Streak that sauz the shanghai rise 16 yeah shanghai was down by 2 today. Lets see whats happening in the treasury market right now. Yields back down below 0. 6 . We havent seen that for awhile. And joe, still chuckling a little bit about football and why we care this time around not the ivies . No. But anything i see this morning it was eric chemi. I realize out on the cliffs they have that full size cardboard cutout of me so then i was thinking, you know, next week if i dont have like being here some day, i might just put it right here just have something on a loop. Less taxes, less government, more you know a welcome respite plus they got sound theyre going to pipe in sounds like the tesla, you know, the motors i saw that. Theyre going to pipe in fans cheering and i read this stuff and we go, okay i want a cutout this makes sense. Put an entire stadium full of cardboard cutouts. Yes and we all go, yeah, that makes sense. But people would do it. Because i was thinking the camera would go in on the crowd and youd go, there i am theres mom i was watching that thinking people are definitely going to want to do this. But this has been a slow sort of a slow bleed to what to expect the stadiums are going to be full of cardboard cutouts with piped in we would have never believed any of this stuff, would we now its just tells you how far weve come. Yeah. How far weve come or, you know, how much weve i guess lost. But we just accept anything now. Anyway, we digress, andrew we digress. Lets talk about some of these comments that democratic president ial joe biden made. Provocative had comments that the market is now going to be listening to when he was talking about his new economic plan, he said President Trump is too focused on the stock market during the coronavirus pandemic. Throughout this crisis, donald trump has been almost singularly focused on the stock market the dow and nasdaq not you. Not your families. If im fortunate enough to be elected president , ill be laser focused on working families. The middle class families i came from here in scranton. Not the wealthy investor class they dont need me were going to talk more about those comments and bidens tax proposal and what it may mean for your money. Well do all of that at 7 30 a. M. This morning. Joe . Thanks, andrew. People do have, you know, mutual funds and its not just all wealthy people that even thats not even talking about that sometimes a vibrant stock market indicates a companys usually maybe not now but it usually indicates that companies are doing okay which means they might be hiring and be able to raise wages and stuff like that. I mean, you only need to go back to economic downturns that are led by a weak stock market it may not be totally correlated and nobody is saying it is, but certainly during the depression or during the financial crisis a weak, horrific, plunging stock market feeds back onto the or is caused by a terrible economy where no ones doing well. I understand his populist rhetoric, but it doesnt really it doesnt really hold water. And andrew, i just i read this today and i actually didnt think about you. I dont think about you in this. I was thinking of seth hanlon coming up. Dont waste time arguing with people whose opinions are opposite of your own i dont know what doyle for a living so accept the way you look at the world is different and find ways to make it work and i read that i love it but i did not think about you. You do think of me . No. I thought of seth whos coming on then i read yours. Youre pisces, right i am. Youre on that middle thing im on the depending on what newspaper youre reading on the cusp well, what do you think this says shut out the noise and listen to what your inner voice has to tell you. Becky, ill get to yours later ill probably get yelled at for reading horoscopes on the air. Anyway one thing, i was surprised by this, joe. I dont know if this is accurate, i think it is though did you know actually only 44 of americans have any contact at all with the stock market . Even in 401 k s and mutual funds . Even 401 k s and the like i dont know if that statistic is totally accurate. But i think its directionally correct. And it was a lot lower frankly than i had anticipated i think its probably come down because theres not as many pensions people have had to use money and savings to live. I mean, i have heard what percentage of people live paycheck to paycheck, run out of money or would run out of money if they didnt get a paycheck. Or what percentage of people dont have 500 for an emergency. Its an unbelievable number. Yeah. The number of jobs that are not connected, you know, that are not considered fulltime employees. If you look at the Digital Economy and how that has changed so many things too right all right. Cant get a 401 k if youre not an employee. That was my first point my second point, andrew, i think holds true that you dont want to have a low stock market nobody wants a low stock market. This market obviously feels a little bit out of sync with the unemployment picture, but yes. It is a barometer of the health of, you know, not everything in the economy and not wages and not, you know, not income inequality. It may not necessarily be a harbinger of that. But if you had to pick, you want a plunging stock market or one that is rising, you take the rising one cheers to that. United and its pilots union have reached tentative agreements for early retirement and voluntary furloughs. The other three biggest u. S. Carriers have already reached deals with the pilots. Earlier this week, united warned about 40 of its workforce could be furloughed when federal aid restrictions expire on october 1st. You know, the timing of this does make me question. Because it was surprising to hear united talking about that earlier this week. Warning that they were going to lay off up to 40 of their workforce all the way in october 1st. We knew things were bad, but we also heard some airlines were negotiating with the government to try to come up with additional aid that might be brought in thats why i thought it was kind of odd at the time that united would be talking about layoffs coming they must not have needed more money from the government. But they may have been something to give them additional leverage in talks with the pilots union too. Go ahead, joe. I made some reservations for a flight did you really . Yeah. Its in december. What are the odds . Yeah. Yeah i did say can i pick a seat and she said, you can pick one wherever you want. Literally. The whole planes open. Kind of so i dont know. I dont know what any i mean and the stock price of united indicates things arent so flush right now which is once again sort of a proxy for how busy okay. Real quick though and its off topic, was it a good price you know i like i get pleasure out of being cheap. Was it a good ticket price it was a very good price. And weve had this argument for years. You know, i dont argue anymore because it just says not to. But airfare 30 years ago is the same as it is now, andrew. And you never give the carriers any credit for that. You dont. Remember if you wanted to go to florida like in the 70s and 80s, it was like 500. So this was theyve treated us very well, the Airline Industry okay so just nod your head yes. Pandemic pricing. Theyre wonderful people, all those Airline People anyway how come all the fares are exactly the same you should read your horoscopes every day i like this. Its also friday. Its also friday it is friday. You know what that means . That im in love youre welcoming it i like it. Embracing it all, joe. Yeah well play that for you in a bit. Meantime, hong kong is going to be suspending all schools starting on monday because of a spike in coronavirus cases there. Most of the city schools have been closed since february with the move to online learning. Hong kong reported 42 new cases yesterday and the second consecutive day of rising local infections and guys, thats just a little telling. You know, they have 42 new infections and they shut down the schools. Its going to be difficult as we head towards september here. Yeah, it is 28 vaccine developments or something. 28 people working on 28 different entities working on it fingers crossed. This is the big ten. So now were getting serious here big ten athletic conference has canceled nonconference athletic competitions that doesnt save you, rutgers, from playing michigan or ohio state, becky yet i know so its not a panacea for your players but i dont know what were going to do. And this is temporary here and this could they could cancel everything. The decision will help the conference limit travel and ensure universal testing of teams under its control. The decision will strike 42 nonconference Football Games from the schedule including matchups including michigan and ohio state the conference allows for the possibility of not playing at all this fall. Notre dame, thats what i thought. Notre dame michigan. Much more on this topic later this hour. A quick check on the cheering section at oh they got it out. There it is. You look like you should be standing on the sidelines in that getup that is not a sitting in the crowds what if we bring it here . It wont fit in the chair, will it if we just stick it there and can you do the audio wont argue with anybody. I say the same crap all over oh, there it is. All right. Great. Thats beautiful wheres the audio from the you driving the car. No, no, no. No, no, no hey. Didnt we have those big heads we all had those big heads what are those called . We do called fat heads what are you doing . Fat heads we had those. We could use those where are those . We still do i think we do have them somewhere. Maybe well drag those out theyre probably back at Englewood Cliffs somewhere its friday. Anyway friday with terrible serious news to talk about, unfortunately coming up. Yeah. When we come back, covid cases surging in hot spot states several governors mandating masks to help slow the spread. Well check in with dr. Scott gottlieb next. And check out shares of Bed Bath Beyond they said they will close over 200 stores in the next two years. That stock fell nearly 25 in yesterdays session. Well be right back. Usaa is made for whats next no matter what challenges life throws at you, were always here to help with Fast Response and Great Service and it doesnt stop there were also here to help look ahead thats why were helping members catch up by spreading any missed usaa insurance payments over the next twelve months so you can keep more cash in your pockets for when it matters most and thats just one of the many ways were here to help the military Community Find out more at usaa. Com to help the military community 49i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Xfinity. The future of awesome. Welcome back, everybody. Coronavirus cases continue to rise in california, texas, and florida. According to the latest figures, the sevenday averages of total cases is up about 26 in california 19 in texas, and about 30 in florida. Yesterday florida reported a Record Number of covid19 deaths and hospitalizations joining us right now to talk more about all of this is dr. Scott gottlieb hes a cnbc contributor and serves on the boards of illumina and pfizer dr. Gottlieb, good morning good to see you. Good morning. Lets talk a little bit about the cases and what were seeing and some of the extreme measures we were just talking about in hong kong they are closing schools now because they had a new surge in cases that surge was 42 cases. And it kind of puts things in perspective when you think about the number of cases that were seeing in some areas here and how were going to really be up against things as we try to get back to school in the fall i know this is a topic we talk about almost every day, but its something i think parents everywhere are thinking about constantly trying to figure out how theyre going to handle this if the schools arent open in the fall weve been watching some cases of some outbreaks at least at a summer camp in missouri. I just wonder if there are lessons you can take out of that that may be helpful as we get back to school well, we dont have a National Strategy when it comes to coronavirus we have state strategies and theres really two dichotomies in this country. Michigan massachusetts, maryland that really sought to crush the virus like the asian nations like western europe. And in their states mostly in the south that have adopted something akin to the swedish model. Theyre allowing spread. They want to manage it to a point where their Health Care System doesnt become overrun. I dont think that florida or texas or arizona for that matter are seeking to crush the virus at this point. I think theyre just trying to keep the numbers down so their Health Care Systems dont become overwhelmed. And like sweden, i think for the most part theyll be willing to open the schools against that backdrop they seem to be willing to do that i think on a local level, it might be hard for certain districts to open just because the Health Care Systems might be overrun in certain parts of those states in three or four weeks when they have to make those decisions. But for the most part if theyre willing to open against the backdrop of a reasonable amount of spread but their Health Care Systems have not gone into this super surge capacity, i think theyre going to do it you know, and well have to see what happens in countries where they opened against the backdrop of a reasonable degree of spread you did see outbreaks in schools. Remember we talk about germany and norway being successes in terms of being able to reopen schools. But they reopened against the backdrop of having crushed their virus. Sweden kept the schools open through most of their virus. But they implemented stringent measures in the schools. Israel tried to reopen the schools and had big outbreaks and had to reclose some of them. So i think that in the south in these states like texas and florida, theyre going to be willing to open against the backdrop of spread theyre not going to be fully eliminate these epidemics by august you know, we are the United States of america and even though these are different tactics these states are taking, theres no closure of the borders. There is free travel between them you may have some soft governors here in the northeast saying if you come in from one of these other states, you have to selfquarantine for 14 days. Theres no way to enforce