Good morning welcome to squawk box here melissa lee is hanging out again with us. Becky is off today for some welldeserved vacation well see her next week. As joe said yesterday, one of the first down days weve seen in a while a little better s p up about 13 and nasdaq looking to open about 45 points higher also showing you treasury yields now you can see where those are standing well flip that around to. 628 on the 10year you thinking about refinancing a mortgage anytime soon, guys . Im as low as they go im good if you have an account where you can use assets for credit line or to make an investment or Something Like that, i remember two or three years ago, i locked this ridiculously low rate if they come to me again and offer another one, it will be lower than it was last time. It was like 2 or 1. 5 when you get money that cheap, dont you think you you are in the drivers seat when rates are this low i dont feel bad about borrowing money at rates like that so you are talking about getting a new mortgage getting more cash back and, say, investing it in the stock market i dont even think of it as a mortgage it could be anything. The sorkin family has always been very conservative weve been the suckers taking 30year fixed mortgages for so long, which is probably the worst thing you can do my guy has told me dont do that you are giving the Bank Interest i know. I thought this was such a great deal for 30 years and now, here we are 10 years later. Andrew, number one, the dow did manage a gain but what about the nasdaq significant pull back but it has been so crazy. Melissa, you are right about waffle house it goes all the way out to new mexico and arizona you can get almost across the country and stop in arizona. You could throw in a couple of ihops and could be blanketing the country. One of our viewers sent it in, a picture of charging his tesla next to a waffle house i dont expect elon to call me or thank me. Hesbuilding places that have food they want to bill out places where you can stop and get a meal i dont see why you dont see waffle house in that context using your noggin melissa, you are very detail oriented like fast money and all of that stuff. All i said was, i like to eat waffles i just want to spend my time waiting and while it is charging, i can eat. You know, the waffle with the whipped cream. Maybe you could build like a waffle stand i wonder if hes up watching. Hes not up this early, joe maybe hes still awake from the previous night is my guest if hes watching. Melissa, you are a new parent. Hes a new parent. Maybe hes up with the baby. Possible. Entirely possible. Melissa, i didnt like that tweet. Either at home or work, you are cleaning up poppy diapers. It was whats worse, joe at 7 00 a. M. Or guy at 5 00 p. M. Or chaining twins, either way, it is poppy diapers can you say poppy diapers she did. And i did. Focus this morning, the big banks will kick off earnings season well hear from jp morgan, citigroup and wells fargo. Well watch for those decisions set aside. Spending and the economy in covid cases. California, just bad news in general. The markets paid attention imposing a sweeping pull back in new openings amid new cases. The governor is closing in door dining, bars, movie theaters and Museum Los Angeles and San Diego School districts will begin the Fall School Year entirely on line basically just los angeles and san diego. If it was all california schools, it would be even bigger but certainly a set back in my house and elsewhere. Once it starts, you wonder whether it is just going to be tough for school maybe not in wyoming but in very populated areas, it may be tough to get in there to school. Meantime, cuomo. New york governor releasing this states plan to allow some schools to reopen this fall. Saying schools that maintain daily infection rates below 5 are eligible to hold classes but warns if the regional infection rate racises above 9 , schools will not be able to reopen houston, texas, Harris County officials activating there an emergency broadcast system sending a message urging people to stay at home saying the virus is spreading rapidly in hospitals where they are reaching capacity. They are asking people to stay home except for essential activities this comes as texas states the first decline. They say the pace in growth had been slowing for several days. Some good news bad news there. Will be interesting to see whether texas, arizona and florida reopen their schools given the spread but also some of the politics. U. S. Health officials and drug makers say they intend to start producing vaccines this summer and some 300 million doses by the end of the year according to one white house official manufacturing process already under way even though they arent sure which vaccine if any will work. This is part of the strategy which is just make lots of the stuff because it is a bet that one of them will and we can get them into peoples hands even faster maybe some of the reagents similar and materials similar. I guess you can start purting some of the stuff together it was a weird story. Go ahead just saying this is the kind of thing we should be doing but we are having signal crossings. Melissa, tell us what dr. Fauci is doing hes giving an update on the coronavirus. He gave it yesterday in a virtual meeting. Saying the u. S. Is experiencing a surge in cases because it never shut down completely but said it is not too late to turn things around. We can get a handle on that i am really confident we can if we step back you dont necessarily need to shut down again but pull back a bit and proceed in a prudent way of observing the guidelines of going step by step all you need to do is look at the films on tv of people that went from shut down to complete throwing caution to the wind bars closing, people without masks. There are things you can do now, physical