Transcripts For CNBC Squawk On The Street 20240713

This of course, the saudis are flooding the world with oil right now. The russians, its not clear where the heck they are because theyre very secretive, but i know who is not there, the drivers. Theres very little demand david and i talk about this with you all the time, carl theres this overall sense, you know what, if we just get things moving, things will come back again. We need customers. We need customers to get their hair cut, to go to the dry cleaner, the restaurants, and we need customers on the road without them, i really dont care what president calls who, you need a tariff to keep the to keep the saudi oil from coming here, and you need the chinese to restockpile, and frankly, thats still not going to be enough to be able to make it so oil real demand goes higher good point yeah. Sorry, carl. 6 Million Barrels a day, jim, is what im hearing right now as we still try to adjust. Even know we know each others cadences so well 6 Million Barrels a day here and its not just not just cars, jim. Its jet fuel, too lets not forget that is also not being consumed anywhere near the way it had been 24 Million Barrels a day right now of oversupply in the Global Market you know, russia and saudi can do all they want, they can go to zero and it still sounds like well have an issue. This is what is amazing there is no spigot to oil. They used to tell me, look, the one thing that Oil Producers know to do is produce oil. We are still doing 13 million, 13 Million Barrels a day here. Nobody has throttled back. So think about that. Were almost out of supply this is why i continue to believe that those who buy s p futures off of oil futures are doomed to lose money and thats whats happening right now. Yeah, jim Credit Suisse has a great list out this morning with S P Companies with the most cash, which is largely fang, no surprise, and the least. And the least is exxon, kinder, noble, diamondback along with american carnival. Exxon and all that leverage is coming home to roost exxon borrowed money to pay that dividend. The only company i think has the ability and wherewithal to pay the dividend is mike worth and chevron, and thats because he didnt win the anadarko bidding. David, how was that in the end how did thad work at anadarko . We know how it worked stop it, just play with me. You were right. Of course, and recognizing the enormous risk that oxy toon on in paying that big price for anadarko the permian assets are still seen as being worth something. There is going to be a sale anytime soon from what i hear may be quite some time, but what youre talking about, jim, is a fundamental deterioration in this business, the likes of which we have not seen in a very maybe ever ever. And theyre going to run out of places to put the oil i mean, cushing is already running out. Im looking in terms of how much was left there look, theres still some reserve in cushing, from people who believe oil is going to go to the 5 to 10. Permian at 10 a lot of oil, it cant even be produced anymore because the prices youre talking about 35, 40 one of the reasons i mentioned oxy is it looks like they need about 34, 35 to do well. Yesterday was whitings day. By the way, one of the worst performers in the s p in the First Quarter was diamondback. Noble was really bad its extraordinary that devon, at one time such a responsible company, so overreached, apache, apache used to have these tremendous international assets. They doubled down for alpine high, thinking it was oil in the western part of the permian. It turns out to be natural gas the mexicans didnt want it. Bingo, they write it off thats how you get apa at bad. Jim, in terms of the broader market, how are you handling this bipolar nature where some mornings we come in here, were talking about vaccine trials, were talking about therapeutics, testing, diagnostics, and other days its obviously a jobless claims today is a number thats just hard to look at. We balance these things, dont we you stop, last night, someone said to me, i said dr. Fauci, he seemed incrementally more positive look, you can do what you want you can listen to cuomo and the ventilators. Im still trying to double check that so few people live without them you can follow every single hand signal of fauci is right behind trump where you cant see him, or you can focus on the companies themselves most companies are beginning to suspend their guidance because they have no idea how theyre doing. You have to say, who has a good Balance Sheetd because the good Balance Sheets are going to come out the other side oliver chen, one of my favorite analysts is starting to talk will gap make it, will nordstrom make it . Will macys make it . Why . What do they all have in common . Balance sheets we dont want to necessarily have at home if were someone at home trying to pay our bills. When you dont have Real Customers coming into stores because many are shuttered at this point, it does make life difficult as a retailer, guys. What i continue to also hear, again, for us to be focused on is another area of concern, is those retailers not paying rent to their landlords right and the impact thats having, certainly on the commercial mortgagebacked security market, which is the debt backing up any number of those landlords or securitized. Not to mention the impact on the reits themselves we talked about it many times, the idea that youre going to need forbearance all the way up because along the way, somebody gets hurt. There are so many paths that have been created as a result of this crisis that you have to keep going down to understand what the true implication is going to be. Whether it is Something Like real estate, whether it is Something Like obviously oil and gas and where that goes or even Something Like, guys, the media business, which you know i follow closely the fact that you have all these networks out there, for example, that arent programming any live sports because there is no live sports and whats happening there if the Cable Companies say, hey, we dont want to pay for your very expensive service, mr. Espn or mr. Sny or msg, and then they have to go to the teams to get recompense the path all leads off places were trying to understand its so hard to try to figure out the ramifications. I spent so much time saying, okay, lets say someone doesnt go to gap stores, does that mean gap stores then default or does that mean that one of these reits then makes a deal with gap and they stay in, but their numbers go down . What happened to Tanger Factory Outlet when you talk to pvh last night like i did and their stores close who ultimately owns the debt then you have bankers who come on the show and it seems like tlar kind of insulated but are they really . Is secretary mnuchin lining up a credit line with the fed all i can tell you is if you try to unwind these, its almost easier to unwind some of those incredibly difficult mortgages we had in 20072009 than it is to try to figure out who is on the hook for gap stores if they dont pay or cheesecake factory, david. Thats a restaurant, david, a very big menni, and you have a lot of calories. I want to fill you in on what these companies do cheesecake, they actually have dinners. But boy, they stopped paying check please no yeah, jim theres so much news in retail you talked to manny, which well hear in a moment amazon says its filled almost all of the 100,000 jobs it announced last month ross stores is cutting, furloughing. You have macys being kicked out of the s p, and then of course, you talked to pvh last night, manny tirico, who himself has tested positive. Take a listen. I think we have a tremendous amount of capability to weather the storm, but no retailer, no apparel retailer is built to be shut down. And thats what we basically are right now. We have our online business, its doing really well, but our stores in north america, europe, asia, and brazil are closed down because the governments made the right decision unbelievable. Jim, his staff is trying to manage inventory from home he himself is being isolated from his folks it is hitting everybody in different ways and how did he get discovered that he had it he went to mont afure hospital why . Because hes on the board. What was he doing . Bringing an order he had put together from pvh for gowns, for masks, because thats what were short of this is the kind of American Hero that were dealing with who doesnt even know how to be a hero, doesnt even know that, yes, he got sick, hes at home hes still working and whats he doing . Hes trying to bring the socalled ppe that we keep talking about to mont afure hospital, working so hard, trying to meet all the patients. Im not from the bronx they are a very nonpromoentional hero, but manny is a hero. Were going to see a lot of Business People who come out unlike 20072009 as being the people who really did a great job through this pandemic. And you know, guys, a lot of those people also, and this is, i dont know, jim, what your conversations are like with people in the business world, but they are already trying to look beyond the current crisis, to hopefully what is a day that is not that far away, where we are have contained the virus and potentially dont have to be as concerned about it as we are right now. But how behaviors are going to change how those Companies Need to change in order to meet the changing behaviors of consumers that are going to be with us for years to come. David, were very lucky we talk and think about the workplace a lot. Sorry, jim we have the very best person to ask about the change. And that is the ceo of mccormick, because you know what when these people are at home and everyone is working at home, they have to eat they have to snack they have to do something. Im not telling you to go for a cup of luckin coffee, but stay here and listen to this. Thats a good tease for david. Lawrence, it is so great to see you. Youre the man of the hour because were all eating at home all these businesses have everybody at home. Is Consumer Behavior changing, and will it ever be the same hey, jim. Good morning itsigate to be here with you. And listening to the comments you had about some of the other industries, it makes me glad to be in the one im in before i go to your question, i have to say right up front, i want to First Express our deepest simp aethds to all those affected by covid19 and thank those on the front line keeping people safe through this crisis. You know, our fundamentals are really solid and Consumers Want flavor. They want great taste. It doesnt matter if theyre cooped up at home. Theyre still going to want delicious foods that taste good, and were there to provide them with those flavor solutions. So lets try to figure out the mosaic you have. You have a very big athome business, but you also have a food service business, which is being hurt, obviously, because the institutions that you serve are not doing as well. Then you also have you have a business basically where people just, well, lets put it this way, youre manufacturing food and nobody can use it. Im talking about Something Like you have in europe but it looks to me that all of those industrial socalled businesses are less than 25 and the consumer business, which has historically done terrifically in a recession, could be the star for a long time tell us about march and tell us about the numbers youre seeing, which frankly, are incredible. Yeah, there are two cross currents at work here. On the consumer side of our business, which away from home, impacts about 80 of our total company business, that part is just on fire right now in march. Through the first part of march, the measured sales through stores are up over 75 which is just incredible in a business where singledigit gains are considered exciting. And some of the stuff thats taking off really reflects the fact that people are cooped up they want things to cook for their kids for lunch, things, ingredients that are used in activities you wouldnt believe the number of requests we have gotten for recipes for slime and window stickers our recipe