Transcripts For CNBC Squawk Box 20240713

They come. Checking out the 10year, weve been around the same level yesterday we were at 0. 75 this morning, it looks like the 10year is yielding. 69 saying the Global Oil Demand will fall by 9. 3 billion a day erasing almost a decade of growth down about 2. 25 baushing it back to 19. 65 a barrel dr. Scott gottlieb, chairman of cbs health, fanatics executive chair. Chief Investment Officer and more coming up in the next three hours. Joe . Becky, you remember United Health care is a dow component we always say, thats right. Thats right you notice the dow is down around 370 or so maybe repairing partly due to United Health care the Company Reported an adjusted 3. 72 for the First Quarter. Nine cents above estimates the company said it is keeping its prior 2020 full year guidance said it would continue to evaluate the ongoing impact. You can see up about five points or so. Ee quaids to the improvements we see. Well hear from bank america and other companies. We are in earnings season now. Andrew we are. We are going to see what these numbers are and what they mean and try to figure it out we have an update for you on the pandemic we do it every morning at this point. Confirmed cases in the United States reaching 609,000 confirmed cases. New york topping 200,000 new york city, a sharp rise in the death toll yesterday the jump came after Health Officials started to include people who never tested positive but were presumed to have died from it. Combined with the fate lts with positive lab tests, fatalities surpassed 10,000 the fda has approved a saliva test created by Rutgers University reducing the risk for Health Care Workers eliminating the need to take a swab in close contact. They are given a plastic tube. The sal i hava test had 100 match rate with the swab when i say 100 . That means the swab test is similar to what those tests can do there are still question marks about how effective the tests are with the range around 70 accuracy i was talking to somebody he had about the number of false positives and false negatives theyve gotten the swab ones are a problem because there are questions of how accurately it is performed you have to essentially jam the swap up the nasal capacity baseball teams will participate in Antibody Testing. This will measure whether people have been exposed and developed antibodies as a result even if they never showed symptoms 10,000 baseball employees have agreed to participate. This will be interesting when basketball went through the same sort of issue and was testing so many players, you did find it was a higher number than had anticipated that had been exposed and had the disease. This might give us a better idea of what is happening in the general population at the time the studies were done in basketball this is different this is what we are going to be doing. This is the way we are going to get back and reopen things well have dr. Waxell on obviously in baseball, if you test every single person, you can field players with confidence eventually youd like to have an Antibody Test on anyone. You point out, it is different to show you dont have it but if youve had it and you dont need to worry about it. So it is safe to go out when they were testing basketball, they said basketball players would probably have a similar reputation to lets say a retail worker or restaurant worker or transportation worker because those types of employees have about as many daily interpretations as a daily interaction. I thought initially it might be higher because of traveling around it was announced that it might matchup with the fedex delivery guy having a lot of interpretations. Another thing, what does it mean to have antibodies . There is so much Conflicting Research some suggesting that the idea is youd be immune. Now there are reports that suggest maybe not. We have to figure out what those tests really actually mean at this point right it would be good to have the antibodies. Sam had some interesting comments he said, if youve seen one pandemic, youve seen one pandemic thats why it is called a Novel Coronavirus because it has never been seen before did you see what rand paul said. Zero symptoms. No soar throat or cough or fever or chills. He had been in contact with someone who tested positive. Thats why he went he was totally surprised that to me, is so. This is so crazy to see that it can put people flat on their backs. The different reactions people have are so extreme young people. Not saying it doesnt effect any but they do seem 20 to do better is it a more rebust system or that the system doesnt overreact. Hell good good to talk about on these things and we have dr. Gottlieb on in a few minutes yes i heard the president mention scott yesterday. The Treasury Department and airlines have reached an agreement on aid phil lebeau has details. This is for 25 billion for payroll grants 70 is money they will not have to repay 30 will have to go back in the form of lowinterest loans looking at airline stocks, they are all indicating they are going to open substantially higher one, uncertainty over the next couple of months the dilution looks to be a little less than people were expecting when negotiating all of this. 10 airlines in all will receive billions from the government delta receiving 5. 4 billion in a payroll grant. Southwest, 3. 2 billion in a y payroll grant. American airlines to receive 5. 8 billion you dont want to miss our interview with american ceo and chairman doug parker well talk about not only receiving this money but the question of when do they expect to see some sign that people will start to sign again do they have confidence well see it when p it gets to july, august, september. You dont want to miss that interview coming up. Back to you. Before you go. Two things i was trying to do some math on these warrants it appears to me, it is a bit of a figure leaf to the taxpayer, if you will. It is so small even if it were to double in value, it would be like 5 of the grant money. Am i wrong no. You are correct about that the Treasury Departments view that the taxpayer should get something. You didnt hear too much complaining from the airlines. They said we understand the government needs to feel that the taxpayer is receiving something. The bigger concern, we reported this back thursday and friday of last week, the fact that 30 of the money given to each airline will be in the form of a loan. These guys have taken out 32, 33 billion just since february in terms of instruments. Now you are asking them to take out more some of these have made it clear theyll have to borrow more a month or two down the road it comes to a question of how much debt. Thats what the airlines were concerned about the way this was structured to say, currently, they have to keep their employees or at least 90 of employees on board and keep planes in the air, many of which are flying out practically empty. What happens when it comes to september, are they allowed to layoff employees what will happen the agreement here on these payroll grants is that there are no mass layoffs before september 30 look, if we see levels on passenger planes to the level we see now. I think it was 95 or 1,000 people still being screened. If we still see that in september, the airlines will have tough choices for now, these grants are doing what were intended, which is lock in the payroll. Youve got 10s of thousands of employees that already agreed to take leaves of absence and the airlines have already stripped down to a bare minimum schedule it is a far lower level of flights than we saw a couple of months ago phil, before you go go ahead. A quick question on that. If the employees took an unpaid leave of absence, does that mean they cant file for Unemployment Benefits part of the whole reason we do the bailout is so they dont end up on unemployment thats a good question. Ill look into that and get back phil, thank you well check in with phil a little later this morning. Also coming up, President Trump says some states may reopen by may. Dr. Scott gottlieb will join us. An expert who has the ear of the president. Condoleezza rice, art laver, steve more, steve forbes, larry lindsay, katherine reynolds, scott gottlieb, jim demint you doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Welcome back yesterdays task force briefing, President Trump says he believes some states will be able to open before the end of april. Actually, there are over 20 that are in extremely good shape and we think well be able to get them open fairly quickly and then others will follow. The federal government will be watching them very closely well be there to help dr. Scott gottlieb has spoken to the president about reopening the country. The former commissioner of the fda, cnbc commissioner and serves on the boert ards of both pfizer and alumina thank you for being with us. I would ask for your opinion on the idea that we could reopen some states before may that came as a surprise to me maybe because im in the middle of new jersey. I think what well see is a gradual reopening starting in may and into june. I think it will be gradual well bring back people to work slowly and in a staggered fashion, that will happen slowly and over the case of months. Some states have seen low numbers. Rural states and states with limited Outdoor Services in michigan, Services Done outdoors arent being allowed. In connecticut, Lawn Care Services and construction are still going on you can see some of those Outdoor Activities being brought back this is why you leave the decision to local governors. Different states have made different decisions about what theyve restricted and what they could start bringing back slowly you could start to see activity come back to some states in early may. I think the vast majority will be midmay when you see activity slowly gradually come back it has been confusing enough for social distancing where you cant hang out with friends or let your kids hang out with friends, do you worry it delutes the effectiveness of where people should really still stay in lockdown thats the concern. It could get confusing i think most people taking queues from their governors. Looking at data where they havent imposed the stayathome orders, the level of dropoff are similar to those that have more strict measures. There are general concerns you are getting more of a uniform response notwithstanding what certain states might be doing. There has been variability about what states have allowed the lawn care is an example. Things like that, where it is primarily an outdoor activity. I still think the vast majority of workrelated activities will come back in april and roll out may through june weve heard reports where there is pressure on employees coming to work even with these lockdown agreements. If you start to see that type of restriction, will there be more pressure on governors, mayors and employees to actually get things back to work . Thats the challenge now. There is a lot of pressure on the Business Community on governors to bring back workrelated activities. The Public Health care and seeing sharp decline on visits to hospitals there is an 80 drop off, people skipping vaccinations some wont come back to get vaccinated after this. Thats the impact of the social and economic cost. That said, when we start to bring back workrelated activities in may, i think we will, we wont be prepared we are not going to have all of the testing in place and we wont have the ability to track people like we want. As we go into the summer, that could be one backstop. It is not going to be a backstop but could be a little backstop as you get into the hot months so you might catch a break no question when we start bringing people back together, youll see a resurgence. In singapore and hong kong, they have a second wave where theyve shut schools and put back in place social restrictions. The question is how do peoples behavior change after this stock in General Mills and campbell because they think people will be eating at home with their family. How much of normal life would you go back to do you go back to church or s synagogue or back to eating out or letting kids stay over with friends . I dont think well have this sharp snap back. Ive talked about an 80 economy in the fall. In terms of what im going to do im going to be more cautious. If i go to restaurants, ill go to places i have confidence in maybe local restaurants i know well those that are advertising what they are doing maybe local businesses will put a testing machine inside and say they test their employees every thursday night paper menus. Cleaning tables more aggressively in between. Youll see these things and i think a lot of consumers will try to stay more local i think things will stay and other things just dont bounce back the same way. Thank you well talk to you more tomorrow. Coming up, well tell you how 100 of the wealthy residents on one florida island. I dont mean 100 of the residents. We are calling the island wealthy residents. Plus jc penny reportedly exploring filing for bankruptcy. Amid prolonged store closures. Here are some images of the Pandemic Impact from yesterday across america welcome back lawmakers, medical experts call for antibody medical testing a small, exclusive island in florida has enough for all its residents. Only 1 of