunities here my sense is also they are simply not prepared to broke any real protest in hong kong they are worried, if you pardon the expression, the virus of liberalism in hong kong can catch on in the mainland or even taiwan so they are going to crack downand may also reflect the fact that over the years hong kong has become less central financially to the mainland for these reasons, theyve basically anthony away their commitment for one country, two systems under the chinese agreement and they are going to ride this out. Richard, then the question becomes, maybe we are, the u. S. , maybe the rest of the world is distracted but to the degree that you would argue and i dont know whether you argue at this point that the u. S. Would in an older world intervene or Say Something or do something, should we, will we, what do you think should happen . Well most definitely. Essentially weve had advantage with an economic relationship with hong kong for years the whole idea was to keep the two Systems Approach if the chinese will strip this idea and totally incorporate hong kong into the mainland we shouldnt give Hong Kong Special status if you had some technology you could send it to hong kong even if you couldnt send to it nameland thats preposterous. Anything that gets there will end up on the mainland essentially were going to start treating hong kong the same way. Its appropriate its sad because people in hong kong will pay a price for it again, i think essentially the old situation is over. Lets go to that issue for one second hong kong was always this sort of, this place that was in the middle, if you will. How quickly do you think the United States is going to hoff on the issues you just talked about . Very quickly. Its one of the few areas where you have bipartisan support. Nancy pelosi will favor it mike pompeo will favor it. It will happen very quickly that the special economic status of hong kong will shrink. Let me also just ask you about, right now the eu has barred american travellers, as you know, so very well from going to europe. How should we think about that how important is that right now . We could think of that strictly as a health issue but theres a lot of people taking more away from it than even. That look, its a health issue if you look at the charts of coronavirus cases and deaths, the u. S. And european graphs are badly divergent. On the other hand, i think it shows to some extent europe is increasingly disaffected from the United States. It began years ago over issues like guns and Capital Punishment i think they look at this administration and a lot of europeans simply dont recognize the United States. Weve treated them not as allies but as economic competitors with all sorts of sanctions and tariffs. I think this is a sign that the transatlantic bridge, shall we say is in disrepair. In disrepair forever or just disrepair momentarily . I think its been in some disrepair for a while. Forever is a longtime. Mr. Trump is reelected i think some of the basics will really be hit whether its u. S. Nato or usco if mr. Biden is elected things will go back to the status quo, things will improve. Revitalization of alliances and importance of alliances. View of the eu is some of the basic Foreign Policy differences between the two gentlemen who want to be president let me ask you finally, you were tweeting out about h b1 visas recently and what it hanes for the United States. You think the beneficiary of that decision is china absolutely. Look, we cant keep china down china is going to grow its going advance in technology we have to compete with china. High skilled immigration is simply one of the ways we compete. Right up there with basic spending on research which isnt high enough in this country. With infrastructure. With the quality of our education. We can talk all we want about 5g and other issues but in the long run weve got to compete and this is one of our basic tools. We want to be able to attract anticipate keep the most talented people in the world why we would not do that is beyond me. Plus one other thing we did this new Decision Just at the time Chinese Forces were attacking indian forces. Who suffers the most guess what its india heres a chance to bring in india closer to us and were kicking it away. Richard haass, always bringing us some great perspective on all of this we appreciate it very, very much thanks again, richard. Thank you, andrew when we come back well get a check on this mornings premarket movers. Plus the ceo of fresh direct talks to bus the on demand grocery business and much more also coming up at the top of the af m former white house chief of stf,ick mulvaney is our guest. Squawk box will be right back. 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. Welcome back, everybody. Macys is out this morning with its delayed First Quarter report it includes an adjusted loss of 2. 50 a hair the covid19 pandemic will continue to have an impact for the remainder of the year although the company does not anticipate another full shutdown that stock down by 2. 75 meantime i want to take a look at some of this mornings premarket movers. Johnson johnson, cocacola, pfizer all down this morning not terribly but down nonetheless. Well keep our eyes on a number of stocks on this first day of the new quarter. Joe . Coming up, the pandemic changing the way we buy our food and fresh direct is taking advantage of it. Well talk to the ceo about the food Delivery Business and the nations Food Supply Chain later ran. Dal stephenson will join us and then Chuck Robbins will be our guest. Squawk box coming right up you say that customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. Lets take a look at the futures. Its the first day of july its the first day of the quarter. First day of the second half of the year after an incredibly strong second quarter, you are seeing some weakness at the beginning of this Third Quarter. Right now were looking at dow futures down about 260 points. Thats gotten worse through the session. Early on we were looking yeah, boeing shares looked like they were he leading the way boeing down 2. 4 obviously thats a big driver, pushing the dow down and up on certain days but well continue to keep an eye raytheon technologys is down and dow inc is down. Fresh direct is offering two hour delivery. David mcinerney is the ceo and cofounder of fresh direct and joins us right now from the companys headquarters in the bronx. David, first of all, i have to say thank you to you and your staff for keeping my family afloat during the pandemic ive been a chefs member since 2011 you were a saving grease you had a huge surge in customer demand i do have to say your staff was wonderful and made it so i didnt have to go to the Grocery Store a lot. I got one of the coveted slots because im a regular member and had regular delivery for a longtime a lot of people were frustrated because they wanted to get deliveries what did you see during the pandemic and how did you handle it good morning. Thank you for being a customer the demand has been tremendous it started in late february early march, and its just, you know, frankly intensified throughout this entire period to a point where i would now is really our strongest point of demand you know, we saw some interesting shifts we delivered to three major cities northeast, new york, philadelphia, d. C. Cities were always thrown for us, where we saw the big growth is where you are, is out in the suburbs. And yes, its been challenging