Transcripts For CNBC Squawk Alley 20240713

And say the market is reaching extremes of being oversold theres been signs of internal panic and we were set up for at least some kind of snapback. A couple caveats there, we did have a couple tuesday rallies of 5 and 6 the past couple weeks that did not arrest the downtrend. One thing you can hang a little bit of weight on right now is the fact that over the past several days youve been able to look below the surface of the indexes and see more differentiation, separating winners from losers and a little more stock picking and less indiscriminate selling all sets us up for a good bounce on obviously expectations of policy traction that were getting from the fed and congress likely. All that seems to say its a bounce, a very strong one, its an overdue one will it carry on to anything i dont know that we can say for sure, but i like to say every bottom start with a bounce, not every bounce becomes a bottom. In the meantime just i think to put your point into one phrase, its turnaround tuesday today. Bob pisani, we want to bring you into this conversation as well how much of this, this move were seeing to the upside right now, is hinging on the fact that we are potentially finally close to some sort of coronavirus stimulus bill moving through congress, versus Something Like short selling, which art cashin has pointed out . Short covering, excuse me. Yeah. I dont think Short Covering is a pretty modest part of it so far because the amount of shorting going on has been fairly modest in the last week or so. A lot of that has already been dealt with i think the coronavirus issues and whats going on with the stimulus plan is the primary mover of the markets right now, what im a little concerned about is a lot of attempts to call bottoms and i dont think thats going to be very successful. Its remarkable, were entering earnings season and very few companies have withdrawn their guidance weve heard of a few, twitter just did recently, but not many. In the next two weeks as we get into earnings season you will see companies coming out saying were not providing any guidance at all its remarkable how few. Joseph over at johnson johnson, the cfo my favorite quote, he was asked by the journal how do you feel about guidance he will provide in april, one thing i know for certain were going to be 100 precisely wrong. Thats a great quote any attempts to figure out earnings estimates will be difficult. Thats one of the reasons the market is gyrating so much we need a little more time and information. Yeah. Certainly in the next couple weeks and some of those numbers and reports that we do get help to hopefully flush out some of the picture. Mike santoli, the fact that gold continues to rally, a big move this morning, the best day since be 2009, even as equities move higher and treasury yields tick up here, how to think about that well, everything was for sale a week or two ago, including gold and stock and treasuries when you had the liquidity issue. The fed announcements have been overwhelming in what theyre going to do to i guess just liquify the system, arguably at least down the road, make real yields a little less negative. Its really unclear what it means long term for gold, but i do think the reflex of openended quantitative easing coincides with that impulse to buy gold i think again, go back to kaum weeks ago where it was just this rush for lateral cash, lateral government money market funds and treasury bills, not even bond funds or other safe assets thats somewhat reversed i see those two things more or less kind of being in tandem were seeing a relaxation or an unwind of that sell everything for cash type mode the cover story of the feds buying up everything, i think contributes to that impulse to get exposure to gold one thing i think very important is the vix at 55 today, so its been coming steadily down in the last several days, despite a couple of days of volatility. If we can go into the 40s, most of the vix futures contracts going out two or three months have the vix below 50 and into the low 40s now, and theyve been dropping a lot in the last few days that will calm a lot of nerves down just looking at the vix curve, when you had june contract at 50, a few days ago, lower than that now, thats going to be its going to do to a lot to sort of calm peoples nerves down if we can get that down and keep it down for the next few days yeah, bob i was about to ask you about the vix and volume based on how much it is coming down from those 80 levels that we saw a few days ago, does that tell you something about at least without other extreme bad news about virus spread or lack of ability to come together on fiscal policy, does that tell you something about stabilization and to some degree i think you just answered that yeah. Well yes, it does. Talk about what the vix means when at 80 effectively vix at 80 means investors, who are out there in the markets think the s p could move on a 5 daily move for the next month thats an awfully big number those are off the chart numbers. Going down into the 40s would mean they would still be high, they would estimate the s p would be moving 2. 5 on a daily basis, thats still extraordinary but a lot lower. The vix is a real number its an expectation of market volatility in the next 30 days and 5 moves every day the market is expecting thats off the charts you can get it down into the 40s and youre talking about 3 , somewhere around there, 3. 