the population of florida has been tested. But 100 of the residents of Fisher Island off miami have gotten Antibody Tests. They purchased 1,800 kits for residents, how keepers and landscapers. The test is done with a finger pick and gives them instant results to whether they have been exposed or have immunity. This is not the test that tells you if you are infected. The testing has sparked a backlash in a state where there is still more demand the island is only accessible by boat and has an average income of over 2 million most of the resident there are over 60. They are also engaging in social distancing since the marina, golf course are all closed the university of Miami Health System provided the tests said, it may have created the impression that certain communities would receive prerchal treatment and are revising the delivering of tests. The residents paid for these tests. But not a good look now when a lot of florida is trying to get the covid nasal test and everyone on this island including their workers are able to get tested. Do we know how they got access i know you said the university they got them from is there a connection or somebody they could call in a way other residents in florida or the u. S. Could not . Clearly there was a connection there is a public Antibody Test going on in miami now. They were clear to say the island test kit were not a part of the study they got the test kits from the same company saying they did not come from the public tests they were not diverted but my Research Shows it did come from that group of tests. Thats how they got it from the same company. Controversy continues there will be a lot more of this yes a lot more robert frank. Following the money. We appreciate you. We have more ahead bank of america set to report in just a few minutes well bring you the results and the reaction plus Nbc Universal rolling out peacock streaming. It happens today a look first at todays s p 500 winners and losers 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. Good morning watching the futures yesterday was a huge up day. You did see the nasdaq up by 4 . S p up 3 and the dow up 4. 2 . This morning, dow futures down by 327 points, s p off by 46 and nasdaq off by 98 Nbc Universals Parent Company launching peacock. It happens today for comcast subscribers joining the streamers home consuming content. What this means now for all of us who are at home watching. Craig moffett. Good morning to you. Who knew so many of these streamers. Hbo max will be next quibi was last week. You have less advertising dollars available. What is your take on this launch today. You are right it is the best of times and the worst of times we are all home and peak patterns are at different times. They are at 9 00 p. M not during the workday we are streaming because peacock unlike most of the others is going to be ad supported. The real impact will be advertisers. It will be very good for the demand side. On the consumer side, youll get a lot of viewers it will be a tough uphill climb to get advertisers to the extent that you can create a habit now that is the question about the culture and when we all go back to some sense of normal. Right you are trying to get people hooked on the service. Disney already has 50 million users. Amazon is the same thing they are all seeing tremendous usage. The hopeis that peacock will b one of those services that comes out the other side of this with a large group of committed customers. Eventually, it will be easy to sell advertising against those that is your metric of success now . I dont think you can measure a free service by quite the same metrics. You cant measure it by the number of people who are trying it you have to stick to engagement type of metrics and how much time people are spending and how much are you getting people truly committed to regular users. Eventually, there will be a shakeout there are just too many. Some will have to combine into packages that are more friendly to customers can they build a stable base of customers that come back regularly. How are you thinking about the power of the consumer, if you will, lets say over the next 12 to 18 months on the other side of this i dont know how you are thinking about the time line and what unemployment looks like and how much money people have in their wallet for these services . Thats a great question the investors we are talking to every day, you really have to try to separate and when you think about stock picks, what is your view of beta versus alpha the beta is going to swamp the alpha in the time line when you think about the duration of unemployment will be the real driver and more about which stocks seem undervalued compared to others. As we think about it, my guess is that you see a prolonged period of unemployment that means almost uncertainly you will see accelerating cord cutting. Particularly because sports are off the air. Those services will go somewhere. Streaming will pick up a lot of users. That will be to the good of these kind of services the real question for comcast is can you replace with advertising dollars. The damage made to the traditional paid tv businesses final question because we have to run. You have an over under on quibi. They are going to start to make it available, it was supposed to be to mobil only now to tvs. Quibis design, short clips there is clearly research telling them people want to see it on television well see good that really catches fire okay. Craig moffett, always good to see you. Stay healthy and sane these days some people say safe and healthy. Im going with sane. All in the eye of the beholder when we come back, bank of america set to report. Well see how it matches up from what we heard from jp morgan and wells fargo yesterday. Also tesla shares surging after a bullish call by goldman sach more after this break. Every Financial Plan needs a cfp® professional confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Bank of america results just hitting the tape well go over to willford for the numbers. Coming in line essentially a fraction ahead of estimates. Eps is a miss but not to the scale of some yesterday. Eps was 40 cents compared to 46 cent estimate. Compared to 1. 1 billion compared to last year of 4. 8 billion the range of estimates was huge from 1 billion to 20. Comes in ahead of expectation which was about 3. 7 last year was 1. 1 where does this put their total reserves versus their total loan book as a guide for wells fargo after theirs yesterday took them to 1. 2 . Jp morgan took them to 3. 2 . Bank of america is looking at 1. 5. Up 50 basis points it was at 1 at the end of last yearer, now 1. 1 of the total loan book. As well as with the other banks yesterday, trading revenue pretty strong. Ahead of expectations. Equities up 39 to 1. 7 billion ahead of expectation we are interested in seeing that from goldman in perms of the ppp program, more numbers on that, 279,000 applications, 43 billion of loans approved they havent broken out that cash out of the door number yet. In terms of the shares, down a couple percent with he were down about 2. 2 free market. Staying roughly around that level. All of the focus will be on what they factored in for those provisions when we get to the call okay. We appreciate it well be talking a lot about those numbers and talk other Big Bank Numbers later today in the meantime, take a look at shares of tesla. Last night, Goldman Sachs returned with a buy rating believing the company has significant product lead and expects longterm secular growth in that market so more bulls behind tesla and elon musk right now. Joe, over to you coming up, david doorman will join us hell tell us what he sees in the sectors. Ahead of the break, procter gamble, many expected to have cut their dividends. P g raising its quarterly pay out by 6 amid a surge in demand for household products we are forget to subscribe to our podcast youll get interviews, original content and behindthescenes access look for us on Apple Podcast or on your favorite podcast app and on your favorite podcast app and subscribe to squawk but youre not mad, pod. Because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts squawk pod today dont get mad. Get e trades simplified technical analysis. Investors going to be paying keen attention to what kind of toll the pandemic has been taking on businesses as we move into the heart of earning season not just the last reporting period but the outlook, if there is one lets bring in barry knapp i dont think youre arguing that we wont see a lot of damage and a lot of lowered expectations, but in your view, it could be short in duration for companies and for the economy . Yeah. Thats the way im approaching this, joe. I think, you know, as you think about the reopening process that you talked about with dr. Gottlieb earlier in the day, were likely to have pardon me the shortest recession in terms of duration on record. And so by the Third Quarter the economy is growing again how soon we make back all of that lost growth, the results, the level of unemployment is an open question but we will be growing again by the Third Quarter. So youre really looking at, you know, one quarter sharp tick to growth and then reaccelerating to the upside. I think that will be the next question for investors is, you know, how strong can that growth be how soon can we burn through that output gap . And then where should the equity market stall out but the question about whether the market bottom is in, i dont think there should be much of a debate about that. The timing of it, the magnitude of the decline, the compression of the equity multiple, all of those were greater than average. So, you know, we should be on the other side of the worse of this for sure. You know, that is not the knee jerk consensus viewpoint that we see expressed so often, barry. And i hope youre right about that you think the lows are in. You think somehow well get people actually back to work and comfortable in what we used to think of as a normal work setting. You actually and i dont know if this is necessarily whether youre going to be right about this but you think that its been pointed out because the denominator could be so much bigger than what were talking about you think the mortality rate will be lower and well get to some level of immunity herd quickly than people think. Is that part of your thesis on how we get back to work after just one quarter it is i mean, i was of the mind early last week we had recovered enough and we ought to at least consolidate for a time and i got drawn the rabbit hole about really thinking about this denominator question there were a series of reports that came out. Again back to dr. Gottlieb he tweeted one of them the other night about women, pregnant women going into new York Hospitals and 13. 5 have already been exposed i started thinking about the timing of when the disease was here, the magnitude of the number of people that were infected, all these studies that have come out. Theres another big one under way, some 15,000 samples in every major city by the Antidoping Agency that looks at athletics and its likely much more widespread. That should play into how we think about the trajectory of the recovery as well yeah i was trying to avoid playing amateur epidemiologist, but i was just so struck how little we knew about how widespread this infection was globally because there hasnt been any testing. Forget all the questions about how many people really got it in china, the study by aei and all. I think we can be confident far more people were sick in china than they told us. But that not with standing thats a big unanswered question well get visibility on in the next couple of weeks barry, you actually point out a lot of the leading sectors are deep cyclicals that would have to be a really short recession for some of these sectors that you point out to have already been rebounding. You think they are sniffing that out. I think the cyclical sectors that are rallying are the ones that could rally in the early stage of recovery. Consumer discretionary, autos, you know, even the Home Builders so this is what a typical recovery looks like, is those sectors starting to rally sharply just like what happened in the early stage of last cycle with the exception of housing. Very good thanks, barry. Well check back in with you and see if youre right. Thank you. When we return right here on squawk box, two big hours ahead. David dorman will join us. Yp a a board member at at t, paalnd young brands. Well be right back. Goodbye fred. [ toilet flushing ] goodbye fred. What if he gets hungry . Kohler revolution 360 with continuousclean. Stays clean five times longer. Its okay, dad. Only from kohler. Confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Big banks reporting. Bank of america, Goldman Sachs he and citi all out this morning. We got numbers, the Market Reaction and what the companies are saying about state of the Financial System straight ahead. Getting america back up and running. Well speak to cvs executive chairman david dorman about state of the economy Antibody Testing a former ceo of inclemen systems will talk to us about the need to test. Second hour of squawk box begins right now good morning, welcome back to squawk box right here on cnbc im Andrew Ross Sorkin along with becky quick and joe kernen. Take a look at u. S. Equity futures at this hour, after a big day yesterday, we like well open the day down. Dow looks like it will open off 325, nasdaq off 95, s p 500 looking to open down 45 point. We got a big lineup of guests this morning lets tell you who is on deck. Well speak with executive chairman of cvs health, dave dorman dr. Sam waxell Michael Rubin will be joining us we have arod on deck. And glenn. Hutchins of north island thats a show for you, joe a lot coming up we got paulson coming up in a segment too. Not pat paulson. That would be difficult. We dont have either john paul sopranos or Henri Paulson but jim paulson. The big banks once again dominating the corporate news. Bank of america reporting short time ago Goldman Sachs and citi group are up next. Lets get back to wilfred frost with more on the numbers and we love these bank reports, at least you pretend to reporter i really do particularly now more than ever. Lets get to the numbers so the allimportant provisions for credit losses how much of the loans that the bank has made, do they fear might go bad given the current environment. We saw a jump there to 4. 