S p 500 few you ares up 15 the nasdaq with a gain of about 1. 7 all because of what is happening with four big horseman check out shares of apple, facebook, alphabet and amazon. They went before congress two days ago and came out with earnings that knocked it out of the park on every one of those counts three of the four are trading sharply higher apple up 6. 1 , facebook up 5. 8 , amazon up 5. 4 alphabet did beat earnings estimate did post the first revenue decline and is down 0. 67 . More on those in a second. Lets kick it over to wi will everyone wilford. Good to be back extraordinary numbers, as you said well discuss those in a moment. First check out this mornings agenda as we are closing out the week well bring you results from cat, chevron, exxon and merck. Kol gate, underarmor and others. The late day of july lets check out the market score card owl three major indices on track for the fourth straight gains. Nasdaq the big oner up 18 month to date up 5. 2 . This past week, back to resoundingly positive momentum speaking of tech, we can dig in it is the big story of the morning, facebook, amazon and apple beating estimates. Starting with apple. A big headline there a 41 stock split. Everyone who owns a stock will get three more shares. Working on a split adjusted basis as of august 31. The last one came back in 2014 and helped the case for adding it back then to the down yesterday, apple said in the recent move, it was an attempt to make the stock more accessible to a broader base of investors. A lot to debate over the years about stock splits they do make it more accessible but does it make it more valuable there is research on both sides of that debate growth in china driven by strong ipad and Services Revenue guys the one you are pointing to there is apple we have gdp prints on the quarter. It does point for that very bipolar economy the fact that iphone sales beat on the quarter is impressive well discuss that on the stock split but we have earnings crossing the tape. Let me tell you what is happening this morning caterpillar out with earnings and it looks like they came in with adjusted earnings of 1. 03. Better than expected revenue came in at 10 billion the street was expecting 9. 76 billion in terms of revenue. Down from the Second Quarter of 2019 the company is quick to point that out 31 decrease from Second Quarter 2019 in terms of the revenue that they were looking at. The decline was because of lower sales volume drichen by lower user demand. They do say for the full year, theyll see an impact from covid and that impact taken around the globe. They are not given the forecast for the full year. For the quarter, down from a year ago and reflected in the stock. Caterpillar shares up 2. 75 . They say they are well positioned the chairman and ceo said they are proud of the global teams continued focus on safety and they are prepared for what comes with this. They withdrew their Earnings Guidance and not providing a Financial Outlook becauses it too uncertain and hard to say whats out there facebook is forcing growth back sale looking at shares of facebook. We did glance at that earlier frmt probably 5 dol 8 increase. The ad boycott was not reflected in these numbers we wont see exactly how that plays out until they report next quarter. The comments werent too depressing on that front for the earnings clearly the stock didnt shake in after hours trade user numbers are amazing for that size up 5. 8 . Coming in at 10. 30 a share. A massive beat the 5. 2 billion profit was helped by the surge in e commerce and shares of amazon up 5. 4 i dont know why that is such a surprise amazon is my first stop. I go to walmart and target it is so easy. Everything gets a first look there. I wonder why it was that big of a surprise it was one of the companies that was lower in a few months it was a tough setup in terms of revenue and what theyve done in the short term and it smashed it the aws revenue if you have one picking for the whole. The cloud numbers for microsoft, we are about to come to and aws, we are always in line. Going to the cloud and that speaks to growing competition in that area. You can almost say that in regard to that revenue that part of the business everyone talks about as beg the most profitable and warrants the high multiples is trying to pick a hole for amazing sets of numbers. I was going to say on the aws piece and i think you are seeing it on all the cloud pieces whether we think these companies are bell weathers or you can extrapolate anything about the economy, what does this say about Small Businesses by the way, just on the way of the amazon if you remember, there were some that seemed frustrated with that you get called before congress and you have block buster numbers like this and you are not doing spending like that raising wages and making sure you are doing testing, you are really going to get raked over the coals. It was that cost control that allowed that extraordinary bottom line beat it is significant move in the right direction. No one really cares about that extraordinary move in the quarter. They would be able to write off the bottom line at the moment. With a beat as well. Again, both in apple and amazon, globally impressive. Not just a u. S. Beat andrew, it comes ba beick to tht point. On the morning, we get spanish gdp down 5. 8 on the quarter just the two sets of economies around the world, which is a depressing thought actually. Finally, talking about alphabet when i keep saying, how much can you extrapolate out . Top and bottom line numbers, topping estimates despite reporting First Quarter revenue. Revenue drop in the 16year history for the company. They did tell investors that google ad sales fell take a look at shares this morning. They are off about 10 10. 35 right now not trying to pick holes in an amazing night of earnings flat year Revenue Growth still on 35 times price to earnings for that company. Kind of the cheapest of those Tech Companies the cheapest of the cheap paying 30 plus and maybe it will start slowing again in the top line growth. The other thing i wanted to go back to is that apple stock split. Clearly, it Means Nothing for the overall market value of apple. It will make a difference in terms of the Share Holding given that weve seen all of the brokers transform what they offer by free trading and stock splits they can buy portions of shares before it was totally inaccessible before making them slightly transferable. This will lower apple from being comfortably weighted to being a quarter of that number i love the way you say stupid it is it is ridiculous you stupid, it sounds better. It is stupid. The likes of johnson and johnson and goldman sach might now see a benefit in the margin as they are waiting for the index that people track that will be at the top of it. Again, that is quite interesting that goldman has a higher waiting and the dow despite a comfortable growth because of its price. Just fascinating but stupid. It is worth pointing out too that these four big stocks are probably the reason that the markets are doing so well when there is another huge story out there. These four stocks make up 17 and that is why you are seeing such huge gains despite the fact that there is another big story that would be turning stocks in another direction. Thats the stimulus debate lawmakers have failed to come to an agreement to agree on extending the federal jobless benefits we thought we had a deal democrats tri democrats tried to pass a 3 trillion gop rejected that. Negotiators plan to continue talks today. Well see what happens when those checks stop coming in and what that has meant to the underlying economy if it is only a brief delay, it will still have significant impacts. There is a relatively small but growing risk that we dont get a deal at all. Thats not expected but clearly if any delays someone has their key open. I hear every comment you are making can someone just turn that key off it is interesting with all the futures up to remind ourselves that this time yesterday, we were massively lower and close higher massively on the day on the nasdaq which was higher the macro policy concerns. The week as a whole is set for strong gains for all three indices in july. Particularly strong. Still to come, dr. Scott gottlieb on the top coronavirus headlines. We mention futures are higher today largely because of those tech names cat helping there with the numbers. Expecting a massive gain for the nasdaq and healthy gain for the other indices too. We are back in a couple of minutes. [ engines revving ] its amazing to see them in the wild like th shhh. For those who were born to ride, theres progressive. Lookentertainmentour experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Welcome back there is concern of potential coronavirus case china reported highest number of daily cases since april. Hong kong with new restrictions. Japan with record daily infections france, spain infections are increasing joining us now to talk about this and more is dr. Scott gottlieb he is former fda commissioner and cnbc contributor he is on the boards of pfizer and illumina thank you for joining us you and i were texting about this with err seeing a rise in places like asia and europe you think theres a real risk, there is going to be a decoupling between the United States and the rest of the globe. We are seeing it right now. If you are an american, you cant travel to many places around the world United States is a handful of countries where travel into and out of asia is fully restricted. You cant go to europe or china right now if you are an american when you look at these other countries. You are seeing outbreaks it remains to be scene whether theyll be able to control that. They are taking aggressive action there is some assuming theyll not get heavy epidemics in the fall and winter. They have the means in place with testing, tracking and tracing to keep the infection at bay. That remains to be seen. If they cant do it, it will be very hard for states that have gotten virus down to lower levels to keep it there. When you look around the world, you are seeing the United States get decoupled from other countries in terms of our experience that could translate to lost opportunities for america relative to the rest of the world. Lost opportunities like what . Slower gdp growth the risk of slipping into a recession. The ability for students to go to inperson learning. Lost Business Opportunities because we cant travel abroad asia is allowing travel. The United States is being isolated from the rest of the world right now. There are coordinates put around the United States for other countries wed be engaging with. We have not paid attention now because there is not a lot of places we want to go as things evolve and the rest of the world keeps this at bay and they dont have have outbreaks. That will look sharper. I dont think well be able to crush this we have a rotating series of regional outbreaks well be able to get under control and will start to burn through heading into fall and winter dr. Burke said yesterday if everybody would wear a mask, we could get this under control do you think it is too late for that i dont think it is too late but you need to do it on a National Level with a uniformed approach the combination of wearing masks, shutting down certain congre congragate venues and keeping gatherings down. You do see the cases starting to come down in arizona what theyve done is close settings like bars, limited capacity in restaurants. People have become more vigilant in that state and you are seeing more adherence to masks. That seems to be enough to bring the levels down. Whether thats the combination that would keep it at bay in states like connecticut and michigan we dont know. It is a possibility. You need more uniform approach you cant have some states adhere and other states with the pandemic andrew, you had a question . Doctor, talking about National Testing and more National Program i want to ask you about a story that appeared in vanity fair i know youve been in touch with the white house. Apparently, there was a group led by Jared Kushner in march and april developing a National Testing program, beg able to surge testing to different states and get ppe to different states on a National Basis that plan was leaked to the magazine were you aware of it do you know what happened to it . It was later shelved in part was the president decided testing was not in his political favor at that time thats a good reporter. She used to cover the fda, so i know her i cant voug for it. I did read it. Some elements of that plan were implemented. The plan nationalized the market from the testing certain aspects of the supply chain for testing. Getting agents pipettes. The government did take steps to move the supply around the country. In some respects, there were certain elements other elements particularly around trying to create a National Market for Testing Services themselves. What we have are state markets for the testing. You really only swing the capacity in quest and large commercial labs that are able to have some excess capacity. Labcorp is doing about 180,000 tests right now. Theyve swung a lot of that into the south because that is where the epidemic is. Thats the only swing capacity we had trying to create a pool and move it around, that hasnt been done just on that point, if we have that swing capacity that is taken to where the outbreaks are, does that mean we have less testing in areas we think it is calm and under control and will have less notice if it sneaks back up . Ares that exactly right the reason there is delays in the northeast for testing isnt because of a deluge of cases but because that capacity has been moved to other states. They are spreading their delays across whole countries they are not just going to have delays in florida. Theyll try to move around capacity i think thats a real risk so that if we fall behind, they could lose control of it this is a risk looking at opening schools, you look at can you do testing you cant detect outbreaks in 24 hours. That is a risk in opening schools. If you want to detect an outbreak, you need to get the tests back thats another factor when we look at whether or not we can open the schools not the note i wanted to end on thank you. We appreciate your time. Always great talking to you. Well see you next week. Coming up on the other side of this break as washington debates the next version of the stimulus bill, well talk to robert frank with a look at some of the less talked about items on the tleab got to hear about it well tell you about it when we return after this. Rced camarade. And you should be mad at tech that makes things worse. 