5 , a better deal. Yes, its in a way the vix is a temperature of the market in a very shortterm way. Traders dont really know whats going to happen in the future. Theyre guessing the vix is their way of making a guess on what the market may be doing and its temperature, high means really, really tough, lower is definitely better. And pretty incredible were having a conversation you want to look back i was going to say go ahead. The vix had the similar spike peak months before the ultimate low in the market. When the selling intensity peaks but not when the index is bottoming all the time. Talking about the vix coming down into the 40s as a positive. It really speaks to a difference what a month makes we might not all be together at post nine at the New York Stock Exchange but great to kick off the hour with you two. We want to get to seema moody in the meantime, though, who joins us with a special guest. Marriott Ceo Arne Sorenson arne, a pleasure to have you on the show today. Thank you for joining us during what is an incredibly difficult time fort the u. S. Hotel industry i want to start this conversation with you addressing your employees in the past week you announced a number of staff reductions, furloughs of tens of thousands of employees, what steps are you taking to help these employees make ends meet and find other opportunity as unemployment is certainly set to rise here yeah. This has been obviously an extraordinary decline in our business the last couple months, i suppose, if you look at where it started in china, but the way its moved around the rest of the world and shown up here in the last few weeks breathtaking in its decline. You know, i sat around the table after 9 11 in 2001 of course i was at the company in 2008 and 2009 when we went through the great recession. Both times thinking this was the worst we had ever seen and what were seeing today is dramatically worse than what we saw in those two prior crises the last two most recent ones and seeing revenue down 75 plus, probably i suspect nearing a 90 decline in the united states, and obviously at those levels there isnt any business in the hotels. The team that weve got of folks around the world, including in the united states, have no role to play and theres no revenue coming into those hotels we have started by going out to communicate with them to be transparent with them, to work our tools and to work the policy tools in order to make sure that they can navigate through this time, which is no fault of theirs, as well as possibly can be done, and so we focus on transparency, we focus on health care, we focus on sort of a furlough approach as opposed to a termination approach, but doing one that allows our folks to be eligible for the Unemployment Insurance and other tools out there and weve been advocating with the policymakers on the hill and in the white house, make sure these tools are set up so they are immediately available at probably more substantial support than is typically the case, and lets adopt policies that allow us to take care of these people. Arne, do we still have you . Im still here. Yeah. Great. Actually, on that point, this time last week, you were at the white house alongside other hotel ceos where you, together, asked for about 150 billion of Financial Relief for the Hotel Industry if youre not able to get that from the white house what happens to the Hotel Workers there were two buckets we talked about and i raised with President Trump and many folks on the hill. One bucket is to make sure were taking care of the employees, and thats the most profound and there it is about all the tools that ive just mentioned, Unemployment Insurance, health care, trying to carry our managed associates on Health Care Even through this crisis, and perhaps some direct distributions to folks and the like the second is a set of provisions to make sure that the businesses that are within our network, within marriott, but also within the industry as a whole, and remember we dont own the hotels that are in our system, they are owned by several real estate investors, often by separate operating businesses, that run a Hilton Garden Inn or a hyatt place, they tend to be locally focused, they have mortgages, capital they need to make sure they can tap in to survive this crisis and reopen when you talk about the 150 billion, were really talking about tools that might be available to both of those communities in order to support them as we go through it. You talked about a 75 decline in revenue the number of Hotel Closures continues to rise with record low occupancy across the u. S at what point do liquidity concerns start to be something you pay a lot of attention to, the strength of your Balance Sheet here marriott is in one place, weve been a solid Investment Grade for long time. When revenue and, therefore, ebitda disappears, there will be pressure on our debt to ebitda ratios and well have to make sure that we work our way through that and were doing that, of course. With we will make sure we take care of our own Balance Sheet. More than that is making sure the network of hotels, which is you know, has hundreds of thousands of people engaged when you include the Franchise Network in fulltime employment, we want to make sure that those Small Businesses have got the resources they need in order to be able to open when demand comes back now, the demand coming back is a key piece in all of this when states around the country are telling people to stay home and not gather, thats obviously not good for our business in the short term weve got to work our way through that and make sure were taking care of the health needs that