mixes are up over 100 its a staggering thing. Its funny because it seems like that people have decided, when they stay at home, they not only have lunch, they snack all day, which also plays to you im thinking these are the new way that we handle our day, and mccormick is integral to it, which is why its so hard for you to keep your stuff on the shelves in the supermarkets. It even goes beyond the shelves, jim, because on our businesstobusiness side, we make most of the seasonings for the snack industry, so you know, that snacking behavior at home goes straight to our product we like to say whether you know it or not, you probably have eaten something flavored by mccormick today. Now, the last quarter was a complicated one. And i thought you explained it very well in your Conference Call people didnt realize how big a China Business you had developed and where it was really headquartered. And it did hurt your numbers, but it sounded like its coming back tell us about your wuhan experience you know, jim, when i last spoke with you, it was in january. And this whole situation was just starting in china and you know, we talked then about the priority being the health and safety of employees and quality and integrity of our product. We have three plants in china. One at wuhan at ground zero. We have lived all phases of this crisis you know, our China Business is coming back. All of our facilities are open people are back at work or operating normally the demand for the retail products, the brands that consumers here in the u. S. Would recognize, are on the shelf over there. Its through the roof. Food service is coming back slowly, though the quickservice restaurants and Food Service Restaurants, regular Food Service Restaurants are open largely, but customer traffic is building its going to take a while for that to rebuild. What happens . You have 118 facilities. You have more than 40 manufacturing factories, but you have that one in europe thats gigantic can you make Something Else there . Because i know that it just seems your company is so committed to communities you have always been a community person, obviously, talking baltimore here, but in europe, what can you do with that factory to keep people busy, get people jobs even in the interim . Well, you know, i think that what youre thinking of is, we have a large continent factory in the uk that supplies the Quick Service Restaurant Industry you know, right now, theres not a lot of demand from that part of the industry. We think theres a temporary phenomena. So even though the plant is not running production, those employees are still being paid you know, we have a long history as a company of having a long hch term perspective on our people as assets and not cost. We know this is a temporary situation that were going to come through and were taking care of those people and the rest of the world, we are pretty much able to repurpose just about anything thats targeted towards that food Service Sector, back toward retail products. Were even taking our Food Service Production and supplying club store packs and one thing i want to compliment you, because this acquisition, obviously, that people were second guessing of your hot sauce, of franks, i have to tell you, lawrence, i was on amazon for a fiveounce bottle of old bay hot sauce, 39. Sevenday wait and its a third party is there any way for you to be able to meet the demand for what i think is probably the most successful product in history . I promise you, were not the ones price gouging on that one and the old bay hot sauce has become a little bit of a collectors item well definitely ramp that up. But to your point about that acquisition, franks red hot is through the roof its up well over 100 in march, as consumers are stocking their pantries, and even frenchs mustard is up over 100 . So this is a great time to be in those businesses lawrence, so i bring it home. I have three bottles my wife doesnt know its like fine wine. This is like nappy, and she just puts it on everything, and its empty. Shes going through all three bottles. She had no idea she was pouring something that was worth so much, so please make more. Well, thanks, jim well definitely do that but look, i want to make sure that Everybody Knows that were really focused on the safety and health of our employees and making sure that the quality and integrity of our products stands the test of time we have two principles that we stand by at all times. One is the power of people the other is the taste you trust. Were not taking any shortcuts during this time we know food supply is critical. We have got some real heroes working in our plants and our Distribution Centers to keep america and the world in supply of our brands and our customers brands for whom were supplying ingredients. Were really committed to that lawrence, we want to thank you so much, ceo of mccormicks. You buy that stock i found frenchs mustard for 1. 79 at walmart i couldnt believe it. Thank you for being on the show. Back to you, carl. All right, jim. Great interview. Thanks very much were getting some q1 numbers out of ford. Well turn to phil lebeau. Good morning, phil good morning. Ford q1 sales in the u. S. Coming in better than expected. Still a decline like the rest of the industry hit hard by coronavirus shutdowns meaning people arent going to dealerships so the dealers arent buying new vehicles a decline of 12. 5 for the First Quarter. Again, that was better than the expected decline edmonds had it falling 14. 1 last night, we got the official sales rate for had First Quarter. It was coming in at its lowest pace, a little over 15 million since 200012, but the Monthly Sales rate for march, the one getting a lot of headlines today, the worst since april of 2010, coming in at 11. 35 million vehicles, as a sales pace for the month. And it will be bad in april as well guys, back to you. All right, phil, thank you very much. Jim, for march, month on month, youre looking of declines, i have seen two numbers. 27 and 35 this morning these numbers are staggering. Staggering because theres a big change we were talking about it with david just a second ago, the chain of mortgages and who owns what and whos going to go bad the companies, ford is a huge assembler. The companies that get hurt by fords numbers are incredible. And ford, talk about Companies Whose talk price i dont like in terms of where its headed it has that macys feel. This is ford i mean, the one that didnt need aid during the 20072009 downturn lets hope their sales rebound because those numbers are just not sustainable. Hey, david how is that luckin doing lets talk luckin because it is, obviously, in this incredible torrential downpour of news, it may be not that significant, but it doesnt help luckin coffee, you may recall when they went public at the new york stock exchange. By the way, jim, a lot of things you have been talking about for some time have been proved correct. One here is certainly the lack of transparency you have always pointed to like the fact i said their numbers were phony and you were furious at me yeah, i mean, its really hard for me. I cant pat you on the back from here anyway. Dont want you touching me. Or a warning about corona long before other people were taking it quite as seriously but on this one, lets just get to the news because the shares are stunning down some 80 plus after the company identified i did the currency conversion, about 310 million, what theyre talking about, in fabricated transactions that took place between the Second Quarter and the Fourth Quarter of 2019 they have set up an independent special committee to oversee the internal probe of these audit issues they have accepted the recommendation to suspend Certain Senior members of management as a result so far of what they have seen. And they say theyre going to take all appropriate actions and things of that nature. You might imagine this is going to take a blow to many of the Chinese Listed Companies that we have seen really in a procession that was never ending at the new york stock exchange, and luckin, a competitor to starbucks, jim, and perhaps their beneficiary here they were telling me theres no way that luckin could do those numbers. They were saying, thats not possible thats like every Single Person in china having five cups of coffee they were so wise to these guys. Oh, my what a bunch of hose bags. Yeah, and there were people who were short the stock also a number of significant hedge funds that we know well that were very much proponents of luckin, carl, which again, is going to just be shockingly lower this morning not for for good reason, given all their numbers are now in question. Perfect yeah. Meanwhile, starbucks is extending the closure of their u. S. Dining to may 3rd probably not a surprise given how the shelter in places have evolved over time. We want to get to wilfred frost who has newed on jamie dimon hey, yes, indeed. So good news jamie dimon, the chairman and ceo of jpmorgan, is back at work albeit, working remotely like a large portion of the companies as opposed to temporarily handing over the reins to his president s and coos. He had a message, saying my hope goes out to all of the individuals and families most affected by covid19 there were some thanks in there for his workers who he said are working hard to protect their fellow citizens while working to support the financial system, and he expressed his pride in them now, specifically, on the bank and what its doing at the moment, he said as one of the Worlds Largest Financial Institutions, our actions are critical to keep the Global Economy going. From processing 6 trillion in corporate payments each day, worldwide keeping more than 3,900 of our branches open to meet individuals financial needs. He said the countries and citizens of the Global Community will get through this unprecedented situation, but it does serve as a vivid reminder that we all live on one planned. He said Jpmorgan Chase will play its critical part in helping the world recover. Our extraordinary opportunity to prepare us for difficult times like this. We will rise to the challenge. He also said, quote, i want to thank you all for your sweet well wishes you sent my way after my emergency surgery he said i have been recuperating well, getting stronger every day. Im happy to be back at work this week. So thats from jamie dimon, chairman and ceo of jpmorgan thats, of course, good to hear hes back and healthy and im sure many shareholders of jpmorgan and frankly of other banks as well will be pleased to know hes back at his desk, albeit his desk at home, guys. I think its important, there was a time when he came in and bought a lot of stock. I know thats probably the last thing he does when he just gets back to work, but one thing we have really been missing since theres no buybacks allowed, bankers coming in and buying their stock, and i wonder whether they think it is a buy or more importantly whether they think someone is going to pressure them to get rid of their dividends and therefore they can go even lower a buy of stock here by jamie would be incredibly significant, the fact he called the bottom last time around any sense on whether he is focused on that as all not at the moment, jim. No i mean, interestingly, on the company dividends, both mike corback and james gorman to me confirmed they wont be canceling those, which is, i guess, a small step. I couldnt agree more. Personal purchases by executives would be a vuj vote of confidence, as you alluded to, charlie sharp has done that. For the other banks, theyre in a quiet period earnings begin april 14th. That will be a huge moment, not just because, of course, it may provide an opportunity for some of these guys to buy stock of course, even if theyre thinking about t they wont be able to tell us that until april 14 and but the earnings season will be really interesting, guys, because we may hear a sizable amount of write downs because of potential risks of nonperforming loans, but that number, you know, may be smaller than some people fear. Well have to wait now