but i think the team has done a remarkable job of rising to the challenge and really, you know, taking, you know, were getting to a point now where were capable of taking all of it. We saw things like 600 increases in customers coming in and shopping the store which is, you know, was daunting at first but i think they did a great job of reacting to it. Yeah. I mean as a customer i did notice some of the bumps along the way and im sure with so many people. Wanting so much from you all at once i saw there were different times where you all put limit, whether it was for 750 limit per order or maybe 50 items that you were allowed to have at one point as much what you wanted but what you could have normally i would have multiple deliveries during the week from you but obviously because of demand i just had the one. You must have been seeing some real issues and i just wonder what was that . Of it in trying to deal with workers and protect them trying to deal with the flood of people coming in and how prepared do you feel at this point . We feel very prepared yes, it was all of the above what was interesting was it wasnt just an increase of consumers coming in and customers coming in but how much they wanted to buy because the delivery slots were tight people were buying more and more and got to themonth where i was hearing stories about somebody who got a spot would buy food for all of their neighbors on their floor in the building that was the magic ticket for us to get, put a limit on it. And by putting a limit on it allowed us to get more we did limit the skews a little bit. I thought it was more important to let people have access to a tbone steak or a porter house take as opposed to nine different varieties of porter house steak. Lets have one valk. Grass fed, the prime, dry aged we brought it down to one and that worked well for us. I appreciated that more than dollar limit too david, just in terms of the Food Supply Chain and some of the issues weve seen in the country at this point, what issues did you all come upon in terms of what you could access to and are there any problems with that at this point or has that worked its way out . For us it was not our biggest challenge. A lot has to do with the nature of our business. Were heavily focused on fresh and weighed in on fresh foods. Its the meat, produce, seafood, cheeses and dairy. When you think about those different categories, we have really, really tech relationships with the growers and manufacturers and farmers and ranchers so, communicating with them regularly, giving them an insight into what we were seeing allowed them to plan accordingly for us and as a result that wasnt our biggest challenge what was your biggest challenge . The biggest challenge was trying to catch up with the demand on a daily basis. It was tough to firing we would see orders coming in, and we estimated a basket size would be a certain amount and in reality it became a lot larger that caused us to ship around operation, were moving people to different departments, adding on more trucks, more drivers eventually what it was really pushing the envelopes of how much food we could get out of each building. We were fortunate because the building that were in now is sort of a massive stateoftheart facility that we just completed about a year ago. We really just completed it about a year ago and that allowed us enormous opportunities in terms of flexibility to take the increase in demand without having to scale up the labor as much i do realize that you are able to offer two hour delivery now. This is the new thing youre announcing i would imagine that theres huge demand for that too and even at this point i have a hard time getting slots for multiple deliveries during the week how will you be able to kind of manage both of those things where you continue to offer and open up slots and then also make sure you can deliver for some people at least in these urban areas within two hours yeah. So, first it starts with what is the consumer offering. For us it started with next day and then we launched the same day where people could order in the morning and then we have gone more what kind of consumers out there, they wanted it right away thats really what prompted us to get it going. It was also about enabling you the courtroom to, to live the life that you want to live which is probably not just one delivery a wreak you get multiple a week. By adding two hour it allows us to leverage the different buildings that we have we have the Main Building but very much a hub in spoke model we have the Main Building and then we filter out to smaller buildings. Thats something, i think, thats likely the direction that well be going i dont want to plan super far ahead and i want it quickly, and in this case the variety is less than you would see at the fresh direct sight but enough to get what you need or should satisfy whatever it is youre looking for that day david, everybody in the grocery business is trying to do what you all are doing right now. Maybe the most notable amazon trying to take over whole foods. Tryi i tried its service. Not as good. Because its a high demand issue now i wonder what youre doing and the success you are having make you a target for another company that would like to get better at this have you had Companies Reach out that would like to potentially buy you . Yes, we are in a hot sector online food is at the top of the conversation with everybody. I think we internally are focused on our customers and growing our business now thats really where we put our focus, and all of our attention. You mentioned a new building. I was a customer for that too. That definitely had some hiccups and led to some frustrations are you past the point of those growing pains or with all of this new demand for customers coming in the door do you risk running into some of those issues again do you need to build another new building already yes, were past the growing pains and yes there were growing pains. And if you asked me a year ago i would have had a different answer but today i really, really happy that we went through all that we did to get this building as tight as it is right now, to allow us to really grow, and, yes, we will, we will be expanding and ultimately will need more buildings. I think our short term goal is to capture the northeast corridor and then to go into other areas probably thinking about building something similar. David, i know its a different business but maybe an adjacent business, i dont know if youve been following uber in talks to buy post mates, theyve been in talks to buy grubhub how similar are those businesses they are not profitable yet. Youre profitable, right so, we dont comment. What i would say is we are, i am happy with where we are and very happy what the short term future looks like too do you see those businesses, the lyfts and ubers of beiever g get in the business you are. Thats not my area of expertise. Im fairly comfortable on commenting what we do. Im a fan of our delivery model. Im a fan. Of the way we the way we have our routes and depots set up and i think it is really, really important to enjoy the food chain all the way through. Our trucks are refrigerated. When it gets down to quality of the food thats important. From the time it leaves the farm, its refrigerator jatd, comes refrigerated, comes into our trucks thats an important component of online food when it relates to quality. David, thank you for your time today again, thank to your