8 billion. The number in the same quarter was 1. 1 billion. An increase of 3. 7 billion the other factor weve been looking at to give us a kind of a guide of the scale of provisions that these companies have made is total reserves relative to total loans and for bank of america that has increased by 50 basis points to 1. 51 . 1. 51 of total loans they made fear could go bad moving forward. Mine the numbers yesterday, jpmorgan increased by 90 basis points to 2. 3 , wells fargo increased by 10 basis points to 1. 2 some themes have come out from yesterday and looking at some of the exposures bank of america has is that within consumer you want to have a lower exposure to credit cards, which they are providing quite heavily against fearful credit cards might go bad. Part of that is some other areas of the consumer are well protected by the c. A. R. E. S. Act, mortgages they can see payments delayed so they dont have to provide against those yet because the Government Programs might protect them from going bad. Bank of america has big exposure to the consumer but not too much to credit cards. Within commercial lending certain sectors we would have expected like energy, real estate, for some subsectors and also areas of retail also which, again, bank of america doesnt have a huge exposure to and therefore the scale they are providing against are a bit lower than jpmorgan. Citi has a big credit card business we watch out for that. Now looking ahead, at the positives which came through yesterday was strong trading particularly coming through in terms of fixed income commodities. Massive print with jpmorgan and that bodes well for Goldman Sachs. Both Goldman Sachs and Morgan Stanley dont have huge amounts of loans to customers. Smaller. In their Wealth Management slightly more commercial again, they wont have as big a negative there and have to see if their trade is significant enough to give them any beats even at all. One quick final point. Liquidity for bank of america, very strong. 700 billion increase 700 billion in liquidity up 120 billion. Deposits growing 6 . Rates are down they cant make as much money but it does show us the level of strength thats a different position perhaps than 10 or 12 years ago. Okay. Thank you. Thank you for being here with us we were talking about jim paulson, our next guest. Doesnt see a lot of value in maybe pouring over earnings. We like to see them, io, jim paulson but they may not be quite as relevant in terms of what to do with your investments and markets right now, chief investment strategist. Does that sum it up, jim, you know, its transient and hopeful we get out of it quickly and go back to something, some semblance of normal . I think thats how the markets will look at this by and large. Really hard to look at it. We know that they are going to be awful numbers across the board. Some of them just, just really bad like the airlines and energy and the like its hard to take away a lot from that when you know it but, i think there will be some interesting things i think it will be interesting to see how many companies, you know, they are not going to have what forecast will they have any more than we know but i think it bears to see if companies present a confidence that, you know, hey were taking a hit. No doubt about that but well get through this or if theres more companies that say look were going to be kind of more permanently impaired here even when we come out. I think some sense of that will have, will have an impact. I think to the extent companies suggest inability to make payments or something or they might have to have more layoffs, you know, those kind of comments certainly would resonate a little bit with markets. One area im kind of interested in is what i would say is the new Era Companies that, you know, certainly Technology Part of communication, some consumer discretionary, high growth or persistent growers theyve done so well in the bull part of this market, and theyve also done extraordinarily well in the bear part of this market. You won even though the rest of the economy is falling apart, is the new era continuing to do fairly decently. If they are its sort of interesting what value do you place on these companies when they can do so well in an up market and also so well in a down market. Its the high growth new era part that actually did better than all of the defensive type of investments in this bear market and they trounced them in the up market. That will be interesting to see what those Companies Say ill tell you what i fine interesting in some of your comments because it answers a lot of concerns that we were just talk about that i have with barry knapp who was just on and about the restart of the economy and you point out a lot of the rally weve seen is better news on the virus, and more talk about restarting the economy and you point out, at least you believe that the market can do okay with only a partial and a very slow restart and that the market will take that, a partial restart as more of a v than as a u and, therefore, all these concerns were hearing about having to wear masks and being tested and not going, feeling comfortable at a crowded restaurant, all those things you still think the market will look beyond that and we wont have just a grind lower based on a very bad restart i think so. If were going to go down Something Like 20 to 40 annualized pace in the quarter were in, in the gdp, any bounce at all will feel like a v off of that when you have 20 unemployment rate, and 25 decline gdp, if you hit any bounce at all in the Third Quarter its going to feel like a v compared to that. I think i think thats the v debate, u debate is not really that pertinent i think well have some sense of a v in the last half of this year 2021 might be a little more Slower Growth but weve had Slower Growth throughout this entire recovery. The last point i would make interest look, every recession you have, it doesnt just come right back on you know, every recession you have, its a process of restarting the economy again once you go through a recession. In some ways this might not be that different were going to have a v jump to start it well have a big chunk of the economy which comes back on right away then other parts will take longer to come back on but, hey, thats not at all uncommon in past recessions. Look the stock market in most recessions typically takes off long before earnings turn up so thats not even going to be uncommon we could have earnings still falling as we have right now and yet stock prices already recovering thats happened a lot in past recessions as well so, im not exercised about whether we go back to 100 or not in term of the economy operating. We wont but i dont think we need 100 to have the market continue to grind higher you have a lot of metrics that youre looking at im checking the vix right now vix is back to about 40. You say things are calming down and you point out the vix is down it was below 40. A little bit above today the bond yield, that low has held, credit spreads coming back in, u. S. Dollar declining, the daily volatility moves are less, and there is he some discussion now about, as you already have done about different sectors and stocks again i mean the coming loss you think are in or we still go back down and test some of those i guess im leaning i dont know im leaning more towards the lows are in. But that doesnt mean we arent going to have some more nasty periods and bad days but i do think, you know, the other think thats happening youre seeing more the cyclical, more high beta sector starting to perform again a little bit. You know, one thing, this is an idea that came from you the last time i was on, joe you said you wondered in this wild market environment were in and weird crisis, do some of the standard conventional financial guide posts we use to determine whats going to happen, are they working . Are technical indicators working . Are fundamental indicators working . I think they are messed up i dont know if they are working well how do you use fundamental data thats in free fall for example. If you look at policy indicators like a zero funds rate and a sub1 ten year treasury and a 6 trillion fed Balance Sheet and 15 deficit to gdp ratios, they are pretty messed up but the one indicator thats still golden, in my view, that i think investors should pay the most attention to, is the one that hasnt changed a bit. And thats Human Emotion man fear and greed is still alive and well and acting the same way its always acted and right now sphere on steroids i mean not only is their fear about traditional fears of losing your life savings or job but fear of losing your life or life of a loved one. That is high levels of fear. And historically when youve had this high a level of fear among investors, its been a great time to lean towards risk assets as a corollary, whenever you know youre in a recession always a good time to buy stocks so i think more than any other indicator for me is i think as long as fear is this high, risk assets are probably reasonably priced and i think thats where were at its like everything. I agree with you that sort of has been my take all along. I dont think they give out medals for panic they dont award them for that but like Everything Else you say absence makes the heart grow fonder what about out of sight out of mind not panicking and then whistling past the grave yard which you seem to be doing sometimes fear is warranted Nuclear Program has been really, really scary and when its not just your finances, when youre worried about ventilators being available for people, its just a whole different ball game. Whole different story. Real life it has. Sometimes you feel good about trying to keep your head but other times youre saying what the hell am i doing. Im heading for the hills with my hair on fire. Anyway, thank you, jim we appreciate it backtoback, we got to get a bear on because we have a backtoback you and barry knapp. Well get somebody looking for new loss coming up soon. Becky. When we come back cvs executive dave dorman will join us after this break and talk to us what they are seeing at cvs check out shares of United Health it beat on both the top and bottom lines and maybe even more impressively it backed its full year outlook you wont hear a lot of that this earnings season that stock is up 1. 8 . Futures this morning have been one some pressure. Even with that dow component trading higher the dow this morning is indicated down by 317 points this comes after a big up day for the markets yesterday. Squawk box will be right back. Apps are used everywhere. Except work. Why is that . 