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Wealth management. Pampers the 1 pediatrician recommended brand, helps keep baby skin dry healthy so every touch is as comforting as the first pampers. The 1 pediatrician recommended brand lawmakers negotiate the next round of stimulus, there is a provision that would allow for 100 deduction of business lunches robert has that and more it is called supporting the american restaurant workers act that would allow Business Owners to deduct 100 of business meals. Currently, they can deduct half. The new proposal would allow companies to deduct all clientrelated meal costs leading to more orders, takehome pay and more hours to wait and kitchen staff President Trump has been asking for this call after a call with celebrity chef it would cost the government an estimated 2 billion to 3 billion a year and shows little impact on restaurant recepts others says it the virus not tax cuts that are keeping people from restaurants some think it would make it easier to disguise personal consumption as a business expense. A small piece either side has gotten fairly ramped up about because it is fairly controversial. This is on the corporate side of things. In the u. S. , companies can already discount 50 of something that is forward client facing saying if you wanted to go to a michlin starred restaurant or mcdonalds. There is a provision. It cannot be lavish and skrex t gent theyve also required you to take out beverages from the bill you can include a meal but not the three martini lunch. Thats my question. Who drinks at lunch anymore . Nobody drinks let alone the three martini lunch. When i was at wex closing bell, only occasionally. Robert, does takeout count. In a covid era, does takeout count . Does this include catering to your home, if thats where it is yes absolutely both, if you are a Business Owner and meeting with a client or if you have employers or employees being catered because they are at work, that is being counted as well. This would lead to more delivery and takeout, not just eating in restaurants. Thank you, robert still to come, apple, amazon and facebook shares up is there more room to run. Thats next. As business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. Find a stock basedtech. On your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Welcome back to squawk box. A blowout quarter. Apple crushing the estimates, splitting its stock 4 to 1 that will happen next month. Apple sales up as well howard ward, chief Investment Officer for gamco. Named the top global Large Cap Fund the past 10 years by lipper in 2019 and 2020 the question given where the stocks where these companies are living right now how well they are performing whether you still buy in from here good morning, andrew, thank you for having me. I will give you two answers to that i cant help someone who wants to be a shortterm trader. If you are an investor and you are looking for something to own the next 35 years, you absolutely can be comfortable buying these stocks today. I will admit that i am amazed at how well these stocks have done over the years and the quarters that were put up yesterday, particularly by amazon and apple were simply astounding facebook was no slouch either. Google Beat Estimates but did take a little hit with the advertising side of things, which was to be expected that will be a sicyclical kicke as the economy opens these companies own their platforms, for the most part apple doesnt own a platform but it owns the high end of a related market and technologies. So i dont see anything thats going to disturb the growth path these companies are on the next couple of years. Im sure over time, the situation will become more complicated. Right now, these dominate and created. My hat is off to jeff bezos and tim cook and others. Howard, we talk about them as a collective maybe we should in certain ways. In other ways, they are in different businesses with different issues and multiples one of the points wolf was making on a multiple basis, you could argue that google is cheap or cheaper how do you stack, if you will, these four companies if you are a longterm investor you know whats funny, you are right. They have different multiples. In each case, the stocks are very defensible when you get into the cash flow metrics but lets talk about the valuation question when you look at amazon, in particular amazon is a stock that people have used as valuation not to own ever since it went public. That didnt work out very well it worked out for jeff bezos on the other hand to become a richest person in the world to forego the shortterm profits. That has worked out for them, there is a lesson in there not only to manage their businesses. Investors that took that longterm ride have done very well i can really make the same case for these other companies, which for the most part are not driven by shortterm metrics. In the valuation argument, look, we have to remember as investors, yes, valuation matters but a lot of the time, valuation is not a factor in determining equity performance not a factor at all. In a world of growth stocks, that is probably more true than a world of value stocks. Valuation takes up too much of the energy and space the focus should be more on these growth metrics and how strong the moats are that these companies have right quick before we go, if you werent going to buy any of these four or if you were and you wanted to add on one or two other names outside of this group, who do you love right now . On your threetofiveyear horizon . I think service now would be our pick in the software as a Service Space would be a leader and providing an it help desk in the world of online software, so service now, clearly i think adobe is the other one both of these companies are big Free Cash Flow generators and dominant in their respective fields with much of the same runway others have you still cant dismiss microsoft. That is our biggest position, we havent added to it for years. Weve done as well as others have for years microsoft is number two in the web Services Business and software nobody is bigger Satya Nadella has done a great job. They have a lot going on there in the world of artificial intelligence, Cloud Computing and leading edge technology. I would not rule them out as well great to see you. We appreciate your time this morning. Thank you nice to see you. Becky. When we come back, Quarterly Results from merck are on the docket cat trading better than expected results. Saying the number we should be using is 84 cents per share. Revenue came in at 10 million that stock up 5. 6 thats a dow component up by 70 points. Futures are indicated up at this point. Stick ouarnd well be right back. This is squawk box on cnbc 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. Were helping members catch up by spreading any missed usaa insurance payments over the next twelve months so they can keep more cash in your pockets for when it matters most find out more at usaa. Com for when it matters most 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. Veteran executive dr. Tony coles on his venture that he spun off and now going public. Well discuss. Okay welcome back taking a look at a couple of big earnings reports chevron came out earlier than expected bigger than anticipated loss they are looking at an adjusted loss of 1. 39 a share. The street was looking at a loss of higher share. Revlon came in with misses we knew these would be bad we know what happened with oil prices but this is much worse than anticipated it looks like they took impairments and other charges. The di looted loss was 4. 44 through in other they also fully impaired 2. 6 billion investment in venezuela because of uncertainty with the current operating environment. All of that is a kitchen sink quarter. The stock is down by about 3 right now and well continue to keep an eye on this. We knew this was going to be bad. The street was looking for a loss of 92 cents on an adjusted basis. The company came in with a loss of 159 revenue 13. 5 billion versus 22 billion the street was looking for. Merck is out they came in with earnings of 1. 37 a share and thats much better than anticipated. The street was looking for 1. 04. Thats a beat of 33. Revenue 10. 9 billion versus 10. 4 billion the street was looking for. They were raising the outlook and a lot of this is what weve seen with the beat for the quarter. For the full year theyre looking at adjusted numbers of 563 to 538 the street was at 531. This is a 33 cent beat it is taking the numbers up accordingly. The stock up by 2. 25 . Wilf. Becky, thank you. In the last dozens of spacs are planning to ipo. The company focuses on neuroscience research. Hes a board member at regeneron and meg tirrell joins us for this interview thanks so much for joining us, dr. Coles. Well, thanks for having me, wilf its a pleasure to be here sobering times with the passing of john lewis whom were remembering fondly for all of his contributions. Hear hear to that, dr. Coles. Perhaps we can start with the question of why now and why via a spac for what youve done with sarabel recently nows a terrific time we have one of the state of the art portfolios for the treatment of one of these medal some diseases epilepsy, schizophrenia, parkinsons disease, alzheimers are diseases devastating to patients and their families. Now more than ever patients need new therapies and alternatives our company is focused on unraveling the mysteries of the brain. Were committed to finding the best ways to treat the diseases. With the flow of capital into Life Sciences sector right in this particular moment, we thought this would be a terrific time to strengthen the Balance Sheet. Weve got 5 clinical stage assets we have seven programs and eight Clinical Trials. So we have a lot to do and well need resources to reach these therapy patients as quickly as we can. As you said, bioTech Companies coming to market every single week at the moment. So are you seizing that opportunity . Do you think there has been a lifted tide of covid into your broader sector even if thats not the primary focus of what you guys do . I think so. For one of the first Times Society is recognizing the true value that the pharmaceutical sector brings. The pandemic has caused us to look at this particular crisis and look at those who can actually help. I think the industry can do that i want to come back to your question about why a specific and why the combination of specific and type. Spacs have been used across Many Industries theyre relatively new to the Life Sciences sector what made this particular transaction attractive for us is that this was a really strong group of high quality investors. Investors who will support the company and stay with the company like fidelity, like t. Row price. We thought with the strength, this was a deal that was over subscribed by twofold. That that was a great sign that the neurosciences area, while its the last great frontier in Drug Discovery and drug development, was really ripe for raising capital to drive these therapies forward. In the combination of raising capital, the moment of covid and society looking to the biopharmaceutical industry to solve these medal some problems, we thought this was a terrific opportunity for us to do our work on behalf of patients hey, tony, its meg tirrell i wanted to ask you about neuroscience being your last frontier theres a quote from adam stone from one of your investors we believe neuroscience represents the next era of neuroand biopharma weve been hearing about alzheimers out of a meeting that just happened i feel like ive been hearing folks in the biotech industry saying this. I think i quoted george stengos saying neuroscience is the next cancer area. Where do you think we are in terms of making real breakthroughs for good drugs for brain diseases