are the most fundamental needs, but when those restrictions start to open up again we want to make sure people are Strong Enough to reopen arne, this is morgan, to that point how much of the canceled business weve seen, the vacancy rates, whats been lost in the near term is going to be recouped later, versus just lost well, obviously the business that we had expected last night will never reoccur, right. Those rooms went down dark last night. Think broadly about three different kinds of business. One is Group Business that would have been on the books and has been canceled. Most of those Group Customers are rebooking later this year or rebooking into next year we certainly believe that Group Business, when its safe to come back, will come back then youve got individual business travelers and individual leisure travelers, vacationers, and that business we think will come back as people get confident about the ability to safely go about living their lives in the case of vacations or doing their work in the case of business travel, and we think that will come back fairly quickly that doesnt mean, for example, that 2021 will be what we would have expected 2021 to be before the coronavirus. But we would guess that 2021 is going to look more like 2019 than it will look like what the coronavirus leaves for 2020. Got it. In the meantime are you or your franchisees having conversations, will you, are you repurposing some of the properties to help with the coronavirus efforts right now . Oh, absolutely. That started in the beginning with a few of our hotels in wuhan, china, where we quickly housed Health Care Workers we have a few hotels already in california that are serving duties like that weve been in touch with states and hospitals and the red cross and a number of different organizations to make sure that we are doing what we can to be helpful in a way that works for our folks. There are complexities to different uses some of those uses really cannot coexist with a Traditional Hotel use and its got to be one or the other. Weve got to make sure that the folks working in these facilities have the right kind of expertise or the kind of roles that theyve signed up to do and were working through all of those processes across the country. Lets talk china. There is a recovery under way . On a call with investors last week you said in certain provinces youve seen occupancy rise to around 20 has it increased further it is we are still encouraged. When you look across asia pacific, china, maybeland chi mainland china, hong kong, singapore, and south korea are the five markets you have some signs the transmission of the virus has been the curve has been flattened, i suppose to use the phrase that increasingly is used across the world, and that were seeing Business Activity begin to step back up. Its those five markets thats a little bit different i would taiwan is probably in the 35 occupancy range. China is climbing out of the Single Digits towards the 20 range and were seeing a number of cities which are building factory capacity and starting to build a bit of Domestic Travel it is not about International Travel at this point in time well continue to watch that as it goes forward. There is there are some signs of encouragement there. Back here in the u. S. , how reliant is occupancy here in the u. S. On the airlines returning to service well, it depends dramatically on the market and the hotel. There are some mid western markets that are much more drive to markets, but when you get to new york and San Francisco and some of the longer haul resort destinations those are going to be more drive dependent. That more fly dependent, excuse me, which varies by time of year as well. Until the Airlines Come back, some of those markets will have a hard time getting back to the levels they were at before arne, now we were talking about bailout prospects or relief packages and what that can mean from the government side as we see the stimulus bill move through congress, hopefully today. Could we see that type of situation happen within the private sector specifically as well as you have stock prices come off, as you have real estate values tumble could we see more consolidation or deal making happening well, thats certainly theoretically possible i think on some level you could say based on the markets reaction to the crisis everything is put on sale, but it means nobody would want to be a seller in this market unless they are somehow theres a desperation element there or there is some view that their business will not come back. You know, i think for most of us, there is tremendous nearterm uncertainty and tremendous pain that has to be shared by our group of associates and by other participants in the economy who are getting walloped by this there is also tremendous optimism before long were going to get out of this and it may take us a little while to get back to the kind of normal we were used to before, but we know that when the fear is behind us, when weve made progress with the transmission of this virus, which we will, people will get back and say im going to live my life and go back to work and do the things i want to do, im going to take care of myself, of course, but im going to be engaged in the things that i want to be engaged in and we believe that that includes travel, and so well get back there. I think as a consequence, you wont see the kind of Bargain Basement deals, i suppose that might have been the case even two or three crises ago. If you go back to the savings and loan crisis in the early 90s, in part because