until we get to earnings for the granular numbers, whether its stock buybacks or earnings and write downs. But i feel like the tone from mike corback yesterday, from james gorman yesterday, and well listen to David Solomon, was relatively encouraging relative to the share price we have seen in the banks jim, you brought it up with citi, down 50 that paints a dire scenario. The tone is a bit better than that back to you guys all right wilf, good stuff great with gorman yesterday. We had corback yesterday as well and well talk to David Solomon in a few moments jim, about leverage ratios and dividends and what goldman in their bank note this morning is called the, quote, burned down book value metric, which as wilf suggests, maybe things arent quite as bad as the dire scenarios. We havent heard from a lot of the bankers and thats good because the fact theyre coming on and telling a story is very different from the old days in 20072009 where a lot of bankers were hiding. I know that jpmorgan always felt if you had to talk about it, obviously, you didnt have credit, but i think this is different. I think that interview was great yesterday. I hope we deliver on solomon, and im hoping Charlie Scharff comes on i know hes a new guy, but youre starting to hear that its different this time in the sense they do have capital and dont confuse them with europe we know a lot of people drew down their revolvers and that could be painful, but when you look at what happens to europe, they never recapitalized europe is being revealed as the sham that a lot of us thought they were, and i like the fact that even if there is any chance that we get an antiviral, if theres any chance that some of the things we hear anecdotally are working to get people out of the hospital, any chance we bend the curve, then this group, which has been an unbelievable bear market, would be attractive i dont think its attractive yet. You and i both know there are hidden things in every bank that neither of us have thought about that come back to haunt every time, but do you think its going to be different than 20072009 . I do, and we made that point a number of times. We do know the banks are varbetter capitalized. We know they have taken a great deal less risk over this period. But your point is a good one, jim, and its not lost on me, certainly, because i have made this point so many times you could have looked at all of the filings of Merrill Lynch and never had a clue never had a clue what they were really doing in terms of the risks they were taking on in their portfolio of ceos and other mortgage connected securitizations. So lets keep an eye on that as we listen to an opening bell here, of course, and get started with trading this morning. Lets keep an eye on something we have been talking about a lot, jim, which is the cmbx, the cmbs portfolios, the lending to real estate, the lending to energy it doesnt mean by any means that these banks are not going to face a difficult time but certainly one expects that they are in a far better position than they were in 2006 and 2007 heading into, of course, the financial crisis back then. The 2016 drop in oil that took february to 26 scared a lot of ceos in the oil patch and they really kind of fled from it im trying to figure out where the money is we have not talked at all about private equity which i think we may discover is more of an achilles heel than we realize. Private equity was down there in the permian spending like crazy, and david, you have insight to private equity i dont have, and i just want to know, are they doing as well as they keep telling me are they still kings or are they suicide kings . Listen, i think in any portfolio, there are huge problems that theyre focused on theres no doubt if youre a large private equity firm, youre going to have your share of difficulties. By the way, it doesnt eve mean its an energy it could mean anything consumerrelated at this point where youll have a tough time that said, jim, theyre also sitting on top of a lot of cash for many of the private equity firms. If theres a deal out there they were relying on Bank Financing for, thinking about, theyre not going to do it, but what theyre focused on, i think, is so Many Companies in distress and a real opportunity to move into their highyield bonds and get returns of which you would not have seen previously unless you were doing a full deal, or providing ecwouldy in some fashion, again, ala Warren Buffett like numbers where you can get an enormous return its a mixed picture private equity certainly is going to have holes in their por portfolio and real opportunity as well. Theres a human side that comes back you get these ceos and you think how are they doing you have, say, this morning, the government, ftc going after altria and jewel and you remember, wait a second, we have a prominent ceo who has got covid. Howard willard, manny yesterday. We have a lot of people, a lot of prominent ceos who are symptomatic. Its so different. It isnt just, geez, how is that company doing . Its how is that ceo doing this is a new world. I know. Boris johnson apparently still expressing mild symptoms netanyahu, im sure you saw, telling nbc news hes selfisolating jeff shell, our own ceo at nbcuniversal so your point is a good one. I did want to ask you with this relatively flat open, i know you dont like bond guys opining on stocks, but gumlack did say yesterday, im indifferent between 19k and 22k on the dow, because the gap, in his words, is really just the bit ask spread bond traders understand this from experience. How much latitude how much latitude are you on equities, at least on the dow i like where jeff is, theres no distance between me and jeff. We go back and forth, and hes quite a gentleman. I still expected to get the reit test i expect any market that is driven by the price of oil is going to be wrongheaded it should be driven by earnings. Right now, theres this big dichotomy between companies demonstrating good earnings power and Companies Saying were not going to talk about irnings anymore. Im waiting to see Companies Say we pulled guide ps the day we see you pull guidance and nobody cares is the day when we start thinking about after covid, this is what could happen the after covid quotient isnt with us because we expect it to sweep the snagz, but if you get any bending in the curve, well say, what was that guy you suspended . But maybe its better, and i think the most prominent one is disney i mean, disney i was just going to say that. Right its firing on no cylinders. Yeah, we have conflicting calls today. David, you probably saw this atlantic says the negative price action is overdone they go to overweight. Guggenheim cuts the target from 160 to 100 because they think the closures theres a good chance we could look at longer park closures than we think right now. Parks are very important. We know that, right . Almost 40 , i think. So not insignificant and again, back to the theme that we certainly talk about and will be talking about a lot more how will behavior change will people be willing to congregate in the same way they did previously will it take time for that to come back, even when the parks and Everything Else reopens, i think is a key question. Lets not forget, espn, an important contributor as well to that company, right now, i mean, theyre airing stone skipping. And theres a question, certainly, as to whether or not the Cable Operators are willing to pay or whether they see an opportunity to potentially return money to their subscribers in some fashion. So there are plenty of pressure points, studios closed right now, theyre not making new productions. At the same time, of course, everybody is homestreaming disney plus, an incredible start. And most likely great deal of momentum thats been created there. Guys, we were talking earlier with wilf about jamie dimon being back at work james gorman joining wilf yesterday from morgan stanley, and we had so many notables here as well. Very happy as well that this morning were now joined by David Solomon, of course, the ceo of Goldman Sachs who joins us from the companys headquarters where i would assume its a fairly lonely place. David, its great to have you this morning thank you for being with us. Good morning, guys. And thank you. Thank you for having me, and it is relatively quiet here at 200 west we have about 98 of our employees working from home, working remotely, but there are some people who do have to be in the building to move money and for processes, so i have been making my center of operations from here. There are other people in the building i feel like i should be here, and its certainly a very safe place to operate with so few people in the building yeah. We are following similar protocols at cnbc. David, so much to ask you about, but let me just start off, broadly speaking, in terms of how youre viewing risk right now at Goldman Sachs a company that has been known, of course, for managing risk better than perhaps any of your peers. What is right now a real focus for you at Goldman Sachs in terms of what represents the biggest risk is it perhaps the cnbs markets, real estate, private equity . I dont know, but im curious as to where your focus is when you have a change, when you have a change in the comek environment, especially one thats happening as swiftly as this change has happened, it creates a real change in the perception of the risks that we all hold across all asset classes, so one of the things that we have been trying to to with our clients across banking, market clients, Asset Management clients, is be in a position to talk to them about how they can manag manage, pare risks, think about risks on an ongoing basis. One thing that makes this difficult is the uncertainty that exists. Its very easy to think about the direction of things when its easier to plot a course and obviously here, the uncertainty is very high, so we have been advising clients, and we thought about this ourselves. You have to be very, very prudent and thoughtful about the risks youre taking. And try to weight and evaluate and understand how confidence will reoccur and how well ultimately get the economy going again. Yeah, i would assume one thing youre advising is i hear from so many other bankers is if you have an opportunity to raise cash, you probably should do it. Do you agree with that are you seeing a lot of your companies trying to increase liquidity, certainly those that are Investment Grade, hitting the Capital Markets . No question, if youre running a company, and my discussions with ceos running companies, one of the Risk Management perspectives at every company, every business, even Small Businesses, has to focus on is do i have enough liquidity to weather the economic environment were faced with so certainly, if you have an opportunity to increase your liquidity, to access the markets, to work with banks, to access liquidity, its very important that you reunderwrite your plan and have adequate liquidity to weather through this we will get to the other side of this, but you have to be in a position where you have adequate liquidity. Were spending a lot of time with clients helping them. As you referenced, david, the Investment Grade market opened up quite strong over the course of the last two weeks. I think you have heard this from a number of guests record issuance last week. Record issuance for the month, record issuance for the quarter. So highgrade companies have had access but one of the things now thats going to be important is to try to provide opportunities for other companies that are below Investment Grade, for smaller businesses to have access for capital, and thats something were very, very focused on. David, you mentioned, of course, getting to the other side of this goldman has always been fairly good at adapting to changing positions. I can recall in 2009 after the financial crisis, the company had i think what still stands as your record year of 13. 