that i know people just around here who are not following that enforcement. Whats to say that this is not going to surge again in the northeast . Well, i mean, thats the problem. We have a lot of infection in this country so its going to be hard to keep it out of the northeast. I think our borders are fairly pore ous to your point. Paying a pretty big sacrifice to crush the virus to not have it reimported back into the states and see epidemics heading into the fall if we had a more uniformed strategy, that would be better to have one mind around it that we wanted to fully eliminate spread and want to crush the virus. At this point, its going to be hard with so much infection around the country. Its going to be hard to get to a point where you could, you know, youre not going to eliminate the infection but get it down to levels that are much lower. The prevalence of infection in the country right now must be pretty high. It must be on the order of 150, 1 in 175 people have the infection right now. Before when we were burning around 20,000 infections a day, the prevalence was 1 in 200 people now it must be higher than that. Scott, thats a strong argument for a National Policy were you in favor of that . Are you in favor of that now well, we havent had it i dont think were going to get it you know, this has really been helpful to have a uniform approach on how were dealing with this on a state by state basis. We didnt to that. This has been largely up to the states thats why weve seen a patch work of solutions and outcomes youre not going to be able to unring that bell now its up to the states to try to implement measures to try to hold onto their gains. I wouldnt be surprised to see some get more aggressive on enforcing those. Starting to trace people off of planes an things like that monitor people off of planes i wouldnt be surprised to see that start to happen as, you know, these states in the northeast continue to have relatively quiet periods right now and you watch things get worse in the south remember, with texas and florida right now, their Health Care Systems have a lot of residual capacity in arizona its higher its almost 25 . Thats going to continue to go up its going to get worse before it gets better i think as you see those states get pressed, i think theres going to be more concern in states like new york, new jersey, connecticut, massachusetts that, you know, they dont want to head into a fall carrying more infection thats getting reimported. Not sure if you heard us talking earlier about the big ten saying theyre only going to be playing games in the conference for the football season coming up in the fall they did leave open the possibility of canceling that too. Do you expect to see i mean, it i feel like were all kind of sliding towards this resignation that, okay, things are not going to look like normal were not going to get to go back to school on a normal basis. Im sliding towards resignation that my kids probably arent going to play sports is that a defeatist attitude or realistic as many. I think the schools are going to prioritize keeping the classrooms open. So the extracurricular activities, if theyre going to sacrifice something theyre probably going to look to do that and focus resources on keeping classes open and to the extent they can keep outbreaks from happening in the school try to sand away the things that are sort of extracurricular that could have outbreaks regimes for testing students and athletes as well many are talking about testing the entire student population every two or three days. Its going to be harder for Public Schools to do that not because the technology doesnt exist and the capacity its there its resources its expensive so local districts are going to have a hard time doing that. You might see the specter of have and have nots when it comes to the Public Schools. Because some districts that have more money that are wealthier might implement some more stringent measures including testing while other districts that are harder pressed dont have the local resources to do it wont be able to adopt those tools. Dr. Gottlieb, thank you its good seeing you have a good weekend. Well see you next week. Thanks a lot. Coming up, andrews got this story. Hopefully youve looked into the details of this, andrew. Im talking which ones that . Barbados. A new solution. Yes for those likely to be stuck working remotely for the foreseeable future what about working from barbados theres an offer from that country. Well explain that next. You know, i know florida theres no state tax maybe you can just have no taxes . Barbados not that we would want to do that as we head to break, take a look at the biggest premarket decliners in the s p 500 were coming right back. When we started carvana, they told us that selling cars 100 online wouldnt work. But we went to work. Building an experience that lets you shop over 17,000 cars from home. Creating a coast to Coast Network to deliver your car as soon as tomorrow. Recruiting an army of customer advocates to make your experience incredible. 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Its smarter Trading Technology for smarter trading decisions. Fidelity. Okay, folks. Welcome back to squawk box. This is executive edge weve got a story for you. Joe mentioned it before the commercial break if you are sick of working from home and you want a change of scenery, consider this, folks. The Prime Minister of barbados considering letting visitors stay and work remotely from the island for a year. Lawmakers there considering what theyre calling a 12month barbados welcome stamp it would seek to help replace lost tourism revenue there have been 98 confirmed cases of covid19 in barbados. The island has been relaxing restrictions and has lifted curfews. I have been trying, joe. I know youll say its cynical to find the tax rate in barbados. Tax rate for 2020 is about 28 i dont believe the welcome stamp comes with a tax rebate of any sort just so were on the same page. Well, hes saying come on down but they will let you work from there right but is it rent free . Has he got a bunch of places where you can just move in you know, hes saying come down. What does it actually include . I could go to barbados any time i want, i think, as long as i can pay for the hotel. Well, i think sort of like the United States, you actually you cant just come work in barbados okay. Cant work i think you cant willynilly show up and do whatever you want still going to be costly. I think you go on vacation there. You get a tourist visa, but theyre giving a longer one. Yeah. There are a lot of states that wouldnt take you from the there are states within the United States that dont want people the idea theyre saying come on down, we welcome you you know, thats different in itself too right but i think its you know come down. Its only 2,000 a night oh. Im getting more information so heres the deal yeah yes. The tax rate for the tax rate is only 12. 5 on taxable income, but thats well if its under 50,000 barbad 50, if its over its 28. Residential income is taxed at 15 . New york city is not going to let go of that income even if youre not there it sounds like they are fighting people already who are working in the hamptons and the rest youre going to pay the new york city taxes you normally do and 12. 5 in barbados. Thats a big fight there are so many of us who havent been working in new york for months and were still paying new york city and state taxes. Right right. And you get its expensive to live in barbados until you live in the center of the island or something. I dont know i think we just are stuck. Youre not sold no. Ill stay here id love to hear more about this though. This is going to be a fight between all these municipalities, these cities that no longer have all the workers in them. Theres cities everywhere where people are working out in the suburbs, not in the city or state limits anymore and its going to be an interesting case study to see what happens the whole movement of millennials to the city and then i guess they eventually move out when they have kids, but thats all been its up in the air now. The allure and the attraction of the urban environment. You know, with covid, it changed everything you wonder about bedroom communities. Wouldnt the real estate be going up they are. Huh its wild the prices that are going on i mean, im up in connecticut and youre just watching the real estate prices just go up and up and up and up really . Is that true many. Yeah. Same thing in new jersey. Meantime, ill be returning on the show from barbados because you could be anywhere at this point you might be there now. Could be. When we return tech stocks on a roll pushing the nasdaq to new highs. Were going to talk strategy well do that after the break. Take a look at futures at this hour lets show you whats going on three hours before the opening bell and looks like wed open down about 150 points on the dow. Off marginally on the nasdaq and up on the s p 500. As we head to break, look at yesterdays s p 500 winners and losers youre first. First to respond. First to put others lives before your own. And in an emergency, you need a network that puts you first. That connects you to technology to each other and to other agencies. Built with and for first responders. Firstnet. The only officially authorized Wireless Network for first responders. Because putting you first is our job. Good morning welcome back to squawk box. Take a look at u. S. Equity futures. Bit of a mixed picture this morning. The s p is looking up, up marginally dow off, though, about 150 points nasdaq looking to open down 1 the nasdaq continues to climb, to power through closing at another alltime high. Now more than 3 just this week, folks. Joining us right now is sam stovall from cfra. And sam, i feel like were asking the same questions over and over again because the question is, can these tech stocks keep going up . Morning, andrew i think they can because when you look at Earnings Growth which is expected to be much stronger this year than the s p 500 also positive gains next year the longterm growth rate for the tech sector at 13 is better than that for the overall marketplace. And on a relative valuation b e basis, its trading at a discount to the s p 500 over the last 20 years. So theres still good upside potential and if we end up having to go back into a yellow mode, if you will, for the covid situation, again theres going to be increased demand for technology to in order to work and live from home. What do you make about the broader prognosis for the economy in the market . You look at the airlines this week theyre down i think about 8 across the board that clearly has to be weighing on confidence in terms of where we are as a country and how quickly we can proceed true. Also taking a look at some of the retailers. Brooks brothers. The Company Filing for bankruptcy best buy yesterday as you reported earlier down 25 yesterday. Walgreens, et cetera so were going to be seeing very important data come out in this Second Quarter reporting period. Quite frankly, those that miss are going to get hit hard. Those such as fedex earlier are likely to be seeing some very strong price appreciation. So i think in general the market continues to look for a v shape recovery were calling for a 26 annualized gain in gdp in the Third Quarter followed by a nearly 9 . And nearly 6 for all of next year and the earnings expectations are pretty much in line with those forecasts. So sam, i think i understand why youre saying to some extent that things may worsen but these are some of the stocks that wouldnt necessarily be as affected because they can actually do well if things do worsen covidwise but my question is, initially it was a rising tide. And the averages went up from those lows and now people have said its probably going to get tougher. What youre seeing in these tech stocks now is the narrowing. Does that show that theres a reason theyre going up because they can still do well or is it just showing that the speculation has now moved into the high fliers, the money from the fed and Everything Else . I mean, is it a good thing or a bad thing . Well, i think its a good thing certainly for tech and i dont necessarily think its such a bad thing for the market overall granted right now we have 50 of the near 150 subindustries in the s p that are trading above their 50day moving average. Thats down from more than 90 just a couple of weeks ago on june 8th and also looking at the 200day moving average you have only about a third of the subindustry so weve been coming down in a sense digesting the gains and slowing the overall momentum when you look on a relative basis which areas have the better strength. And we all know that Growth Stocks tend to do much better than value stocks in a low Interest Rate environment. Which is where we are today. Okay. Sam, in terms of the numbers were going to see, earnings reports, how do you look through them and how do you not . And the other piece is across the board yesterday we talked to institutional investors. They say two, three months out from now were either going to get a vaccine or not its going to be binary. If youre in the market, youre going to win if there is a vaccine. If yo occur out of the market, youre going to lose do you agree with that assessment well, i think that wall street is definitely looking beyond the valley. Expectations are for a 45 decline in earnings this quarter, 25 decline for all of 2020 but then a 30 gain next year for large caps 50 gain in earnings for midcaps and a more than 100 surge for small caps and were also expecting to see very strong results for developing and emerging markets. And maybe one of the reasons for that is expectations for a vaccine to come out in the first half of 2021 i dont think its either just on or off meaning we continue with a bull market or we fall into a depression. I think that the market continues to fluctuate right now were in the Third Quarter which historically is the weakest of all quarters. We are coming up to the november elections. If the market declines, history basically says worry about the potential for a replacement of the administration and that usually throws volatility into the market sam, always good to see you have a great weekend thanks for joining us this morning. My pleasure becky thanks, andrew still to come this morning, weve got some stocks to watch ahead of the opening bell. And then College Footballs fall season in jeopardy as the nba prepares to restart games. Well dig into the reopening plans in just a few minutes. And a remund inder, everybody you can listen to us any time on the cnbc app some see a Grilled Cheese sandwich and ask, why . I see a new kitchen with a grill and ask, why not . I really need to start adding less to cart and more to savings. Sitting on this couch so long made me want to make some changes. Starting with this couch. Yeah, i need a house with a different view. And this is the bank that will help you do it all. Because at u. S. Bank, our people are dedicated to turning your new inspiration into your next pursuit. Welcome back one stock to watch, ford may have to shut some u. S. Plants as early as next week due to a lack of engines from mexico the u. S. Ambassador giving us the word on this a ford executive says the automaker has several pliers operating under restrictions imposed in parts of mexico its not sustainable with u. S. Plants that are running at 100 . Coming up, College Football in the fall is looking less certain after some news from the big ten. Cutting its nonconference schedule well get an update for that and other major sports or nonrestart straight ahead dont forget to subscribe to our podcast. Youll get interviews, original content, and behindthescenes access look for us on Apple Podcast or on your favorite podcast app stock slices. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. Schwab. I know that every time that i suit up, there is a chance that thats the last time. 300 miles an hour, thats where i feel normal. I might be crazy but im not stupid. Having an annuity tells me that im protected. During turbulent times, consider protected Lifetime Income from an annuity as part of your retirement plan. This can help you cover your essential monthly expenses. Learn more at protectedincome. Org. Weve been reporting the big ten athletic conference has canceled nonconference Football Games. It will limit travel and ensure universal testing of teams under its control. The move comes as nba players from 22 teams arrive for the leagues restart in orlando this week and two Major League Soccer teams had to pull out of their restarted season due to higher rates of covid19 infection. Joining us now for more, Washington University founding director of Sports Business Program and sports impact founder and president and our own sports Business Reporter patrick, we keep talking to dr. Scott gottlieb who says that colleges cant do what pro sports is able to do in terms of protecting players and maybe they have an easier path back. Do you agree with joe, i think he is right. When you have a bubble like Major League Soccer, the nba, nhl, its in edmonton and toronto, it does create more containment. One of my concerns, joe, when i look at the college game is trusting young people to do the right thing. Here i am in los angeles daily im going over to the track at ucla and im seeing 30, 40, 50 people running, doing stairs, this, that and the other. Most of them not Wearing Masks so you wonder, you know, how is this going to play out with young people being on a College Campus id love for it to work and i think the conference only strategy is a smart way to go if youre going to try to do it i just have my reservations its going to ask. Jabari, do you think theres a big disconnect between college and pro . Should we just write off college . I do like College Football and hoops a lot better than just for me in terms of my interest and draft kings and Everything Else college is looks like it may not happen, right . Weve talked about this, jabari, i know ive got to put off my im not much of a supporter as you are with draft kings. College has to be different from pros their total proposition value to go down in these bubbles are much higher. These college kids are not getting paid like the pros are remember, these are Public Institutions with government money so the government are behind a lot of these institutions and if were having problems, you know, as a society dealing with covid, you have to think that the government institutions that fund a lot of these Public Institutions that you see through ncaa tournaments, theyre not going to allow kids to go back when its unsafe. At that point theyll be opening up to possible types of lawsuits from workers comp type of issues to more you have to be very careful. I applaud the ivy league for doing something that is very, very extreme and hard to do but, again, the ivy league does not have as much tied up in football its easier to say they can cancel than the power five that have millions and millions tied up it wont be an easy decision believe me, i understand by canceling what youre trying to avoid, and thats by helping kids survive for the future so they can enjoy their careers and theyre young and we know how at least a little bit about covid. Theyre not quite as at risk but losing anyone would be devastating to many of the decisions that were made, right, patrick . Its untenable to be able to move forward even if the risk is whatever it is its if its less than 1 , you still cant do it. Thats right. You know, jabari just touched on it you think of these professional athletes you mentioned, joe, Major League Soccer two teams in the mlss tournament in orlando having to pull out in the womens tournament, one team had to pulled out these are people getting paid. They had financial incentive to be safe. If you have student athletes without the same financial incentive, they may be more lax in their behaviors one thing on this, stanford cut 11 of those 36 college sports. Now prior to that most of the sports that had been cut in College Athletics had been from the group of five schools, which are the schools that dont generate as much money, schools from the mac, mountain west, but withstand fords move the other day, that just brings to bear just how much financial pressure is on these schools. If you dont have a College Football season, all the more likely that many power five schools who have already furloughed staff, cut salaries, so forth, youre going to see some of them start cutting programs you know, jabari so go ahead. Yeah the mls, first of all, me and patrick was talking about this last night credit to them its easy to say everything theyre not doing. I watched one of their broadcasts and i thought they did a great job. Miking up the players to take you away from the empty air youll hear. Camera angles were fascinating they did a good job. Im not going to sit here and not give the mls credit. Im curious how the nb a m lb. I think did a a good job their broadcast will be some things that were going to be used to moving forward miking up the players, it was a great idea credit to them its hard. Its hard to bring these sports back because youre dealing with human beings, these lives. You do not have professional leagues without the people and thats why you have to protect the people. Just makes me think, jabari, you look at what you look at the money involved and you look at what networks are willing to pay for nfl and you see youve got to keep that in the back of your mind at all times, that theres going to be a lot of motivation and maybe misdirected and misguided and motivation thats not that doesnt have the players wellbeing in mind i mean, just because the players make a lot of money in professional sports and theres a lot of money for everyone involved in it, does that mean you should take more risk and the money makes up for the risk to your health i dont know theres a big impetus to do that im not sure we need to keep it in mind constantly, that money shouldnt be the overriding factor here it shouldnt be yeah, joe, but at the same time from an athletes point of view im sorry, patrick. Go ahead, jabari. From an athletes point of view, its a manageable risk well, its not a manageable risk but its a risk that some of these guys i understand why they take it remember something, joe. The owners will always get their money back they cash out, they will be fine players, this is money thats gone theyll never see it again i understand why you have to go and make the money at the end of the day, we all have a livelihood. Im not up at 6 00 in the morning for fun and games. Im getting paid to do this. If you dont play, you dont get paid thats money that youll never, ever get back. I understand the risk, i understand the nba theyre doing a good job trying to protect people. Adam silver was one of the first people i heard say the data, not the date the nba and disney are putting all of that aside and they are going straight into the hot spot number one and theyre putting their science on the line and theyre saying, listen, we believe that disney has the proper protocols, that we have the proper protocols to get this thing done we have enough players to get it done no turning back. I understand why theyre there this is profits player wise theyll never get it back. Owners can make this theyll cash out players never get the money back. Thank you, jabari patrick, thanks. These young guys, great health, but, you know, even if it is what do you think it is for those guys probably less than 1 , but there are anecdotal stories that scar everybody to death about what the virus has done to young people tough one. Tough one to try to figure out thank you both patrick, jabari, see you soon. Thank you, guys andrew. Okay. Coming up, two big hours ahead. Much more on the markets as we head into the last trading day of the week. Take a looatk the biggest losers in the s p so far were back in just a moment. Come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. And geico loves helping riders get to where theyre going, so to help even more, geico is giving new and current customers a fifteen percent credit on their motorcycle policies with the geico giveback. And because were committed for the long haul, the credit lasts your full policy term. The geico giveback. Helping riders focus on the road ahead. The geico giveback. 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. Tale of two markets. The nasdaq hits an alltime high we will break down what you need to watch ahead of the weekend. Joe biden laying out his plans for an economic recovery back on the table, Corporate Tax hikes. Well debate his message to wall street and his plan to get the country back on its feet. Disney world planning to reopen despite a rise in covid cases. A look at the company and what it means to investors as the second hour of squawk box continues right now. Good morning welcome back to squawk box right here on cnbc im Andrew Ross Sorkin along with becky quick and joe kernen. Take a look at u. S. Equity futures. A little bit better on the dow down 100 points. The s p 500 looking higher 12 points up the nasdaq off just about 31 points joe . Thanks, andrew. Coronavirus concerns pushing investors further into tech stocks dow raised the week to date gains during yesterdays session. Mike santoli joins us now with more good morning, mike good morning, joe continues to be a story of whats working, whats not saying the glass is half full, half empty heres a look at data. Stocks versus bonds. S p 500 against the 10 year treasury yield that is also kind of plummeting some lows that weve seen earlier in the spring. Now you would look at that and say that somehow theres a different message being told here by the way, the treasury yields really remaining compressed even as theres a ton of new treasury supply it feels like theres a firm bet as shortterm rates remain anchored at zero theres a way to explain the divergence stocks are over optimistic or pessimistic. In the market, banks, small caps against the s p 500,this also would be on a year to date basis. The victims of low yields are suffering and that would be, of course, banks, small cap big underperformance youre seeing year to date. Those stocks that are working, we keep talking about the big tech stocks, they trade much more in line with bonds. They are essentially bonds with some extra up side they are disinflationary assets if you want to think about it that way we dont know how long it can stretch. We dont know if it can make sense that amazon is up 200 million in market cap which is whats going on this month you can explain whats going on relative to the bond market without saying, you know, bonds get it and stocks dont, joe we were talking about it earlier, mike. I hadnt thought of it that way. Im not sure Technology Just illustrates froth or whether it illustrates a part of the market that will be somewhat resistant to a resurgence. That was a question i asked, you know what i mean no, absolutely. I think it can be both i think you can have a very solid rationale for why people are gravitating there. It can get crowded and you can overpay for the certainty that they seem to deliver thats the riddle. Watching it is youve got to admit certain days where weve talked about the its always red on the center one, which is the dow, and usually red on the s p but its almost never on the nasdaq its just like its like relentless its apple and microsoft in particular they seem to trade in line and just kind of pile up market value without really reference to whats going on headline wise or anything. Best in class. Mike, stay with us lets continue this conversation for that we bring in liz young shes with bny melon investment manageme management well talk more about investing in the market. Youre still in the camp of being on the offense, right . I am. I think the best way to look at this is that the market has been comfortable with the resurgence in cases but not a resurgence in restrictions as long as we can keep the restrictions at a manageable level, theres up side especially over the long term. The reason im talking about still being aggressive in stocks, defense isnt what leads us out of recessions in order to win the game, you have to be on the offense. If you think about the objective of equities in a portfolio, its to produce growth. You have to own things that are going to produce that growth is it going to happen in a Straight Line . No especially not going into an election season, going into a time when were expecting another fiscal package headwinds, seasonality, all of that happening in the next 60 days that will pressure us over the longer terms, if we look out 6 to 12 months from now, we do expect things to be higher in terms of the conversation we were just having with mike, would you be telling people to be piling into the crowded tech trade weve seen thats done so well or would you be telling people its time to start nibbling on the stocks that have underperformed like the banks even though youre looking at the 10year yield. Im not a big bank bull even though i work for a big bank im not a big bank bull. What are the things that would drive bank returns you have to look at the price return probably not going to see a lot of that with such a flat yield curve. Now the limit on dividends thats another headwind for bank returns. I wouldnt necessarily be looking at banks, but the question of technology is right now if youre already in it, do you stay in it yes. If you are not in it, do you add new money . I dont think this is the best entry point especially as we head into a period of time over the next 60 to 90 days we probably see a little bit of weakness when we get weakness tech stocks get hit if we have weakness on big mac crow themes and we have some of that head wind that could be coming down the pike. If you wouldnt put your money in the tech trade, you wouldnt put it in banks, where would you put new money to work right now . Were optimistic on this recovery and that it does hold up i think you need to be in those cyclical areas i would be in industrials. I would be in small caps you have to look in the small gap space. The small cap growth space is different than large cap growth. Small cap growth is health care versus large cap is tech i do still think you have to have your foot on the pedal here mike, can you explain why the 10year is back below 0. 