team. Thanks for having me. Lot more ahead another big hour of squawk still ahead. Former white house chief of staff Mick Mulvaney will union us to talk about the raingemni ppp fund left over and the need for more stimulus. Were back with that and more in a moment dear fellow Business Leaders and technologists, i feel the weight you carry, as i carry it myself. But as i reflect and see all the Amazing Things youve been doing. One thing is clear, technology has never been so important. Youre turning living rooms into conference rooms, backyards into school yards, and bringing doctors into homes virtually and securely. You are transforming Business Models and virtualizing workforces overnight. Because so much of that relies on financing, we have committed two billion dollars to relieve the pressure on your business. And to help us all emerge from this, weve opened our supercomputers and patented technologies to scientists around the world, accelerating the search for a vaccine. This isnt easy. But as you adapt and move forward, were here with the people, financing, and technology, ready to help. Good morning were about to bring you a starstudded hour of interviews all coming up. Well stuck stimulus with former white house chief of staff Mick Mulvaney Business Roundtable new call for policing reform with Randall Stephenson and making equality more than a talking point with cisco ceo Chuck Robbins. All of that ahead as the final hour of squawk box begins right now. Good morning and welcome back to squawk box im joe kernen along with becky quick and Andrew Ross Sorkin u. S. Equity futures at this hour down a little over 200 points. Come off the lows, a little more than that. Started out down 40, 50, 60 points got progressively worse as the morning went on. We should point out monday and tuesday, the last two days of the quarter the dow gained somewhere around 800 points. So giving back about 200 this morning. Andrew the Senate Voting last night to extend a key government Relief Program thats for Small Businesses and the vote to keep the 660 billion Paycheck Protection Program going getting passed unanimously. The deadline to apply for aid was about to expire. 130 million remains to be loaned out ppp would keep going until early august thats now likely. Joining us to talk more about getting businesses through this crisis is Mick Mulvaney, former white house chief of standpoint. Good morning to you. Ill ask you, is your expectation that this proposal is going to make its way through the house and get signed by the president . Good morning. I didnt realize i was leading off a starstudded hour. Yes. Something will absolutely pass were in a down Economic Cycle coming in to an Election Year so a lot of political pressure to pass something i fully expect something to pass before the august recess we did see yesterday, i think, the program was extended to august 5th that lines up with the next Time Congress goes on vacation in august im hopeful, those they are looking at it through the economic lens and not the political lens because i think one of the things that congress is relearning again is that economic stimulus is slow. As of last week the last time i checked i think logical half of the money from the last Stimulus Program had not entered the economy yet. When you talk about passing stimulus legislation politically what it does is heighten expectations things for people that things will get better quickly. The economics of stimulus is something i hope they are looking at i do hope they are looking at, i heard they are looking at a Capital Gains holiday. Some other small bits and s. Recognizing the fact that they have to fix what was broken the last time. Weve talked on this program before about the rfk of the advanced unemployment insurance, discouraging people from going back to work a lot of working to be done. They got the whole move july they are not here for much of july but i do expect something to pass by the end of the month. Is your sense or view that theres still enough stimulus in the storm that hasnt reached the public that we dont need to necessarily pass another bill . I think certainly you have to ask that question. The numbers i saw was that bank cash deposits since april are up by 2 trillion even some of the money thats out of the government coffers and in the company is sitting in banks. I think it bears questioning whether or not weve seen the full impact of the previous stimulus which is a reasonable discussion to have before you vote on another one. All right does a Capital Gains holiday which you just mentioned make sense to you i think so. We looked previously at the possibility of tying Capital Gains to inflation so that you didnt pay Capital Gains on inflation only on true gain, and if thats getting any sort of attention i think that would be a good thing it unlocks a lot of assets tied up because of unrealized Capital Gains. That could be a stimulus short term could be something to look at permanently as part of the larger package how do you think the administration thinks about that, meaning Capital Gains holiday in the context of what i think people look at is this covid crisis creating more and more inequality. Is that an issue that you think the administration or frankly the senate or house would think about sure everybody thinks about it and as i mentioned i think you look at this as part of another package of the stimulus for lack of a better word. The other thing the white house has looked at a couple of times over is that socalled middle class tax cut that would come in the form of reducing your holding taxes, your if i okfica thats a way to get money into folks pockets in the middle class quickly. I know some are considering Kevin Haslett left the administration he was concerned about inflation. Which we dont talk much about any more we end up with inflation one of the worst taxes on the middle class and elderly. I hope that balancing is going on and im confident it is mick, i have a question getting inside the administration for a moment and my question relates to masks i dont know if you saw theres a Goldman Sachs report that came out in the past 48 hours suggesting if we masked up as a country we could really move this economy into a much better place dynasty much more quickly. Why do you think the president has not been more aggressive publicly himself and the Vice President advocating for masking . Its a good question. Ate fair question. Heres what i think. Is that when we got into this and think back to february and march, what were we told we were told some things to be really worried about was guesting this virus from a hard surface. Getting this virus from asymptomatic folks who had the virus but werent showing any symptoms now we know or think maybe those are not the easiest ways to get the virus and not the highiest risk its getting it from folks who have symptoms. Analysis on masks need to change should be changing youre starting to see more and more people wear them. I think secretary mnuchkin and mr. Powell both wore them. Ive seen mr. Vice president wore them. The president could wear them to send that message. The way you get this virus by getting it from someone who is sick if you wear a maverick and they wear a mask it reduces the risk incredibly wear a mask going to work, to church, to my rallies. That message could be changing i think based on new information but why do you think i mean even in the past week we havent heard that message directly from the administration i