that uncertainty was not married with the kind of recovery we knew came afterwards the deals done in the depths of that crisis were the most attractive deals ever done. Yes, there were some deals but not as striking. Get to 2008 and 2009, relatively few deals done at the bottom of the crisis because people had the confidence that we would come back. I think here, too, because there will be confidence that business will come back, there will not be the kind of desperate bottom of the market deals somebody might have dreamed of 30 years ago. The Hospitality Industry has gone through a number of crises, but looking at your stock its down about 50 this year why should wall street buy your stock, hold your stock when its still uncertain when demand will return and occupancy will come back to better levels . Of course im not a stock trader and im not going to pretend to tell the market the way they should go about doing this i know business will come back and the values will be much more like the values we had before than the values we had today again, between now and then, i cant tell you with any precision how the markets are going to navigate through that there will be smart players who get in and have the capacity to ride this thing right back up to where it was before and then beyond. Lastly, how are you working with the federal government to convert some of the close Marriott Properties into makeshift hospitals . This nation is facing a short annual of beds for infected patients. Yeah. And that, again, those are conversations were having more on the state level and with Health Care Community directly we do have some conversations under way with the federal government about the way we could be helpful with both our facilities, but helpful in making sure weve got hospitals that are getting the right kind of distribution of the patients who need care and so were working through all of those things there are some things which are easier to do than in some of our fliacilities to be close to the facilities where theyre working, maybe not bring as much risk home to their loved ones or family is a bit easier than converting a hotel to a Health Care Facility where patients will be taken care of where you have equipment needs and other needs more complicated. The staffing is also more difficult there. Were working as quickly as we can with the folks who have expertise in that area to do what we can to be helpful. All right arne sorenson, the ceo of marriott, thank you for joining us and seema moody, thank you as well shares of marriott are up 12 amid the Broader Market rally. Kelly, back over to you. Great to hear from arne right now. Well take a quick break. Microsoft Ceo Satya Nadella is going to join us in just a couple minutes time and we will have an interview with him to talk about the business, about the economy, and everything thats going on right now. T awhere. Were back right after this. We see homes staying cooler without the planet getting warmer. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Every time it takes care of something for us, we celebrate. How often does that. Got it. Servicenow the smarter way to workflow. Which of your devices are protected by daily security updates . Daily security updates. Daily . I dont know. The only thing. Im struggling with this. Some providers you have to manually download updates to each device. Comcast business securityedge updates every 10 minutes to help keep your connected devices protected against new ransomware, malware and phishing threats. Every 10 minutes feels pretty good. Get secure, reliable internet and voice for an amazing price. Call today. Comcast business. Beyond fast. Welcome back lets turn back to this mornings market rally which remains intact with the dow up 1400 points, 7. 5 again. Rbcs mark mahaney joins us now. We heard from david tepper this week hes buying some of the big cap tech names what do you think people should be nibbling on here . I think there are few defensive names in large cap internet looking for them, i think they are netflix, amazon, akimi, spotify, down cap even chewy every other company that we cover is going to see has already seen material earnings cuts and revenue cuts and i would expect more to come. Yeah. That said, as worse as it gets, you know, you wonder if its overdone and on that point maybe both uber and lyft are in that territory. How would you kind of find bottom for those companies and how do you start thinking about the rebound . Oh, i think theres some very interesting places, stocks that are i think are oversold. Now when they start basing out is when the estimates base out weve seen contractions in demad demand for uber and lyft greater than we thought and its a moving target within the space of three days last year, the company saw demand in seattle from down 40 to 50 , to down 60 to 70 in three days i dont know when things get less worse, but when they do i would think some of the companies snap back fundamentally quickly and their stock will as well i think uber is probably the single best example of that. You will see people whenever we get out of lockdown and shelter in place, people will start commuting again. That means ubers demand will surge and the amount of supply thats going to be out there in the market for really all of these Gig Economy Companies is going to be very large, unfortunately, but it means its better for their businesses. Fundamentals and stocks snap back quickly. Mark, we like to ask you about valuations and it seems to me like that conversation and that question