4 billion in profits what are you doing right now to position the company for what you believe will be certainly a changed environment once were past the coronavirus well, i think theres going to be a lot of discussion coming out of this crisis as there is coming out of any crisis as to what has to change, what adapts in society, how we change in society, so more people can participate, how things can be better what can we learn from this . There will be a lot of that. For us at the moment, were extremely focused in a different environment where people are working from home, how do we serve our clients . How do we make sure that we can show up for our clients and help them at this difficult time . And also, because this is such a humanitarian crisis, how can we as an organization be helping those in need . How can we find ways to support those that are vulnerable and underserved. At the moment, were focused on our people, were focused on our clients, and were focused on helping those that need. I think theres plenty to do on those three things and there will be plenty of time when we come out of this to focus on the way we and all other businesses will need to evolve. David, i know you have had people there, of course, giving the ability you have to analyze things analyzing the virus, trying to understand the progression, the spread what are your best guesses in terms of when we will get to the other side of this were obviously in the midst right now of unprecedented conditions this unemployment claims number we got an hour or so ago was truly just shocking in so many ways, and many are preparing for what they believe will be a very deep recession what are your views on that and on how quickly were going to come out of this so, im obviously not a medical experts, although i find myself talking to lots of medical experts, and i think its important, you know, to listen and to try to learn andy uncertain, so dwlii think its hard to predict. I do personally think we will move forward as we continue to build more confidence around our Health Care Resources, so i think its very, very important that the focus thats now on improving our Health Care Resources throughout the country, so we can help people in need right now, its super important. Testing is very, very important. There are a lot of advances in testing that are coming very, very quickly, but creating better access to testing, which creates better information and better data. These are the things, the underpinning of the Health Care Services were providing that will allow us to build confidence and then ultimately as that confidence is built and we have a better understanding of the trajectory of the virus, it will give us the opportunity to start to slowly open up parts of the economy to find ways to have people back participating safely so that we start to get things going again. You know, theres no question, david, that we were late to this we were slow to adapt. But i really see now lots of focus. I see focus from government. I see enormous focus from the private seconder, and i know with the resources we have, the ingenuity we have, the creativity, im very optimistic that well make progress its hard to predict, but im optimistic well make progress and start to plot a path forward in the coming weeks. David, its jim hi, jim how are you doing im good. How are you . Alist time i saw you was super bowl weekend, i think it was the last weekend well ever remember it seems like a long time ago, and im glad you can see me because i cant see you. I wanted to ask you, look, full disclosure, i worked at goldman and its a huge position in my travel trust you announced a stunningly big dividend hike last summer. Can you tell me whether thats now under reevaluation or can you reaffirm your commitment to the evaluation sure, jim when we announced our dividend hike last summer, you know this and youll recognize this, we were in a place where our dividend as a portion of our return of capital was out of sync with the rest of the industry was we were much lower and had always relied very, very heavily, almost entirely, on share repurchases, our form of capital return we thought there needed to be more of a balance and so we brought our dividend up so it was closer to but not quite where the rest of our peer group would be you know, i think the discussion about dividend right now is a discussion about capital return, and one of the things i know you saw because as an industry, the Banking Industry wants to be in a position to lend, to provide liquidity, to support our clients. The group of large banks made a collective decision to stop our capital return through buybacks route now, which is a significant portion of our capital return i know dividends are getting a lot of attention because over in europe theres been quite a bit of attention, and european banks are in a different place than u. S. Banks, and european banks also have dividend which is paid once a year is the vast majority of their capital return and a very, very significant part of their earnings here in the United States, its a much smaller part of capital return we have as an industry stopped a large portion of the capital return its my expectation well pay our dividend return. The goldman i know, the commitment to the employees was extraordinary. Can you take a pledge that you wont lay anything off in the next three months . I have been very clear to our people that during our crisis, peoples jobs are safe were incredibly focused, jim, on our employees and our community, were trying to find ways to add support that were giving we made an announcement earlier this week that were increasing the amount of emergency home leave to two weeks that people can take people have parents or family members, they need emergency home leave so we have increased that. I have been personally focused on the fact there are all sorts of people in our goldman community that might need support. We have people that are security guards that work for us that work in the cafeteria and food service, that work in cleaning these are people that are goldman employees but theyre part of the Goldman Family and community, and were working with the vendors and the unions to make sure that because of whats going on, their incomes have been affected, were making up the difference. So we care deeply about our employees, and were very, very focused on their safety, their security, and their wellbeing during this crisis david, its carl. Hi, carl. You rolled out a plan good to see you a plan to give aid to Small Business 300 million, act as a complement to the federal program. Theres a report out of reuters that some banks are nervous in participating in the program for fear of legal risk, financial risk what are you telling Small Businesses about the opportunity to get loans and how to navigate what is going to be an enormous amount of red tape sure, first, we have been very focused on Small Businesses at Goldman Sachs for quite some time because we think Small Businesses are such an important part of the overall economy. I think youre all aware of our 10,000 Small Business program, which has given us great insight into Small Businesses for a number of years, over the course of the last decade i participated earlier this week in what i call a Town Hall Session where we had 1500 of those Small Businesses on a Conference Call with myself and senators cardin and rubio, who as i think you know, lead the Small Business subcommittee that was very, very involved in the Small Business provisions that are in this bill this bill obviously provides 350 billion, which i know we all want to get quickly into Small Businesses that need help, that need support. And were committed to doing that a lot of Small Businesses will access that through their existing banks theyll go to their existing banks where they have checking or they have a relationship. We have always been focused on Community Development Financial Institutions which are kind of a layer below banks that in particular serve Small Businesses that might not have the same access to the Banking System and more vulnerable communities, we have supported these cdfis for a long, long time as a part of our effort to participate in this and get capital to these smaller businesses quickly, especially in these more vulnerable areas where they might not be as connected to the Banking System, we pledged in that pledge 25 million that will go to supporting the infrastructure around cdfis, to give cdfis the opportunity to ramp up quickly and get more money deployed, and in addition, we pledged 250 million of our Balance Sheet that can be deployed through these cdfis to Small Business. From our perspective, were excited to play our role in helping get our capital and our Balance Sheet deployed out to these Small Businesses that are in such need right now and so thats a focus, and we have been working hard at that david, you also have insight into the consumer now that i think you might not have had as an institution not that long ago, given your efforts in retail, marcus is a name we know at this point as part of that. What are you seeing on that front in terms of balances, in terms of need on the credit side and what are your expectations there for that business given this economic turmoil . Sure. We obviously are focused on our marcus platform and our consumer business i would start by saying, and i know you all recognize this, its still a relatively Small Business when you think about the big consumer businesses that are out there. But i think for one, on the deposit side, we offer a very, very attractive offering right now, an overnight government guaranteed deposit on marcus a cd is 1. 8 5. What were seeing because people have cash, weve seen during the course of the last few weeks, people coming to marcus at an increased pace weve seen our deposit flows have increased in marcus because we think we have a compelling offering on the lending side and our credit card business, were certainly seeing change in behavior very quickly. Through the credit card we have insight. As you would expect, spending particularly around travel and leisure and restaurants and being out in entertainment has plummeted but youve seen some pick up in spending on staples, food services, those kinds of things obviously given the pressure thats on everyday individuals, because of this crisis, there will be pressure on those businesses and one of the things were focussed on is helping consumers. We have a program where people can opt in to defer their Interest Payments on their marcus loans or credit card loans and its simple. You just text to marcus or apple card and you can defer your interest at this point in time your interest in payments. So were very small in that space, but were trying to do our part, and were watching it quickly. Its very early to see big patterns with our small dayta set. You mention add the top of the interview,98 of your employees are not working from your head quartersor are working remotely or from home. Once we get through this, is that going to become more the norm are you expecting significant changes in work behavior and how would you approach it at Goldman Sachs . The first thing i have to say is im so proud of our people at Goldman Sachs. If you had told me even a couple months ago that we would have 98 of our employees working remotely and wed be able to serve our clients, take care of our people, participate in the economic system, play our role as smoothly as its going, and i wont say its perfect theres bumps in the road, but their commitment, their flexibility, its really been awesome, and im so proud of our team and what theyre doing. Now, obviously when you go through Something Like this, you know, it forces you to ask questions and think about things differently. Weve certainly had certain parts of our business where people travel and they work remotely regularly but i think whats interesting is it creates a new lens to think about things that can continue to make this a very attractive place for people to work it can change the way we have our real estate footprint over time i think those are longerterm things im not at this point a big believer that the shakeup or the change