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[ barking ] welcome back the number of new covid19 cases each day is beginning to slow in the United States. Still there are now close to 2 million confirmed coronavirus case worldwide and the death toll now stands at more than 125,000. Joining us right now with the details on how one of the Largest Health Care Companies in the country is helping this public crisis is dave dorman the chairman of the board at cvs and former chairman and ceo at at t and dave thank you for joining us today good to see you. My pleasure. Lets talk about cvs right now and what youre seeing you really are on the front line pharmacies are essential businesses you are open, staffed every day. What kind of traffic and demand are your seeing both in terms of the front of the store and pharmacies in the back if you look at march, first part of march with the amount of people coming into the store, what i describe as panic buying, all manner of things with the shelterinplace order, traffic slowed down but still steady we have 200,000 front line employees that include 40,000 pharmacists, doctors and nurses and the rest are store employees who are there every day. We have another 100,000 management and staff employees, 70,000 a day which are dialing in or connecting through our vpn. For us its all hands on deck. Testing has become really important part of what were doing. We have great familiarity with the abbott labs platforms. The new one for covid. Were active in three states in a private Public Partnership georgia, massachusetts and rhode island over 3,000 tests a day are coming through cvs manned centers. We have a number of other states that were in discussion with too that will be coming soon so testing activity is really important. I think couple of things that have come out of this. Telehealth has gotten a lot more attention and a lot more activity were seeing a big increase in thatutilization again with people shelterinplace people are more comfortable talking to a doctor through an ipad and describing their symptoms and thinking about what they should do should they be tested based on their symptoms or have they been positively identified what they should do to monitor their condition. We see that enduring past the coronavirus we think telehealth will get a boost from this and continue. Same thing with home delivery. We have a cvs store, 10,000 of them, cvs within three miles and 70 of the u. S. Population so delivery directly from the store is a Real Advantage for us and were seeing that spike. Were approaching a million new Home Deliveries a week from cvs stores if we see that continuing as well. I would throw out there, becky, that one of the things we havent heard a lot of discussions about, at least in the public domain, is lets just look at the facts as we know them today a lot of working done to find antivirals that will attack this virus. Once its had an onset an infection and how do you track it similar to what tamiflu does with influenza number one and believe there are a number of highly competent pharmaceutical companies and researchers looking for the right one. An aint viral will happen again vaccine. Once we get a vaccine how do those aint virals get distributed. How do those vaccinations take place. Do we need to vaccinate 230 Million People we cant get more than 120 million to vote for president. So we have to figure out how those vaccinations will to be done because i have great faith well get our vaccine, just a question were thinking about that our ceo has brought this up a while ago because we give vaccines for flu and other things, shingles and the like in our stores today this is going to be a big effort, if you think about how slow its been to totally mobilize on testing and now appears we are, as a country, mobilized on testing well have to have a similar but even bigger effort on vaccination. Dave, thats a lot to go through. Lets start with the testing you guys are doirng. Obviousl obviously were getting but i would argue were not ready in terms of reopening the economy based on the amount of testing thats out there how quickly can this ramp up youre doing a lot of testing, why georgia, rhode island and why massachusetts . I would love to see it here in new jersey yeah. For us, we have communities that we serve where we have, you know, eaetna members. Georgia we have 9,000 cvs colleagues in georgia including about a thousand pharmacists 335 stores a million insured. Its a community where we have a lot of involvement in. Were trying focus our efforts we have the resources for the testing. The Nurse Practitioners that can go man these test sites because they are not at cvs stores in the case of georgia its in a parking lot at georgia tech which is a state school and proved to be a good location driven by our community involvement. Obviously rhode island is our headquarters state were the largest employer in rhode island, i believe. And massachusetts next door we have a significant number of our employees and thats where the Company Actually was founded when do you think that we will be able to reopen for business i mean were hearing now some states at least might be able to do it before the beginning of may. But i guess that very much depends where you are, what the situation is in your state and ate little harder to see from a place like this where its been hit so hard. Youre exactly right. New york is a totally different situation both in terms of density and how new york operates from a mass transit perspective and working in a vertical world, meaning, you know, buildings, elevators and like quite a bit different. If you look at texas or california, places where people arent as dense and have fewer cases, so i do think its going to be a local phenomenon and managed locally. Lets face it whatever we say from a government perspective individual human beings are going to make their own choice about what they feel comfortable doing. If i listen to jim cramer it sound like hes going to keep a rubber suit on for a longtime where other people might say gee i feel comfortable going to a restaurant in my community or being with people i know, i might be more trusting but i think human psychology here is going to play a lot into okay were open what does that mean i give jim credit at least hes in engelwood cliff. Im in a bedroom from my house lets talk about potential shortages. Theres been discuss about the supply chain the idea so many of our pharmaceuticals, the base supplies come from china there has been a lot of questions about that and a lot of concern as we were heading in to this lock down that people needed to get their pharmaceuticals, anything they absolutely needed to take in big supplies ahead of time have we seen any of those problems actually develop . Are there drugs you cant get ahold of in your pharmacies . At this point, if you go back a month we started to talk about supply chain in early march with the obvious facts that he some of these ingredients come from china and india. You know what we have in stoing the u. S. From the suppliers that we deal with and our own stocks make us comfortable that we can get through, you know, lets say the next three to six months, you know, without any real risks. But there will be spots where behavior, again, like chloroquine, there was a rush in buying, people trying to stock up, hoarding might be a word thats a drug, as you know, thats used for lupus, gets used for Rheumatoid Arthritis there are people who are on that that need access to that we ended up creating a shortage because of hoarding thats not good at the moment what our people say is that if we are cautiously optimistic about our ability to manage the supply chain all predicated on how long this lasts, i mean. How much longer well see it, and obviously were talking with all of our suppliers about make being sure we have adequate access dave, very quickly. You serve on the board of at t, paypal and yum i wonder broadly from all the different sectors of business that you see and that you have a perspective on, how much do you think is going to come back and how quickly . How much has Consumer Behavior changed and are there places, i would say maybe paypal sees upside because of Online Shopping how quickly do see people going back to casual restaurants and things like that actually im not on at ts board any more since i retired as ceo and yum as well. Im on dells board. From paypals perspective and dell in addition to cvs obviously in paypals case youre exactly right they are seeing more activity, people shopping from home, increases in the number of net new aci was the, new paypal customers that have come from this so they also have large customers who have been affected airbnb uber, for example. You know their traffic is down and they use paypal for payments i think, you know, a lagging indicator would be someone like dell who is in the infrastructure business. You see some increases in certain product areas but you know as time goes on general business demand, you know, could be affected. I think from my perspective its just like we talk about reopening the country it really depends whats going on in the Airline Business is dramatically different than what were seeing in other parts of the economy. You know, if youre in travel, lodging, entertainment, those businesses have largely been shut down. And i think the question is how quickly do those actually come back where i think businesses like cvs to the extent we wont see the surge weve seen going on but i think returning to something that looks more normal will be less of a change for us. Great, dave, thank you. Good to see you. And we hope to talk to you again soon appreciate your time thanks, becky meantime some numbers just out coming from Goldman Sachs, i want to bring him to earnings coming in at 3. 11 per share. Consensus estimate was for 3. 35. Revenue hit wall street forecast and increased a year ago and most of goldmans segments with notable exception of Asset Management when we return what the ceo of carnival is saying about the state of the cruise industry got to he see whats going on with the cruise industry thought it was dead . It may come back first check out shares of tesla rallying in the premarket after a late night initiation by Goldman Sachs with a buy rating and 864 price target. The analyst says the firm is positive on tesla because we believe the company has a significant product lead in evs which is a market where they expect long term secular growth. Check this out boeings market cap versus tesla. Tesla pushing 131 billion while boeings market cap has fallen belo 8w 0 billion. Cnbc is back right after this. Welcome back to box. Delta, american airlines, jetblue, southwest and five other u. S. Airlines say they now reached a deal with Treasury Department. This is important forges of 25 billion in payroll grants approved by Congress Also known as a bail out. And the largest government aid package ever the deal requires airlines not to furlough or cut the pay rates of employees through september 30th but just september 30th. So after that they can meantime carnival ceo speaking out about the future of the cruise line industry talking with cnbc yesterday, despite the Global Pandemic bringing the industry to a stand sill well i dont know if you can believe this or not. Customers have already started to book trips for late 2020 and 2021 so, maybe they didnt need a bail out in the future theres going to be travel thats going to return and travel and leisure and when it does well return with it. Social gathering at some point will return and when it does people will want to cruise as i said we have lots of people booking now for 21, some even for 20 still and well have to see exactly how this evolves take a look at where the cruise lines are trading right now. Youre looking at carnival at 12. 30 Royal Caribbean at 36. 69 airbnb in advance talks for a new 1 billion loan as the travel Company Continuing to raise debt combat a steep drop in its business. Sources telling cnbc fidelity, t. Rowe price and blackrock are those participating in the financing. The rate guys and im curious what everybody thinks about this, will pay 9 for that debt while airlines and so many other businesses are getting bail outs at effectively zero rates if not grants unto themselves so theres going to be a big discussion i think when this is all over about the winners and losers you have a company like airbnb doing it on its own and then airlines and so many others on the other end of this taking government handouts. Joe well government handouts to make sure we keep an important part of the transportation sector open. I dont think you can argue that it hurts the economy overall to have it shut down. Parts of the economy that get hurt but then Hotel Companies would probably be ticked off if you bail out airbnb not to mention all the municipalities that dont get taxes collected from some of these things that are under pressure too there will be winners and losers but you have to decide which industries are most important in term of the employment they have and taxes they raise, the revenue they raise for municipalities well go to break, becky but i couldnt help thinking about you talking about the airbnb we had that discussion in my house about Airbnb Versus Hotels and i dont know if this is true somebody put a stamp on the sheet and went back a week and a half later and it was the same sheet. I think maybe tightened it up a little bit, smoothed out the wrinkles but maybe airbnb is the way to go. Anyway, still to come on squawk box, quicken loans ceo joins us and discusses the Mortgage Market and real estate prices. Stay tune. Osuve seen the black light in the hotels stay tuned well be right back. Welcome back, everybody. New data out this morning on the Housing Market diana oleck is here and she has more on the front on the mortgage business. Diana. Reporter Mortgage Rates dropped to the lowest level ever in the Mortgage Bankers association Weekly Survey last week thats 1990. That caused yet another rush to refinance. The average rate on the 30 year fixed with conforming loan balances held at 3. 45 from 3. 49 and thats with loans for a 20 down payment 99 basis points lower than the same week one year ago total Mortgage Application volume rose 7. 