6 i dont get it i know theres concern about coronavirus cases or Different Things happening, but its shocking to see these levels at this point yeah. First of all, it starts with 0 short rates as far as the eye can see. It starts with scarcity around the world. And then just even if we are moving in the right direction on things like employment and things like growth, the bond market is probably very comfortable that theres so much kind of slack capacity in the economy thats built up over a short period of time that it will be a real long while before you have to worry about risks up, inflationary uptick or anything like that i dont know if theres a better explanation of all of those things together. Theres still the yield premium in u. S. Treasuries i think theres a lot more attention on the shorter end of the treasury yield, like five years and things like that people basically saying maybe rates dont go up from the fed for a long portion of that five year you would manage. Mike, let me ask you one more question about the markets and the feel of it it feels to me at least like youre not seeing the sort of sleepy trading days that you would normally be seeing that week after fourth of july. I feel like people are on edge people are used to working from home so even if theyre somewhere trying to be on vacation, i feel like people are more involved. What do volumes tell you its jumpier than you expect. Its illiquid. There is small trader retailtype activity that investors want to interact with. That keeps bubbling up the bid in the teslas of the world and some of the smaller kind of fastermoving stocks, that has remained. I do think if i look at a volatility index, that means big money is hedged up a little bit on alert for something that can come down the road july is seasonally a strong month. You actually have more excuses for the overall market to break down if you want to look at the news the markets decided not to. You can take that however you want it doesnt seem that its entirely gone. Mike, thank you we will see you later today. I know youre around for the 9 00 liz, thank you have a great weekend thank you andrew. When we come back, a lot more on squawk box this morning. Companies like Procter Gamble taking on racial bias. Were going to speak to the head of strategy for p g after the break about social experiment in the battle against racism. A check on the Housing Market data being released a few minutes ago that could shed a light on the state of the Real Estate Industry as we work through this pandemic. lta about it after this short break. Squawk returns 49. 50 i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Xfinity. The future of awesome. Welcome back to squawk box. Many americans taking a look at the impact on employees and customers when it comes to issues of diversity and inclusion. One organization doubling down on its approach to combatting racism is Procter Gamble a video called the choice encouraging white americans to speak up about bias. Fostering conversation about race between strangers joining us to talk more p g strategy is damon jones. Good morning. Before we get into some of the details, just tell us how this came about. Im curious about what kind of debate there may or may not have been inside the company about how to approach this well, for years weve been using our voice and position as a leading advertiser to spark these constructive conversation on race and bias back in 2014 we launched a Campaign Like a girl to talk about gender bias. And we had the talk. Black mothers were having with their children and last year the look we wanted to help given all that was happening in the world we know that a lot of the evils were facing now, racism, sexism, they all start with bias we cant tackle these problems until we begin to talk about them so the challenge is always how do you do that in an accurate way . How do you do that in a way that brings People Voices invite them in to be part of the solution thats our objective. Its an Important Message were living in contentious times amid of what some people are called a cancel culture. Starbucks many years ago put together their Race Together Program which immediately drew criticism despite i think its well intention my question to you is how you think about that sort of nix in terms of how you approach this issue and what kind of feedback youve gotten thus far sure. I think what we know because were all about serving consumers, Consumers Want to know the values behind the brands they buy every day. As we consider all of these types of programs, we do it in a fair and accurate and very respectful manner. Were very clear on our goals. We want a society that fosters great public discourse, even when we disagree we bring multiple views to the table and we handle those views in a very respectful way were clear on the objectives and outcomes not everyone is going to disagree we want everyone coming to the table bringing their lived experience and perspectives beyond their own what we did is we paired strangers together, people with different lived experiences, white, black, gay, straight, all of these images of diversity and we said, lets talk about these things sometimes we disagree. Thats the proper process of learning weve actually taken that same process within the walls of p g. Were walking the talk when it comes to bringing people together and getting through some of those difficult conversations. At the end of the day its not about a popularity contest, its about getting to the culture of respect and understanding that we all want to live together. How do you think about this in terms of branding i know that may sound crass but thats there is a branding element to all of this you know, historically people p g would sell a product this is selling a brand and there really is no i mean, there is an over arching brand, but you have lots of brands underneath the umbrella, if you will. We do the answer is its a little bit of both. There are times weve chosen to speak out using both of our brands secret is a brand thats been very vocal about gender equality doing a lot of work with the u. S. Womens National Soccer team there are times other brands have gotten in weve used the brand of Procter Gamble because we want to make sure that message is clear that theres not another distraction. Sometimes people feel the message is to commercial people feel like youre doing it to sell soap were not doing it for that reason we want a Better Society those are careful, measured decisions we make making sure it has the impact of really changing minds, opening hearts and leading people to action the otherquestion i was going to ask you has to do with advertising, i dont know how much youve been involved with this situation with facebook and some of the others how do you think this changes the advertising approach for a big company like yours i mean, i think weve been clear on the standards of advertising everywhere, right . Were not going to step in and advertise where theres hateful, denigrating, derogatory comment. The higher level objective for us is the accurate and respectful portrayal of all people thats a standard consumers should hold every company to we are seeing lots of consumer interest on that, and were taking action and really clear on what our standards are. Were applying those standards equally to all of our partners we think were going to be part of the solution by setting the great example that weve been setting, taking action where its needed, being very clear on the standards and walking the talk to make sure were getting the accurate and positive portrayal of people. Damon, weve got to go. One final question, which is this from a commercial perspective, not advertising on facebook, do you think its actually had any impact on the business i cant speak for other companies. There are many different ways in which we can choose to get our messages out were going to put our dollars where those decisions are made in a clear, accurate, respectful way and i think consumers will recognize the things we do for them. Damon, nice to see you. Appreciate what youre doing appreciate you coming on the program this morning thank you. Great thank you. Joe. Thanks, andrew coming up. Mortgage forbearance data. Well get a check on the health of the Housing Market. Futures have recovered a little bit but threatening triple digits on the dow now. The nasdaq is now down 27. Squawk box will be right back. Time now for todays aflac trivia question. Who is the highest paid female e sw wn bcsqwk thanerhecn ua box continues not covered by my health insurance. 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 now the answer to todays aflac trivia question. Who is the highest paid female athlete . The answer, tennis star naomi osaka. Breaking news on the Housing Market and new mortgage forbearance numbers. Diana olick joins us now with more hey, diana reporter hey, joe. Yeah, the numbers of loans in coronavirus mortgage bailouts is dropping, but a lot of borrowers are now extending their terms. As of july 7th the volume of loans in active forbearance where they are allowed to delay for at least three months, it fell by 145,000 week over week according to black night roughly 4. 14 million loans were in forbearance thats 7. 8 of all active mortgages. Thats the lowest amount since april 28th by category, 6 all backed by fannie and freddie 12 of fha va loans were in the bailouts private bank loans 8. 2 . The drop was driven by the fact that all of them were started at the beginning of april the majority of those were extended more than 26 of loans in forbearance were extensions for the week ending june 28th. That share has increased steadily for the past three weeks and we expect it to continue to increase i want to turn to another sector of the Housing Market that is seeing a lot of pain and that is Senior Housing very vulnerable to covid19. We just got some new numbers out this morning that it saw a huge drop in occupancy in the Second Quarter to just under 85 . That according to the National Investors center. That nearly 3 percentage point decline was the largest quarterly drop since data reporting began 14 years ago it is the lowest occupancy on record the only two markets with occupancy gains were sacramento and cleveland. Atlanta and denver experienced the largest occupancy losses that puts several Senior Housing reits at risk. Bentos has an advantage as it owns both Senior Housing and medical housing, the latter doing much better. Seniors looking at different options, whether its home sharing, multigenerational living with family this is going to be a big issue Going Forward as senior homes have been hot spots for the virus and seniors are most at risk joe . Diana, on foreclosures, do you expect to see those just ramp up and become a real problem at the end of all of this what do you think . Reporter no, i dont not like we saw during the last recession. Thats because we have a record amount of equity in housing. Homeowners are in a far better position than they were 15 years ago. If they werent able to hold onto the house, if they felt they werent going to be able to pay that house past the limit on forbearance, they could easily sell it and just get out from under it i dont think well see foreclosures but we could see people forced to sell their home. Senior housing, a lot of construction lately. How does that play into the drop in demand . Reporter well, yeah. Builders were looking at the aging baby Boom Division thankfully a lot of it is not really scheduled to come online until next year. Hopefully demand will come back. There will be pain in the sector as people decide what they want to do, how they want to live thats a sector of the Housing Market thats going to be in trouble, i would think, at least through the end be of this year and going into next one especially as we see the new supply come online. Diana, thank you. Appreciate it. I was looking at the shot. Really nice. What are those are those blooming beauties . What are those those are really nice. What are those again . What are they called hydrangea. New computer app where you put the you impose the flower on the phone, the picture, it will tell you what flower it is. There are people that have i dont know whether you can do that, but i saw it highlighted the other day. That would be good for me, its like i can spot a daisy or a rose. A rose is a rose is a rose thanks, diana. Becky. Joe, theres an app that i used the other day that can identify a bug when you put it over it, too that was really cool it was trying to figure out what the heck it was. Which ones to squish and which ones to which ones might be eating some bugs eat roaches. Is it a bad one or not . A spider is not a bug either. I would never i am very gentle with spiders. No. They go after the bugs we dont like mosquitoes. I think bats eat mosquitoes so you may not like them. They