once we get to the other side will be swift and dramatic. But it will be gradual, and it will, i assume, increase the amount of Video Conferencing it will make us more comfortable with tools like that it will make us more comfortable in providing more flexibility to employees which, by the way, makes this a more attractive place to work. Were thinking act those things. I think those are more down the road things to think about right now, again, focussed on our people their safety their health how do we help in communities . How do we help people in need . How do we serve our clients . There will be lots of time when we get through this to the other side to think about those other things yeah. And we hope theres going to be time between for you to join us again, david as we continue to obviously watch an unfolding well, very difficult time here in the United States and around the world. But thank you for taking some time david, the ceo of Goldman Sachs joining us thank you for having me stay safe and healthy. I appreciate you having me today. Jim, you heard some positive things in terms of the dividend there from from him when you asked that question. He finally he explained it to us. Britain just and the european banks give away too much in the dividend, and whats so important about what he said is there are a lot of people looking at wells fargos dividend and thinking that cant last because something is going to happen. And goldman doesnt have the big dividend that even though he jacked up 47 last year, but these theres going to be any saving grace to owning these stocks, maybe they can maintain the dividend i thought james gorman yesterday was so good. And michael corpat was good with us maybe i know, youre supposed to say its different this time. Its been costly, one of the most stupid phrases weve had. I think this is compelling people hate the banks but maybe when they report, well see the nonperformers not spike or maybe theres more reserve i dont know you listened to david. Hes pretty confident. And luckily for us the way earnings season is stacked, that will be our first peak as to what the quarter looked like guys, as we were talking to him, mnuchin did hold a call with bank ceos yesterday to talk about the economy and the participation in the sba loan program which we just asked david about. Jim, that will be key in maintaining theres a big fear that when you get everybody is going to apply tomorrow its so generous ive got to tell you eight weeks. If you stay open, you get check back for the employees but also for a lot of your overhead this is a program that if its executed will be nothing is a savior because you need to have customers but you will be able to in very short order according to secretary mnuchin, get this money back and the banks have to be ready for it. If theres anything thats going to tie this over, its that particular aspect. 85 of america really works for small and medium sized business. I hope it works. Its got to be smooth. The banks have to be ready i know someone was critical of me on twitter that i went to the bank and the bank says theyre ready for me okay yes. I have a decent account, but ive got to tell you, i think theyre going to be ready. They got the call, be ready for everybody. This is the program that is going to tie us over while w wait for something to work antiviral whether we get something thats a vaccine. Everyone is negative Governor Cuomo said only 20 of people live off a ventilator im not getting that we have to start thinking about what its going to look like on the other side and its not too early to do that and i feel heartened that the government is doing some things that make me believe that there will be businesses that do open, and exist, carl, that not everything is going to be boarded up like im starting to see in brooklyn where i see places boarded up like its going to be a hurricane. Thats got to change yeah. Absolutely guys, im thinking of the two stories that we did not get to one, we didnt mention boeings memo to employees about the voluntary buyouts. Well give more details about who is eligible in a few weeks, but thats 160,000 workers right there. And david, zoom, announcing that 200 million daily actives up from 10 million in december. Its just a reflection of exactly what were doing with each other right now it is, and this change thats taken place. A tenfold increase in their user base, and there are some security flaws theyre trying to deal with in terms of people joining some of the conversations that are not wanted ive been hearing a bit about that they say theyre working on that that does speak to the ability, really, of the economy to keep functioning in some manner with everybody at home. It goes back to the call the president had a couple days ago with all the ceos of the major broad band and cable providers and 5g providers in the country as well. Because things are working in that way its pretty remarkable, but it certainly points to the fact that you can expect theres only going to be increases in usage as this becomes more the norm than not as we continue to at least try to focus on some things that will stay with us after this crisis passes, and i hope youre right, jim, that we get the antivirals soon and i hope youre right that we get the tests out there we need and the antibody tests and so many of the things we need there seems to be some hiccups in the delivery right now from the government at least based on some people i know are trying to develop the antivirals and running into territory problems between fema and hhs, and who has actual jurisdiction over the Emergency Response and antivirals. Lets hope it all gets streamlined and gets moving as fast as possiblen. So many tests i have to tell you, you see zoom is down today off that thats good news. Ive got tonight, if this were a mad dash or stop trading, i have ring central tonight theyre going to announce a get or the to zoom they have the ability to do it theyre nationwide they have the infrastructure theyre gunning for zoom you know who else is gunning for zoom chuck robins with webex. Talking about security i happen to love zoom. I had a zoom Cocktail Party last week not bad. You know, david, you like it you didnt have to go out. But look out for ring central when they come on tonight. They really they want to antizoom, zoom. And who is zooming who i dont know it could be ring central spacex does have privacy concerns about zoom. Those are things to whrestle wit in the days to come. Looks like a great show tonight. Carl, i have a daughter thats an introvert like david shes telling me its an introverts paradise introvert you said youdidnt like people you on air said you didnt like people i know. You keep reminding me. Youre on tv. It was a little sarcastic there was some truth to it you know that. Although, here i am sitting alone at my kitchen table. Youre in heaven. That speaks for itself. To our viewers, good thursday morning im Carl Quintanilla with david faber and jim cramer and sara eisen. Its been a busy day were coming off 6 route the last couple days on the s p and adding more to the downside this morning. Jobless claims 6. 64 million filed for claims this week thats a new record. And weve got other news regarding boicregar regarding boeing and oil its hanging onto hope that the russians and saudis are mend their differences with the u. S lets get to Rick Santelli yes look at the dow. Taking this data in stride the data is not as bad as it anticipated. For february, numbers unchanged. No revision to the january number if you look at extransportation, its down. 9 durable good orders headline up 1. 2 if you look at the extransportation component, just like fact orders it drops down. 6. And capital good orders nondefense exaircraft proxy for Capital Spending down. 9 just shy of down 1 . Thats the final february. The. 8 is down. 9. Shipments is swapped out for down. 8. We saw the dow improve a bit it is now much less negative than it was. We saw Interest Rates are close to unchanged maturities a basis point or two higher this data, of course, being february final, isnt going to reflect what we know will be coming and impeding some of the numbers. At least at this point in time, we want to continue to monitor all the data to try to figure out exactly where we are and where we may go once we get on the backside of covid19 sara, back to you. Rick, thank you the data, whats telling us the story in the American Economy in realtime, the jobless claims number 6. 65 million americans filing for unemployment claims last week jim cramer, are you surprised to see the market is taking it not too poorly the fact that the dow is attempting to go higher. Were not seeing the sharp selloffs that weve seen in the last few weeks on some of the bad news i think to some degree, we have to go beneath the numbers nine minutes ago, there was a piece. Pennsylvania is on track to surpass one million unemployment claims maybe its not spread out. Maybe its concentrated in some states the reason i mention this is because walmart is coming out and talking about theyre hiring like mad amazon hiring like mad everyone knows the headlines, but there are jobs and then in some states there are not. Pennsylvania is not even a big state anymore. And its a gigantic part of the claims i think part of is the west and how it was so natural gas oriented maybe theres a mosaic issue i almost touched my face a mosaic issue about where it is and where it isnt thats why the Oil Discussion is so important dr. Fauci was on the today show, ive been doing Infectious Diseases for almost 50 years and i can tell you i dont fully understand what exactly the mechanism is that allows some patients to express mild to no symptoms and others to go into basically respiratory arrest, and weve got to figure out that mystery yesterday there was a great article in the times that talked about how its the intensity with which you are exposed to it like the doctor, the doctor was exposed to it over and over again. Its almost like radiation, xraies. If you are really in an intense contact like even an airplane, youll get it badly. But if its a mild touch to it, then its not as bad now, this is just the theory there are so many theories and who is going to go against dr. Anthony fauci . Hes brilliant ive never seen people more clueless about something thats ruining the world than this. Its like theres a meteor headed to the world and we cant figure out why i wish we had a clearinghouse of people who were just saying this is true. This is a lie. This is false. Because boy, theres too much false and negative news about whats really going on sara but for every negative news, jim, and you mention the virus load story on the New York Times about the Health Care Workers being at risk because of the heaviness of the fact theyre getting the virus. For everything that there is, there is a Silver Lining for instance, theres a company in ohio thats now disinfecting the masks approved by the fda. Well have them on later on closing bell for every problem in terms of Getting Health Care supplies like ventilators and masks, theres an apple delivering 2 Million Masks to new york. Theres antivirals in the work. Theres also a small study out of china that had a control group this time with some promising results. So we just to your point last time, have to streamline this, but for every problem, there is an American Company working on it we just have to get it through we just have to get it scaled. I had a doctor in jersey who had a control versus not saying the hydroxy works i had another one who said it worked another one who said it didnt do anything for me perhaps you have to start it early. Again, we dont have enough data on anything. Its amazing the chinese have to have some data they can share with us, but what they shared seems lets just say dissembling to some degree theres i mean, two antibodies some people are using. An article just now about somebody is using an oral mist but sara, have you ever noticed theres no one place that says this failed and this succeeded it makes it feel like the