3 compared with the previous week that seasonally adjusted and driven entirely by refis. Refinance applications jumped 10 for the week and 192 higher than the same week one year ago. Low rates did little for home buyers Mortgage Applications to purchase a home fell down for the fifth straight week. 35 from a year ago. Spring Housing Market started early and ended early thanks to covid19 purchase applications in the states hardest hit which is new york, california and washington state. They are about half what they were a year ago. Andrew okay. Thanks very much, diana. For more on the state of the Mortgage Market and the feds reaction to the crisis were joined by jay farmer ceo of quicken loans largest mortgage lend her in the United States. Jay, thanks for joining us just tell us over the past couple of weeks what have you been seeing . What is it like . Well, as mentioned i think from a purchase perspective weve seen application dip a bit although a lot of prequalifiation march was the biggest closing month in our companys history 21 billion in mortgages closed. What does april look like at this point april will be bigger. You know we did close to 52, 53 billion in the First Quarter were estimating well be near 75 billion in Mortgage Applications in the Second Quarter. So record numbers there, which is important, helping folks to save money and our centralized systems allowed us to continue to move forward here although a bit more complicated in the marketplace. Let me ask you about the complication in the marketplace. To the competent you have economists working with you, whats happening to real estate values over the next 12 months what theyre he telling you . Were hopeful that well start seeing the economy light back up as we get into june and july if thats the case we wont see much of a dip here in real estate values because well have a shortened window where there wasnt the purchase activity if, of course, things extend beyond that we cant get people in home and purchases done we could see a drop in real estate values and make refinancing more complicated as well. Its not your business, but it is your business to some degree how do you think about the number of people who may not be paying their rent, what thats going to do landlord whose may have a mortgage on a property and how that cascades or doesnt cascade into the Banking System . You know, it is kind of our business, obviously. One of the largest mortgage servicers in the country we have a few million clients were collecting payments from and similar situation. I think right now the most important thing is education were talking to our clients who are thinking about whether they should make their mortgage payment and taking the time to explain the programs, make sure they tuned situation is critical i think theres been a lot of either miscommunication or theres been, you know, different communication occurring and people arent sure what to do so weve been taking the time to educate folks on what their options are and because of that our forbearance rate is lower than the industry average and i would imagine its the same type of philosophy on the rental market working with clients to determine if you can help them otherwise is important right now. Jay, with rates solo right now i wonder if there are people who are trying to refinance mortgage and if theres any appetite for that just given how much cash theres been in the Mortgage Market lately yeah. Were having record days from an application perspective. Again, it may come in pockets. As you know we do business in all 50 states which is helpful to us. So there can be ebbs and floss in certain states or regions as shelterinplace started to take effect overall interest has been at record levels. Well have a record month in april for Mortgage Application which will translate to another record in close for may. Jay, can we go back to tissue you were just talking about, when it comes to people who either think that they cant pay their mortgage this month or want some kind of payment deferral lets say you are in a business where youve been laid off, do you have a mortgage payment that would be due, whats the conversation how is it supposed to happen what are they supposed to do this is an interesting one. In mortgages in particular as you month the servicer is taking the guidance from fannie mae, freddie mac or gennie marsh ae its not within our decisionmaking to figure out what to do for them. Our tool right now is something called forbearance we have discussions with clients. It gives you and opportunity to pause your mortgage payments and no impact on your credit but at some time in the future you have to catch that back up right now were still waiting on guidance what that will be here for this crisis. It leaves the clients a bit uncertain. What were work with is trying to explain to people what their options are and also understanding if indeed they should skip the payment or shunt skip the payment, because at some point in time youll be making that payment back, its just a matter of how well figure that out together thats why taking the time, pause, weve grown our servicing call centers by hundreds and hundreds of people all working from their homes, to take the phone calls, answer the question, our Technology Team stood up a website that allows folks to get those answers as well and i think thats the most important thing just everybody kind of take a deep breath and do the he research and then make an educated decision if forebearians is the right thing and taking a pause without affecting your credit makes sense then thats what well do. We appreciate your time and perspective and all the work you guys are doing right now thanks so much you bet thank you. Were going to take a quick break. First check out shares of Goldman Sachs. First told you the earnings did fall short revenue topped estimates the Investment Bank says it stopped purchases of its common stock in order to pour more capital and liquidity to meet the needs of its clients were coming right back. Knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Im good at my condo. Well planned, well invested, well protected. Voya. Be confident to and through retirement. Aand were here for you ry day fespecially now,rs. 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. Researchers race for vaccines as well as therapeutics, antiviral combat covid19 our next guest says theres something more important. Joining us now why serological tests are crucial. Systems found end and former ceo and founder of biofirm and serves as a visiting fellow in neuroscience at cornell medical college. Been a while, doctor sam, good to see you can you tell us what that means. How will that get us back on track, serological tests why are they crucial joe, how are you it has been a while. I think weve been talking about developing a vaccine thats critical. Weve been talking about antivir antivirals what is also as critical to something that is a novel virus, we call this a Novel Coronavirus. Its novel because the human immune system has never seen this before. So one of the things that we have to worry about is what percentage of people are developing immunity. Its my feeling actually that before we get a vaccine on the market, and perhaps even before we have an antiviral on the market the winner of this war against this novel emerging virus will be the human immune system the only way were going to be able to tell whether or not human immunity is winning is if we develop not only the assay were using right now, which would jar the pc assays looking directly for the virus but also developing a serological test for antibodies we already know in places in the world like iceland, in places in germany, in place s the farrow islands the percentage of people that have seen the virus and have beeninoculated is far greater than the number of people who tested positive the positive testing in the world has been the tip of the iceberg. At Columbia Medical School in the Maternity Wards we see women coming in that are positive for the virus at about 13 to 20 of the women coming into the Maternity Ward with 86 of them having a slight case of disease. 10 of them having moderate disease and only a few percent having severe disease. So that means that the majority of people coming in are one, mild disease carriers, but two, their immune systems are seeing this as clearing it. And so instead of saying that we have 600,000 people in the United States that are virus positive, there are probably millions of people and that means that before theres a vaccine in a year and a half, and, you know, im not a big fan of repurposing drugs, i actually blo lly believe you cr drugs in a specific fashion like the antibodies that people are trying to create but more importantly i think there will be a new generation of antivirals. Im working on a couple of thing that i think are interesting we need to test people for antibody, we need to do proper testing so that the tight rope that were walking right now and its a tight rope about getting us back to work, opening us up to normalcy versus protecting the people from disease is one that isnt easy. Were affecting people psychologically and emotionally. Right now people cant take their families out the only way we get people back to work is to know whether or not they are immune or whether or not we can take a risk. And i believe that while were seeing, as a divider of denominator and a denominator that are virus versus deaths, what we really should be looking at is who has the disease. If we look at that if we try to understand who has the who has had the disease, who has had the infection. Some people dont even have disease induced by this virus, those numbers are going to be way down below 1 . The way they are in parts of germany, iceland, farrow islands and other places and if thats true, there is a risk reward we can have at any given point in time also this is like a domino effect this is an emerging virus. A longtime ago a mennor of mine, who was a Nobel Laureate talked about emerging viruses he said they were going become the scourge of mankind they may very well be. This one wont, but there will be one maybe one day that spread and wipes out humanity this one isnt going to be that virus. But since its an emerging virus it came from animals and infected humans and then evolved to pass between human and human. Since its doing that, its new and our immune systems have never seen it before and we have to respond most of us do. Some of us dont and those of us yeah, go ahead. Sam, do you feel confident in saying that its similar to other pathogens were were i o inoculated or maybe its akin to hiv where it doesnt leave you i dont see how how. It doesnt go into genome. Its a positive strand of messenger r and a. Its a positive strand of messenger r and a. Viruses, emerging viruses especially involve to converge on a receptor that normal biological processes use and this one usgets into lungs. This one is profibrotic. This virus is new and does new things to us but i would doubt if i had to make a bet and someone said to me youre not going make an immuno response to this virus or humans arent i would say they are wrong because weve made immune responses to every virus in history some have killed us. Sars killed 75 of people. In the maternity studies that i talked about a moment ago, right now virtually all the women are fine with sars 50 of them died with the middle eastern strain of the coronavirus 50 died. With certain times of influenza people died. With hiv they died emerging viruses infect and the one that didnt indues a proper immune response was hiv. But thats because it attacked the very cell that was supposed to be immune, and its not only antibodies that give us immunity but also our t cells that give us immunity to viruses and this is going to be a viral infection thats going to indues an immuno response and if we think about using the proper serological tests to tell you that people have seen the virus, i would make the bet that those people can go back into normalcy and there may be others that to take that risk there are young people that dont have underlying medical conditions, that may want to take the risk. But sooner than later were going to have to get off the tight rope that were walking and figure out how to bring society back into normalcy thats got to be before we get a vaccine, which is going to be a year to a year and a half. J and j has a great program. There are great programs out there in vaccines. Well see. Vaccines are tough they are not easytomake. Antivirals are tough there arent that many great antivirals the antibodies from patients that have seen the disease, and using their plasma, may be quite obviously and were seeing that right now. So, you know, this is not an easy game because this is a novel virus. The human immune system has never seen it. Therefore, its all new. But human you know were supposed to use scientific data. Tony fauci is spot on and dapt change and each day were learning more about this disease. And were learning more about how to treat the disease but i would believe we need to move forward well do the test the Antibody Testing not, but as you say not to see whether youre currently have it but to see whether youve had it and that is these are a lot of things that you have opened up for us to think about, sam. We appreciate it and maybe we can get back. Thats the question. If we dont have a vaccine how do we get back to normalcy sam, thanks for coming on today and sharing all of your thoughts with us. Joshua, a real nobel prize not one of those economic ones or peace. Thanks, sam. A real Nobel Laureate. Back to you becky. Citigroup out with its earnings wilfred frost has the numbers on that reporter unlike southeast others its a slight beat on both the top lines expectation 104. Main reason for this is higher exposure to fix income trading which has been very strong throughout than perhaps some of the others have had. But they still have significant reserve build in the loan area so overall still the same kind of concerning theme, i think you have with all the banks about the outlook for the economy. Lets go into some of those numbers. First trading. Fixed income, currency, 4. 