mean there are members of the administration that are out there talking about that, more as surrogates, but why do you think the president hasnt said look if you support me, if you want to support this country, if you want to support this economy im asking you, im begging you to wear a mask he could easily say that. In fact hes done the opposite probably should say that given the information we have. The cdc stuff is changing on a weekly basis one thing ill point out the president doesnt wear a maverick and ill remind folks because i know a little bit how the president operates theres no more socially distanced person in the world than president of the United States theres hundreds of people designed to keep people away from him it wouldnt hurt him politically or economically and would help for him to go out and say go back to work just wear a maverick best thing you can do. Let me ask you, because you just said about the politics of all this right now and the market is trying to understand what may or may not happen in November Chris christie made a comment over the weekend that the president needed to shift his approach if hes going to win in november if you were sitting in the white house right now what would you be the telling him to do yeah. The National Polls are worthless at some level because we dont elect a president nationally we do it state by state but they do have value to show trend. One trend youre seeing a loot of folks in the middle, undecided voters who are notorious for being undecided because they switch back and forth those folks have not been happy how the president has run the last couple of weeks that message is hardwired into that National Poll so is the data regarding why folks have changed not because they like joe biden. Its because they are unhappy with President Trump if he does do Something Different or better the next couple of months they will come back him to. The message would be all right how do we get the president to be the president , because youre not going change the president how do you get him to do what he does best is to drive forceful messages and get that aligned where the country wants to go which is strong leadership on covid, strong leadership on black lives matter movement. They do that and they have a really good chance at victory in november fit turn out to be a referendum on donald trump its tough that binary champions between trump and biden, trump does very well trump versus trump the only person that can beat donald trump is donald trump, i think Mick Mulvaney, always good to see you and get your perspective and stay safe out there. Hope to talk to you very soon. Thank when we come back, breaking jobs data. We got junes adp private payroll report and were expecting a bounce back from stla month stay tuned squawk box will be right back you say that customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. Still to come this morning adp Employment Data for month. Then randall stephenston and Chuck Robbins live stay tuned youre watching squawk box right here on cnbc. [indistinct radio chatter] mom come on, hurry up all systems go . Mission Control 5 4 3 2. Ignition and liftoff. vo audi etron. The next frontier of electric. Steve liesman has the adp payroll report steve . Reporter joe, 2. 37 million just a touch shy of expectations adp reporting that june payrolls private payrolls rose by 2. 37 million and of course they revised upwards the may employment work which is crazy they do this all the time. They are now saying it was a gain of 3 million compared to their original forecast loss of 2 million. Adp was among the closest ones to point to you an upside surprise they were still way negative and this is whats going on in the job market where numbers are literally swinging by millions the good sector for the move june rising by about half a million Service Sector 2 million. Theres the none farm payroll report expected to rise tomorrow by 2. 9 million. Looking at jobs, good job numbers especially on the Small Business side. 937,000. Medium business 559 and large also doing well up 873,000 sector data tells a reasonably good story up nearly a million leisure hospitality. Strong growth in construction trade, transportation, education, Health Services and print services all on the plus side now put that aside for a second because i want to point your attention to another indicate orthat did a good job to point to the Positive Side in may and that was the home base they do payrolls for 60,000 Small Business companies and cover a million workers. They are saying the pace of improvement was slower in june than it was in may so the jobs report naturally falls short of expectations and they are also noting, andrew, that the recent round up of infections may not be picked up in this june report a lot of cross crepts. Adp looking for 2. 4 million home base looking for something of a disappointment when you do your model youre doing a model this afternoon or tomorrow . Reporter i dont know. I dont think any of the things that go into my model work i ran at it couple of times before its not doing a good job. I need new inputs to my model, andrew, and i might spend some time to fine them. Ill use the home based data what are the missing the inputs in the Steve Liesman model . Reporter hiring. We have no hiring. We have good reasonably good data on firing i can not square, andrew, the huge number of jobless things were getting. 1. 5 million expected tomorrow. 1. 3 million. I have this massive data on firing and there has to be you have to offset hiring as much plus to get to the positive numbers. I dont have really concurrent data or High Frequency data on hiring im amazed the economists have done as well as theyve done even being within the ballpark given the gaps we have on whats happening in this economy right now. Steve liesman, thank you. I do want to say i like the fireplace. I do i like the look. I like it better than the office look i think you should get a storybook out and a rocker for the next segment nice to see you. Good suggestion, andrew ill bring it up with the committee. Thank you when we come back inside the Business Roundtable call this morning for congress to pass policing reform before the sum certificate out. After the break at ts Randall Stephenson will tell us why the group decided to speak up now and what concrete solutions they hope to get out of washington. Big day at at t as the ceo hands over the title well get into that and so much more when squawk returns vo since our beginning, our business has been people. And their financial wellbeing. Its evident in good times, with decisions focused on the longterm. And crucial when circumstances become difficult. That continued emphasis on people our advisors, associates, clients and communities gives us purpose, strength and a way forward. Today. And always. Nations top ceos are joining together to push for policing policy reforms. Business round table just out this morning with recommendations for congress and the group wants lawmakers to act before the summer is out Randall Stephenson is the chair of the committee on racial equality and at ts executive chairman and randall thanks for being here we were together not too long ago on this show talking about some similar things, and we were actually referencing you earlier because youre not new to this this whole cause and i guess part of the frustration i heard in your voice last time was because you went through this about four years ago when something