if we wind the hands of time back to the early 1990s, were probably at the same point we were with cardiovascular disease, hiv aids and even cancer, meg. Sometimes this work does take a long time. Look where we are on each of those diseases hiv aids is chronic disease, certain cancer deaths are down so that in the last 30 years or so has been striking that we can improve the mortality of those problems one of the things weve committed to, as i mentioned earlier, is unlocking whats happening in the brain, diseases like epilepsy, schizophrenia, alzheimers. If we can unravel the mysteries of the brain and understand whats going on, we can make progress our approach is a state of the art approach which targets certain receptors in the brain to try to understand which of those receptors will have the greatest effect if we can interact with them in the proper way. This is of course important to minimize side effects at the same time. The problem with the therapies today, they arent very good or effective and they have a lot of side effects weve been here before and seen this kind of challenge before and im determined that we can actually address whats ahead of us in short order. Thats my optimistic side. All right tony, weve got to leave it there. We look forward to hearing about your progress. Indeed, our thanks to dr. Coles. Thanks to meg tirrell also at lan patrickoff. Stay tuned youre watching squawk box on cnbc big numbers from big techs top four we have the results and analysis you cant afford to miss not to mention, three dow components out this morning. Well run you through those numbers. Plus, its deadline day and no deal in sight well tell you what lawmakers in washington are doing as extra Unemployment Benefits are set to expire. And the nba is back. A look at media stocks and the sports returning is straight ahead. The second hour of squawk box returns right now. Good morning and welcome back to squawk box right here on cnbc. Im Andrew Ross Sorkin along with becky quick and wilfred frost in for joe today take a quick look at u. S. Equity futures at this hour after big tech beats yesterday nasdaq looking to open 186 points higher, dow up 56 points and s p 500 up 14 points breaking news over to biffle right n wilf well get to meg. I dont have it. On the vaccine front. Reporter another big deal coming from the u. S. Government to secure doses of a potential covid19 vaccine under operation warp speed this one to sanofi they are going to be paying 2. 1 billion to these two companies to secure 100 million doses of the covid19 vaccine the 2. 1 billion, half of that will support the Vaccine Development including Clinical Trials the remainder will be using for the vaccine. Scaleup. Sanofi is going to receive the majority of this funding and the government does say it has a further option for the supply of an additional 500 million doses longer term. Now, guys, this is just the latest but, of course, we just saw a similar deal for pfizers vaccine, 1. 95 billion for 100 million doses of pfizers vaccine if its successful this is sort of furthering securing these doses they say they plan to start human Clinical Trials in september followed by a phase 3 study by the end of 2020 so they are a bit behind the frontrunners in this race but quite a large deal here. This is the most weve seen yet from operation warp speed. Back over to you. Quite a large deal but the most recent pfizer one this is no fresh news on the Vaccine Development and the vaccine trial . Reporter thats right. The timing is what weve heard from these two companies already. Its a really interesting deal, wilf that almost 2 billion for pfizer was all for the vaccine this about 2 billion, half of it supports development and then the rest would go towards securing those doses meg tirrell, as always, thanks so much for that. Now the other massive story, of course, weve been focused on all morning is the four horse men of the tech world, facebook, amazon, apple, alphabet all beating the streets estimates on top and bottom lines. Those four names alone, 17 of the s p 500. Actually, about 40 of the nasdaq 100 though. In recent qqq ratings it is a bit lower. Dom chu joins us with more on those numbers. Some other names that are out this morning dom . Lets hold those for one second because we do have news this morning of some of those business earnings reports. Ill focus on some of the dow components take a look at whats happening with caterpillar shares. Up almost 4 which means 30 or 35 points in terms of the overall dow jones nuls up 3 here beat on the bottom and top lines for caterpillar. Better than expected results there. They are not going to give it a guidance, any kind of a forecast for the rest of the year because of the effects of covid. Caterpillar up 3 . Thats one to watch, dow component. Another to watch is whats happening with merck you mentioned pfizer and Everything Else. Merck was better than expected in terms of results. They also under their full year guidance for profits and revenues helped along with their k keytruda then another dow component out in the last few minutes, thats chevron. Those shares lower they posted a lower than expected loss. He sees the effects of could he vird 1d, through the very earliest of next year. As you just mentioned, lets check out the premarket action for the Big Technology stocks because of all of them, only alphabet right now is still in the red. You can see theyre off by about 1 nonetheless, better than expected results from these four like you said, a massive part of the market for the market weighted cam indices apple up 6. 7 , amazon up 6 , facebook up 6. 6 i think becky has a question for you. Yes im happy to answer it. Dom, looking at the merck numbers. All of this stuff just hit were digging through it the company is saying on merck they expect an unfavorable impact of 1. 95 billion for the year because of the coronavirus pandemic thats similar to what we heard from lily yesterday. They department see an impact in the First Quarter. As you see people not going to doctors offices, a huge part of that is people getting new prescriptions. Thats something that they are now saying they expect it a dip in the revenue. I guess you have to frame it with the expectations, right yeah. Their prior forecast was a certain range. Even with the impacts theyll see from covid, they feel comfortable enough to ramp up and increase the range for their adjusted earnings and revenues as well for the full year, which means as you theyre yeah. Go ahead. If youre looking at it, they raised it by before the street was liking for 5. 31 theyre now saying 5. 63. They beat by 33 cents. It is confirming the third and fourth quarters that they expect they will be in line, at least correct thattest a forecast. Weve been dealing with so many of these companies that are not dealing with any kind of forecast or projection maybe some of these companies are more active and have visibility into the workings of drugs, doctors, precaution to. Not one saying youll be giving the forecast. Dom, thank you for that report meantime, were going to talk about some of these four horse men and start with maybe apple our next guest was an early investor in apple. Alan patricof, chairperson and cofounder of graycroft. Primetime partners backing tech platforms and products for the aging population i want to talk to you about that as well, alan. Weve looked at the top four Tech Companies they just keep blowing past anybodys expectations even during this covid pandemic and, in fact, have become the ultimate beneficiaries of it all. My question to you as an investor, you look three to four months out, the specifics on what dave and celine have started. I think there will be more deep observation of all of these companies. Everybody is going to face up to the fact that they are basically utilities. You can survive today really without facebook you can survive without Google Google represents, what, 90 of the search just think about that. No matter what you do, if you are sitting there, you want to find some information, you have to go to google. Sure bing gets a certain amount of search traffic, but anything people are so dependent upon is something that becomes a utility, a public utility. Which means something has to be done to make sure that a public utility doesnt take advantage of the public in one way or another. To me its inevitable. I think its unfortunate that the earnings came out at the cusp of these hearings because certainly it doesnt help their case i dont think their performance particularly helped their case theyre all put together but they have different factors that are affecting them apple in particular is a toll booth and, you know, you cant have an app without going through the toll booth, pay that 30 . You know, no exclusions. Whereas google, facebook, amazon have a different characteristic. Right. Amazon, look at the amount of searches that took place for purchases on amazon during this period theyre the only place to go. Alan, lets break down each one. Lets go to one of your first investments, which was apple and one of the Great Success stories of all time. Lots of people obviously buying computers right now, buying technology especially if were going to be virtual for in other words, people are investing in technology to the issue youre speaking about, about it being a toll booth, whether you think the government will ultimately undo that and what the implication of that is. I could make the other side of the argument, which is to say that, you know, if youre going to sell a product on somebody elses shelf in any kind of store, there is some kind of fee that is paid typically to the retailer and in this case apple is the retailer. Yeah, but, andrew, youre looking at one side or the other side is where else do they go to sell it . We have now people are put in a position where they have only one place because theyve chosen to sell it on that platform theyve chosen to create an app and build a product to be sold as an entity they could sell it as an android app. They could sell it as a web only app. Theres other opportunities unless youre saying that you think apple has a monopoly which is a hard argument to make given that their market share globally even in the United States would not represent a monopoly. You have to separate it android has a bigger share of the market outside the United States in the United States certainly apple has by far the greatest share of the traffic and i dont think anyone would start something if they didnt think they could sell. If i were one of these Tech Companies that we talked about, i would be thinking if you cant lick them, join them i would be looking to find out what type of regulations are reasonable i dont think any of these companies have ceos that are devious. I dont think any of them have a dream they would have this kind of control of the markets theyre in the fact is, were here today and every minute of the day, every second they are building more information, more control and they inevitably have to take over more and more of the world in each of their categories. It was shown during the pandemic people couldnt survive without amazon when you get to that kind of position, someone does have control of what you want to do and if i were a retailer, other than apple excuse me, other than amazon, id say, you know, wheres my wheres my share of market . How am i going to get to alan, let me ask you a question about facebook. I know you and i have talked a lot about facebook i think hes such a competitive guy that it was one of the more honest moments when he was talking about competition. He went through a list of competitors and you could tell this is what he these are the companies he wants to beat he says the most popular messaging service in the u. S. Is imessage the Fastest Growing app is tiktok the most popular app for video is youtube the Fastest Growing ad platform is not google or someplace else, its actually amazon and the largest ad platform is google. He would like to be the number one. When you think about it and look at the numbers, he isnt. Well, but you talk about the fact that hes competing against other people like you mentioned, youtube on google and you mentioned i cant remember which one you mentioned on amazon yes, amazons share of advertising went up but its a fraction of what googles advertising is at. Yes, certainly amazons ad revenues have been growing dramatically that has not stopped google. The only reason the ad revenues went down this quarter, again, its a perfect example people are not searching as much theyre not traveling as much. Theyre not going places and looking at things so obviously their advertising is going down. So thats an inevitability thats the only negative that came out of the pandemic. Alan, if youre right and all of these companies are going to be regulated to some degree, what does that say about the valuations of them today as an investor do you say, im still going to invest in them because five years out by the way, there aus a it sort of puts everybody in cement certain ways and maybe helpful oddly enough. I think were at a moment of time people are ive heard from all four of these companies. Ive heard from my children im buying amazon, facebook, apple, google thats why