has taken on a different light Going Forward. If youre not talking about just the next quarter, even if youre not just talking about 2020, what do you think should be the mindset of the investor investing in internet stocks for the three to fiveyear time frame . What can they be sure of what should they be betting on and believe fundamentally . I think you start with the most risk averse mentally, where is there the least Liquidity Risk this is very different when the sector was, you know, ten years ago during the great financial crisis the Balance Sheets at names like google and facebook are about as bulletproof as you can find anywhere in the market i think amazon is actually pretty close i think you can start with those names. Also the valuations intrinsically, estimates probably have to keep dropping but the valuations here are far from par far from stretched on names like google and facebookp those should be good core longs i want to switch and have you think about were going through as massive disruption in Consumer Behavior. Which companies will benefit from those changes in Consumer Behavior we see an Inflection Point in demand for food delivery online, Meal Delivery online, Consumer Staples purchases online and Grocery Shopping online. I think amazon is fundamentally going to benefit from those trends so you have a company with a rock solid Balance Sheet thats probably going to benefit in terms of the Consumer Behavior shift because of this environment. Amazon should be a clear longterm winner yeah. Then, of course, amazon has whole foods as well, which least from my own personal experience has been busy in recent weeks too. Im curious about the cuts in advertising spending right now we have twitter saying that ad sales have been hit by coronavirus and withdrawing its First Quarter revenue outlook and forecast you make the point in your note that some of the largest internet ad spenders are, in fact, other Internet Companies break this down for me yeah. So we i think had a very clear i dont know if its a clearing of the deck data point last night or not, we may still get worse, but twitter told us last night their ad revenue in the month of march was down something on the order of 15, 20, maybe 25 , almost with certainty we should all believe its going to get worse in april youre talking about a company that generates about 3 billion in internet advertising globally this is a large data point saying you should expect or im interpreting them as saying you should expect their ad revenue globally to be down 30 , maybe more in the june quarter thats much more severe than we saw any of the internet advertising names suffer during the great financial crisis just says something about how severe the contraction is. This is for a company thats, by the way, seeing a surge in usage and engagement and more people are turning to social media that twitter reported an excel flags users. Its not a user problem or advertising problem, advertisers have stopped spending online in every chanel thats how severe the v is going to be. Mark mahaney from rbc, thank you for joining us speaking of amazon, that stock up 4 year to date pretty incredible juxtaposition with the selling pressure weve seen across the board. Yes coming up next, weve got microsofts Ceo Satya Nadella who is going to join us. Were going to talk not really so much about these markets. You can see what theyve been doing. About how hes been leading microsoft and what he sees from a business perspective the Technology Tools that microsoft has been deploying and what way he sees out oth, ats coming up in just a moment hey you, yeah you. I opened a sofi money account and it was the first time that i realized i could be earning interest back on my money. I just discovered sofi, and im an investor with a diversified portfolio. 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Welcome back time now to get an update on the virus. Our sue herera has that at headquarters. Indeed i do thank you very much. Good morning, everyone defense secretary mike esper is telling pentagon employees who are teleworking to plan to do so for, quote, weeks for sure, maybe months, end quote. This contrasts with President Trumps call to open up our country in weeks, not months indian Prime Minister Narendra Modi has ordered a threeweek lockdown for indias 1. 3 billion people to fight the coronavirus outbreak it follows yesterdays move to ground Domestic Airline flights. The restrictions are set to take effect at midnight modi told indians it will be, quote, a total ban on venturing out of your homes and failing to deal with the virus over the next 21 days will set that country back by 21 years as the death toll rises in spain, madrid officials have taken over an ice skating rink after the city morgue overflowed spain reported 514 new deaths and more than 6500 new cases since yesterday. And the Convention Center in madrid that recently hosted a u. N. Climate conference is now being turned into a temporary hospital to help fight the outbreak it is expected to house 5500 beds in britain, the Health Minister there says the new lockdown measures are rules, not advice, and those rules will be enforced today is the first day of restrictions that allow most britons to leave their house only to shop for basic necessities, exercise or seek medical care as always find more on the coronavirus coverage by heading to cnbc. Com. Morgan, back to you. Sue herera at hq, thank you for bringing us the latest s p up 7 right now and after this break, weve got a big guest joining the show microsoft