do, in large quantities. We used to have a bat house yeah, theyre good very helpful. Still to come on squawk box this morning, joe bidens plan for Corporate Tax hike. We will talk about his plans for an economic recovery right after this break then disney world in orlando is set to open despite the spike in cases in florida the stock seems to be at a covid crossroa crossroads well talk about what the reopening will look like and what it means for disneys bottom line. Futures at this hour, lets take a look the dow is still under pressure. Down by 105. Nasdaq down by 29. S p off by 10. When we were showing the s p was higher that was a mistake that was not the case. S p has been down all morning too in line with the dow and ghknnaaq rit ow its indicated down by about 11 points well be right back. Youre first. First to respond. First to put others lives before your own. And in an emergency, you need a network that puts you first. That connects you to technology to each other and to other agencies. Built with and for first responders. Firstnet. The only officially authorized Wireless Network for first responders. Because putting you first is our job. Former Vice President joe biden outlining his plan to revive the economy in the wake of the coronavirus pandemic. His plan includes raising taxes on corporation it is time Corporate America paid their fair share of taxes we thought in our administration we should lower the tax from the high 30s to 28 , and lower it to 21 im going to raise it back up to 28 provide hundreds of billions of dollars to invest in the growth of this country. In the days of amazon paying nothing in federal income tax will be over. Joining us now, Pwc Tax Services coleader and seth hanlon with the center of american taxes fund did anyone tell you i was talking about you earlier . Did it get back to you were your ears burning i missed that. I read my who ahoroscope, the will be people on you wont try and not change i need rohit to do the heavy lifting. Im going to preempt what seth is going to say because i saw the Vice President yesterday saying that all the promises that the Trump Administration made about bringing jobs back, manufacturing and how that was going to help wages go up, he said none of that happened and that he was going to make sure that we delivered on these promises this time i went back and just saw in my own mind before the pandemic, i think those were pretty good employment numbers we saw. Unemployment was very low. It helped a lot of groups that hadnt participated. We had some of the fastest wage growth that weve seen in a decade and we had some pretty good stock Market Action did any of that come from the tax cuts and from the what we saw the first part of the Trump Administration or was that all going back to obama and Vice President biden and president obama and Vice President biden and their policies look, i mean, certainly the economy had been growing and then, you know, you have the tcj, tax cuts and jobs act enacted in the end of 2017 when we looked at the data what we saw in response comparing the eight quarters to the tcj to the 8 quarters after, you saw a significant increase in factors, and significant cant drop in deleveraging and significant increase in research and development all of which will create more innovation, more jobs, kind of continue to fuel the knowledge economy that is the future of the United States. I think there is a story to tell about what happened after the tcj. That quickly gets clouded by the pandemic. That was going to be my point, seth. I am not arguing with you right now,im not trying to convince you of anything, but i do remember before the pandemic there was just a thought that democrats were going to have a hard time running against the economy that we had seen prior to the pandemic in terms of unemployment and wage gains and Everything Else. Hearing the Vice President say nothing was working now that the pandemic has hit, youre able to say that because were in dire straits at this point, but i think thats a false narrative, seth i think it would have been tough to run then against the economy. I think were in the last few years of a recovery that began about ten years ago and i think a lot of those positive trends had continued in terms of job growth job growth was slower in the last couple of years than they were during president obama and Vice President bidens term. When youre at 12 its easier to get to 5 than 5 from 3. There are underlying trends that continued the promise of the tax cut, right, was there would be such a boom in Business Investment that u. S. Workers would become so productive that they would get a 4,000, 9,000 raise Business Investment declined after the tax cut. I dont know what numbers they were looking at. That was the big promise of the tax cut and it completely didnt happen what happened was corporate revenues fell off a cliff and they got hundreds of billions in services the message before the pandemic, rank and file workers still werent sharing in the recovery as well as they should have. Those trends are long term that was a longterm trend. Income inequality got much worse during the obama years because the fed or however you want to blame it when you cut business taxes, revenues are going to go down. That was the whole point of doing it youre hoping that the growth it engenders, you make up for that elsewhere. Rohit, tax revenue did not decline overall at that point. I think it was basically flat, was it not well, no. Revenues as a percent of gdp did decline. You have a 1. 5 trillion tax cut. Thats certainly to be expected, although remember, of that 1. 5 trillion decline how much . Decline how much, rohit . I remember, did it decline 1 . I thought that tax revenue was fairly flat. Thats a percentage of gdp. It wasnt like it fell off a cliff. Right nor would you have expected it because even a 1. 5 trillion tax cut, remember, thats over ten years. In the same tenyear period the federal government will spend 43 trillion. Rohit, remember there i can just remember that republicans said we heard there was no magic wand to bring back manufacturing jobs they said, see, we did we were able to do that. Seth, is that a false narrative that we did find something that started bringing manufacturing jobs back here we were on our way, werent we the Manufacturing Sector was in a recession in all of 2019 and i think all of the promise about capital coming back to the United States, investment boom simply didnt pan out and this is before the pandemic. Rohit yeah. So, i mean, we looked at data from the s p 500 and what we found is between the eight quarters pretcj and the end, the data suggested a significant increase in Capital Expenditures some of it starting before the tcj was enacted. Lawmakers said youre going to get a benefit of this starting the First Quarter of 2017 so go ahead and start making the investments. Certainly now Capital Expenditures have bottomed out the whole economy has bottomed out. I think the cap ex data is fairly strong. You can quibble about whether or not theres cause and affect the data is there on Capital Expenditures if youre comparing eight quarters before the bill was signed into law and eight quarters av it was signed into law. So, seth, we wonder if this is the time because of the jobs picture. As an illustration, i heard the Vice President talking about Amazon Amazon doesnt cheat on their taxes, its just the way the tax laws are written, there are certain times where they are expanding so quickly that they get to appreciate, whatever causes them to be able to have a low tax rate has the good that amazon has done in terms of job creation, its a huge amount of people that are now employed by amazon and paying taxes and theres a huge amount, i mean, of wealth thats been created for shareholders and elsewhere, has amazon not contributed to the good of this country and society in spite of not you know, what people did they not build this did the government really build it for amazon . Should they be putatively taxed because theyre so successful . I dont think this is about punishment at all, its about a minimum essentially what Vice President biden is proposing, its a 15 minimum tax there used to be an alternative minimum tax that the 2017 law got rid of this puts back a sort of version of it. All its saying is that Companies Like amazon, enormous Companies Like amazon that are showing profits for book purposes but not for tax purposes have to pay at least a minimum amount of tax. So theres nothing punitive here nothing is going to stop Companies Like amazon from innovating what biden proposed yesterday was another 300 Million Investment in r d, 5g, theyve brought the economy and innovation forward. There are times the government drives innovation there are other times you would like to leave it in innovation we could always have that argument youre very low key. I preempted you. I softened you up. I like this seth a lot more. Let me ask you this. Do you think that there was some criticism that this was like make America Great redux. Populus what President Trump ran on the first time around, were hearing it in Vice President bidens plan and theres not nearly enough about the new green deal and about some of the other things we heard about during the primaries none of that is really in there. Is that disappointing or is it just what happens when its a general election instead of a primary . I think a lot of it youve heard about investments. Thats a major part of it. I dont think its a departure during his stance that democrats were talking about during the primary. Everyone is saying, hes sort of borrowing trumps schtick. What hes doing is actually outlining you know, hes actually sort of delivering on the suggestion, you know, and the rhetoric that trump had used in 2016 and completely different deliver on right rohit, youre a numbers guy. If i got if we got a real flame thrower on the other side, you wouldnt be there to really, you know, push the mcconnell you work for mcconnell, right . Its like you dont want me to tell anyone that. Yes deputy chief of staff before i left and joined enoc. I get it, seth. I get it you think youre winning so youre being really gracious you think youve got it in the bag. I dont need to come here flame throwing were weve got a Comfortable Lead going to be very reasonable, right . Huh . No lead is comfortable. No ones getting come place september on our side, i guarantee it. Yeah, right thats a good idea complacency never works. I appreciate that. Were definitely having you back, seth kinder, gentler. Thanks. See you guys. Great conversation, joe. When we come back, a check on whats moving in the premarket plus the reopening of disney in florida amid the spike in covid19 cases a look at what it means for investors and the company. Talk all about it after the break. 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I can see you, becky you know i can see you at all times. I know. Why do you think im taunting you . Why do you think im taunting you . Welcome back to squawk box. Its friday. I wouldnt do it if you couldnt see me. Im in love im in love with the prospects of having only like 70 minutes left in this no, no, no its going to be the best 70 minutes weve had, i think im not looking forward to the weekend so pull up a chair, folks join us no im not looking forward to it anymore than normal. As we count down. These weeks are hard. People dont understand, they really dont what was it, i was seeing something i think they do. Remember yesterday we were talking to Arthur Brooks i said his son gets up at 5 30, got this great job in idaho on a wheat farm hes living life every day is full. He gets up at 5 30 god, i would love to sleep in until 5 30. I think his job is a little tougher. It might be im not good at things like that the wheat would not get ploughed it wouldnt. We wouldnt have any bread futures down 120 then the marine corps. Forget it. Ive asked people, what if you cry during basic training . I think they here are some names dragging on the dow today. Walgreens, boeing, chevron the biggest laggards this morning as you can see there. Leading the s p 500 lower, United Airlines, devon energy, mgm resorts. We will come rhtig back, finish this hour out and move into the new hour stay with us welcome back to squawk box. It is a very big week for disney and the Magic Kingdom and animal kingdom, yeah, set to reopen it comes amid the spike in coronavirus cases. The stock down 20 the company has a lot riding on the theme park business. Julia boorstin joins us on the developing story julia . Reporter good morning to you, andrew. Disney is starting the phased reopening in disney world in orlando tomorrow this comes after yesterday it started its phased reopening of Downtown Disney. Thats the outdoor mall by the anaheim park including masks and social distancing. This is an important moment for disneys parks and resorts division which last year was the largest by revenue analyst Michael Nathanson said they lost due to the closures. It comes as the shares are at a crossroads its down 17 over the last year now analysts are on average bullish with 13 buy or overweight ratings, 11 holds and one sell rating. Telling us the question when parks will return to last years levels, that depends on the case of infections, health of the economy, consumers willingness to travel to orlando were told absent a vaccine, the most important thing for disney is to focus on safety and make sure attendance continues to climb higher well have to see how it looks based on the turnout saturday, how consumers feel and well have to see what disney says how quickly it can increase capacity remember when they opened the ov overseas parks like shanghai, it was only 20 capacity. Before you go, how does this fit in with the rest of disneys business we think about streaming, we think about movies how is that part of the business fairing . How does it relate the theatrical part is on hold mulan was supposed to come out the end of july. What were seeing now is the one part of disneys business that is thriving during covid is the streaming part of disneys business thats disneys plus as well as hulu it seems like hamilton last weekend was a huge hit for disney we will learn more about streaming numbers, streaming additions when disney reports the next quarterly earnings. Back over to you julia, thank you very much. Thanks, andrew. For more on what this means for disney, lets bring in Alexia Quadrani and tana mobi. Welcome to both of you folks you both have buy ratings. Alexia yours is overweight one of the things i noticed in your notes, your only anticipated revenue comes as a little bit of a shock for me being shut down in theaters. Why do you think its only 2. 