youre seeing these kinds of increases i think the quartertoquarter earnings are less important, in my opinion, and i am not thats not my area to focus on that i think whats more important is the control they have over data is at the heart of all of it until we figure out until the government figures out hopefully or somebody, how to make this data they have ubiquitous to other people, its not going to happen right okay alan, its great to see you. Weve got to talk longer i also want to hear more about your latest endench and we will do that the next time we speak form j former, now hes over. Stephen ballmer well talk about all thats going on including the nba season thats just going on for those of you who are just watching it. As andrew mentioned, the nba tipping off last night for the First Time Since the pandemic shut down the league we will talk media stocks, the first for sports and what it means for companies right after this break [ thunder rumbles ] [ engine rumbling ] [ beeping ] [ engine revs ] uh, you know theres a 30minute limit, right . Tell that to the rain. [ beeping ] for those who were born to ride, theres progressive. Welcome back, everybody. Under armour reporting back. They reported 31 cents a share that stock is up by better than 12 right now. Revenue came in well above consensus. It was boosted by a surge in ecommerce. The company said that its product strengthened the quarter for the hover and mens and womens training apparel products the company has seen strong initial demand for the u. A. Sports mask. Thats a personal protective equipment mask that was specifically designed and tested by athletes. Theyve seen strong initial demand for that. By the way, the ceo is going to be joining squawk on the street just a little bit later this morning wilf performance still down 40 year to date compared to nike which is only down 4 or 5 year to date. The nba returning last night in the Orlando Bubble with two games featuring two los angeles rivals and superstar rookie Zion Williamson joining us now for what it means ft. Meade yeah stocks tuna amobe very good morning to you thanks so much for joining us. Are you expecting the ratings to be better than ever given of course the lack of other sports to watch and the lack of ability to go to the games in person good morning, wilfred thanks for having me no, i think frankly the lockdown weve gone through could provide a major incentive in terms of the audience so while that sounds counter intuitive. I think theres been a pentup demand for sports consumption. So what the lockdown has done is to accelerate the cord cutting sports has called for the growth in the streaming system. When nba returns, if they can manage the Health Protocols which continues to create some weariness, if they can pull it off and then, of course, the nfl in september, thats going to be the big cahuna, we could have a big banner year for all of the sports leagues. I slightly misunderstood what you said there you think it will prevent cord cutting . I do think that the absence of live sports has actually accelerated the cord cutting in the paid tv ecosystem and the return of sports will likely have the opposite effect in other words, more and more people are likely to subscribe to paid tv when you have the nba back and all of the other leagues. You could see some attrition in the growth of deceleration and growth of streaming services its a major beneficiary of this absence of live sports when you have the sports leagues back, the pentup demand will have the opposite effect. Lets talk about your stock busines bigs the share price is where youve already reached. What did you make of the earnings yesterday i think the earnings, frankly, were much better than we expected. We saw a lot of the tail winds going on in the broadband business which was riding the tailwinds of the covid19 pandemic on the other hand, theme parks, as you might expect, film studio, advertising business has got whacked pretty hard. So as we kind of look out, we think that, you know, the next few quarters still provide some volatility but the core cable business led by high Speed Broadband continues to, you know, outperform expectations. The network has been holding up pretty good so we think comcast right now remains one of our favorite names we did raise our target price to 50, by the way. Thats kind of our current outlook right now. What about cbs viacom particularly with the prospect of nfl returning well, thats really the big question we have, you know, wilfred here cbs, and fox especially has the highest exposure to nfl programming by our calculation in terms of the minutes viewed as well as the exposure to advertising revenues overall viacom, cbs as well and of course disney. So i think all of the Major Networks to varying degrees are relying on nfls programming, which as you know has been pretty dominant in terms of having the highest rated shows on television. So theres a lot riding on the potential return of the nfl. If we think the potential walk back if that happens at the start of the nfl season could be extremely detrimental to the overall tv ecosystem we continue to believe that the protocols in place right now could actually facilitate a playing of strict protocols. Were a little weary in terms of the details of the rules you know, hundreds of documents of strict protocol that need to be followed by the players and the staff and thats making us a little bit weary whether they can pull that off so fingers crossed. Tuna, thanks so much for joining us thank you so much for having me still to come, the fed maintaining its stimulus commitment as the debate continues in congress over another round of help to Small Businesses and families across america. Well debate the sticking points in a few minutes. Later, the ceo of shake shack joins us and etfs for any amount you choose instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. Stocks by the slice from fidelity. Some Companies Still have hr stuck between employeesentering data. A. Changing data. More and more sensitive, personal data. And it doesnt just drag hr down. It drags the entire business down with inefficiency, errors and waste. Its ridiculous. So ridiculous. With paycom, employees enter and manage their own data in a single, easy to use software. Visit paycom. Com, and schedule your demo today. Well get her reactions to the numbers and where the stocks may go from here welcome back, everybody. Still waiting those numbers out of exxon mobil, but we can tell you about chevron earlier this morning. Again, exxon mobil, chevron both dow components what theyre going to report obviously has a big impact on what happens with the markets overall. Chevron is down by 2 , i should say, after the company came in with a bigger than anticipated loss street was looking for 92 cents. The loss was more than 1. It was 1. 3 1. 30 something, i thk if youre looking at the full number that was the adjusted loss the full number was 4. 44 a share. Revenue came in at 13. 5 billion. Mike wirth, who is the ceo there, made comments saying there is risk that continues to be out there for oil prices based on what happens to the economy around the globe if the pandemic rises up again. Were waiting forex on numbers the street is looking for a loss of about 61 cents there. The big question is will the Company Announce anything that says what it will do with its dividend right now the dividend is yielding 18. 3 thats incredibly high cash flow doesnt cover that exxon is expected to report results any time. When we return, were going to bring you exxons numbers as they hit thats coming up plus, republicans and democrats at odds over the coronavirus stimulus bill. Meanwhile, millions of americans waiting for an answer. Well debate the sticking points and discuss americas job landscape after the break. Check out the futures after the big beats yesterday by some big Tech Companies watch the nasdaq up 205 points right now. Dow up about 89 points s p 500 up about 20 points wee ghba aerhirrit ckft ts. 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. Yeah, everything is runningis smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. Welcome back congressional negotiations hitting an impasse even as both bodies agree more relief is needed eamon javers has more. Reporter its a deadlock here in washington remember the 600 a weaken hansed Unemployment Insurance runs out today theres no indication theyre going to be able to get together and pass a bill today to extend that if youre depending on that life line, you might want to brace for that impact. Last night there was a late night meeting. After that, both sides came out and said they werent optimistic heres what democratic leader Chuck Schumer said last night. We just hope they understand the gravity of the problem the bottom line is this is the most Serious Health problem and economic problem weve had in a century and in 75 years and it takes really strong, bold action and they dont quite get that. Reporter for his part, mark meadows, the white house chief of staff came out and told reporters the democrats told them they were willing to allow that Unemployment Insurance to expire if they didnt get what they want. He said he was not optimistic about a deal here. Politico is reporting this morning that some offers were exchanged though in that session last night, that the white house offered to extend for four months the 600 a week Unemployment Insurance the democrats countered with an extension all the way through the First Quarter of 2021. Democrats really want a full bill here with all of the bells and whistles republicans are now pushing whats called a skinny bill, a narrow extension of that Unemployment Insurance to try to get a massive extraction of liquidi liquidity. Guys, as we stand now, it doesnt look like theres a deal possible there is still a number of hours and well see where we go from here. Eamon, thats what i would say. Youve been through this enough times that you wouldnt say forget it, its not happening, as we head into the weekend, correct . Reporter its not impossible you have to look at the incentives the president has zero political incentive to allow this to expire and take money off the table of americans millions of americans just before a National Election democrats have said they dont want to have this happen both sides have an incentive to get to a deal here the question is, what are the terms going to be . Thats where the political pain is going to come for somebody in this negotiation. The big question though is the senate, right . I think there are Something Like 20 republicans who have said they dont want to continue to increase the deficit by the spending that weve been doing to this point. How movable is this number what would it take to convince them otherwise it would take a number of democrats overwhelming them with the votes. You would have to get them willing to move something to the floor that a lot of people dont support. Thats a tricky move but they might be able to do it if the white house pushes them to do it remember Senate Republicans were behind it earlier to cut the 600 a week payment down to 200 a week because theyre making the argument that thats too much money, 600 a week, because it disincentive advises them from looking for work. Theyd like to cut that back in a time of worry about deficits theyre not on board necessarily with this white house proposal to extend it for four months the president is on a different page politically he sees this as something he has to do ahead of the election. Folks, very quickly lets take a look at exxon mobil weve been waiting on exxon to come out with its earnings or its loss in this case. The street was looking for a loss of 61 cents it looks to me like this is an adjusted loss of 70 cents. Reporting a loss of 26 cents a share but that includes a positive noncash inventory evaluation of 1. 9 billion or 44 cents a share. You add that up it really would have been a loss on 70 cents a share versus 61 cents the street was looking for. Also, weve been talking a little bit about the dividend, whether that dividend is going to be safe it doesnt look to me through the quick glance through when i was talking to eamon, its an 8. 3 yield however, darren woods does say that the company has identified significant potential for additional reductions and is undertaking a comprehensive look at a countrybycountry details. Additional details will be provided when plans are finalized. There would have been reports earlier this week that maybe the company was looking for additional layoffs the company denied that at the time again, they say they have reduced the cost reductions and that provides further efficiencies this graph with additional reductions is an undertaking with a countrybycountry basis. That suggests there could be additional cuts to come. That stock is down to 19 cents to 41. 