8 billion expectation was for just under 4 billion. Equities a nice beat 1. 2 billion, expectation was about 1 billion. That was a positive. In terms of the provisions for credit losses that was 7 billion. Same number a year ago and same quarter was just 2 billion quite a big increase there where do they stand now in terms of their total reserves versus total loans and we got some comparisons here across the bank citi going up 1. 1 , 110 basis point to 2. 9 . There are some of the others we talked about through the course of the last day or so. Citi is light slightly bigger. Theyve bigger exposure to credit cards they mentioned the ppp program 3 billion in applications. A lot lower in terms of applications dollar amount than weve seen for the likes of bank of america or jpmorgan, no hard amount in terms of what they paid out well look for that. At the moment share is down 2. 7 as you guys have been saying for the rest of the market declines today offsetting gains yesterday. That doesnt apply for the banks. All banks decline yesterday adding to those declines again today, becky thank you very much right now joining us for more on what we should think about the Banking Sector after hearing the results over the last couple of days and state of the u. S. Market and economy lets welcome in mohamed elerian. Hes a chief economic adviser. Great to see enthusiast morning. Good morning, becky thoughts on the Banking Sector we knew these reserves would be taken. The amounts are all over the map. Jpmorgan may be the most cautious and kind of conservative on this entire situation. What do you think now that weve had so many of them reported, jpmorgan, wells fargo, citi and bank of america. They are consistent on all three messages one is very large loan loss reserves jpmorgan took 8 billion, citi took 7, bank of america took 5, these are large numbers and expecting what jpmorgan called a severe recession the second the thing is trading is great margin is very strong month and not surprisingly it exploded and banks were in the middle the third is reopening an old debate narrow banking versus universal banking. Turns out it helps to be diversified. Which is the opposite of what the discussion was back in 0809. Really interesting but the message is very consistent do you think this was a case of them actually seeing a huge recession thats going to be taking place because of these charges or do you think this is the case of them being conservative in that instance . I think its both i think they expect, the imf, everybody expects the worse economic hit since the Great Depression and thats a big statement. But i also think if you made a ton of money own trading, you really dont want to show massive profits right here you dont want to say hey look im okay while 17 Million People are unemployed in the last three weeks. So they are both willing and able to take it. What do you hear about whats happening in europe with the Banking System there the potential exposure the banks here might have. Is that a big issue at this point. Is that something we should be concerned about or should we feel good about where it stand i missed the first part of your question. I apologize. The european Banking System, i know theres been some questions raised about that. How much do our exposure do our banks have to that we dont have much exposure to that. European banks depends where you look the banks want to be part of the solution they need to be because theres a massive credit squeeze that may develop. We dont want liquidity to become a solvency issue. The third issue is tricky. How much credit risk should you take on your books and how much should you take on and how much should somebody else take on and thats a really tricky issue i guess that gets back to this question of how soon the economy reopens some talk yesterday that there are some states that might actually open up before the beginning of may i guess its hard to try to figure out what the quantity is going to be in term of how much business comes back. And i guess with the lag time is before we get back to some state of normal. Whats your guess on this right now so it is a guess. I think most of us see a gradual return it wont be spontaneous. It wont be instantaneous. It will the take time. There will be hiccups. The one thing we havent talked about is risk of a double year thats something i worry about what if we reopen and end up like singapore and have to shut down again, like hong kong seeing infections go back up what do we do then theres a balance of risk. Im glad i dont have to make that decision. Its one of the most difficult jchlts to make how much economic risk to take versus health risk thats a really tough call were going to have to learn were going to open. Were learning every day and thats positive. In terms of needing testing coming back do you try to figure any of this out. Its difficult to watch the different lines of thinking on this we were talking with sam waksal about testing antibodies to people know if theyve been exposed and feel safer going back or generalized testing. Seems like theres some sort of new normal to brother your phraseology when it gets to testing and what we should get used to. We should get used to testing. The hardest thing will we accept as a society as a health positive will we accept something im carrying something im tested and open to be randomly tested will we accept that or not if we do we can open more quickly. If we say no i dont want that it will be harder. Do you look at certain sectors and think these sectors are more likely to rebound more quickly. Jim cramer thinks you need be a more stock picker, not picking blindly. But the idea that there are going to be some serious winners and serious losers some areas where things rebound more quickly and other place where it could last for years he yes, yes you see it already s p u. S. Has done much better than emerging markets and for good reason. Relative call is easy here the absolute call is a tougher one. Absolute call meaning when were back to all clear all the way around are we going straight up zbhen going straight down again . Thats why i liked the quality trade. Keep the claim on the up where side while protecting the down side the relative trades are working out well and working out according to Balance Sheet, where youre going to be on the other side of this crisis and how good is your management. Were seeing that over and over again, played not just within the u. S. Markets but u. S. Versus the rest of the world. Good to see you thank you for your time. Thank you okay coming up when we return right here on squawk box an upliftinger to for these tough times. Celebrities and sports stars fundraising for Food Assistance by offering some one of a kind experiences. Michael rubin from if a phanatin arod. Take a look at shares of tesla Goldman Sachs saying tesla has a significant lead in the ev market which it expects will experience long term secular growth stay tune youre watching stay tune youre watching squawk on cnbc of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Yeah, they say if you blanch it its better, but that seems like a lot of work. Now offering zero commissions on online trades. We charge you less so you have more to invest. So were working 24 7 toected maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. Fanatics. Welcome back to squawk box futures right now indicated about where theyve been anywhere between, lets just say minus 350 or minus 370, minus 300. They did briefly trade down in the 200 and change but back down near the loss. Take a look at crude, wti hit 19. 20 earlier this morning. Thats the lowest level since february of 2002 the iaea said overnight Global Oil Demand will fall by 300 Million Barrels per day versus last year erasing almost a decade of growth but thats about the number that we saw in terms of that deal, but the supply concerns are now, i think, in the background i mean supply is bad the saudirussia situation is there and now were back to worrying about what demand will look like. Yesterdays sport merchandise giant fanatics launched the all in challenge encouraging alisters across all industries to donate to a fundraiser and address Food Insecurity during this pandemic. So far mark cuban, just bieber, Alex Rodriguez signed on fans can bid on or donate to win special experiences in a 100 of proceeds go to organizations providing food for hardhit americans. Joining us now Michael Rubin our friend and executive chairman of fanatics and the man behind the all in challenge its great youre putting this together and our friend arod, ceo of arod corp thats fine, i dont expect to be on the alist ever. Im wondering how far down do we go before we hear from you what do you think arod . We got to start the alphabet again before we get there or not . Tell us about it, michael we lost audio okay alex is laughing maybe we still got it with you youre an alister one of the first people. What happened. Michael called you and presented this to you. Michael is already doing some stuff with the masks you werent surprised. I dont know if you did anything with kenny i dont know how much he raised for food what about this . This is a great idea too joe, thumbs up. Can you hear me. I hope youre hearing me anyway, michael called me and he said i have an idea to raise a bunch of money and i think i need your help ill call around with some of my buddies. Like kenny did with wheels up. We donate ad million meals for those in need and michael has not slept in two weeks trying to put this thing together. And it has worked out really well im really excited to be in a position to be able to rep back, teach a batting lesson and i have a trophy behind me from 2009 one in new york and one here the one in new york is going away in this challenge you know, i see the problem, michael. I dont have anything to auction. You know, arod i like any of that stuff theres a problem. I see why maybe i wasnt on that list initially how do you think about this, michael and who is participating . Well, its an incredible experience for people to be able to donate for a chance to win an opportunity to be a guest host in the morning we were going to hit you up anyway glad we could do it on live tv you and becky and andrew are committed to help and feed a lot of people that need help were excited to you guys to give a guest host to somebody on squawk box thank you in advance thats a good idea. Thats a good idea do it off of the name of squawk box not necessarily me or andrew or becky. Thats a pretty good idea. Whats the its a team sport to answer the question you asked. For me i said this with you, with you guys several times, i really believe that in a crisis and theres no bigger one than our country ever faced its the responsibility of the leaders in sports, entertainment, business to really step up and figure out how to make a big difference so, you know, for me i just kept thinking about what else can we do really interesting thing is i called some of my friend and said hey what do you think about this guys like alex, people like magic johnson, peyton manning, so many great people we reached out to with this idea. Much said the same thing weve done a lot but i want to do a lot more what else can we do. The real thought process here was to get everybody working together for an incredible cause and certainly theres so many people today that are out of work you talk about it on your network. There will be tens of millions of people out of work. This is such an important issue. And to be able to get kind of the world united against this issue to me special. So having every athlete, river artist, every celebrity going all in, contributing their most important prize items or creating a once in a lifetime experience to help raise money and that money going to help people is something thats very exciting what finally happened, did you make some masks, michael on another subject. Is that still happening. This is not the first thing that youve pitched in on yeah. Masks have been great. Were in the process making a million masks. Were making about 25,000 a day. I see people wearing them. Its been youre pleasure to help and we were honored to do that this year is such a big opportunity have somebody like alex say i want to donate my world series trophy. I want to go take somebody to batting practice all to raise hundred of thousands of dollars for, you know, helping to feed people is really special ive been blown away just the first day we launched this yesterday at 12 00 and so many people came with so many great experiences and some of the viewers on cnbc who wouldnt want to go to batting practice with alex and have his world series trophy. So its a way people can donate and make a big difference but take something away from pinpoint we thought it was the best combination of, you know, having the world join together its not just for people who can win an auction and spend hundreds much thousands of dollars, this is for everybody we have experiences we can donate 10 and 25 to win. Justin bieber will fly to