similar had happened in dallas i guess nothing really changed in four years. How do we make it stick this time, in your view well, i think, joe good morning, first of all. I think whats different this time is people recognize and accept we got a problem. And people, the American Public, i mean the polling shows American Public is ready for something to change. They are ready for legislative action so you have folks in the house, you have folks in the senate who are working this issue they have legislation thats actually passed in the house so now the time is ripe to get some legislation passed that could produce not just kind of figurative reform but real reform and there are ideas on the table for legislation that if passed would produce reform now, if you note some frustration by people now that maybe its not going to happen because the senate will not even get a bill on a floor to debate thats a problem because i think the time is ripe and the brt leaders said this is the moment we need to get ready, we need to get our position established and we need to push to get legislation done and get real reform done. Everything is set. The table is set now we need the senate to get to work and put a bill on the floor and debate it. The more sectors, more groups that get involved the better, obviously, but i just can you make the case that this is the business round table or businesses that have to do the heavylifting. Its happening organically just across the entire population, i think, and the point keeps being made and some of this, you know, some of the background that the business round table was able to help with tax reform and then you guys can motivate politicians on tax reform. Is that the same thing as trying to change something from the ground up culturally is that really the role of business although we welcome everyone trying but its not the same thing as trying to get congress to move on tax reform doesnt seem that simple, randall . You know, look, ive been doing this a longtime, 13 years as a ceo, 38 years at at t joe, i have never in my career experienced anything like what ive experienced over the last three weeks in terms of employees, broad based number of employees that are saying what are you doing . What are we as a company doing we have these values, you post them on the wall are we going act in accordance with these values to value equality and theres a real concern, not just among our black employees right now but among a broad based employees and thats whats happening across america right now is americans are saying this needs to be dealt with candidly its not being dealt with yet its stuck so can the Business Community lend our voice to this and do we have a voice to lend to this . Is it relevant for the Business Community to step in i got to tell you, if we dont have justice for all citizens, because theres a segment of our citizenry thats precluded from just treatment then youre not going to have tranquillity, peace, civility, thats just not good for anybody whether its business or the communities in general. So we believe strongly business has a role to play here. And that our voice is relevant there are of areas that were not experts on there are areas where we think our voice is relevant and we have something to lend to the conversation if thats the case well lend our voice. One of those areas is, you know, we got provisions in our police law that havent even been legislated they are functions of Court Rulings over a number of years this is the kind of thing legislators need to legislate. They need to put in formal legislation, debate it in front of the american people, pass laws to deal with this as i said, all hand on deck, and its welcomed for business but how does business have can money leverage politicians to act and is there a way that business can somehow use that leverage where the common person on the street cant get a politician to do something and business might be able to . Do you see some method where that would work, randall i would its mighty i would businesses, and folks from the brt, we all have access to people in congress. We have ready access where we can voice these issues very directly i spent a lot of time over the last two days with Congress People specifically tim scott of South Carolina who i got to tell you, after having spent the last two days talking to him, hes put a very reasonable starting point. It doesnt have all of the issues addressed that some of the Democratic Party would like to see addressed but he has a reasonable starting point. You spend time talking to tim scott, your see a willingness to entertain amendments of all kind to address many of the issues that folks from the other side of the aisle want addressed. He needs it on the floor to debate so business can lend their voice with Congress People directly. And we also look we are very active at the state and local level. And we have the ability and the brt you should assume will use its resources to begin to run ads, and direct communication to encourage our Congress People to stipulate and pass legislation you know all politics is local as they say and in terms of, you know, who at t hires, who they elevate to manage positions, who at t puts on the board or any company, you need to walk the walk as well do you think thats being done by American Business i think American Business has made a lot of progress, joe. I think the events of the last three weeks have caused all of us to pause is it time to step up our game. Is there more that can to be done we at at t weve been very diligent in ensuring we have good representation of africanamericans on our board and i think it starts there. And if you dont get that part right then it doesnt flow down into the organization. But is there more that at t can do absolutely our new ceo, weve had this conversation in fact hes had a conversation with the board already on what more can we do so theres a lot of effort going around how do we step up our game and some of the traditional Diversity Inclusion efforts weve been engaged in is not enough we have to take another look at this when gayle king asked you, white guy, great guy, in a position to lead at t after all these years of experience but she asked you, youre walking the walk, where is your, you know, where is putting a person of color in the ceo job. Why didnt that happen you said that was a fair question do you think thats a fair question sure, its a fair question. Its a fair question to ask of any Senior Leadership role at at t did you look at diverse candidate . Did you evaluate diverse candidates for the ceo role . I can tell you very specifically the board went through an elaborate process in terms of the ceo Selection Process before they selected john stenke. Looked at a number of candidates outside of at t. There were a very good slate of first candidate. When they put everything into the decision matrix, you know, they landed on john stenke fair question. The next executive position coming up at at t you should assume the board and john stenke will ask are there diverse candidates are we looking hard . Are we be aggressive enough to look at diverse candidates to fill these roles yeah, i think its fair. Police reform and how we go about it you can imagine how this issue just becomes really a hot button issue for both sides depending on where you stand were seeing some increase in crime in certain areas in new york city. Theres worries that youve heard about the broken window idea, that you cant