8 . I didnt realize that was such a small part of the overall business thats a great question becky, good morning. Things have been very fluid the last few weeks and months. Were now seeing spike in cases in florida theres no question we talk about reopening. This is coming at a very inauspicious time for disney that being said, i think theres a lot to be said about, you know, steps that the company have taken already theyve got the reopening of shanghai hong kong, tokyo under their belt and with the domestic park close enough for months, one can have some Comfort Level that there is a huge pentup demand you saw what happened Downtown Disney theyre reopening on july 9th. The place was literally mobbed people couldnt wait to get going again. So to your question on revenue, i think its still very fluid right now. Disney florida relies a lot on International Visitation and we know that tsa passengers are well off year ago levels all things being said, this is something that i think is subject to being revisited at this point in time as julia alluded to, there are a lot of other businesses that are starting to come back to life. We think it will pick up the slack. Alexia, julia mentioned one of the biggest things to do is focus on health care and get attendance back up as soon as possible thats a big rolling question. How quickly do you think theyll be able to ramp up attendance and allow people in the park while at the same time being safe have you figured any of that into your plan on this oh, absolutely. I think capacity and attendance is a huge part of the story. So were assuming that disney will open well below their probably allowed capacity in shanghai i think well see the same thing at disney world when they open tomorrow they want to do it carefully to answer your question more directly in terms of what are our assumptions for capacity, were assuming 20, 25 on opening and then slowly building up to 50 capacity guys, we are tight on time so id hate to do this. You each have price targets that arent very far off from where the stock is now its at 116 tuna, your price target is 120 alexia, yours is 122 ill ask you both very quickly would you tell people to sell if it hit your price target no, absolutely not. I actually think our price target is 135 so we do have still a long way to go to our price target and its a question of really the longer term view, what happens with disney how can they continue the plan of reopening, both in all of the businesses, not just the parks. If you start reopening the parks, the losses start cutting back a lot, which will give people more conviction in forward estimates which will help the stock a lot. Short answer, were not asking anyone to sell even at this current price target, which is subject to being revisited. Were still very optimistic. We think the surprise is on the up side. Disney is arguably the best position in the Media Company to recover from this pandemic with a very solid Balance Sheet still intact. Right tuna, alexia, great to see you both, thank you. Thank you coming up, senator Shelly Moore Capito on the prospects of more economic stimulus squawk box coming right back good morning futures pointing lower as we make our way towards the opening bell this friday morning the dow wiped out the weekly gains in one session yesterday the Service Sector pushing the nasdaq high. The next round of government stimulus what could it look like. Who will benefit well get into the leading proposals. Its a sad question but which retailers are going to be the next to go bankrupt . We saw iconic clothing sellers go bankrupt. The ceo of box. Com talk to us about how businesses need to adapt and fast the final hour of squawk box begins right now. Good morning and welcome to squawk box here on cnbc. I am joe kernen along with becky quick and Andrew Ross Sorkin u. S. Equity futures are down this morning on the dow. 153. In fact, down on the nasdaq up both sessions. Up 53. The s p down 17 and change treasury yields have not been the key story. Alan greenspan said put that ten year up so we see it all the time were seeing in recent weeks below. 6 at. 584 we saw oil prices pulling back a little bit there were some bills and inventories a little bit unexpected this week and then youve got the continuing concerns about the uneven reopening of the economy really not just in this country, andrew we probably have to worry about covid everywhere we do we do. Here in particular given the continued spike. Were going to start this hour right now with the debate over more government stimulus from washington treasury secretary Steven Mnuchin says the Trump Administration does support more payments to americans. We do support another round of Economic Impact payments. You know, in most cases those are not checks, its direct deposits and we can get that into hard working Americans Bank accounts very quickly joining us right now for more on what we can expect from the next stimulus bill, senator Shelly Moore Capito from West Virginia good morning to you. What do you think this should look like . How much money should we be spending what should the program what should the contours of the Program Actually be . Well, i think weve got to look at a couple of things i think we still have issues with our small businesses. We still have many that cannot reopen or cannot open fully. I think well probably look at 9 ppp and probably try to tailor it more to the remaining businesses that have yet to reopen or be able to bring as many people back as they need to to have a full economy the other thing is individual assistance we know that the enhanced unemployment runs out at the end of the month that is a source of concern for many of us, but on two fronts. One, its a source of concern of those who are still unemployed but also trying to get people back to work were going to try to weave something there where we can get people back to work but also help those that still cant go back then i think were going to look at the issue of flexibility of state and local. My governors received 1. 25 billion. He needs to have the flexibility to say to our cities and counties that you can use that to replace lost tax liabilities. We need to have a ceiling on how high were going to go here. We cant keep throwing trillions and trillions here we need to be very targeted in our relief senator, there are a lot of businesses going on, restaurants and the like that dont have outdoor space are going to move into the fall, the winter. There are lots of businesses where the math isnt going to add up is the ppp meant to help those businesses what businesses dont you think have either access to it now and need it. Smaller business. Things of that nature where youre not going back full board. You cant have a full house of customers and i think thats an issue. So i think weve got to figure out some way to keep those folks connected to their employee like we originally envisioned with the ppp. Still able to open the doors were seeing businesses close. Senator, thats the question. I can make an argument that gyms for the next 12 months are going to struggle mightily until you get to a vaccine or some real therapeutic, the chance that you can ever fill gyms up the way you used to, its a Business Model up to itself that doesnt work so we have a business on the other side well, i think that thats something that we need to look at but at the same time were looking at large employers across this country. I was talking to somebody last night who owns not Just Wellness centers but also physical therapy centers. They cant go back full yet either because of the restrictions on distancing so i think those are the ones that maybe lost a second round im just thinking, a second round is more targeted or something of that nature where we can gradually work these folks back to full employment. Hey, senator. Good morning yes, good morning. Ive been thinking about some of the big companies, too. Obviously the Public Markets have opened up and a lot of these companies have been able to get additional financing and funding. You are very likely going to see a lot of companies, big companies. Weve heard it from places like united and thats an industry thats been hit hard my expectation will be towards the end of this year and next year youve seen other companies that have cut back as they realize the revenue is down, struggling in other areas. What if anything can the government do about that or what happens to those people who are part of those waves of layoffs yeah. I think the best thing that we can do is keep our foot on the pedal in terms of development of the vaccine and the testing equipment. I think the same day point of testing, results as youre walking into a manufacturing facility, youre walking into a university i think is critical we had a hearing on that a week and a half ago where nih and others were moving very rapidly towards that obviously development of the vaccine is very, very critical here as we see the spread start to pop up in certain areas i am concerned about large layoffs. I did see the news on united i think also some companies have realized they dont need as many people as they had before. We saw that in 20082009 i think thats a phenomenon as people are working from home, maybe more efficiently in some Ways Companies are going to say, wait a minute we dont need to be as heavy on the employment side. I think thats a source of concern that we need to monitor as were moving our way through this trying to work our way out. Senator, the other question you mentioned lie brilt protection yes. Its an interesting one because a lot of businesses want that Liability Protection. At the same time we have states, if were being honest, that are being more responsible in terms of how theyre even dealing with some of these issues how do you think about Liability Protection in the context that, you know, some states and businesses are saying, you know, we require masks, others are not. It becomes its a tricky one. Well, it is, although i would sayits not just businesses. Its universities. Its nonprofits if you have an Oxygen Company and you are sending people out to other peoples homes and youre not adhering to cdc guidelines, not acting responsibly, you need to have an avenue for your employee to say, wait a minute, you caused me to be in an endangered situation. On the other hand, as more and more people are coming back, if our employees are following cdc guidelines, i know theyre all a little bit different, but i think we see our National Companies setting guidelines themselves i think they can play a big role here, and i think that i think that we have to have this protection in place or were going to have more difficulty getting people back to work or were going to have more difficulty with employers calling people back to work if they dont feel like theyre adequately covered and theyre adequately i dont want to say if theyre not adequately prepared they shouldnt be reopening. If they are adequately prepared, they should. Weve done pretty well in our state. I see the statistics were up right now, but were up from being like second to the bottom i think you have to put that into context okay. Senator, we appreciate your time and your perspective and wish you lots of luck we all need it. Were rolling to the weekend, arent we . Yes, we are. Thank you becky. Thank you thanks, andrew. When we come back, whats really behind the markets tech surge . Solid performance from the likes of amazon and apple. Another big driver of course is chips. We have a rundown of the most important sector and the players in it next right now as we head to a break, take a look at shares of United Airlines the company and a Union Representing the 13,000 pilots have reached a tentative agreement for furloughs and early retirement packages. A memo said the deal still needs to be ratified well continue to watch it that stock is down 5. 25 stay tuned, you are watching squawk box on cnbc 49. 50 i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Xfinity. The future of awesome. The nasdaq continuing its record run up over 3 this week as the dow tracks for a loss and aside from the faang names, much of techs leadership is joined by big names before we finished last hour, rog, we didnt have enough time. Were going to talk to a chipabchip ab analyst. The only place chip stocks can go is higher think if you knew that think if you were god, rog, and think if you if our viewers really knew that, wouldnt that be wouldnt that be phenomenal if we actually knew Something Like that . We could all put all of our money in it . But you do have a compelling case that the likelihood is that outperformance continues lets start with that. Yeah, i agree with you. Im not god but i do have some insight on the industry. The Semiconductor Industry has been surprisingly resilient during the covid impact. The industry did take a nearterm hit in january and february as a lot of their customers factories were closing in china however, most of the factories in china are back up to kind of normalized production levels, 90, 95 . Were not seeing as much supply chain disruptions as we did the beginning of the year. Whats been happening on the sales side is weve seen a surge in demand in cloud and data center spending, particularly to support the stayathome economy. Weve seen nvidia, micron and others who are benefitting as more and more businesses are moving to the clouds, as more consumers are spending more time on the internet doing ecommerce or gaining and employees are also working from home and using applications like zoom. So this is creating a tremendous amount of data on the network. Theres a lot of bottleneck in terms of the performance and theres upgrades going on significant lip. Weve seen a surge in cloud and data spending in chip stocks were seeing a big buildout of 5g infrastructure to support Hyper Scale Data Centers but also in tandem with the 5g rollout thats been happening in china and the rest of the world. Were seeing also positive memory cycle where memory pricing is relatively stable the Automotive Industry, which in some cases represents 30 to 40 of chip revenue had a big impact, negative impact in february, march, however, china