somebodys house and sing a song to them oneonone kev kevin hart will give somebody a speaking part in his next movie. Leonardo dicaprio will give somebody a speaking part in their movie. Major League Baseball will let somebody throw the first pitch in the first game of the world series so theres so many people working together to raise, you know, tens of millions of dollars for people that need, to help people not be hungry. Very interesting. Tell us everyone youve gone over a lot of things and i guess the list isnt complete, is it yesterday there were about 50 people who just went all in when they saw this and its been so many incredible names. I just saw tom brady is going all in now hes announcing that this morning. Theres been so many incredible people so today we have about 50 people go all in, in the last 24 hours. Our goal is to have every celebrity, every artist, every athlete go all in and contribute one of the most important prize possessions or create a once in a lifetime opportunity and tens of millions of people involved there are certain items like this experience with alex i hope everyone in new york or everyone in the country saying man i want to bid on that because i want to do batting practice with alex and i want to have that world series trophy. But then theres lots of people who can donate 10 or 25 to have an incredible experience to have Justin Bieber sing oneonone to your house or tik tok stars, spend a day with them in new york city mark cuban will sign somebody to a one day contract in preseason if youre a sports fan, a music fans an entertainment fan, do something for everybody here thats great. Alex, while we have you here and we got to go in a second but do you have a plan to get mlb back on the field . Thats going to happen at some point hopefully this summer. What your hearing . Do you have any insight into that arod i dont have any deep insight. I know major League Baseball is working around the clock to do the right things, to be a leader like the mlb and nfl this virus is very serious, very fluid. The virus will tell us when we play, baseball cant tell the virus when we play players want to play and fans want to watch. So im hopeful we get it going thank you both, michael, thanks for doing this. Im thinking, i have a participation award from a Golf Tournament i was in last summer. Im not sure thats as good as some of the stuff arod has. Thank you both for coming on and good luck. It sound great well be following this closely. Becky. Thank you joe, thank you very much. When we come back we got breaking retail sales for the month of march thats when the coronavirus really started to hit the American Economy theexpectations are for a drop well ask the chief Investment Officer about successful investing in the midof a pandemic as well check out shares of some of the companies that have reported Quarterly Results this morning youll see right now how their stocks are performing. Some wneinrs, some losers. Squawk box will be right back. When you look at the Critical Issues facing our world, what do you see . We see a billion more people breathing free. We see access to fresh food being the global norm, not the exception. We see homes staying cooler, without the planet getting warmer. At emerson, when issues become inspiration, focusing core strengths to create a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Welcome back to box this morning. Take a look at futures were in the red things got worse dow off 455 points nasdaq look top down 130 points. S p 500 looking to open down about 60 points. Becky . Thanks major u. S. Airlines getting a government lifeline as the coronavirus squeezes travel demand the Treasury Department says the carriers including american airlines, united, delta, southwest, jetblue and Alaska Airlines have agreed in principle to a 25 billion rescuepackage companies will have to payback 30 of what they get from the government 70 of that total will go towards keeping employees on farrell and wont need to be reimbursed airlines cant layoff employees before september 30th and agree to restrictions on stock buy back and dividends at 11 00 a. M. In an exclusive interview, the ceo of american airlines, phil has reported back anthony. Done a Little Research i asked that question before Steven Mnuchkin said that the reason they want to make sure they give money to some of these companies and make sure they keep their employees employed is that way the government then doesnt have to turn around and support those same employees if they get laid off in Unemployment Benefits. Phil did a Little Research on that and is telling it i want to make sure i get this right. That with delta which has a large number of employees who took unpaid leaves of absences those employees can file for unemployment hes checking with some of the other airlines on that i want to report back the what he said on that. We always go back and forth about that do you help the workers is it really different if you help out the company that employs all the people its all connected coming up breaking Economic Data march retail sales are out were on the loss of the day for futures. Plus well be watching for the Coronavirus Impact on these numbers. Stay tuned squawk box coming right back e ready to listen. And ready to help you find opportunity. So. Lets talk. Edward jones. Its time for investing to feel individual. Jud. Welcome back to box. March retail sales and key manufacturing read from the new york fed Rick Santelli is standing by bring us those numbers reporter these are for the record books keep in mind that retail sales started in 1992. Because we were down 8. 7 on headline march advance and that is the lowest read ever, 2008 had that title prior to today and it was down 3. 9. So we more than doubled that down 8. 7 lets go through the internals both are a little less than we were expecting meaning they were not as negative as we expected the control number actually is positive at 1. 7. Thats what gives inputed into other up the food chain data points like gdp. That was obviously a bit better than expected. That headline says it all. For empire, remember empire started, i believe, in july of 2001 the all time low on elm pyre is minus 34. 3 from february of 09. Wow we we want through that. Minus 78. 2 is their april read on Empire Manufacturing in and around gotham and obviously thats not a good number no one was expecting these numbers to be much better. But that really is doubling the expectations for what we were looking at if we look to the markets we should have been prepared nor. Remember i talked about interest rates. You really rather have them going up at this point not down and they are going down. We close at 75 basis points on the ten yesterday. Trading at 67. We closed at 22 on a two year yesterday. A bit under 20 maybe the dollar index also that barometer, we said at least for this point in time i like a strong dollar for our country but at this time in anxiety. From a global perspective you want to see the dollar ease off a bit because demand for dollar economy is not doing as well as we are dealing with coronavirus is one pressure. Today the there are index is up smartly so pretty much everything i see is pointing to the fact that we may have various pieces of good news, flattening of curve and some programs helping businesses, but in the grand scheme of things theres a heavy slog ahead joe, back to you every time one of these numbers comes out, rick. Steve liesman joins us now with more we saw it a few times withthe claims number, steve seems like the forecasters cant get negative enough to really hit the numbers or get anywhere close to them. Reporter yeah. I mean they kind of had this right on the minus eight on the headline, joe. What i think is interesting is they seem to be doing a good job at capturing the way consumers are spending right now ill give you some details which is kind of interesting clo Clothing Stores are down 50 Sporting Goods and hobbies down 23 . Nonstore retailers picks up your internet up 3 another interesting aspect of this, health care and personal care up 4. 3 , Building Materials up 1. 3 the other thing i want to flag wish deknew there was the hoarding going on in march and im looking for that category that might pick that up. I saw it earlier it was up 1 or 2 , Discount Stores were doing pretty good in terms of the people buying stuff ahead of time. Well see how that works Motor Vehicles down 25 . Why does any of this matter . We want to look at the downturn and then try to gauge and forecast the upturn. Well show you the cnbc rapid update, Second Quarter looking worse now, Third Quarter looking better let me go to my chart. 31 decline. Notice decline in the First Quarter. The upturn, the Third Quarter upturn getting stronger at the moment thats whats baked in why is this market going up . I dont know if you told me it was doing so based upon a strong and strengthening belief in a Third Quarter rebound there it is in the fire i cant say if its right but theres a 17 rebound in the second and Third Quarter followed by what looks like an 11 rebound in the fourth quarter. We dont know if these guys are right. Were trying to gauge whats built into market right now. Thats what is it. Unbelievable, unprecedented decline in the Second Quarter but very strong rebound in the third. Joe . All right steve, thank you andrew, toss it over to you. Thanks, joe. Lets talk more about what this mornings mick numbers and earnings reports mean for investors and what we should all be doing joining me now is chief Investment Officer at cal thestrs. Christopher, thank you for joining us walk through how youre thinking about the markets right now andrew, its really about taking a look at your Asset Allocation i encourage all investors to back away as much as individual stocks i got a little bit in the whole market as a broad portfolio. We repositioned ourselves very defensively, underweight equity, overweight fixed income and risk mitigating assets and trying to take the opportunity to communicate with people and this is about the time that while the rally this last week really surprised a lot of people where you have to start looking at where are opportunities to get back in. So, given youve become defensive, im curious are you looking at this we keep debate is this going to be a v, a w, a hockey stick lets hope it isnt. How do you see it . You know, probably more like i think last night the amount of monetary and fiscal stimulus weve seen which is unprecedented. Youll see some strength in the economy in the Third Quarter we still have to get through the Second Quarter the empire state number shows you how dramatically the economy has been shut down i doubt we stop the economy almost on a dime, which is amazing but i dont think we can restart it as efficiently. Well end up stumbling out of this slowly. But well rebound on the other side in terms of your long term perspective, you know, a lot of investors out there that say the stock market should be up, maybe its reasonable today, maybe it should be higher on the thesis effectively that if we print money the way we are, assets should be more valuable. Do you buy that . I am afraid that the amount of money were printing, good grief somebody at some point will Pay Attention the deficit with these programs im worried the fed is going too far with some of these programs buying high yield bonds, waving market to market rules those things will have consequences i dont think well get a lot i dont believe well get back to february highs at all. I think those were extreme levels but the market really, last week was obviously certainly surprising touched near those loss. I still believe we probably should and will eventually, as all this Economic News and earnings comes out you know, stocks dont rise when earnings are getting cut but this stimulus will have an impact without question, and we should expect probably the market will come back a bit stronger as the leader of a public pension fund, what do you make of the bail outs of the airlines, for example . In terms of what Public Policy should be. You know, andrew, its such a tough call and its almost the amount of bail outs and as i mentioned before the Federal Reserve stepping in to different markets and bailing out Different Industries on a fiscal basis its as if were going to look past a recession and the government is going take that burden Long Term Debt has huge consequences and costs we saw in 08 that the Federal Reserve was able to start to reduce its Balance Sheet but took them almost a decade. I think well see the implications of some of these moves and its not until we get some perspective in a couple of years will we find out what is the true cost. But, yes, there are certainly some things in here for concern. The reason i ask about this specific question he and im not picking on the airlines but we are in a situation where clearly we have decided that were going to socialize losses and privatize gains. That has happened. Weve now seen it two times effectively in the last call it 12 years between 2008 now and 2020 with this pandemic. One of the arguments that people make oftentimes about saving the airlines, for example, is both their critical nature but, you know, the question are the shareholders of these airlines somehow special or critical and they say well you