wild west and we dont know anything . Yes but it also makes me feel like there are so many ingenius American Companies working on it and taking their resources and deploying it toward the common goal its patriotic something has to work. Theres so much being thrown at this, and that were jesus waus waiting for the news and waiting for the federal government to announce the data is there to back it up so we can figure out a path forward though it is impacting so many businesses, so Many Companies, so many ceos ow. Lets get to seema modi to joins us with a special guest caught in the cross hairs here. Booking holdings ceo i would like to welcome the ceo of booking holdings. We appreciate you making time today, especially given the circumstances. Just yesterday you disclosed to investors and your employees that you have tested positive for coronavirus. How are you feeling right now . Well, thank you for having me on i feel fine. I feel great i havent had a symptom in many days i got tested last thursday i didnt find the results until two nights ago inbetween, tested and getting the results, all of the symptoms resol resolved i am fine. Glad to hear youre doing well you have a unique lens into the world of travel, bookings on hotels, flights, shortterm rentals. As you look at longerterm bookings what does it tell you about consumers and how confident they feel about taking a Summer Vacation right now . I think people are scared its natural right now people are much more concerned in terms of their immediate needs. You have people worried about am i going to have a job, am i going to get sick . Is somebody in my family going to get sick . Theyre thinking about that more than am i going to go away in july or not . Thats the basic thing and i feel for everybody having been through this myself, i know this is nothing to laugh about ive been so fortunate to come out of it. I know there are a lot of other people that are not coming out quite as easily. I am sympathetic, and i get it theyre not thinking about travel right now yeah. And i imagine your personal experience battling coronavirus, although as you say, you only experienced mild symptoms, how has that changed the way you think about your 27,000 employees, retention, especially as many of your peers have started to furlough employees . Yeah. Look, the first thing is always safety announcing i was positive. I got notes from employees saying thank you so much i had it i was afraid to tell anybody i was concerned. And everybody should know this is not anything but a disease. Anybody can get it and if you have the issue of the virus, you need to get help. Make sure to reach out and not feel ashamed or afraid to ask. Thats the first thing of course, after people are done worrying about their health, they worry about their jobs. Look, this industry is taking it harder than any other industry people are losing their jobs left and right, and thats why we need the government to step up and help support the travel industry we probably took it first and were probably the last ones who are going to get out because people are going to be concerned about traveling. I know theres going to be travel again we all know that its just how fast and inbetween the time we are now having this terrible problem and the future when people are going to start traveling again, we need some support to make sure we can get over this bad period glenn, im glad youre feeling well its true we need some stories like yours everyone reads the other ones. Let me ask you, open table 54,000 restaurants worldwide how many are open and not for takeout . Very few. I look at the numbers, and yes there are some places that are still open, and we see an occasional reservation here and there. I look at that and wonder sometimes, did those people, are they o bbeying the local jurisdictions in people will go back to restaurants too. Thats where support is needed also because we know that this is a temporary period and we need help and support for those small Business People, the small restaurants that they dont have a lot of cash flow. They dont have a lot of savings in the bank. We need to help support them so when people are ready to go out and dine again, there are restaurants to go to we were talking to the head of Spirit Airlines yesterday his point was vacation travel eventually will return because nobody is going to take a vacation on zoom, as you put it. Hes worried about Corporate Travel and when you have goldman with 98 of workers working from home, how much do you think about whether or not companies decide they need their workers to fly thats an interesting question we also went from what was very, very minimal Video Technology in our industry and people like to travel and meet with each other. In our Company Almost 27,000 employees, almost everybody is now working virtually. We have 10,000 Customer Service people working in centers, working from home. Its just an amazing thing to be able to accomplish that. The question is should we be spending so much money on flying around traveling . Maybe we shouldnt spend so much doing that this seems to work there is a potential for significant changes in the way people do Corporate Travel but in terms of leisure, correct, people are going to want to be there its nice to see pictures. Its better to be there. What do you make of the new cares act from congress and how much relief will it provide to you potentially and your industry like the hotels, obviously, like the airlines is more needed well, i think its a great start. Lets start right away, great thing. Government getting up, getting that money to work for our very hard pressed airline people. The Hotel Industry really great so thankful for the president , secretary of treasury, senator schumer, speaker pelosi. Just fantastic getting that up and running. Its great were going to need more and ill put it bluntly, we are going to need more and im glad to hear theyre already working on another package because when you have zero revenue, which is what a lot of these airlines are getting from it, zero revenue is not the way to run a business. They are going to need support for some time so that when people can travel again, theres actually airlines to go travel with for ourselves, were looking at the details. Were not sure whether we need it or not. We have to abide by the regulation, how its going to work before we take or not take money. Its not just the u. S. Were global we operate around the world in over 200 offices governments around the world are putting money to work to help support Different Industries that are badly affected. Europe is doing it india is doing it. All the governments are doing it thats really great. But i want to make it very clear that this is just the early stage. Theres still going to be a lot of issues economically for some time, and well need that support even more so in the future i think 136,000 people flew yesterday in the u. S. , versus 2. 1 million a year ago the same way. Hard to predict, but when do you think somebody is going to be willing to take the middle seat in a crowded airplane again . I can start right away. Nobody wanted that willingly take that seat lets start right there. Nobody liked that ever look, its going to be a pucks of people feeling safe and obviously i listened to you guys talk about great things coming down the pipe and hopefully one of the vaccines is going to work. Maybe 2021 we have vaccines. Maybe 2022 the whole world is thinking about hey, this virus is just like Everything Else, nobody has to worry about it we hope thats the case. Its going to take time. Its not going to be happening this year. Its hopefully a 2021 where people hopefully are feeling its safe to get on a plane and travel and people start doing it again. And its going to happen slowly and in different places its going to happen at different rates. And the bigger issue is going to be what is going to be the friction far traveling . As you see, some governments are being restrictive about who theyre letting into their country, and theyre letting people in only if theyre willing to giver up certain elements of privacy so you can be trapped if you come down with the virus. They want to find you and who youve been close to these are things were not used to, and people need to make decisions am i willing to give up my privacy to tecertain placs in airports youll see fever checking everywhere. With sars, you went through anything, there were fever checks everywhere. These things will help us feel safer. They will make us safer and then people will feel better about getting on a plane what are you seeing happen in asia in we spoke with mar yachts ceo last week who said occupancy is starting to climb in china and then data that shows that hotels are back up to 50 which is similar to precovid volumes. Asia so coming back, but there are second waves in areas, for example, in hong kong where they relaxed some of the restrictions, starting seeing more virus activity coming u and immediately clamped back down again. So its going to be waves of up and down i do believe, though, the asian governments have been better than us in terms of taking an approach that immediately when they saw it coming took steps to prevent an outbreak like were seeing here. It was well done by them, but they had the experience of sars in 2002 and 2003 and they knew having said that experience, they were better prepared to really take action right away. And thats something unfortunately we did not do. Now, are some things going to just change . I throuought the cruise line business was good, but now boats, no one wants them to dock and the stuff on the surface, lasts so long. I always love using your place as not just airbnb but yours ive used yours. I love staying at other peoples places i dont want to stay at anybody elses places. I dont know how clean they are. Is some behavior going to change because were worried about the surface . Weve been thinking about that ourselves i think its going to be individual people who make different choices. Some people are going to say i want to stay in a hotel because i know theyre cleaning it with industrial strength cleaners and doing it right i feel safer in a hotel. Other people are going to say i dont like the hotel there are a lot of people in the lobby. There are a lot of people in the elevator and they touch all the buttons. I want to stay in somebodys home that i know wont be as many people and i can talk to the person different people are going to have dint ways to think about this and the good thing about our business, we offer both as we always have, and we let People Choose who what do they want . If they want a home, we have that if they want a hotel, we have a hotel for them glenn, you have a lot of cash on your Balance Sheet. Im wondering that in this type of environment, will you look for opportunities here to acquire smaller travel companies as many say that theyre not going to be able to keep the doors open its a strategy youve used in the past yeah. Well, were always looking at ways to improve our business ill be honest, right now firs priority, number one, taking care of our customers. We have 400,000 contacts a day going through our Customer Service for booking. Com let alone priceline and other companies. Thats the most important thing. Deal with our customers. Two, make sure my employees are doing all the protocols that are being followed make sure everybody is is they have a problem, we want to help them immediately. Those are the two things most important. Partners next, what to do for them theyre hurting badly. Now, after that, yes, important in a crisis, dont just focus on todays problem, but be thinking further ahead, whats the strategy Going Forward for the next year, two years and certainly were going to be looking at everything. Because youre right, valuations have changed tremendously, and there could be some opportunities . Okay. Glenn, well leave the conversation there we appreciate you spending time with us today. We hope you feel better as well. Glenn. I feel great. Thank you so much for having me. I just want to thank all the other people, the doctors on the front lines, nurses, everybody just we thank them so much. We know theyre risking their lives for us absolutely. Thank you, glenn ceo of booking holdings. David . See in a, thank you. And thank you for bringing glenn to us. The s p up almost 1 it was there a nice positive morning so far for the broader markets. Whats coming up later today on the big mad money show all right we have okta, ring central were going to chipolte. Theyre doing Amazing Things for the people hanging on in the economy. Watch that and david, our friend larry culp is going to talk about whats going to happen with the 20 billion he just got. Yeah. You know, so many stories we have not covered, jim, because of Everything Else in connection withing, of course, the closing of that deal were going to have utx, raytheon closing soon. So many Different Things we never talked to hp xerox. It will be interesting to hear from mr. Culp. We need a different channel where we talk to each other. A channel for the news we used to do thats a great to do well see you tonight. We are hanging in close to session highs. The session low was minus 208. 