ignore a broken window because then it becomes, you know, it starts mushrooming. Are you worried that if we start moving resources from Police Departments to other areas, are you worried that we could see crime come back in certain areas, and in trying to do good it could be counter productive and for the people were trying to help because kbhoe where crime is its in some of the areas that, you know, that we worry about in big cities joe, do we bother it . Of course you do Public Safety. Thats the whole point ever policing and we heard nancy pelosi speak yesterday at the brt and she talked about this requirement that we address and we are attentive and very diligent about Public Safety. Does policing need to change yes. I think the data is in and the answer is yes, the policing process needs to change. And how Police Interact with the communities and particularly the black communities. That has to change this is why you need a legislative approach to this, joe, because if you just you know, kind of throw caution to the wind here, you will have chaos. You have to build a bridge to a new policing environment and thats what the legislators need to address. So we dont go from point a to point b without a bridge in between because without a bridge you do have chaos. And we think thats why legislators need to step up. Do you see if lets say if you en masse were to take funding and move 20 to Community Funding instead. If there are fewer police, should there be the same number of police or even, you know, increase numbers where you need them, doing their job differently, or do you think we should have less police . And if you were in a police force right now and you were watching what was happening around, i dont know whether you would really want to be a policeman much longer, would you . It seems we need to worry about both side of that. Of course, you do, joe. So im a businessman and, you know, a few years back, you know, ten years, right when i took over this job 13 years ago we said look the world is moving to wireless we need to tremendous allocate capital. We need to reallocate talent we needed to reallocate our business to wireless we just didnt the next day stop putting capital and cost and Customer Care into our wireline business we built a transition plan on how do you get the capital and the people reallocated so you dont destroy one as you build up the future. Thats where we are with policing what do we want the police force to do. Where should they be involved. Weve been involved ranging from Mental Health to addiction should they be there if you pull the rug out tomorrow no, you will have Public Safety issues we need to begin toe train Police Officers on how to deal with these situations and over time have the people best suited to address Mental Health and addiction issues address those because you just cant pull the rug out tomorrow because you will have i mean significant problems but we need training for our officers on how to deal with these situations, how to deescalate violent encounters in these situations and so you have to build this bridge. Thats what legislation is about how you build a bridge from here to there i just wonder with the way the country is and, we have an election coming up, things can change but if you cant get tim scotts, senator scotts proposals to even be considered, how far apart are democrats and republicans on what needs to be done with such a contentious and, you know, emotional issue as trying to reform the police in this country . How is it going to happen, randall, between you mentioned nancy pelosi, between nancy pelosi and someone on the other side like a mitch mcconnell, or someone thats a republican. Were going to be frustrated again as things dont come together i find myself frustrated now. Thats why the brt is engaged because, you know, look we as Business People think this is something that need to happen just for a good functioning society. So, you know, step one is, can you get a bill passed out of one of the chambers of congress . House. Theyve done it. I actually i give a nod to what the house has done. That bill is not crazy that bill addresses a lot of fundamental issues, really important issues that need to be addressed with Police Reform you know, should all of those be passed into legislation . I think thats subject to debate thats yu have a senate. The senate needs to debate their version of what this would look like and get this in a conference and do the hard work of legislating unfortunately, and i dont want to be partisan on this, but unfortunately we have democrats who say we wont even debate the issues the democrats have some very valid points that need be publicly debated the issue of qualified immunity, if immunity for Police Officers, that is a big issue to be addressed by congress. We cant even have a debate on immunity i was surprised yesterday when i spoke to tim scott he has said hes open to some alternatives that would address the core issues of immunity which is, you know, how do people who have been victims of Police Misconduct get compensated for that because of this immunity theres no avenue for people to be compensated for improper treatment by police. Hes prepared to discuss are there avenues we can take to address that but this idea of immunity, i mean thats a big issue and theres a lot of people that i have spoken to, that are in the Public Policy domain they are not partisan people who say there are some serious incentive issues attached to immunity thats why were challenging the senate get to work lets take the scott bill, lets begin to debate it let debate immunity. Let the public determine what immunity should look like via the ballot box politicians should set policy not courts the courts have written the law around policeimmunity. I think we ought to have a debate on this yeah. Important issues i wish you could just say it police need to be part of the solution they should never be part of the problem because its a solution thats desperately needed in some of these parts of the country and in so many cities. Nobody hates a bad cop more than a good cop, right the good cops, lets return to protecting them, giving them the tools they need and that they are not all being painted with the brush of a bad cop we need reform, joe and were calling on the senate to sepp it up we need to talk about your move great career and thanks. You got a great relationship with the show and Everything Else we hope to see you again on this issue and look forward to talking to the new ceo very good, joe. See you later andrew thank you. When we come back another interview you dont want to miss, cisco ceo Chuck Robbins will join us to talk about his companys search for inclusions during this time of social change and how businesses can survive this pandemic intact as we head to break check out shares of United Airlines that Company Planning to add 25,000 flights to its schedule in august. Hoping to capitalize on an uptick on air travel especially to u. S. Leisure destinations stay tune youre watching squawk on cnbc welcome back to squawk we want to get down to our headquarters where jim cramer is first day of trading of this new quarter. Some questions of what the last few days look like looks like well open in the red. Im curious how you handicap tomorrows jobs numbers and how you think that may or may not impact the market. Historically today is seasonally strongest day of the year its odd to see it down. I think that the last jobs number spurred a