Ceo Satya Nadella. Stay with us sensei a live bookkeeper is helping customize quickbooks for me. live bookkeeper okay, youre all set up. sensei thanks that was my business gi, this ones casual. vo get set up right with a live bookkeeper with intuit quickbooks. We see hat emerson,kthroughs when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Theres one thing you can be sure of. Theyre changing by the nanosecond. Thats why cognizant created a unique engineering approach to design and build new digital products. Learn how cognizant softvision designs experiences and engineers outcomes. Cool. Welcome back microsoft is based in king county, washington, one of the sites of the first major outbreaks of the coronavirus and microsoft has been offering technology, procurement of personal protective equipment and has seen quite a spike in its software and other resources that help with working from home joining us the ceo of microsoft, satya nadella. Satya, thanks for being with us. Its great to be here with you, jon well, i just want to start off, i know youve been out there talking to employees your executives have been talking about the aid that microsoft has been able to give, but from your perspective, what you can see so far, how bad is this first of all, jon, i would say, you know, i would want to express my sincere sympathieses with all those who have been directly impacted and also a big thank you to all the Health Care Workers and other Critical Services workers who are helping us get through this. I think at this point the most important thing for us as a company is to ensure the safety of our own employees thats i think the place where i start from we have done everything to Stay Grounded in the Public Health guidance, in every community, starting at the king county, but everywhere we operate and taking that and ensure that the safety of our employees is the paramount importance then, you know, this pandemic has no borders and its cure is not going to have any borders. We have to come together as a Global Community and we have to do our part. I sort of describe our role as the Digital First responders to all the First Responders if you take even whats happening with microsoft teams, its become Critical Infrastructure for people who are doing remote work. Weve seen increase in teams usage, 900 million minutes a day, so therefore scaling and im thankful to all the microsoft employees who are really building all the Critical Infrastructure and scaling it. Similarly were working with cdc in their prescreening bot because one of the other challenges we face right now is how do we take the load off of the Health Care System so this prescreening bot with cdc protocols is being used by providence and others and were coordinating with many other industry partners, walgreens, krogers, fedex, all to bring together a coordinated solution to help in this time of crisis the other thing thats also happening is education lots of students with Remote Learning and thats another place where microsoft is stepping up to help and how does one conduct Remote Learning and one of the things were doing even today is taking the lessons weve always had in minecraft education and making them part of the base game when kids are at home and parents are also getting involved in helping them stay with their education lesson plans, i think this could be a step forward were doing everything we can to helps us work through this crisis, but its going to take all of us. Tell me, satya, how are the Systems Holding up how is Azure Holding up . Are you able to add resources that you need to keep all of this going yeah. The scale for sure is unprecedented, right when you think about anything in software, when you have an order of magnitude change, thats a pretty big thing so one of the things that i, you know, if there is a Silver Lining to any of this, is this current architecture of public cloud and applications has that elasticity built into it the ability to be able to scale if this was a previous generation of Data Center Architectures i dont think or Software Architectures i dont think we would have been able to deal with this crisis as effectively as we have been able to i feel were definitely holding up were seeing peak demands. Even the other area we are having peak demand is even on our xbox side. If you look at the engagements, it surpassed what happened in december, which is the holiday season, so across the board there is definitely a change in the network characteristic and scale characteristic but the good news is that the public Cloud Infrastructure and the sass application architectures are scaling and holding and thats great to see. Yeah. Broadband and Broadband Services certainly have become essential for people to get information and other physical resources delivered. You have said that the next couple of weeks are going to be crucial in how we respond to this pandemic, particularly when it comes to government what is it that you hope to see . I think all of us now are really grounded in how do we flatten the curve because i think the key thing before there is either a therapeutic or a vaccine, the thing that all of us, you know, can do is to flatten the curve. That means reduce the burden on the Health Care System so for me, what we can do to ensure the safety of our employees is probably the biggest thing that we as a company should be doing in order to make sure that we can make sure that the burden on the Health Care System is not increasing and spiking that i think is the most important thing. Of course the