68. For more on what weve been talking about with what is happening on the federal level with whats happening with the government, whether theres going to be a deal or not, what should be happening at the federal and state level, lets bring in operation hope and chairman and ceo John Hope Bryant good to see you. Honored to be with you, becky. You heard what eamon was talking about. How its really tough to get any sort of cohesion at this point theres divisions between the republicans and their own parties, theres definitely divisions between the democrats and republicans and the democrats and kind of trying to figure all of this out but at the same time we are looking at the Unemployment Benefits expiring and people probably getting a rude awakening from what theyve gotten used to over the last several months. What do you think needs to happen what can happen both when it comes to the state level and the federal level. Im working on a new Marshall Plan weve got a state to adopt it. Companies are passionate and agreed to adopt pieces and lanes of it. Im encouraged where thats going. Thats a longterm vision or part of a longterm vision we need the bible said where there is no vision we perrish. Dr. King did not say i have a gdp that will grow by 2 a year. We have to rise up where our solution is as large or larger than the problem that we face. Right now we are blaming americans for something that they did not do. Americans did not create a pandemic americans work, pay their taxes, they work hard, they werent lazy they didnt ask for unemployment Small Businesses didnt ask not to have customers. They did exactly what we asked them to do, becky, and were not doing our part were sort of rearranging the deck chairs on the titanic here. The ship is sinking and were sort of picking drapes and we have got to remember that the second part of this economy beyond the investor class that largely watch this show, one of the most important shows in the world, i might add, is theres a consumer economy, becky. Thats 70 plus of our economy they need confidence and they need to know this. Kevin oleary, the chairman at oshares etf, cnbc contributor is with us kevin, i hope you heard what john had to say. Obviously something needs to be done, but theres not the on pe tight, i think, that there was for spending to the extent that we have been to this point kevin, what do you think happens next how do we handle this . Oops looks like we lost kevin john, let me ask you that though theres not the appetite for this that there had been before. How do we find some sort of a compromise what do you think that compromise looks like . Well, i mean, you know, easy math says if you cant get to 600, 200s not the number, then you split the middle, but what you dont do is tell america no right now. America needs a yes because they did, again, all the right things again, this is not a crisis where we blew it or capitalism blew it. This is a war. Were at war we need extraordinary measures were at war with a virus. We need extraordinary measures and we all need to pull together, not republicans and democrats, we need to be part of a get it done party right now. And the compromise is that we want this party to continue. This party cannot end. This party has to continue its called the economy. That economy is largely dependent upon the working class people that you know that we have as clients of operation hope that get up every day and work really hard and now want to work really hard by the way, theyve got a few extra dollars more than what is required to pay their mortgage or their rent and their car note so be it they did not bring this upon them you want them to have a little money to go to a restaurant, buy something online, keep the kids entertained with some school supplies, right . You want them engaged in the economy. You dont want their confidence to shut down john, the question becomes though how long do we continue to spend this amount of money . How do we eventually pay for it . There are a number of republican senators who keep saying we cant run up the deficit to this limit. I think youre right, something absolutely has to be done. I wonder if theres a better way to do it instead of saying heres an extra 200, 400, heres what it might be. Rhode island, i know youre familiar with what theyre working on there i think youre working on a plan with the governor to retrain people to make sure they come back to the jobs that do exist after this pandemic. Yes i was doing a c. A. R. E. Act refinement, i commend them for the first stimulus package it was smartly done. We screwed up on the Health Care Management piece, thats why were in this ready part a gina romando has a novel motto for the nation rhode island back to work. She has combined stimulus money with wrap around jobs retraining packa package. Were one of her partners. Financial coaching, Financial Literacy giving people the resiliency they need theyre working for their money, their money is working for them and they feel their government has a vision for the future. Were also going to be working with Small Businesses there, also giving them the coaching that they need because as we talked about here before, becky, 96 of all black businesses dont even have an employee. So its hard for them to do the business and the business at the same time. They need help with the business management, books and records. Again, they are not lazy either, but they need some support she has Major Companies that are agreeing to hire on the back end so youre not fishing in the empty lake that gives everybody the confidence they need to move forward. Keep in mind, the majority of Rhode Islands population is hourly workers this is a great model for other states hey, kevin oleary, im told youre good. Is that true can you hear this . I can ah. I can. Youre here excellent did you hear all of that what do you think . Yes, im here what do you think about what john has proposed, what weve put forth . I dont agree i dont want to fund anymore companies because what ive learned over the last six months is that we probably wasted 20 of the first ppp packages by giving them to companies that are not going to be relevant in the new digital economy. And we cant decide that politicians cant decide it. The fed cant decide it. The market has to do that. I agree, if you want to give employees that are being caught up in the transition to a new economy, i call it america 2. 0, thats fine. No more money to businesses. Its unnecessary the market is awash with capital thats willing to go through the bankruptcy process because some companies are dead they just dont know it yet. Because lets face it, the propensity to purchase things and the Distribution Channels are changing as youve seen evident by all of the explosion in technology thats made remote working, of course all kinds of products being delivered to kps. No should a movie chain be kept afloat by the federal government, my talks, where nobody wants to go to movies even if there is no pandemic, they want their information streamed to them let it go bankrupt we are breeding inefficiency and meade did i okay kra at this by funding all of these businesses that dont deserve to live that is the nature of how an economy lives. If i want to bid on single c credit, im betting against the fed. Its keeping them afloat when it should be going bankrupt i cant put my capital to work i would argue private capital is good to keep them. Stop funding losers. If you want to fund employees, i get it no more money to Small Businesses no more money on just some random arbitrary basis that doesnt have to be paid back its not the governments money, its my money. Im a taxpayer let the private investor handle this we are killing our economy into japan. But, kevin, therefore, i think im right in saying that you would support extending Unemployment Benefits, the boost to Unemployment Benefits of 600 a week, at least in the meantime then on the flip side . Theres his technology. Kevin, if you can i would give them 400 a week. 400 a week. Theres consensus around the table. You both said 400 a week would be okay. Im okay with that, but i do not want to see another nickell put into Small Businesses or any businesses we are ready now to take over that process there is so much capital waiting to go to work competing with taxpayers dollars coming from the fed. Thats crazy its got to stop and at the end of the day youre going to see how efficient this economy is once its gone through the transition itll be fantastic, but weve got to scrape the betina its all the losers have to die. Its like watching a zombie movie. One gets bitten, theres that moment when they realize the end is near. One friend chops the others head off because its the right thing to do. Its not murder, its mercy. Thats my whole point. Youve got to let these companies die. You know, my mother raised john, your thoughts on that yeah. My mother raised me good manners so i dont interrupt people, but hes just wrong. I respect him. I admire him he does a great job on shark tank, im sure he was a great man. He was a loser at one point. Sam walton was jim kasey was a loser, has ups today. This is ridiculous the Small Businesses did not ask for this problem they are not lazy. They did nothing wrong theyre working hard average Small Business has 25. On the back end of this we have a comeback called the Marshall Plan that will surge our economy. We have to get there we have to get through 2020, we have to bridge people to get there and then we let the market take over. Guys, i hate to cut this off when its getting good i apologize for the technical issues were having. Yeah we will redo this conversation another time john, kevin, i want to thank you both for being here. Okay that was a great conversation. We will do more of it and well try to get that done next week. Coming up, we are watching shares of apple taking another leg higher and pulling futures with it. Much more on that ahead. Plus, shares of shake shack down this morning the restaurant chain did not fare so well bigger than expected loss as it shut some of its locations and cut hours. That companys ceo is going to jo us jininust a bit as well. Were right back after this. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Welcome back to squawk. There are millions of students with disabilities in u. S. Public and private schools, and for those students the shift to Remote Learning has created a new host of challenges in some cases additional financial pressure for their families there are some benefits and programs that can help cnbcs personal finance correspondent Sharon Epperson joins us with more on this important story. Sharon reporter pool time a cool break from school time for isla newton and her brother theo isla, whos almost 11, has downs syndrome. Shes taking summer classes and doing therapy online through the free special Education Services her School District provides, but her parents, jim and dorie, worry Virtual Learning could delay islas progress and derail their finances theyre considering home schooling. That can average between 5 to 10,000 per child in addition to the services that they will need. Reporter Employee Benefits can help families save up to pay for therapies and other costs. A family can save up to 7,100 pretax in a Health Savings account this year and up to 2,750 in a flexible spending account. If you havent enrolled in one of these plans, an fsa or hsa, then see if thats open to you because theyve changed the rules and the regulations now so that you can actually open one this year throughout the course of 2020. An able account allows you to save even more for a special needs child. Up to 15,000 a year up to 100,000 over time without jeopardizing key government benefits but the newtons who now rely solely on jims income say saving up to pay for private services is tough. We dont have the resources to do it, the funds to do it and were just trying to focus on getting through this really difficult educational time reporter parents should also be looking into their medical Insurance Plans to see if certain special therapies are covered and remember to always have a letter of medical necessity from the doctor that verifies that the therapy, the treatments, the items that youre purchasing for your child are for a need for a medical condition. This statement cannot suka can e that the services that you need will be eligible back to you. Before you go, what other types of Financial Planning should parents consider if their child has a disability are there other places they can go how quickly can you get some of these cases paid forgiven the cost in certain cases . Reporter well, starting with the costs and getting those expenses paid for. Again, if youre paying for it out of pocket but youre using fsa or hsa money, then you will be able to pay for it quickly, but in terms of getting reimbursed for certain expenses by your medical Insurance Plan or something, that could take some time. And, again, having that letter of medical necessity is very important so that doctors statement verifies what is needed okay. Sharon epperson, appreciate it very, very much. Thank you. Sure. Still to come this morning, more on yesterdays big tech earnings as Major Companies crush their Second Quarter Earnings Results theyre moving hard in the premarket predominantly. Plus, dont miss our first on cnbc interview with the shake shack o. Ce thats on squawk box coming up next quadrupled their money by 2012 . And even now, many experts predict the next gold rush is just beginning. So call us money reserve, the only Precious Metals Organization Led by a former director of the United States mint. 