distance, wearing a mask, washing hands. Those things as simple as they are can turn it around dr. Fauci also spoke about vaccines saying a panel of experts would need to be on hand to decide how to distribute them in an ethical way. Senate to vote on a fifth bill he said something needs to be done before Congress Begins its august recess. The company that we talk about every day, tesla lets talk about some tesla shares the stock rising as much as 6 hitting a market cap of 320 million. The selloff accelerated around 2 00 p. M. When news of californias restrictions hit the wires. It wasnt the only reversals other tech leaders made a little round trip amazon, adobe, nvidia, facebook hitting new highs before reversing sharply. Well keep our eyes on all of them tesla has been on quite a wild ride website blaring that tesla stock is now higher than googles. I saw it on the drudge report i like that report he never gets strings wrong. I went to look like is something going on here . Just to say that, drudge has gotten so hyper just contently. I look at it every day and i think im feeling okay honest to god, this person has a big job now and said Green Mountain coffee is now worth more than starbucks. The stock price splits the stock price is meaningless depending on how much shares are outstanding. But that was the lead story on dr drudge it is like, get a clue i with enter to look like did something happen today drudge is sensationalizing that, imagine what other news . Right theyll keep using that shot of elon like this just very, you know very happy. I am the fan boy. I think hes the coolest tell the flame flower, you thought the same thing about musk i have always said this, i think if you are betting against elon, you are betting against humanity hes just cool. Hes edison. What did trump say and hes good at those rockets and stuff too. Weve got a lot more on squawk ahead. Well talk about tesla again and elon musk as why wouldnt we kicking off the earnings season at 6 45 a. M. About a half hour from now jp morgan talking about those things from citi group and Delta Airlines all the numbers and the reaction talking about earnings and what will matter. Well have the first from cnbc interview with deltas Ceo Ed Bastian. You wont want to miss that coming up next announcer todays big number, 147 billion thats how much trade in value iphone users are currently sitting on according to Morgan Stanley. Thats potential to fund iphone purchases over the next three years. Flub ld you pop the hood for us . There she is. Turbocharged, right . Yes it is. Jim, could you uh kick the tires . Oh yes. Can you change the color inside the car . Oh sure. How about blue . Thats more cyan but. Jump in the back seat, jim. Act like my kids. How much longer . Exactly how they sound. Its got massaging seats too, right . Oh yeahhhhh. Oh yeahhhhh. Visit the mercedesbenz summer event or shop online at participating dealers. Get 0 apr financing up to 36 months on select new and certified preowned models. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. A big test today for the markets. Earnings season getting under way. Shortly, well hear from jp morgan and citigroup wells fargo and delta. The banks could set the tone for the rest of earnings season. Right now with more on Advisors Capital manager. Joining us with chief investments manager. We wont talk about wells earnings, how much are we going to care about these numbers look at them, make a bet and keep going . You know the challenge of this earnings season is that there is so much uncertainty in the market that folks will look past this. The nearterm reality is different than the longterm risk i think folks will primarily look past this as you can see with news about how people are responding reclosing california they are looking to 2021 and how fast we are going to get out of the Health Care Crisis so people can get back to work to recover. There will be information in these numbers. Our view is to look beyond this. Some stocks are extremely expensive. Pick your spot we find there are still some opportunities out there. Banks will be one of those theyll take longer to recover that depends on the economic recovery given that the market wants to look to what these will be or not. Well hear about 12 months or 18 months what do you think the market call now is on in terms of expectations is this a 12month out, 18months out, 24months out what is the best seeing the multiples we are seeing right now . Good morning. We still think it takes a while for the markets to heal. The consensus is down this year. We are slightly below that you dont get back to the alltime etf even this year. We will be 145 to 150. I largely agree with joe aanne,e have a lot to watch. We know companies are sitting on war chests third thing to me is what are Companies Going to do with cap ex . We need to understand that war chests they are sitting on is willing to spend any or all of it in the second half of the year into 2021 im guessing that is not something well see prevalence of we are going to see Delta Airline numbers in a little bit. Getting some semblance of solvency, how much are you going to make heads or tales of anything there you are right to point out that the cash flow is critical we are looking carefully at the Balance Sheets and cash flow you dont want to be in the whole market at this time. Our view is to look beyond this quarter and even this year and find the elements where there is still secular growth where there is plenty we have a few ways to do that much better prospect out of this quarter. Talking about the tech stocks which held the market up or kept things going here. Do you think theyll grow into those numbers and that they are buying into the multiples number what is it your mind . I think you are growing into the story. There is no debate and doubt growth resides most