2490 on the s p and oil is ldg 22 back in a minute at t has connected us every day for over 100 years. And were here for you especially now, doing Everything Possible to keep you connected. Through the resilience of our network and people. We can keep learning, keep sharing, keep watching, and most of all, keep together. Its the job weve always done. It is the job we will always do. Edward jones is itswell aware of that. Et. Which is why were ready to listen. And ready to help you find opportunity. So. Lets talk. Edward jones. Its time for investing to feel individual. Weve swung higher on the markets with the dow up more than 130 time for our etf spotlight a look at Energy Energy spider etf. Hopes for a saudi russia oil truce. Still down 50 so far this year. Top three holdings exxon, chevron and conocophilips. Trump does say that he thinks russia and saudi arabia would soon make a deal to end the price war. Still to come Robert Kaplan weighing in. Crude oil prices now up about 9 at leaf blowers. 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. Welcome back joe kernen is back having just spoken to the president. Good morning. Out of the blue call i speak to the president occasionally received a call to him said he spoke to Vladimir Putin said and mbs today, and he expects them to announce a cut of up to of 10 Million Barrels, perhaps 15 million. But 10 Million Barrels of Oil Production cut they could be as high as 15 million. I assume hes going to come out and in some fashion with an announcement or a tweet saying as much. And he characterized it in his words, as you know, joe, this would be a big deal. And after speaking as i said with Vladimir Putin yesterday, and we knew that something perhaps was in the works in terms of those two countries frenemy, i guess wed call them. But 10 million he phrased it carefully. I expect that announcement to come 10 million maybe as high as 15 thats what i have, carl i was throwing a tennis ball with my german shepards when i got called in here i had to put on a shirt. You just never know. Tv in the modern age. Oil is on pace on hopes this would come to fruition and the chinese were reportedly building if for their own stockpiles. Any other ground lets watch for the tweets and im surprised. Normally thats the way he does things, but the tweets should be forthcoming as i said how long do i have . I want to bring that on cnbc. Markets already moving on that joe, thank you for that. Joe, coming from home having spoken to the president about oil. Sara lets get to Steve Liesman who joins us with the dallas fed president Robert Kaplan. Steve . Yeah. Maybe the perfect guest to have right after this news from joe from the president there Robert Kaplan, president of the dallas fed, thanks for joining us good to talk to you, steve. I guess i should start with the news you have been following the you are in the oil you are almost the Federal Reserve president for the oil patch given your position in texas tell us what you think the impact of the Production Cut from saudi arabia and russia might have well, its obviously welcome by the industry in the shortrun, so long the coronavirus continues, theres just a substantial amount of excess capacity being generated every day. As you know, theres so much excess supplies being generated every day. So much so that were starting to worry about Storage Capacity for it so this, this will be ek treemly helpful. It will be particularly helpful as we come out of this virus, and lit will speed the time whee the supply demand for oil can get into balance were a long way from that, and people had warned even with the substantial move from saudi arabia and russia, were going to be spending a substantial amount of time working off a high level of oversupply thats still true, but this obviously helps. Mr. Ci want to ask a question about the outlook for the economy. We went into this with the general belief this was going to be painful in fact Second Quarter with a rebound in the Third Quarter. Im wondering if thats your view or if theres growing concern that whats going to happen or whats happening right now might be something that we create lingering weakness in the Third Quarter such that the rebound may be further out this year well, so were like everyone else, were looking at various models of when the curve begins to flatten and our judgment is severe contraction in the Second Quarter. And a rebound. The issue is whats the strength of the rebound and the reason were trying to come to grips with that into the third and Fourth Quarter is as weve talked before, his if i canned investments in the last couple of years has been sluggish manufacturing has been sluggish. The underpinning of the economy has been the consumer. And clearly the consumer is going to come out of this weakened from what weve had in the past were going to have we think were going to have unemployment thats going to get in the low to mid teens we will likely end the year, we believe, below 10 unemployment. Probably closer to 8 it will take a while to work it off. The consumer is going to be much more cautious for obvious reasons. And so theres just an open question about what the strength of the consumer going to be once we get past this virus, and we get into the Fourth Quarter and we get into 2021 i think thats a big challenge and question mark for the economy. I know the Federal Reserve has done a lot, but in the department of what have you done for me lately, i wonder if you can discuss additional things the fed might be considering at this point theres a main Street Lending quilt and talk about state governments being in really severe problems right now. For example, new york state not getting very much income i imagine states across the country are going to have problems what else is the Federal Reserve considering here that might be able to help the economy i want to be cautious about what i talk about. Obviously the main Street Lending program, the fed is working at breakneck speed to get it up and running. Its essential that we get that running as soon as possible. Small businesses are desperately depending on assistance and we want to preserve as many jobs and have as many Small Businesses come out of this as possible thats one thing thats public information. Regarding municipal securities, municipal situation. Were buying commercial paper. Its clear as you said, municipalities need assistance they have to balance their budgets every year theyre not getting tax revenues and so its for Investment Grade municipalities, its understandable why that is a topic in the same way that were already buying Investment Grade corporate bonds. Great to talk to you. Help us understand how you think about initial jobless claims number like we got today 6. 6 million americans filing for unemployment how has that changed our economy . How many of those are jobs lost for good how should we be thinking about the damage that this is doing from a jobs perspective and a broader Economic Perspective the way i think about that, roughly speaking, theres the work force of the United States is 160 million workers and so i mentioned earlier that its our view at the dallas fed were going to get into unemployment in the low to mid teens. I may not be a good judge of the pace of getting there, but i feel pretty strongly were going to get to that and so if thats the case, it means Something Like low to mid teens percentage of 160 million workers are for at least some period of time, going to be unemployed and sitting on unemployment claims. The 3 million last week and the 6 million today is consistent with that. Probably not going to be a great judge of what the pace of it is going to be, but i think thats where were heading. Yeah. Its stressing numbers i wanted to ask you about the markets. I mean, obviously the fed has taken on the role of firefighter and chief. You mentioned the credit markets, Foreign Exchange markets. Weve seen a lot of blockages and issues whats your issue as to how effective the fed has been in stepping in and are you pleased its freeing up some of the systems at this point . Yeah, and its this is it seems like years ago, but it was just a few weeks ago we started with the treasury market and then Mortgage Backed Securities Markets and now have intervened and have programs that are either working or about to be activated for a whole range of other markets, corporate bonds. Were doing commercial paper money market funds by and large the markets now are working reasonably well. Theres still some stresses were seeing and it is notable that with everything were doing, though, credit spreads are wider including for Investment Grade debt even though weve got a program for Investment Grade debt, i think since the start of this crisis even credit spreads for dripl ds are 250 basis points wider and much wider than that for less than Investment Grade thats not a market function issue. Thats a pricing issue and there have been some strains which have been well discussed in aspects of the mortgage markets. Were aware of that. I think by and large the markets are working reasonably well. Were watching very carefully for stresses while theyre working well, the cost of credit, particularly for corporates has increased along those lines, the Federal Reserve yesterday reduced easement of some leverage ratios. Should the banks get more relief on some of the dodd frank leverage and capital ratios to help them play a bigger role in aiding the economy, and on the flip side of that, should the banks be forced to stop paying dividends in your opinion . So we are asking a lot of the banks. The main Street Program is an example, and obviously what the sba is doing is going through the banks. A number of programs are going through the banks, and were asking the banks to exhibit forbearance on credit situations and so i think changing the leverage ratio in a crisis is quite appropriate. We want the banks to have as much latitude as possible because were workinga lot of these programs through them. Im well aware that the uk banks have suspended their dividends, and im not going to comment on that here. We will be doing stress testing coming up and i think we have a regime in place where we make judgments about purchase and capital returns based on stress testing. I think thats a good method and we should continue to follow that youve made we all know the emergency patch is ground zero for the retrenchment in cap ex it was already coming in when we think about the lingering effects of the virus, beyond q 2 and q 3 and the longer term impacts on overall impact, what does that do . Its a concern in that coming out of this i can tell you cap exand the emergency patch is going to be lower. Even before the virus, we thought capex and the emergency patch would be down 10 its more than that. Its a unless there are other programs or left as it is, you should expect business if i canned investment is going to