tremendous rally. I dont think this jobs number will be impacted at all by whats going on in the sun belt other than positively. Should be pretty good. I can under why people would buy it today you gave just the most Important News is that the nighted airlines decision to increase flights. A lot of people feel airlines are the bellwether you could see a turn and then as you said earlier the tape seems to be tainted by aggressive buying yesterday interesting but youre right the flights are going change the game so well see. Your discussion this morning with Randall Stephenson and now with chuck, most important discussion well have and have had in a longtime. Okay. Thank you for that well see you in just a couple of minutes on squawk the sque street and we have Chuck Robbins coming up. How companies can make a fight for equality. Chuck robbins will be our special guest in just a moment. Welcome back, everybody. We are joined right now by a very special guest, Chuck Robbins who is kiss coulds chairman and ceo he joins us exclusively this morning to talk about corporate response to social issues and how technology is einvolving in the work from home era chuck, its good to see you this morning. Thank you for being with us. Its great to be here great to see you as well im not sure if you heard the conversation that we just had with Randall Stephenson but i know youve been very involved too as a ceo and from the Business Roundtable point of view to come up with some answers. How should companies be involved and what issues are front and center for you well, first of all, i have been involved with randall ive been working with him on the committee. I thought he was fantastic laying out the situation and calling on dong actucongress to legislate. All of us as ceos are being asked by our employee, customers, so activity, frankly to stay tuned and actually impact some of these issues that exist and thats what were trying to do and whether its racial inequality weve seen recently, increasing the representation of black employees inside our companies, the promotion rates, we all have more work to do on these things. Looking at issues like climate all of these are responsibilities we have to take very seriously and candidly were building them into our plans as we move forward and make sure were focused on them. I know you had some very specific things youve been working on at cisco. At the beginning of june you postponed your cisco live meeting that had been anticipated because of what we were seeing with coronavirus and other issues when you came out two weeks later with it you nungsed there was a corp operate mindset change at the company and working on building an inclusive future what does that mean . Weve been working on our new purpose statement for the company for about nine month, honest lui and for years it had been changing the world lives, works, learns and plays and it was file for us to really restate what we believed we stood for. If you look at our technology what we fundamentally do is we connect people all around the world. When you mebt people even in remote regions around the world you give them the opportunity to participate in the global economy. You give them the opportunity to be educated. You give them the opportunity to receive health care. And so we think that that combined with what we believe about our responsibility socially does lead to us a purpose where we power an inclusive future for all on the issue of racial injustice, you know, fortuitously we started an engagement with our black employees back last year in january we had a session where my entire Leadership Team spent an afternoon listening to our employees. They talked about their experience working at cisco. We kicked off 100 day sprint where we tried to deal with some of the issues, accelerated what they liked we tackled issues like pay parity now promotion parity how do we make sure our black employees get promoted at the same rate as others. So there are numerous activities going on inside the company and i think this issue has been brewing for a very longtime and its time for alls of us to take it seriously and time to deal with it. Chuck, on top of that i know from a corporate perspective youre also talking about now donating half a billion dollars to charity i think that started out at the beginning of the year where you were focusing on helping the homeless in california and some other places but its expanded beyond that and youve now announced more what role do corporations play on this front . What changes can you make . Where is that money going to be directed you early on when the pandec hit, becky, we basically said, look, we have to do the things we have to do for our communities, frankly, and we have to be a part of helping resolve this crisis. So we set up a fourpillar framework at the time where we were going to focus first and foremost on the most vulnerable in our communities you have homeless, you know, the Homeless Community in san jose as an example, i mean, this virus is attacking them as badly as any group of people in the country. There are people who live paycheck to paycheck that were furloughed or laid off that didnt know where they were going to get their groceries so we worked hard on that the first pillar was the most vulnerable, the second was focusing on families in our community, with he did things like opened up our Day Care Centers to children of First Responders the third pillar was around research and resilience and how do we support those efforts to find vaccines. The fourth is around strategic recovery, how do we work with Higher Education and industries that have to change to a dpt to whats going on and build a hybrid model around education or health care, how it has to change with the advent of telehealth finally coming to our Health Care System so we just believe that through product, a lot of that was product that we gave, through free offers just to get people up and running from home, much of it was cash as you called out and those are the areas that we focused on. Chuck, lets talk about operating a tech business in a time of pandemic obviously people are looking to Companies Like cisco and so many of your competitors to reach out to their colleagues, to their families, to others like they have never had to do before. Its been an incredibly unusual year i know in terms of web ex users, i think you have 500 million users for the mon of april, then you had zoom who saw more activity and name recognition than they had seen in the past as well. You guys are still far away the leaders when it comes to videoconferencing but they showed zoom making inroads, up 13 in the First Quarter a year ago to 28 in the First Quarter this year. What do you think of those other companies and what do you think of ciscos ability to stay on top in this arena . Well, you know, we have in january we were the largest platform in the world and by the time we hit april that plat formed tripled in volume we did an amazing job of supporting that capacity look, we have a robust, you know, portfolio of solutions in this space that were built with privacy, built with security in mind, built for our corporate customers to run mare board meetings, to have intellectual property discussions and those are the things that our customers are continuing to use this technology for. This is no longer about casual conversations over video and casual meetings. This is about our customers are discussing their valuable intellectual property on