acutely in the tech sector. Until that changes, we are still most favorable in tech have been for some time. It has been the largest and best performer. Solid Balance Sheets and big cash positions we think earning in this story take a look at zebra. If amazon is the great white shark, zebra is the little fish that eats more and is trading at a more attractive multiple so zebra is still focused on retail they make the handheld bar reader and now they are making those for hospital use interesting call to bring us that name. We hope to have you back with more interesting names interesting. Well wait for these numbers coming up, a live report from beijing on the ramp up of tensions take a look at the biggest premarket gainers in the s p 500. My name is christine payne, im an associate here at amazon. Step onto the blue line, sir. This device is giving us an Accurate Temperature check. Youre good to go. I have to take care of my coworkers. Thats how i am. I have a son, and he said, one day im gonna be like you, im gonna help people. Youre good to go, maam. I hope so. This is my passion. If i can take of everyone who is sick out there, i would do it in a heartbeat. The u. S. And china remain at odds over a number of issues including trade, intellectual property and others that has chinese firms rethinking their u. S. Strategy. Eunice yoon has more businesses are rethinking whether they should expand and invest in the u. S. And where they should list increasingly, they are looking closer to home on listings specifically because of the Trump Administrations recent moves to block chinese access that has put a Chilling Effect on several startups. There is an understanding now if you are a business in an area considered one of chinas core pillars for its future, you should reassess whether or not you want to have exposure to the u. S. And just how much for example, those core pillars are data, national security, finance and media. The way it was explained to me if you are a financial, alibabas payment arm looking to list in new york and hong kong, how much do you want to make due to the fact that you are one of the biggest financial players in the country, how big do you want to be . A lot of startups encouraged here on the main land and hong kong or to look as preferable several of them are. Who is really being hurt the markets are listed and deep. On the other hand with this approach, you are seeing American Companies could lose out on business and Chinese Markets could ramp up. We are already seeing that here with reforms expected to take place with shanghai in hong kong, ive been told regulations are becoming much friendlier. And at the same time, the Trump Administration has skramed an agreement basically paving the way for more crack downs in terms of investigating publicly traded companies in the United States it seems like the u. S. Is making it harder and the government is encouraging them to stay in china exactly the dynamic and why so many startups are telling me once they had planned for sure to list on the nasdaq because that was the go to place to go ive been speaking to a lot of these startups a lot say, there are bad actors among the startup crowd that maybe started too quickly and werent very Good Companies in terms of quality but there is a concern about the tensions that they are seeing and that even if they do meet the accounting standards the u. S. Puts in place. The a the e at the end of the day down the road, with current problems with current tensions they see with u. S. And china down the line eunice, thank you from beijing. Coming up, futures this morning, no longer triple digit gains. At 84. And nasdaq managing to ink out a smaller gain s p up 10. And that was before turning down after the big news from california jpmorgan and citigroup, i will not call it citi that word is taken to mean a large place people live and there are big buildings. You cannot take the word citi because you call it with an i instead of a y im sorry. It is citigroup. Those numbers as soon as they get the take 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 u. S. Equity futures are rebounding in the nasdaq it felt like a loss after opening and trading section higher the dow turned negative and managed to eek out a 10 plus point gain by the end of the session. Looking at it now, it is green not wear it was yesterday. Tech stocks will continue to carry the market we are joined by tim lesko, granite investment advisors. Weve talked about this before it is either on the flintstones. This is a solid outfit tim welcome. You dont like a couple of high fliers which ones have moved too far and which one continue to help the averages the easiest one to pick on is tesla. They dont make money. So it is hard to put the pe ratio on something that doesnt make money and also makes 4,000 to 5,000 cars still needing to supplement the earnings and get back the bulk is the rest of the technology with very low Interest Rate environment. Like if you had money you wanted to put in the market today, you would by which three or four. Weve had discussions about the trillion Dollar Companies and what has happened to them. It is hard not to look at those. Youve got intel earnings. Plenty of cheap stocks that arent subject to massive change due to coronavirus that are pretty cheap. Do you keep going down the food chain from suppliers to chip makers, do you just buy everything do you go all the way down you try to sell the ones at higher valuations and sell those suffering at low valuations as long as they are not suffering from a massive secular change. This earnings season will show us which companies will come out of this and which businesses are fundamentally changing and which we are seeing from the cyclical reaction it will be interesting to find out what is change for good and what is cyclicality. The reason the