government also has to think about all the people who are being impacted economically because one of the things about this pandemic is the people who are health wise most vulnerable get impacted first and people economically vulnerable are getting impacted as we speak. In our case at microsoft we make sure that hourly workers who, for example, are doing critical functions in our campus who are not needed on our campus because our campus is shut, still continue get paid and our retail employees. We are contributing to the Community Funds in the seattle area and elsewhere i think the government also, im sure, will step up to ensure that those who are impacted even economically are people who can get through this yeah. There is some talk about lifting restrictions on or even recommendations on restrictions for people coming back to work within the next couple weeks to restart the economy. Is it your thinking, maybe im reading too much into what youre saying here, Microsoft Might well make its own decisions and recommendations about when people should come back to work based on local factors, perhaps keep people working from home for a longer time if you believe that helps to flatten the curve we will absolutely be grounded on what is the Public Health guidance in every country, every community we work in i think that thats the fact base that i think will guide us and what has guided us to date and thats going to be the case even Going Forward i think my own impression is that ob serving what has happened in other regions is that this will happen in waves i dont think its going to be one day that everybody comes back i think were going to have to do it in waves and also to really ensure that the curve that has been flattened doesnt spike back again that i think is going to be the key challenge and this is going to remain with us until we have a real therapeutic or a vaccine. Yeah. Speaking of normalcy and what that might end up looking like, cocacolas Ceo James Quincey joined us last hour and said hes focused on retaining skilled employees so that hes able to bounce back and really rebound with the Global Economy when we expect that thats going to happen. Is that your mindset as well, as far as skilled workers and maintaining the size of your workforce, versus doing any cuts yeah. I mean microsoft, you know, we have a great Balance Sheet, were a very diverse business, we have a mix of annually and nonannually stronger than the last time we went into the financial crisis right now my focus is more about our responsibility as that First Responder to other First Responders i think that, you know, with all these changes, in fact there is going to be new demand that we will have that we will have to scale to meet and, of course, ultimately we ares also going to be dependent on the world doing well for us to do well we will weather the storm. Were a Healthy Company in terms of our financial strength. The diversity of the business, the segments, the geos, the product lines and Business Models i feel confident well come out of this quite frankly pretty strong our main focus is safety of our employees, our ability to serve our customers at their time of most need, and ultimately to help the world recover and get back on the path of growth microsofts president brad smith posted on linkedin i believe yesterday about using microsofts Global Supply chain to secure personal protective equipment that youre then going to distribute to medical facilities that need it. I believe elon musk has talked about being able to procure ventilator equipment from china and bring it to places that need it, specifically the l. A. Area tell me about a corporation such as yourself, you talk about the strength of your Balance Sheet and your global network, what you can do, even beyond technology, to help out your community at a time like this . Absolutely. I mean i was so thrilled to see that, you know this is about people at microsoft rising to the occasion this is our supply chain team that had the expertise, had the ability to work this supply issue and get it to the people who needed it most it is fantastic to see i think it speaks somewhat to the culture that we espouse at microsoft and then what is needed today across all the companies. So in some sense, its fantastic to see both the Public Sector and the private sector all of the people rising to the occasion to ensure that we can collectively work through this crisis i want to ask also what youre seeing in work from home equipment and perhaps the mindset about what is essential technology to keep things running . Everywhere i look, web cams are sold out a number of laptop models are sold out as well do you have kind of very recent up to the day intel on how pcs are selling and what kind of spike that has been, a sense of usage versus what weve seen understand normal times . Yeah. I mean theres clearly a spike in terms of the work from home kit, if you want to call it. Also, in fact, ill call it even the frontline kits, whether its in health care or other places where there is a faster refresh cycle of equipment what i see is intense usage, say one of the things that even in teams, its not just about Video Conferencing its about how you collaborate while youre communicating on a digital canvas even in the case of education, you know, people are things like one north classroom its not just being on video, you need to be able to do your work. Thats whats being driven which is the intensity of collaboration and the productivity that people have from being able to work from anywhere the one