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Plus, the clock is ticking in washington as federal jobless benefits are about to expire theres no sign of a stimulus deal we have it all covered as the final hour of squawk box begins right now this morning weve heard from four dow components exxon mobil and chevron that reported wider than anticipated losses caterpillar and merck that both reported better than expected beats. You add it up and it gets us to 86 points right now for the dow . We started out before we heard from any of those companies with dow futures up by 20 points. S p futures up by 20 facebook, amazon, apple, alphabet the first three actually indicated sharply sharply higher this morning, and that is really helping out the nasdaq which is indicated up 207 points. Thats worth 1. 2 and that will give them 3. 5 gains this week close to 7 , 6. 5 for the month of july. Pretty impressive stuff. Lets bring you up to speed on the big quarterly dow results. Merck beating the street on top and bottom lines despite a decline in revenue the stock is up 3 in the premarket. Chevron shares getting hit a drop in fuel demand. Down 3 . Similar story at exxon which reported a wider loss than had been forecast on the bottom line down 1 . Cat shares jumping the company beating the street on the top and bottom lines despite a 31 drop in sales amid the pandemic its up a percent. It had been climbing 2 or 3 higher paired back some premarket gains. Beyond this mornings reports, last nights big tech reports also driving the futures. Three of those companies are worth over 1 trillion in market cap. Overall they make up more than 40 of the nasdaq 100. As those stocks surge, investors are wondering if there are still opportunities or if they should be looking elsewhere joining us to talk about this and much more is ann winblad always good to talk to you its been a while since weve checked in with you but i cant think of a better time given all the news weve seen in technology lets start with the earnings from the four companies. Anybody who was looking who had any doubts kind of got those doubts blown out of the water by the results that came in from the Companies Last night were you surprised surprised how well facebook did in their advertising revenue. I had High Expectations of the cloud revenue for the enterprise components of amazon and google, and google is making great progress on the cloud revenue. Apple was stunning yeah, apple was stunning. The idea that they have actually benefitted through all of this turned out to be a much better Second Quarter for them than you would usually seen, and thats a pretty big rarity from what youve seen. Yeah, i think all of these companies had tremendous up side we really had m march it was final exams on Digital Transformation on all enterprises globally most enterprises discovered they had a long way to go on their digital pathways that means buying a lot of software from these companies. Ann, is this the type of thing where its a blowout quarter that happens now but it cant be repeated in the second half of the year or not . I think that everybodys going to face headwinds from the economy so thats a big unknown and we really dont know the course of this pandemic, another unknown. At the same time we are in a fully Digital World right now as we are experiencing together right now. We have seen laggards come forward rapidly. Educational institutions pivoted on a dime. They were no big consumers Small Businesses have to become much more digital. Advertisers have to retune their messaging, look how they reach their consumers. Consumers are going online for purchases. For amazon, theres so much up side the penetration of grocery buying was Single Digits before march. The penetration of ecommerce globally is really low even though its high in the United States so theres tremendous up side. Were all Walking Around with mobile devices some of us dropped new ones or get new ones they demonstrated they can lead scale. They can operate in an extraordinary circumstances. For all Companies Operating long term this way is going to be challenging to maintain talent, to maintain innovation, to have innovation be spread across unknown individuals in your company, to hire and fire is really hard. We get together all of our ceos, once a week, and those are all Enterprise Software companies. They think very strongly during the pandemic, but the leadership challenges are very, very large. To dwell on apples iphone number for a moment. 26. 4 billion the forecast was 22 billion. How impressive was it that iphones did grow during the quarter even though there was no real catalyst for it, no new release. What does that suggest might be possible when they do get into the 5g lease cycle well, i think any new product release cycle is huge for apple. They own the mobile Device Market the numbers that they put in for the Current Quarter were impressive i dont know what really drove that, but they are the product to have in your hands. They always make it seductive to own a new product, whether its 5g or other new opportunities. The products do wear out over time you do drop them people need new ones everybody has to have one whether they were a student or just an adult living in this world. So they own that innovation cycle. Whats more impressive is the growth in services thats high margin that really is much the future of this company. I think apple is a company thats firing on all cylinders and has very good leadership. Ann, do you own any of these companies . Ive owned these companies for a long time. These are stocks i consider to be companies i own in my portfolio for the long term. Have you added to that stake lately or is this something where youre content to hold on to what you have or you want to get more. I looked at facebook whether i continue to own that stock i have my own feelings about how they manage the platform as a stock its been a stock to own, but i have added more amazon stock over time we had Alan Patricof on earlier. He said these great numbers, while its great for the market, theyre looking at it short term he thinks longer term it could be a problem to continue to see them really dominate when you just earlier this week had all four of the ceos called before congress and grilled about how big they are how much of a factor does that play from the valleys point of view in terms of whether or not theres going to be an overhang over these stocks . I dont think in the near term it has much effect. There could be long term consequences here, but weve got an election coming up. This congress is going to be a new congress coming after november or after january, actually so it takes a long time to have any antitrust effect on these companies. In the meantime, i would disagree with what you said about the up side here with alan, that, you know, lets look at the Cloud Business alone. We really were funding Young Companies in the Enterprise Software space and many of them compete with elements of these companies or actually collaborate with these companies. Its a mix but these companies are going to be competing with each other for very, very large markets and still have tremendous growth the cloud market is i think in mid growth phase itll be very competitive between google, amazon, and microsoft and others, including ibm, but it is a high Growth Market comris, were not investors but you can look at the penetration numbers. India is an example with very little comris. The laggards that have not become digital, markets like education, markets like municipalities, markets like health care, these industries have had to on a dime turn their full attention to being digital entities and that means buying more software. These are all hard Core Software companies at their core and that is the largest Growth Market globally were Software Investors only. Were seeing plenty of opportunities to find new innovators here where there are cracks in the digital framework for companies. That means theres huge Growth Opportunities for these Big Companies as well. And i dont think scale is really their issue right now they are far from their from their aging companies. These are still youthful, innovative, well led High Growth Companies in my opinion in a very high Growth Market which is software i totally get it and cloud clearly a very high margin business its only 3 billion of revenue for google and as you just said, theyre aump in high growth. Maybe thats one quarter or couple of quarters effect but does it make you rethink the valuations of some of these companies if theyre well over 30 times priced to earnings ratio without an actual top line growth yeah. I think google has the artifact of advertising which theyve owned for a long time. This is a really challenging moment for advertisers, for brand advertisers or just any kind of advertisers, Small Business, largescale grants youve had to rethink how you do your messaging you have, you know, all of the major tv events are gone, sporting events, et cetera and we have seen in our Smaller Companies that support, technology for advertisers, that advertisers are not going away, that they are retooling. You can see that effect in adobe stock, which is another stock that i own they own the creative plot which is where you build your advertisements and that is having very strong growth for a company at scale, but i think when you look at googles other businesses, they have reentered the cloud with new leadership. Theyre still building a sales force so that cloud number to me was really impressive from where they are on their cloud strategy, especially that theyre competing with amazon and microsoft in that strategy theyre also a company with a lot of Hidden Assets that you dont talk about, artificial intelligence, quantum computing, mobility all of these are markets that Technology Platforms that will serve them well for future growth in my opinion ann, thank you so much for your time. Its always a pleasure to see you, especially to really dig deep into all of these companies that are really driving the markets right now. Hope we can have you back again soon thanks, and stay well, everyone okay. You, too take care. Andr andrew thanks, becky. Coming up when we return, shake shack ceo on his latest quarter hurt by, of course, the pandemic monday, you dont want to miss steve ballmer. Former microsoft ceo, l. A. Clippers chairman. Hell talk about the Coronavirus Impact and recovery from u. S. A. 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Chad . Your wireless, your rules. Only with Xfinity Mobile. Now thats simple, easy, awesome. Switch to Xfinity Mobile and save up to four hundred dollars a year on your wireless bill. Plus, get two hundred dollars off when you buy an eligible phone. Welcome back to squawk box. The Restaurant Industry has been hard hit by the pandemic its not all bad news especially when it comes to fast food kate rogers joins us. Reporter the Restaurant Industry has been decimated. They project 8 Million People were either laid off or furloughed from march through may. Quick service and Fast Food Companies are hiring in big waves as consumers lean into delivery and carryout and away from on premise dining papa johns made an announcement of hiring 10,000 workers and they have their total hiring efforts to 30,000 since march. Chipotle earlier this month announced it would be bringing up 10,000 workers to fas you have the stores. Other hiring announcements, mcdonalds hiring 260,000. Subway 50,000. Taco bell, 30,000. Dunkin franchisees bringing on 25,000 dominos hired 10,000 earlier in the season the shift is underscored by a lack of willingness to dine on premises 30 of voters say they feel safe in this point in the outbreak dining in a restaurant that is down from a high of 40 back in mid june. Thanks for that meantime, were going to continue this conversation about the world of food. Shake shack posting a wider than expected quarterly loss. Forcing the burger chain to close locations but shake shack has plans to open drive through and make a big push into digital. Joining us first on cnbc, randy. Walk us through how youre thinking about the past quarter and how youre thinking about what the future looks like thanks, andrew. Good to be with you here appreciate it. Look, nobody knows where covid is headed but we expect that the last quarter was the low point weve seen consistent and gradual growth throughout. One of the stories we shared last night on earnings is about shake shack has been built as a Community Gathering place. Born in new york city, right, among the most impacted places in our world right now, continues to be. Thats having an out sized impact on our company compared tosome of the other traditiona fast food which weve never compared ourselves in that category when we look ahead, we say, hey, who do we want to be who are we going to continue to pivot to and evolve. Our team has done such an extraordinary job. Its accelerated a lot of the work we had planned. Youll see exciting plans to do the first ever drive through next year which is not your grandfathers drive through. This is going to be about harnessing that incredible shake shack experience born in a New York Park but adding convenience. Were going to do that in a drive through. Were going to do that in what we call a shack