be weak, and, again, it really the consumer has been the underpinning of the economy. The Service Sector has been the underpinning of the economy, and we know because of this shutdown, the Service Sector is going to come out i think more challenged, and the consumer is going to come out more challenged so thats on the fiscal side away from the fed, it means theres going to have to be more fiscal action to deal with that. Whats been done so far has been essential, but i would put it in the category of relief its basically made sure individuals continue to be able to sustain Small Businesses can continue to sustain markets continue to function but beyond that i think well need stimulus from here. Its not surprising thats beginning to get discussed thats not a fed decision. Thats a congress Fiscal Authority decision but its going to be needed. If i could come back specifically to the Energy Industry which you started the interview discussing and oil prices are now up almost 30 on the reporting of the conversation we had with the president and i believe his tweet about a 10 million 10 million barrel reduction from the russians and potentially the saudis to your point, the global oversupply continues i think its 24 Million Barrels a day. 6 Million Barrels in the u. S what are your predictions for the Energy Industry given that even with the potential 10 Million Barrels not coming to market every day it would seem it is a very difficult industry to be in. It is and so we do widespread surveys and we talk to contacts throughout the industry. And at a number in the low 30s, its challenging for many producers, drillers to make a profit so we would expect that a number of with this amount of oversupply thats going to go on, theres going to be a consolidation in the industry that will be some producers that are going to struggle to make it through, and then you have the Service Providers that provide them services. They will struggle to go through this some of them are highly leveraged and so we would expect youre going to see lower c cap ex, restructure, fewer players on the other end and theres lots of discussions about how to preserve as much of the Permian Basin and Service Sector as possible thats going to be a challenge even with this move today that youre describing. Because the oversupply is so substantial. Im wondering if beyond the oil business which is a big part of your district, but not the only part of it. What else are you hearing from companies, Small Businesses, large businesses, medium businesses, how long can they sustain this shutdown in the u. S. Economy before we start to effect real challenge or permanent damage to the economy . I can tell you among Small Businesses theyre going through the calculation of how to manage their employees, whether or not to take the government assistance whether they are keep their employees on the payroll whether they can survive and that debate is going on across Small Businesses i can tell you in this district, but my guess is nationwide and for larger businesses, theyre trying to determine whats the size of their business going to be coming out of this, and then how much demand in thats the right sizing for their business . Everybody is having those discussions, and the issue that comes out of that, as i mention, well get to low to mid teens in unemployment and hopefully in the year below 10 or neighborhood of 8 . The issue is how fast can we work it down when Many Companies that employ people wont be employing people i was looking at the statistics yesterday and Something Like lets put it this way, a significant percentage of jobs and new jobs come from Small Businesses and i think thats going to be a real challenge and then for bigger businesses, they just have to determine how big their business is going to be and how many people theyre going to employ. I think the managing down the Unemployment Rate is going to be a big challenge, and the consumer not being as strong as he or she was going into this crisis, thats high on the list, top of the list of challenges coming out of this crisis. Thank you for joining us. We look forward to continuing the conversation good to talk to you guys, back to you. Steve, thank you. Thanks for bringing us that interview. A programming note for you. Tune in. An exclusive interview with janet yellen monday, 10 00 a. M. Eastern right here on cnbc were bringing you the top voices in finance and economics to help you get through this volatile period. Stocks are building on some early gains. S p is up 2 energy a big help after that joe kernen report that saudi and russia are going to cut production well be right back. Feels like theres no barriers between departments now. Do you think everyone appreciates it . I do. Huh. Forgot my glasses. Serivcenow. The smarter way to workflow. That Liberty Mutual customizes your insurance, i just love hitting the open road and telling people so you only pay for what you need [squawks] only pay for what you need. Liberty. Liberty. Liberty. Liberty. [spokesman] if youve tried colleg group cheering shed, snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu welcome back to squawk on the street. Time now for the Santelli Exchange and i will send it over to Rick Santelli thanks, david i would like to welcome my guest, zach from Goldman Sachs thanks for joining me today. We all know that these are hard circumstances to deal with and discuss markets, but nonetheless, thank you for joining me i would liketo get right into it theres been calls that we need corona bonds in the u. S. I say we have two year, five year, ten year and a fed that can print debt and there seems to be many willing buyers. We dont need them here. Theres a place that i think needs them really bad and that is europe. How is europe going to pay for all the cradle to grave services in addition to trying to help some of these economies like italy control the coronavirus when they have so much debt and so little ways to generate new debt its a great question what European Countries and policymakers need to figure out is a way to stimulate growth, provide for a recovery within the institutional constraints of Europe Corona bonds are one option and we think european policymakers should be looking at some of this is happening already. I think thats important to stress through the ecb the ecb is buying the already issued bonds and essentially mutualizing debt through its own Balance Sheets it buys the bonds it issues euro notes on the other side which are a liability of the whole euro area. To some extent this is already happening through the ecbs Balance Sheet. Corona bonds would take us one step further and provide another means to support the economy through the crisis, but i think its important to recognize that european policymakers are doing a lot and so were somewhat encouraged by those steps so far. But zach, you said that they the ecb can buy paper, i get that they can put grease in the gears. Our treasure and fed is doing a whole lot more than putting grease in the gears. Theyre underpinning whole industries thats what im talking about. Who is going to underpin that . France, you take out all the Tax Collections in france, whats going to support the system . The banks best customer is municipalities. Right so i would say its not just about europe either. When we look at this crisis, we often look at the United States and the United States has a luxury of being able to issue huge amounts of debt with very little cost in terms of market yields many countries just dont have that ability and i think to some extent europe is in that camp, especially peripheral europe, although the ecb is doing what it can to help, but many other countries, especially in emerging market economies have the same problems. We have fiscal capacity constraints throughout the world and thats a key problem in figuring how to get out of the crisis hoping the virus itself can be controlled such that countries can stimulate with the resources they have available. Youre right, europe does have the fiscal constraints as well as many emerging market economies. The u. S. Has a luxury that other economies dont in that regard excellent zach, its a complicated topic and i thought that needed to be underscored. Christine he guard has her job cut out for her. Back to you. All right Rick Santelli, thank you as you can see we are building on momentum here, gaining for stocks the dow up 284 points after being negative earlier this morning. S p up 1. 35 the nasdaq up almost a Percent Crude Oil is the standout, up about 20 or so. Brent, wti is up about 23 after the president tweets what joe kernen reported to us earlier, a conversation between saudi arabia and russia and an agreement on a Production Cut. And that is certainly helping the price of oil keep in mind, oil is down about 60 still for the year energy stocks, though, are on the top of the market. Were going to take a quick commercial break and stay on top of the Market Action on the other side for many of our members, being prepared. Wont be a new thing. And it wont be their First Experience with social distancing. Overcoming challenges is what defines the military community. Usaa has been standing with them, for nearly a hundred years. And well be here to serve for a hundred more. Welcome back new York Governor Andrew Cuomo is pleading with doctors and nurses from all around the country to come to the epicenter of the Coronavirus Crisis and that is new york our Contessa Brewer is covering that today hi there, carl. Behind me is a hospital in kingston, 90 miles north of new york city. Theyre adding 235 hospital beds inside, that will more than triple the capacity alone. I talked to the county executive hes worried he will not have the medical personnel to staff that capacity. The governor putting out the nationwide plea for doctors and nurses were going to pay you to come in here and many cases were going to pay you a lot you new west staffing agency, a recruiting agency for nurses, says it has seen hospital pay as high as 10,000 or more per week plus free housing and guaranteed quarantine pay, faststaff recruiting says it always pays its nurses as much as 50 more karen has never seen offers this high, a traveling nurse who was based in new york city, was exposed to coronavirus, went into quarantine and now this week is heading back into the epicenter of the crisis and says whats bringing her back, its not the pay. I think im a little apprehensive of going back just because i know how bad its gotten since i went into quarantine and now am out. Im not scared i have to go back. Theres no way not to. Its my duty, its my job. Im a nurse. So desperate is new york for these nurses to come in here that its waiving licensing requirements if you have a lapsed license from somewhere else you can go back through and do a oneday training and get relicensed againp theyre putting out the national plea. Were waiting to see if its filled faststaff said applications are up about 300 alone. Carl unbelievable story. Well see if people respond to that contessa, thank you so much. Our Contessa Brewer is in kingston, new york, this morning. Good morning, Everyone Welcome to squawk alley. Im Carl Quintanilla with Morgan Brennan and jon fortt coming live from different locations this morning on a fascinating day for markets. Futures were weak but we have added to gains as our joe kernen speaks to the president and the president tweets about a conversation he had with the crown prince of saudi arabia saying he expects them, after having talked to putten as well, of a Production Cut of oil between 10 to 15 Million Barrels of oil and jon fortt, that has resulted in almost i think got to be an unprecedented squeeze in crude which was up almost 40 . Certainly has carl, as jim cramer has been talking about quite a bit, equities are responding to the oil markets. This morning it seems to me that a number of networking and broadband players including our parent comcast, verizon, some cloud players, are responding positively not sure exactly why that is, but on all things stocks, you can go to our senior