thing were really focused on is what it does require. For example, a manager who is managing an all remote team to have a new set of sensibilities of how to keep the team engaged and how to check in. We even published a culture guide to all of our managers and employees so we can adjust to this new way of working because we want to make sure that camarader camaraderie, the ability to come together and connect as human beings while we work is there. Thats something that every one has to watch and inclusiveness im proud to see the resources like captioning that need the technology is built in for remote work. Speaking of remote work, how have you been running microsoft. What have you been running it on you sent an email to employees a few days ago talking about working out of a home office with your two daughters. Sounds like close quarters but how have you been able to keep in touch with your executives . We live in teams. Thats become the most critical. We have always been an email culture. Teaming were growing internally for close projects now teams meetings and teams collaboration, with all the other activity that happens around it has become the place where i live sharing the office with my daughters has been actually quite fun. I take my daughters help in setting up the things around my computer because i used to always work on my bed which i work at a real desk at home, which i have shes helping me with all of the things that i should be doing on a desk at home its been fun. I want to ask about product launches maybe its too soon to say this but microsoft had a number of things planned for q4. Xbox, surface neo, upcoming products does it look like youll be able to launch those as of now. Is that a goal or something well have to check back on . Well have to check back on it the supply chains are all coming back in some sense right now thats not a real issue i think the more bigger issue is what happens in the united states, in europe and other developed markets around the demand side of this Going Forward. We feel good about where we are. We look at the demand of work from home kits the question now will be more getting the products done and then launched. Obviously, we mostly focused on quality as well as the situation in terms of the demand and more importantly, safety for the people finally, fiscal policy. We are awaiting some action from congress as far as helping out workers, helping out companies is there any message that you have for the u. S. Congress and our government about whats needed here to sustain this economy during this time i mean, i think the government is doing the right thing. They are focused on the employees who are most impacted and the industries that are most impacted and Small Businesses because those are the parts of the economy that are bearing the burden of this quarantine and stay at home anything we can do from a fis d fiscal stimulus to ensure they can come out healthy and while they are out of the work force are being able to be taken care of. Thats the most important thing that the government can do and any and all plans are on those that are something i would be very, very supportive of really appreciate your perspective joining us on cnbc to talk about all that your company is doing thank you. Thank you lets get down to the other washington, the d. C. One eamon is thering with the stimulus bill that every one is eyeing. Reporter a lot of happy talk in washington. No bill yet. A lot of sports metaphors going into the final couple of plays here theyre saying that they are close to a deal. We saw speaker of the house nancy pelosi on cnbc earlier today suggesting they might be able to do whats call eed unanimous consent. They might be able to pass the bill in the house as soon as today. We also saw Mitch Mcconnell on the floor earlier with a sports met fo metaphor of his own. Im not sure how many ways to say it madame president but the clock has run out. The buzzer is sounding the hour for bargaining as though this were business as usual has expired. Reporter just within the past couple of minutes we heard from Chuck Schumer he was on the floor saying last night they were on the fiveyard line today he says he thinks theyre on the twoyard line getting closer he says theres a couple of outstanding issues but he doesnt see any that cant be overcome in the next few hours as thats happening we see a press conference from andrew cuomo, the governor of new york very frustratedwith the federa governments response saying that fema offered him 400 respirators. He said he needs 30,000. He said the response has been not nearly enough. Well see how fast washington can pass this bill and then ramp up the other support that governors around the kcountry ar going to need. Ive been watching the markets. Both yesterday and today they are not trading quite as much on the headlines as i might have thought. I wonder if looking at a plan to getting back to normal is taking the urgency out of those deliberations. I dont know im just curious if you think theres any reason why people are just not quite as hyped up on every little detail right now. Reporter some of it is baked into the optimistic noise is bake into the cake what will happen is a big Massive Decision process about when do we get the country back to work again. That will be the next big debate thanks. Stocks at session highs now. Well take a quick commercial break. Scott wapner will pick it up stay with us we see harnessing natural gas unleashing the promise of clean energy. 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