track. Half our class next year that will allow us to really capitalize on the digital growth that weve made this year. You know, its been extraordinary. Youre looking at all of the tech earnings. If you were a shareholder of only shake shacks digital growth, youd be way up right now. We tripled our digital growth last year. Thats been an amazing pivot point for us. Randy, one of the questions, i hear this from a number of ceos in your industry. Theres going to be a lot of capital costs to expand into these and be able to shift the business, if you will, over the next 12 months we all hope, by the way, in 12 months from now that people are back in your restaurants so the question is how long you think that this i mean, this is a Health Question to some degree as well, these trends continue and how long they persist and whether people are going to ultimately, maybe this is the optimistic take, are going to have to revert back to where you were before. But then theres a question how much do you want to spend in the interim . Im in the optimistic category im not a believer in the notion that theres going to be a demise in the great cities of the world especially in my city of new york. Well continue to gather no one knows when. Is it 6 months 12 months . No one is sure people will come back. Thats what shake shack has always been built on when we talk about capital, we have the strongest Balance Sheet weve ever had were going to invest that capital in creating experiences that greatly add that convenience factor no matter what we look like in the future, as we do gather again in the best shacks weve ever had and as we look for more convenience in our life through our cars, through any way that we want to get our great food, shake shack is going to do that with the premium ingredients weve already done and the team and hospitality and the way weve always built it. I think thats a smart use of capital. Were fortunate. Weve always had the strongest returns in capitol and we expect that to continue to grow in the future. Randy, i know preparing for the current environment and home delivery, drive throughs, et cetera, most of the investment to pivot for that is on the tech side and ways youve already talked about this might sound like a silly question, but its a genuine one. Tuff to pivopivot. Some can deliver so badly and so well do you have to prepare that differently . Thats a great question thank you. Look, were never going to sacrifice handmade to order shake shack shakes, right . Were going to cook your burgers to order as we always have and we have zero plans to change any of that. So weve got to keep winning on that thats what shake shack has always won on is the quality of our ingredients and were going to continue to do that what we can do now, you look at how our team pivoted in just a few weeks. Weve added the first Curbside Pickup to 10 locations, we expect to have 50. So now you can roll up in your car, tell us when you get there, were cooking it fresh, contactless, hand off and pay. Thats the way weve got to pivot while retaining everything about shake shack that separates us from the traditional fast food thats how we got here thats how were going to get continue to grow from here were excited about the new formats that will add to that opportunity. Look, you are o whole goal is to increase the Addressable Market that shake shack has had thats what were doing with the new formats. Your food delivers well, i can attest to by the way weve seen food pick up in areas like meats as a relatively premium priced restaurant brand within the fast food category, is that less of a problem for you than it is for your rivals or does it mean have you to skimp on quality . No, we would never skimp on quality. Our beef is no hormone, no antibiotic ever. That does not change thats only going to continue our commitment there in the Second Quarter, you see this in the eps impact, we had a tremendous impact, beef nearly doubled at moments from the Second Quarter last year its back in line now and most of our costs are back in a commitment to the hormone antibiotic free meat when you choose to eat a burger, its a really good one randy, want to thank you. Want to tell you the sorkin family, we actually order from gold belly and cooked our own shake shack burgers. I dont know how big of a business that is for you its going to become a bigger business. Thats been fun that was one of the first pivots we did allowing you to do shack at your shack. Thats what Community Gathering is all about if you cant get to the shack, well bring it to you. Well cook it up on gold belly and other ways appreciate the sorkin family getting in on that my family has done that many times. I dont know if we cooked them as well as you do we appreciate it thank you so much. Thanks, everybody. Thanks, becky thanks, andrew still to come, weve got some breaking Economic News on the consumer stay tuned you are watching squawk box on cnbc 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. Personal income figures coming up. 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. But inside every etf. There are untold hours of careful construction. Infinite what ifs . And contingency plans. Creating funds that help target gaps in client portfolios. Tap untapped potential. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Welcome back to squawk box. Breaking news. We have a june read on personal income its down almost double. Down 1. 1 its last month which is down. Its down somewhere to the up side that follows an even highe upperly revised number deflator its. 4 year over year its up. 2 up half over 1 . Expecting up 6 , very close. The ten year note, trading 53 basis points its less than half a basis point. Its 1. 1. Its investment sentiment. Its expected to you down 18. 5 . Its unbelievable we do that stimulus, whiffle. Wilf. Help alleviate thank you very much getting back to the data we saw. Steve, the bond market as rick was pointing to, the highest we have seen the bond market is pricing in a softer second half what were going to get is a major rebound. The base effects. Coming back. Meant the basic picks on the other side the flat employment numbers. Just real quickly, we had major increases in government transfers. You see that Unemployment Insurance and then thats going to go away as well that came from the data here so what happens if that money goes away to the spending side, which beat wilf, if you give me a half a second here, i want to talk about an out of sample note i got from an investor whom i trust a lot. This person wants says the focus ought to be more on the possibility of inflation i know it sounds absurd. What did we just post a 09 and 08 pce numbers you have weak wages and Everything Else like that. The tips numbers are low i dont know if rick is still there, but his concern is this, the fed is positioned for it being low for a very long time theres a lot of fiscal stimulus coming and the concern is if we have a vaccine and the economy does ramp up to normal, where is policy and this persons concern is that, hey, is the fed considering it, thinks its being closed minded and not considering sufficiently the possibility, not that its inevitable but the possibility of inflation. As we go over to rick on that, steve, it is a fair point. It was very clear on the press conference that jay powell said well be dealing with deflationary pressures versus inflationary pressures rick, you look at the comparables. Oil prices were negative just a few months ago so clearly anything oil related by next year is going to see quite a significant cpi print whether or not that reads across to every part of the economy, not to mention things like food inflation. Theres a fair point even if its not true inflation because of strong growth theres going to be some tough comps to avoid it. Yeah. You know, it all depends on how we define true inflation i would say take the travel industry listen, if we get a vaccine, the demand is going to outpace how quickly many of these entities are going to be able to ramp up. I think its true in many areas of the service industry. I think there is a very good case to be made that at some point on the back side of the coronavirus we will have pricing pressures. To look at it from a behind closed doors whisper from a central banking perspective, listen, considering all of the debt the world is generating, inflation can be a healing process for all of that debt if we can get some Global Growth going. Of course, who pays for that in the big picture . The middle class should we see a jump in inflation six, seven, eight quarters down the road, thats going to be key. If you own big real estate, you own big investments, that inflation is going to be a good thing in many ways if you are one of those hard portions of the middle class thats had a bumpy ride and the inflation hits, its not going to be such an enjoyable event. Yes, i think there will be tweaking the fed will release this before the coronavirus hit. Just because theyll wait longer for the 2 to average in in a strong way might be a moot point if we jump over at some point in the future rick and steve, thank you pleasure. For more talks, the expiration of relief benefits, at least on the federal level. Joining us is austan goolsbee. Andrew olin who is former National Economic Council Deputy director and a partner at Global Law Firm myer brown. Welcome to both of you look, i would say reading the tea leaves on this, it looks like both the democrats and republicans think something needs to happen. Because they cant seem to reach any agreement, at least right now, it looks like nothing will happen andrew, do you think thats a realistic way of looking at it do you think something will eventually get done . I think right now a deal is still possible the elements of a deal are certainly there. But i do think time is running out and that a deal needs to start to formulate and start to see real offers back and forth amongst both sides pretty soon for us to get something before the august recess. Yeah, austan, how about you how optimistic are you that they actually can bridge the gap and reach something . I guess im not that optimistic i think your description is right. Im still trying to pick my jaw up off the floor how could we have a gdp number like we just saw how could we have an Unemployment Rate like the one we face and congress does not feel like its their job to do something . I know its a president ial election and usually in president ial elections the two parties have a hard time agreeing, but theres really millions of peoples lives at stake. Were going to get hundreds of thousands of people evicted from their homes if they cannot come to some agreement on this. I think its really disappointing. So what would an agreement look like . You guys just split the difference and get to 400 in unemployment and wrap around some additional spending for the states, municipals what would you do, austan, if you were in charge i mean, i would make it the full amount but if they if the republicans insist let me rephrase that. If you were in charge and you had to cut a deal. Shave it down. If you were in charge and had to cut a deal. The root problem here is the republicans dont agree among themselves all the democrats are for money to people and bigger amounts some of the republicans dont want to do anything. If you can get a majority or significant chunk of republicans to be for a smaller ui payment, then you at least get the smaller ui payment i think we havent had in all of the discussion about ui and whether the ui systems are even able to do a percentage replacement wage rather than a set amount, which its not clear that the states are even capable to do it, but in all the debate about that, it seems like weve taken the focus off the state Fiscal Relief like you said. No. The states are going to be in unbelievably bad situations. Youve already seen nashville. Theyre debating in chicago. A bunch of places are being forced to raise taxes in the face of the downturn because they have balanced budget requirements which is going to make the recession worse that happened in 2009, it will happen even more today i think what happens . Yeah, becky, i think theres actually a deal here around a couple of key areas. If you look carefully, the theyre not that far apart on some really important areas. For example, expanding the paycheck protection prom, ppp, very Successful Program thats helped millions of Small Businesses another round of individual payments both sides agree there something on Student Loans you could see being put in there on Unemployment Insurance, which has gotten a lot of attention, if you look at it, 200 to 600, there is room for negotiating, i think, there and just in kind of perspective, too. Remember, congress only expanded Unemployment Insurance during the last recession by 25. So both sides have already indicated significant support forex panneding Unemployment Insurance at this time then you see trade or Liability Reform that leader mcconnell has asked for with enhanced funding for the states you see that as a package. I think its going to require Congressional Democrats to realize that they need a more targeted package here and that this is simply just kind of the next phase in policy and