got to save the whole company because pensioners are shareholders too and we need to save them what do you think of that . Yeah. I have to say i dont buy into just the pensioners. But they are a small percentage. I think we have to start saving individual people. But its a question of overall costs and as you said all of a sudden too big to fail remember that term from 08. Im implying almost everything is too big to fail i hate to say it but in capitalism we should have some destruction, even from an event that people cant foresee. Just different with this being a health crisis. Theres the view in washington that they can bridge this with government money but somebody has to give some of that government money back i am concerned about that. I dont buy into the argument that its about saving the pensioners its about saving the overall economy and right now that starts with this jobless claim number, 6 million last week. Whats it going to be tomorrow those are huge losses of individual people. They are the ones that need the support during this time period. And then sort of follow on question becomes how are your going to allocate your capital do you look at this environment and say i need to put more money to work, for example in private equity because they will start to buy up thing potentially that maybe opportunistic over the next year, i want to be more active rather than passive you know, andrew wouldnt surprise you that the private equity firms have already started raising dislocation funds. I think investors will take a look at those but with a skeptical eye. This is not a financial crisis if we were discussing Federal Reserve and congress will soften the blow to the financial side this is a health crisis. There will be Investment Opportunities obviously in Certain Industries but they are not going to be the strong returns that people saw in 09 or 2010 but, yeah, i think as a long term investor, counter cyclical. So when things are down well be coming back in to buy. Most of my peers and ourselves include are in a lot better position in cash coming into this it gives us an opportunity to slowly start to turn on offense and look at opportunities to invest christopher, for so very long just two months ago all we talked about is esg. Something youve talked about as well the question is, is esg, is this the beginning of the esg or end of esg, especially in an environment where clearly if you had great governance, if you had prepared for the worse, that moral hazard is almost over because the government is going to come to protect everybody who didnt you get me riled up esg, absolutely still matters. I understand that challenge. If you have bad governance and government is bailing you out thats part of the problem with the government stepping in and creating a safety net under wall street but, no. Esg absolutely does matter the environment climate still matters. Governance is showing, well see these in these Quarterly Earnings report coming out this week and next and after that companies that are better governed, better prepared, think about those long term risks versus companies that just put all the risk into each individual quarter esg will matter and i think youll hear about it more not less coming up okay. Chris, i hope to have you back soon stay safe and healthy. Thank you lets do it in person next time. Absolutely. Hey, joe, i know you wanted to Say Something about the delay and i think youll hear my question in about three, two, one. I think it might be 10, 15 second i want everyone to know that is how its hard enough. You know what the hardest things to do is if you try to Say Something a little bit light hearted or joke if you have any worries about being embarrassed or something not going over like falling, like when i said that about the participation trophy, i literally waited 12 seconds. And watching arod and michael, one, two, three, four, five it is deafening because it sounds like the biggest lead balloon and so weird to do this. Its hard enough in person but i understand how a guy dies on stage doing stand up where no one laughs thats what you feel like for ten second and then you pray people get it or laugh or something. Very hard. Joe, that joke wasnt the delay with that joke when we come back well check in with jim cramer as we make our way to the opening bell. Check out three of the big bankers we got this morning. Those stocks are down in territorial trading. Stick around squawk box will be right back. Gsz 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 futures right now at the, low almost i think down a little bit more than this, down 500 and change lets get over to mad moneys jim cramer youre busy, jim busy doing a lot of Different Things did you hear sam waksal talking about the possibility of trying to get to know exactly who has got immunity and who doesnt anything new strike threw with what sam was saying . Reporter the key thing for me is something that, that many of these companies are trying to figure out like abbott lab has been trying to figure out. What is serology they claim to have millions of tests within very short period of time. Where we can find out who had it the problem is does who had it translate into wont get it again. The bears are saying to me who had it is meaningless. What do you think, joe i think you know, i learned a lot for sam. Theres a reason why its called novel. If i had to place money on i want it will be what weve seen in the past. Until immune system is one of the greatest creations of evolution ever it can literally your immune system has an antibody for something thats not on this planet because the way it combines genetic material. It doesnt design it like lock and key. Its in your ability to manufacture that im hoping that this is like previous things where you do develop, you know, an immunity to it. Like you say, the bears say no i know. If i were the president , which im not, i would say okay listen if this does prove that you can have immunity, now we know who opens the economy. Its that kind of person a person who already has had it. If not then were had it if not, were back to what governors say. How do you figure have you figured out why is it, number one, true about the percentage of antibodies in some of the pregnant women that have come to places where theyve been tested and its much higher than what we think of as the background level of infection in the general population is that true thats what bio reference labs is saying theyre saying, listen, jim, dont forget the younger people are getting it you seem to think theyre immune, theyre not. Every day we get it seems binary, but i think, joe, it isnt. Theres a lot of data all over the place. If you decide its black and white, i think youll miss whats really going on in the economy. You heard that line earlier, jim, once youve seen one pandemic, youve seen one pandemic thats also what sam said. Brilliant scariest movie ever, contagion kind of true im not going to watch it stephen king. Its all over the map. Yeah. All right, jim you know what its like its like john george being in the same room as bloomin brands what a conference. What a show. Hey theres a reason thats named bloomin brands. I would name my company after the best product on the menu thanks, jim. Coming up, what to watch ahead of the opening bell. Well ask new york fed director Glenn Hutchins about the sea sawisa i seesawing markets. Well be right back. Risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Welcome back the futures are deep in the red as the Bank Earnings roll in and investors get a better picture of how the coronavirus is hitting the economy. Weve gotten some numbers this morning that have been worse than the bad expectations that were already out there joining us now is Glenn Hutchins, hee is director at the new york fed he wrote an oped last week in the wall street journal with gary cohn entitled the feds new mission to save the economy. He also serves on the board of new york presbyterian, which is in the hot zone right now. Give an update on what you can tell us on whats happening here in new york. Some of the numbers weve been seeing have been fairly optimistic in terms of hospitalization numbers dropping and intubations, too so, one of the leaders of the Hospital System in new york said this week that were at the end of the beginning i think thats important as weve talked through this crisis, we i reminded each time we talked this is a Health Care Crisis leading to market and economic consequences. We need to start with the Health Care Crisis. It feels that statement makes it feel to me that the first phase of this crisis, which was flattening the curve, is now in hand we now have to move on to the phases deploying testing, continuing to rebuild the health care capacity, continuing physical distancing, contact tracing, and then the therapies and vaccines to be through this first stage, not unlike whats happened before us in italy and china, is a very important landmark that is a cause for some hope that we will be able to see the light at the end of this tunnel i think thats worth pausing on for a moment thats great news you think this is a situation where we can open the economy beginning of may, middle of may, end of may its very hard now to predict that you know, the adi slightly right of center, center for American Progress have come out with plans about what we do to reopen its important to Start Talking about that those plans, the next steps in those plans involve deploying testing. We dont have a sense now of when we can deploy the testing i heard numbers it like we need go from 150,000 today to 500,000 to 750,000 per day that might take another 45 days to get that out there. We also need to build hospital capacity, not just ventilators, but continuing with icus, Health Care Workers and ppe for them. Right now, for instance, theres a big dialysis shortage, shortage like that will come up. Then we need to get to being able to get back out into society, which will have continuing physical distancing and contact tracing, plus isolation, then once we have therapies and vaccines well get going again. Its hard now to attach timelines to each of those, except now the first step in the timeline appears to be one we accomplished thats very good news. Glenn, we have economic numbers today. The march retail sales today came in down 8. 5 . The expectation was down 8 . Then the Empire State Survey came in and showed a number of negative 78. 2. I dont recall seeing numbers like that. Probably not surprising when you have these stayinplace orders out there. How are the Bank Programs doing at this point in terms of trying to get support to the small, medium and largesized businesses out there what do you hear look, people are focused on individual pieces of this. Lets look at the entire picture. Theres roughly 1 1. 2 trillion n support thats flowing out in four different packages to important parts of our economy we talked about the ppp, i seen you talk about it on this show thats 350 billion the Airlines Support program, which is administered by treasury, 50 billion. The main street programs, 6 600 billion. Not getting enough attention relative to its size, much larger than the ppp program, another 6 600 billion being deployed into Corporate Credit programs so theres 1 1. 2 trillion of support to the Corporate Market being deployed right now thats in addition to the general programs that have been out there for a couple weeks now supporting the markets that fund credit worthy companies. So theres a massive unprecedented support for corporate financing being scaled up right now, and if you look at it in totality, its impressive. Theres been a lot of problems with the ppp program i implementation, it had overwhelming demand so it could have potential for substantial impact do we need more from that . Yes. Have we been able to scale that up quickly and we can look back and say that was pretty good i think so i think the overall programs scaled are unprecedented theres opportunity do more if necessary. The Treasury Stabilization Fund still has dry powder, so they can combine with the fed to do more another hopeful sign were getting this stimulus out very, very quickly glenn, we have about 30 seconds left, but, you know, with some of the hiccups weve seen along the way, do you think its more likely we open the economy again or some of these Small Businesses that have been waiting get their checks i think the Small Businesses in waiting will get their checks the programs are now starting to flow capital out youre hearing about businesses receiving the money. Its going to take some time to scale up a new program and put 3 350 billion out to Small Businesses across the country. You feel bad for the businesses that have to wait. On the other hand, youre starting to hear about it getting out there. I talked to one banker yesterday, she told me they have done 10 years worth of sba business in two weeks. Thats a bad thing in terms of they got backed up and good that they got it accomplished 37,000 loans flowing through a pipeline that used to do 500 a year glenn, i want to thank you. Were out of time. Its great to see you. Hope to see you back here again. That does it for us today. Join us tomorrow, folks. Right now its time for squawk on the street. Good wednesday morning. Welcome to squawk on the stre