automotive is recovering back to precovid levels in the u. S. And europe were seeing some signs of life in the Automotive Industry so production is coming back online its up 11 or 12 . The nasdaq is up 17 the s p is down 2 its outperformed the s p. This is coming off a very strong 2019 the Semiconductor Index was up double the nasdaq last year. Despite a lot of the volatility and uncertainty, the Semiconductor Industry has been surprisingly resilient. I was thinking about, you know, the fluctuations and boom and bust times that stocks have. Its urprising, raj. Supply and demand. When you consider modern day living and what part of our life isnt dependent on a chip somewhere, its unbelievable its not going to change and thank god there are people who know how to do that. Putting those micro circuits on silicon and on silicon and having it work and having it boggles the mind and to me its just magic i dont know if it is a physical basis. There wouldnt be the internet without the Semiconductor Industry there wouldnt be the mobile phone. Keep going. Artificial intelligence. Keep going, biotech wouldnt be anything without it. Should always be a buy but its not always a buy consider there is quite a bit of cyclicality, you just gave the most compelling reasons that the cycle continues, right well, i think the cycle continues because investors that ive spoken to are looking at 25 2021, 2022 theyre looking at 2021 as a recovery year as we get to some kind of normalized earnings. In terms of valuation perspective, the shares are not as expensive if you look at 2021, 2022 i think thats the Investor Sentiment on the valuation side. I think whats important to note is that the Semiconductor Industry has really fundamentally changed since 2008 the industry has moved to a just in time supply chain the industry is not operating with a lot of inventory. You have to react quickly with short lead times theres been a lot of m a. Thats created a more benign cycle. You still see boom and bust, but theyre not as extreme as youve seen it in the past. Whats been the main cause of the volatility in industry is external events. Its been the china trade war that was initiated in october of 2018 that carried forward into all of 2019 and then the covid impact it hasnt necessarily been due to kind of fundamentals or like a massive boom bust anymore. Thats important to note. Top three that you would the ones that have nowhere to go but higher are the ones id like you to give me the names for, the three. So we are continue to be very bullish on nvidia we upgraded the stock when it was around 200 in march we think that continues to go higher thats a primary beneficiary from the stayathome economy in two respects 45 of the revenues from gaming, they saw a 50 increase in gaming hours on the nvidia g force platform gaming and Online Gaming in the cloud is driving growth. On the data center side theyre the leaders in terms of training and chips going into the hyper scale and vertical customers like facebook, amazon, microsoft. Also, we are bullish on micron micron hasnt moved as much as nvidia because many think there is some sicyclicality in the stock. We also like microchip, which is a play off of broadbased recovery in the sector so if your life depended on it, could you design a micro circuit . No. I just analyze the companies i dont deal with them. We would be in the stone age if it was dependent on and i remember some ee, some Electrical Engineering who understands that thats why people dont want to do that. Its hard, hard work. Difficult profession. A lot of math complex math. Thank you. Thanks, raj andrew, can you imagine . We dont want to be building bridges, ither we dont want to be mechanical engineers, Civil Engineers no type of engineers except a train engineer. You dont want me doing anything in this space probably dont want me doing anything at all, but when we come back, a lot more on squawk. Stories from two corners of the economy being rattled by the coronavirus. Were going to tell you about them first, why recent moves from the Trump Administration are causing doubts about the typically safe world of college issued bonds. Which well known retailers could be next in the avalanche of bankruptcies this year stay tuned youre watching squawk on cnbc President Trump weighing in on the American Education system this morning he just tweeted, now that we have witnessed it on a largescale basis and firsthand, Virtual Learning has proven to be terrible compared to in school or on campus. Not even close schools must be open in the fall, if not open, why would the federal government give funding . It wont this comes as california has decided to sue the Trump Administration over a new education that they want to revoke the visas of International Colleges that are only offering online instruction in the fall. That could be disastrous for schools finances because they rely on International Students scott cohn joins us. This has gotten pretty contentious. You saw harvard and another school suing, but now this is the first state to come after the government for this level too. Reporter thats right. We expect, becky, that there will be more states. Harvard and m. I. T. Also sued there will be more states. This lawsuit in california seeks a preliminary injunction against the policy that the state attorney general calls arbitrary and capricious the California State University system is a party to this suit it is the largest system by tuition in the country and the fifth largest issuer of debt this university has about 10,000 International Students as a percentage of enrollment, here are the schools with the most International Students. Illinois institute of technology followed by carnegie mellon, northeastern, nyu and stanford they are big issues of debt. They have been traditionally among the most credit worthy the vast majority rated aa or better for now so you layer on International Student declines potentially, more so than in the past, and it creates a very challenging budget situation for colleges and universities reporter of course, International Students typically pay top dollar, full tuition in some schools theyre making up 15 of tuition or more. Susan moody says the ones most affected are smaller schools without big endowments this can cause problems if students decide to study elsewhere instead of the u. S this could be longterm issues we have already started to see some revisions of outlooks, smaller schools both public and private. The hope though is they will be creative with this issue as they have been with the other challenges that theyve faced so far this year. Scott, is there any indication that schools are actually trying to change their plans . We had talked to robert frank the other day who said some of them had talked about potentially offering one course or something that would be in person maybe theres a way to get around some of these rules yeah. That seems to there seems to be talk about university of Southern California yesterday tweeted that students who need to have an in person class for visa purposes will be able to enroll in an in person class free of charge so the idea is theyre trying to be able to keep these students here the concern is that, you know, this policy, which pretty abruptly changed, this was talked about in the california suit, there were International Students who had plant to be he here based on the previous guidance and signed leases the schools are trying to find a way, both to keep that important tuition revenue stream going but also trying to keep these important International Students we have seen the markets rocked by all of the changes that have come with the pandemic and then the economic shutdown from that. How about the College Bonds that you were talking about, how have they been performing since the entire pandemic began . Yeah, its not exactly a widely traded index or asset class. They definitely are out there. These as i said are very credit worthy, stable debt instruments. The yields did soar back in march when the pandemic first hit. It looked like schools were going to have to were shutting down, were going virtual and might be faced with some of these issues theyve stabilized to some extent right now, but it has been an uncharacteristically volatile market in the last few months. Im guessing youre somewhere in the Mountain Time zone. I dont see any daylight coming through those blinds right now youre not giving us any clues youve just got a plant. Pacific. Wow, youre behind. So are we guessing which state youre in . Are you in the best state for business now or is this Something Else this is Pay Attention, joe. Oh, oh, oh. Thats what im we always want to know where you are can you tell us where you are . Im in california im in california. So you dont need to all right. Good first time youve ever been honest with us about where the hell you are we are seconds away, joe. Were were seconds away. Going to get them right now. June Producer Prices data. Rick santelli, the one and only at the chicago cme the numbers. The june read for Producer Price index down. 2 on headline. That is a big miss considering we were looking for a number up. 4. When you strip out the all important food and energy, down. 3. Were also looking for up. 1 down. 3 especially on that core is important because the alltime low from february 2015 is down. 4 so you can see that there is definitely a deflationary wind blowing in this Producer Price dataset this morning if we look at the trade number, that was up. 3 if we look at final demand, that was down. 8. We are expecting a number to be down that follows an. 8 read that was unrevised. Year over year that was final demand if you look at year over year headline, it was up. 1 year over year x food and energy, down. 1. This tells us a lot actually i talked to many sources that believe were going to go through a deflationary cycle, but i also talked to other sources that believe that in conjunction with that were going to have a backtoback inflationary cycle so it really is a mixed outlook on the short term versus medium term on inflation. Its very important to monitor this as we move into next week and see cpi, Consumer Price index, well have more info the big news continues to be treasury yields. The only maturity level that did it yesterday, many were in the box were 7year note yields. This morning 3s and 5s that could have been interday trades if they had closed there would have been new alltimelow closing yields now 3s and 5s are should they close at current levels. This real flight into the sovereign, even fixed income space in general, especially if you look at Investment Grade, look at the Investment Grade etfs, the spread on the barkley index. Securities are in vogue though returns are much smaller this gives credence to the notion that what is going on with some of these spikes is affecting the psyche of equity traders. That is showing up in the price and yield of treasuries and high quality fixed income and sovereign paper across the globe. Joe, back to you. Rick, as always, theres something in it for bulls and bears. So things are so bad, rates are plummeting so the economy, you know, its slowing and so scary, flight to quality. Rates are so low, theres nowhere else to go on the stock market you should sell the stock market or buy the stock market. I couldnt agree more. Thats why a bond guy should never try to pretend they know which way stocks are going you can do anyway, thank you, rick santelli. Wait. There is one other reason we should Pay Attention to, and that is all the liquidity thats been pumped in on jobs thursday last week i talked to us and goolsbee. There are things us and democrats and republicans can agree on, thats more money. There is a lot of money in the system, there was a lot of money already voted into the system or put aside by the fed thats hardly been used and theyre talking about more no matter how you want to slice this, in the end liquidity is going to make a huge difference especially if the worst case outcomes regarding vaccines and such dont pan out by year end all right thanks, rick. Guys, i just got on good sources that scott cohn is actually in barbados see lie hes in california someone just tweeted in that hes not in barbados. Oh, you got that from twitter. Reliable sources. Thats funny. That was from a if people arent watching from 6 00 on, theyre like, what are you talking about . Watch all three hours. I think scott cohns down in barbados which retailers could be the next to go bankrupt . We already saw Brooks Brothers file this week, but there are more stories teetering on e th edge well talk more about it when squawk box comes right back. N to help us fight back. The plasma in your blood can literally save lives. But we need to act fast. Please donate plasma now. Please donate. Donate. Donate. Donate now. You fought for your life. Now lets take the fight to covid19. Go to the fight is in us dot org to find out how to donate. Hey lily from at t here. With some helpful tips. Tip 1 you can currently get the amazing iphone 11 for halfoff on at t, americas Fastest Network for iphones. Second tip you can put googly eyes on your stuff to keep yourself company. Uh for example, thats heraldo. Hes my best friend. Oh, sorry nancy, i forgot you were there. Get the amazing iphone 11 for halfoff on at t, americas Fastest Network for iphones. Welcome back, everybody. Brooks brothers and sur la table the latest to file for bankruptcy businesses have been decimated and many are expected to go bankrupt Courtney Ragan joins us with whos on the bubble at this point. Courtney, this has been so painful for so many of these retailers. Reporter it really has, becky. You might remember on march 17th on this show i pointed to eight retailers on this bankruptcy watch list since then four of the eight have filed for chapter 11 among several others we think thats just the beginning. 