then, you know, Senate Republicans have raised a lot of concerns about price tags and, you know, that package there certainly is still going to be pretty expensive. We have to watch and see if thats acceptable to them. You could see a bipartisan agreement coming into those elements time is of the essence here and we havent seen the real haggling begin where a deal could emerge separate question but it does relate to all of the spending. You were involved with the white house in picking people for the fed. What do you think of judy shelton . Listen, you know, the president has nominated, you know, for the first time in the process of actually selecting people to get a full gaur rum on the fed, which hasnt happened in years and youve seen her get a strong vote so i fully expect her to be confirmed at this point. Would you advocate on her behalf being part of the fed my business now is not advocating pro or con any particular person. Shes clearly got strong support by Senate Republicans, you know, and she has a long history of monetary policy. Austan, the ppp program, we had kevin oleary on earlier this morning and he was suggesting that if you want to continue making payments to individuals for unemployment, he was okay with that, but he thought that we should stop paying companies that dont have a chance of recovering he likened it to being like making zombie payments cut them off and let new businesses develop later what do you think of that . I saw he said that. The only thing i can say is a lot of these companies are only becoming zombies because were messing up the control of the virus. If we would just have a National Policy to slow the rate and spread of this virus, a lot of these businesses would be perfectly viable so i understand kevins point in theory, but i think its pretty dangerous to say right in the middle of the virus, well, these are probably going to turn into zombies anyway so lets pull the plug and let them die. I think that would be a mistake that would snowball in a pretty negative way if we dont see any agreement reached, lets just play this out and walk through the scenario austan, ill start with you. What do you think the economy looks like a month from now, three months from now . Well, you know, all of that depends on how does the if the virus continues to escalate and weve got even more of an outbreak than what we have now, i think you would literally see a redownturn of the economy thats unlikely. Mostly what it means is the recovery is not going to be near as strong as what we need it to be we had around epic decline of gdp. Even if its only a third of the whole, some strong rebound to fill that downturn and if we do not support the weak parts of the economy, then im afraid were going to hit a couple of big speed bumps from the states and from the Small Businesses closing and from the evictions and those, it might even stall out and get worse. Andrew, is that what youre expecting, too yeah. I agree the economic outcomes are being driven by covid. Clearly this is an unprecedented time from an economic perspective. Policy has had to accommodate that thats why weve seen policy makers move in phases. Its very difficult to know how covid is going to proceed over the next every couple months. To have seen phase after phase of essentially bridge financing for the u. S. Economy to get through the successive months as the Public Health officials attempt to deal with the pandemic, so thats why i see this latest round of negotiations, really kind of the next phase in that process if theyre not able to get an agreement here, they still can come back in september, you know, potentially maybe make Unemployment Insurance benefits retroactive. Thats one way to handle it if theyre not able to get into a deal here. I fully expect another package to really help the economy get through this time and also to kind of spur some additional growth the economy took a hit from covid and i think the fundamentals are still sound but having a good, strong package focused on economic incentives and getting people back to work will help us recover once covid has been contained. Andrew, i want to thank you for joining us thank you. Austan, congratulations on that patio you built i love the picture you put out. It was the best. Of the marshmallows roasting. My back is still sore. Good to see you good work. Andrew okay coming up, its worth seeing its all on twitter, austan tweeting it out a couple of days ago. Meantime, cramer on this mornings stocks to watch. We have to ask him about all of these faang stocks first before we go to break, check out the biggest dow winners premarket. Stay tuned, youre watching bccn welcome back to squawk box. Take a look at gold prices hit ago record High Crossing above 2,000 earlier this morning before pulling back a bit. I want to talk to jim cramer at cnbcs headquarters. Jim, great to see you. Want to talk about these faang stocks but want to ask you about a tweet you sent out this morning. You wrote, i think the market is only, quote, easy because there are so many people who truly believe its all about the fed or its all phoney if these people focused on companies they would be more worthwhile what do you mean by that well, i think that there is an intellectual laysness in our business that has become id say endemic which is meaning that you dont have to look at individual companies, you can just say, look, the s p is overvalued because of what fed says, its just free money or these few stocks are overvalued and they dont want to spend the time or they dont have the rigger to actually look at what these companies are doing. I think a lot of the people who come on air frankly dont spend enough time doing homework and its somewhat embarrassing i think that they do a lot of other things other than actually read the nittygritty. I make that charge only because if they did they would not be saying these inane things. These companies are extraordinary, theyre doing amazing things. You do the homework so lets talk about some of these companies real quick you say on apple, for example, own it, dont trade it. Right. What do you mean by that . There are people who come on air and say this quarter is this good or that quarter is no good, worried about the apple 12 or 5g or Service Revenue slowed down, lets downgrade it to a hold or make it a trading hold all thats nonsense. When you look at it is a Great Company doing great things that does not think like that they play with a totally open hand you can Read Everything apple is doing. The only thing they dont give you, per se, is they dont give you the handset number that big decline in the stock was a lot of people felt that because they didnt give you the handset number, therefore, they were hiding something no, its because it wasnt relevant given the service numbers, im sorry to be so strong on this issue of intellectual rigger, but you went to college, you know there were people who did the homework and people who didnt. In our business it doesnt matter if you do the homework you can just blame the fed. Do you put any distinction between these four companies you look at an alphabet, a bit more of a mixed quarter, a different business obviously than apple, apple different business than amazon, amazon different business than facebook look, alphabet is totally beholden to advertising and if ruth hadnt talked about how the last seven weeks were good that stock would be down substantially. Brian owe staff ski is an unspared hero, the cfo of amazon and he laid out the fact that basically they are spending all of this money on trying to keep workers safe, what they didnt realize is that the whole country if not the whole world was going to amazon. A humble call. Facebook was all about small and medium sized business. Again, no intellectual rigger, no realizing how this Company Makes money. I do not understand how these people can even come to work i mean, who are they jim, we have to go. You think amazon will submit and you saw what apple just did. Apple cares about the little guy amazon is not focused on that, theyre focused on getting the goods to the little guy. Apple is taking the right move tim told me i want more people in the stock these other companies should do that, too, they think theyre like warren buffett, they should just split do the homework. Okay. Belichick see you in just a little bit. All right you do the homework better than anybody else. Coming up when we return, closely followed analyst mark ma haney does his own homework on the big tech stocks. We will talk to him after the break. For any amount you choose instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. Stocks by the slice from fidelity. Right now, switch to tmobile and get four lines of unlimited for just 25 bucks a line. With access to americas largest 5g included. Thats right. Unlimited and nationwide 5g for the whole family for just 25 bucks a line. Only at tmobile. Weve been talking about those four big Tech Companies reporting Quarterly Earnings last night mark mahaney from rbc joins us to discuss them. If we look at asnapshot of the share prices clearly theres some difference in these numbers. Was there a stark difference between the advertising performance of facebook and google i think there was i think facebook showed that its ad model currently is more resilient than googles. There are two interesting numbers that came out of the facebook print, one is that they disclosed this he now from 9 million advertisers, their last disclosure wag 8 million the second was this they disclosed their top 100 advertisers accounted for 16 of their total revenue, last time they disclosed it was 20 . So they are diversifying their advertiser base and dramatically increasing this. Both are auctionbased models, they dont set the ad models, its the advertisers and they are bidding against each other more advertisers means more bids, higher prices better for the model. At the margin facebook looks more resilient. Weigh up for us the relative valuations of those two companies particularly in light of the fact that google didnt have Revenue Growth this year. Well, i think valuation is still more attractive even with the rise in the stock. Still more attractive for facebook we like both stocks. I think you can look at facebook and pay about 22 times earnings for something that i think is sustainable 20 to 30 grower. I think thats attractive. With amazon a couple multiple terms higher, 25, 26 times earnings in part because of that drag down from other bets, investments, and Autonomous Vehicles that depresses the earnings if you adjust for that its still more expensive than facebook but the multiples are pretty tight. Moving on to amazon, mark, clearly a fabulous quarter not trying to pick bulls, but the question could be to what extent have they brought forward multiple years worth of digitalization transition from the consumer and growth. Wilfred, thats the right question i dont think i think what weve done is weve had this 20, 25year ramp up in Online Retail penetration. We just accelerated this, we are not going to be coming back down, we are just going to work off of a higher plateau. Here are the numbers going into the covid crisis about 13 , 14 of retail sales were online, right now we are at 17 or 18 and i think we will start climbing from there going forward. Two interesting numbers that came out of amazon, 51 year over year Online Retail growth for them in their most mature market, the u. S. , thats almost double any numbers they printed in about the last ten years. Second is just how profitable this business can be because if you strip out those covidspecific expenses this is a doubledigit, ie, 10 operating margin business. Weve been waiting for this for 20 years as ive been tracking this stock they just showed you the power of the model. Very quickly, mark, throw microsoft in as well are we seeing much more competition now in the cloud as far as i can tell its a threehorse race, really theres two whatever, 500pound gorillas in there, aws and azure. Its very competitive between those two. I dont see anybody catching up to them. Mark mahaney, thanks for joining us great discussion. Thank you. All right. Lets take a final check on the markets on this friday by the way, its last day of july, too. You will see right now that the dow futures after the four dow components that reported this morning added up you see dow futures up by 67, s p futures up by 17 but the real story has to be the nasdaq up by 200 points thanks to all the strong reports from facebook, apple, amazon and alphabet last night. We continue to hear more about that when squawk on the street comes up in just a moment, wilf, i want to thank you for being us this week. We will tune into closing bell today to see you andrew, i will see you back here on monday. See you on monday have a great weekend. Its time for squawk on the street. Good friday morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer and david faber. Final day of july and futures are green as we got three out of four blowouts on mega cap tech last night the impasse continues in congress on that extension of benefits, earnings from cat x on merck. Gold hits 2005 this morning headed for its best month since 2012 jim,
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