their platforms and we have to ensure we have privacy, security and those are the things that we focussed on and thats why our customers continue to lean on this technology. When you build all of that in it is a more a little more robust and a little more complicated to deploy and for the consumers i think some a simple solution is good for our highend enterprise customers at the still lean on web ex to provide them the security that they need. Weve talked to companies and some have been up front on how they are going to have to cut their budgets because theyve seen their revenue drop significantly. One of the things you see budget cuts come are on things like marketing and advertising. I would imagine that corporations may be more willing to spend when it comes to technology infrastructure, particularly when they are trying to make sure that they are keeping things safe that is correct they are allowing their employees if possible to work from home. What have you seen from companies in terms of being willing to spend money on Technology Even at a time when corporate budgets have to come down well, i think that all of our customers had a splurge of spending to get through this transition to work from home they beefed up their security, they obviously took advantage of these platforms like web ex and i think that theres not one answer for customers today Different Industries are impacted in different ways you see airlines and hospitality that are struggling, you see the pharmaceuticals and financials doing okay so every industry is in a bit of a different spot but what i would say generally right now is theres still too much uncertainty in the system for our customers. So there is a lot of customers who are still thinking through trying to figure out what is it we can do, what was our business going to look like 90 days from now, whats it going to look like six months from now every time we get good news we get this reemergence and this explosion in cases that has people wondering whats really going to happen over the next six months so i think theres still just too much uncertainty in the system and i think weve got to get some of these issues resolved and we have to make more progress on this economic reopening in a way that is safe that people feel good about and i think we will have more clarity. Until then i dont think we will. Chuck, does this break down geographically at all . Are there companies maybe in asia that feel like theyve come through further on this or is this a global problem where people look around and say we are only as safe as the latest place thats seen an outbreak . Well, you know, i was on the phone this peek with a couple customers in asia and i think theyre cautiously optimistic. Obviously they went into this pandemic earlier and they are beginning to come out of it. I think its still early to see how its going to happen you see singapore that started to come back and then have seen a little bit of, you know, some hot spots in their country, but i think theyre dealing with it well i think its a little early yet, but our expectation would be that we would see it ramp in the same order that we went into it. So you would see asia come back, then europe, then the u. S. Ultimately but, again, i still think its early and we have to see how this thing plays out you are headquartered in california and we have seen the moves that Governor Newsom has made recently about rolling back some of the reopenings requiring people to wear face masks. Whats it like operating a business there and what are you doing with your employees in california well, first of all, i think that the state has done a really good job, it was one of the first states to close down and make sure that we were trying to stay safe. Santa clara county has even been more aggressive. With our employees the great news is that we have affinity to work from home we build this technology so this is a natural motion for us, were not really used to doing it this long, but its a very natural motion for us. So were just taking it day by day, you know, our essential employees are in the offices where they need to be working in labs, building hardware, doing the things we need to do for our customers. Our supply chain teams are working hard and have done an incredible job for those people who dont need to be in the office we will take this slowly and make sure safety is first for them and we will see how the next couple months go. How has coronavirus really transformed the Digital Business of companies as companies try to do exactly what you just discussed . I think that obviously theres been a lot of discussion around this multiyear acceleration of digital transitions with customers i think what it has done is it has it has accelerated the ability to work in a distributed fashion for sure that to itself doesnt equate a Digital Transformation but it definitely has done that it has made clear to many ceos, many of my peers, that we can actually work productively this way. Doesnt mean we want to do it every day but we can work productively this way. The other thing it highlighted is those customers who have invested in their technology, architecture and infrastructure made that transition much easier i think what it says to ceos is that when theyre able to from a capx perspective or when they have more visibility in their business, that may be six months or a year from now, this he realize the importance of making sure they have the foundation in place, you know, when we see the next crisis that we see. I think thats really whats happened chuck, with he appreciate your time today. It is great to see you thank you for joining us and we will talk to you again soon. Thanks, becky take care. Some breaking news from pfizer that may have helped the averages, meg tirrell, i dont know what it is exactly yet, but meg has more on this im trying to see how this relates to covid, i guess if its Antibody Research make its applicable is that it its as applicable as it gets, joe, pfizer and bio intention covid19 vaccine phase one and two results. They posted on line on a pre print server, they have submit it had to journal, havent yet been Peer Reviewed but looking at 24 patients on two lower doses of this vaccine all 24 generated knute leadsing antibodies those are the important ones that stop the virus from being able to infect cells they saw that at levels 1. 8 to 2. 8 times what you would see in patients who have recovered from covid19 in terms of the safety, they said they did see some fever, but no serious adverse events and they saw the higher dose wasnt any better in terms of the immunogenicity data than the lower ones so thats why they continued with lower doses positive news for pfizer and bio intec in a race to vaccine. I thought pfizer said they wouldnt release anything physical they published it in a journal. Theyve submitted to a journal and they have submitted it online so folks can see the data. 24 out of 24 and pretty good potency if its 1. 8 to 2. 8 thank you, meg that probably is responsible for what weve seen here we have to go. Make sure you join us tomorrow squawk on the street is next good wednesday morning, welcome to suite, im Carl Quintanilla with jim cramer, david faber live from separate locations. Welcome to q3. Features have come offer Early Morning lows, adp shows private sector job growth of 2. 4 million, covid cases remain a worry as eight states posted new highs, ten year 69 basis points but, jim, looking a over this release from