11 major retailers or brands have filed for bankruptcy since the pandemic shut down much of the country joining five names earlier in 2020. This includes 200yearold Brooks Brothers and sur la table. Yesterday nieman marcus, jcpenney, j. Crew, all of these were weakened and the subsequent store closures ascena retail, thats the parent of ann tailor, loft, justice, lane bryant and others they are preparing a filing. Its debt is considered distressed interim chair kerry teffner said, quote, it is evaluating all options available. Tailor brand warned in an sec filing, quote, if the effects of the covid19 pandemic are protracted and we are unable to increase liquidity and or effectively address our debt position, we may be forced to scale back or terminate operation and seek bankruptcy protection moodys has 20 names on the list include rite aid, party city, j. Jill, petco and others those are the names we should be watching carefully back over to you. Courtney, you know, you start thinking about this and the incredible number of jobs that are associated with these retailers. Yeah. What do people say when you ask them whether these jones are ever coming back, whether theyre gone for good . Its such an interesting question, becky. We dug into the job data and what happens to some of these employees when stores close or they file for bankruptcy when it comes to when do these jobs come back not exactly. We know a lot of retail has gone into sort of a Warehouse Distribution space not all of those skills are exactly transferable a lot of the people that work in stores, theyre Service Oriented those are the kinds of jobs we want we see them end up in more of a hoteltype job, maybe even phone Customer Service less so for a Distribution Center because by the way geographically those arent in the same place the workers havent been able to find work. Courtney, thank you great to see you thanks. You, too lets talk more about how the Retail Industry is changing with one of the biggest agents of change in the grocery delivery business. Were joined right now by chay wa, the cofounder of box. Com. Thanks for being with us. Thanks for having me, becky wondering if you were going to play the guess what state im in theres no sunlight here as well. You could be anywhere i think thats all of us these days lets talk first of all about what courtney was just mentioning, in terms of retailers under pressure youve obviously seen this i want to dig into this with box. Com. This has been change that was kind of on the way the pandemic put everything kicked it all into high gear what do you see happening . Thats exactly right. There are a lot of retailers and the pandemic pulled up a lot of those trends, online adoption and death of the retailers i think were going to see a lot more 11s coming up i dont know about 7s or retailer 7s. Definitely a lot more 11s in the months to come so chapter 11 versus chapter 7, meaning these companies will continue but just have protection from the court . Thats right. Im sleeping way too late and the youtube algorithm about the crash that was getting picked up by seagull it amputated its own arm what a euphemism for the Retail Industry you look at the retailers, what happens is they say, okay, you know, store traffic is low so lets close a few stores if that doesnt work, were going to lay a few more people off around the corporate office. If that doesnt work, a lease back of our real estate. You see that over and over again. Well see a lot more 11s versus chapter 7s. Boxed has a pretty unique take on Home Delivery for groceries and things you guys are more like a costco in that youre providing things in bulk. What have you seen during this pandemic weve definitely seen folks stocking up. Folks stock up that im a toilet paper salesman 2020 is the year to be in the profession from the crazy stockup of home products, cleaning essentials. Folks are stocking up on everything they need every day have you been able to handle the problems with the supply chain that just about every retailer i know of has faced in terms of trying to get your hands on enough toilet paper that people are ordering or things like hand sanitizer, clorox wipes or things can you get ahold of those yeah. If you come on the site right now well have a litany of all of those we did throughout the pandemic its partially because of our wonderful buyers and merchants who went out and sourced those materials and being able to receive and push out the orders in one of the many automated Fulfillment Centers. Its not a fake zoom background, its a real background behind me what did that mean for traffic . How did your traffic increase during the pandemic . I mean, you know, from a business perspective, our consumer business was more than double throughout the pandemic traffic definitely spiked. Its come down since then but still at an elevated new norm. Whats most important is when you look at the data of the customers that came in during that time, the cohort data shows the customers that came in through the last 90, 120 days are the stickiest customers in the history of our company im guessing many other retailers are seeing i think the shift to online is sticky and it will accelerate. Chiew, the pandemic is not over people dont want to go to stores frequently if at all. Do you think people will still be buying in bulk and stay once theres a solution to the pandemic i think so. Were already seeing the Growth Trends this is going to layer on some mental scar tissue of folks all over america folks wont forget we will get through this i dont think on the other side of this folks will say, things are normal, 2020, lets forget about it it will produce a mental scar tissue. Youre based in new jersey, right . Thats right. That is the that is the winner so i am in jersey. Not far. Thats what i thought, right near rutgers where do you operate im trying to get a feel for what kind of customer are you looking at are these urban customers . Suburban customers where are you delivering these things weve watched such a huge change in where people are working and just migration out of the cities at this point. What have you seen that is such an interesting question because traditionally our Fulfillment Centers are closer to urban populations but what weve found over the last 90 to 120 days weve spread out. The states that are seeing the biggest covid surges are seeing the highest Conversion Rates and highest traffic rates. Were seeing that demographic information shifting. Thanks for joining us good seeing you again. Thanks, becky take care i was watching santelli do the inflation data the dow going into that, down about 200 points, 180 pints. Aft also at 8 32, after the data came out, gilead released some information, Additional Data on remdesivir and for the treatment of covid19, and the company says data presented includes something that looks like a 62 reduction in the risk of mortality compared with standard care. Its Additional Data in addition to what we reported six weeks ago. Dr. Scott gottleib said it is not a home run, but it is another arrow in the quiver, the arsenal to deal this disease theyre calling this Additional Data on some of the testing. Its big news. Up a little gilead is up a little. They also say it needs to be confirmed with additional testing. So theyre saying it in kind of a soft way, but i dont know whether thats what caused the market to come back so significantly or not. The day you hear gilead announce, weve got to wait for this, but the day you hear they announced an inhaler version of this right. That you can effectively go get a a cvs, walgreens, whatever, is the day the market will really, really move it will be the game changer. I dont think we saw just for the efficacy of the compound itself, i dont think the last study was 62 . This is a 62 reduction in the risk of mortality compared with standard care. Then they go on to say an important finding that requires confirmation in perspective clinical trials. We have no inflation because the entire world is shut down. That doesnt sound like what will make the market come back. Joe, i missed it at the top how big of a patient study or population did they look at . I looked at the bottom. They talk about that it went across all subgroups but i dont see the actual 800 numbers on here comparative included 312 patients i dont even think thats i think thats a comparative one i think this is the first this is Additional Data from the first trial that they were doing. Its a phase 3 trial right i dont remember how many people were in that either. Looking at it now to see. I dont know maybe meg tirrell knows if she knows and is listening, email us, meg. Ill look through this to see how many people they are talking about. Maybe 397. Globally no maybe that may be a subgroup. Coming up, key upgrades and downgrades you need to noah head of the bell. Stay tuned, squawk box will be right back the hoa has been very involved. These shrubs arent board approved. You need to break down your cardboard. Thank you. Violation. Violation. I see youve met cynthia. At least geico makes bundling our home and Car Insurance easy. And it does help us save a bunch of money. Two inches over regulation. Thanks, cynthia. For bundling made easy, go to geico. Com coming up, what to watch ahead of the opening bell on wall street. Bank of america will join us stay tuned squawk box will be right back. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. But what if you could stdo better than that . K. Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Welcome back to squawk weve got two big target increases on two faang stocks this morning, Frank Holland joins us with the latest on those, frank good morning. Faang and fake meet am focus citi upgrading its price target to a street high of 3550 increasing from 2700 and maintaining a buy rating the e taylor had a 22 share of ecommerce shares are up nearly 70 keir yahoo err to date. Goldman sachs raising its price target on netflix to 670 forecasting that netflix will add 12. 5 million new subscribers in q2 well above the guidance of 7. 5 million. Coverage of beyond meat initiated by citi with a sell rating and price target of 123 analysts forecast the company will face near term pressure due to restaurant closings and long term pressure from competitors entering this market beyond down nearly 2 in the early trade. Frank, youre still here youre still here at this point, frank, you havent left yet . Im still here. Youre still here. Im going to get to barbados right after the show youre quick. You immediately i called you a team player. I have room in my bungalow only for you becky and andrew have to stay. Thats nice youre selfless, you immediately volunteered to report from down there youre a team player. Im there reporting im there for you. Team player thanks for offering. Thanks for volunteering, frank futures moving off the lows of the session among the possible reasons Gilead Sciences hard to say exactly the company stressing stressing that as soon as we get any Additional Information we want to put it out. So there was also data that showed that mortality had been was first the standard of care mortality had been sharply improved, in this case it was 62 , the company went on to look at a comparative analysis including pregnant women and some some other groups of patients and had similar results. So the stock is up joining us now savida. Far be it from a company to ever want to, you know, release early info on covid that is premature. The company does point out it needs to be confirmed, but when, you know does this say that the market is hinging on covid mostly and vaccines and therapeutics it seems to respond to each bit of incremental info whether its a huge advance or not, savida. I think youre right, joe i mean, if you look at our survey we do every month of our clients, the number one tail risk is that our clients are citing is the second wave of infection. I think that thats what all eyes are on, you know, the number of case counts, which seems to be rising again i think thats front and center. Whether the market is pricing in a strong recovery or whether its pricing in a second wave, our work suggests that, you know, valuations of stay at home beneficiaries are kind of in line with valuations ofthe cyclical come back to work beneficiaries. So, you know, i think that the market is pricing in a 50 50ish probability of a real second wave risk at this point. But its interesting to see that whats driving the market higher and you and i both know this, is really tech and kind of more of the online, you know, maybe more of the stay at home types of beneficiaries. I dont think that the market is pricing in that everything is fine and were all going to come back from this, you know, imminently. Have you been i mean, when you see the nasdaq every day, savita, whats your feeling with that does it make you feel good about the prospects or does it make you say, oh, my god, whats happening . It makes me think there is no place else to go i think thats why tech has seen inflows. Think about it, Tech Companies are the future, tech is growth, tech is not necessarily as economically sensitive as other parts of the market, but the risk is tech is getting super crowded and this is by institutional investors, hedge funds, mutual funds [ inaudible ] i think savita is my Michelle Carusocabrera still on we have this is the second time we have had some serious background noise savita, take it away. It sounds like a fire alert. Its a fire alarm, but it happened earlier and i didnt smell any smoke so i guess were okay savita, you say that no place else to go the other take we had some people saying was that these stocks are going to do these are the ones that people say are covid plays to some extent, digital, you know, stay at home type situations. Does that make sense i mean, i think that ultimately they are immune to second wave risk, you know, relative to banks or industrials or Online Retail so i think thats thats the mantra right now i mean, i think it makes sense but i think that people need to really think about how crowded technology is getting and as we move out of this i think that tech is going to be used as a source of funds for institutional managers to get long other parts of the market. Savita, have a great weekend and weve got to go. Andrew, becky, have a great weekend. Everyone at home as well make sure you join us next week. Squawk on the street is next good friday morning, welcome to squawk on the street. Im Carl Quintanilla with david faber, mike santoli, cramer is back on monday futures are soft amid another day of record covid deaths in the u. S. , china state funds put a cap on that rally in shang high although we have improved on this additional mortality data from gilead on remdesivir disney opens tomorrow and oil is back below 40. David, as joe was saying with savita it is a reminder of how starved the market has been for medical news these last couple of weeks yeah,el
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