Transcripts For CNBC Squawk Box 20240713

Thats something to behold. Its hadding the lowest level since march of 1999. Right now well take a quick look at my board, which is current. I can see it down 4. 13 i say that because ive been practicing waiting 12 seconds to get a quote on something that im trying to give you instantaneously. Now im back on the nasdaq and i can actually see it. The coronavirus pandemic has sapped demand for oil and global storage is rapidly proefing capacity the world is running out of room on ships anchored at sea the may futures contract for wti expires tomorrow looking out to june, the situation isnt quite as dire. Its back to more of what were used to, kind of, at least in the last couple of weeks as you can see there, june delivery under 23 a share meantime, an update now on the pandemic as we bring you the numbers as we do every single morning. Here are the latest numbers. Global cases topping 2. 4 million now with 165,000 deaths. Now, the u. S. Cases nearing 760,000 with more than 40,000 deaths new york state has 248,000 cases with more than 14,000 deaths and we are now averaging over the past couple of days over 4,000, close to 5,000 deaths, which is literally the equivalent, if you can believe it, guys, of the number of people troops that were killed in the iraq war on a daily basis. Its a remarkable and terrible tragedy were all living through. Over the weekend a number of protests, though, spurring springing up, shd say, across the country. I want to tell you a little bit about some of those protests taking place in florida, north carolina, virginia, michigan, maryland, new hampshire, texas, california, and others all of them are demanding that their States Reopen for business pressure, of course, has been building on governors in recent week to begin the reopening process as total initial jobless claims have surged past 22 million since the outbreak began. Meantime, an nbc news wall street journal poll saying americans are worried about lifting stay at home orders too quickly. 58 of respondents said they were concerned that the country would move too fast. About 32 said the greater worry was the Economic Impact of waiting too long you see that debate playing out across the country right now becky . Andrew, thank you in washington right now, the Trump Administration and Democratic Leaders are moving closer to a plan to replenish that Small Business fund, the relief fund out there for them eamon javers has been looking into that. What do you know this morning . Good morning. We know you la makers have been told to come back to washington. Theyve been back in their home districts. Theyre expected by wednesday. Thats a pretty good indication theyre getting close to a deal on capitol hill. Heres how we think the contours will work out. It will be about 310 billion of additional funding for the ppe, thats that Small Business Paycheck Protection Program thats so popular that it ran out of money late last week. 60 billion of that is going to be dig natured specifically for rural and minority businesses. On top of that, 75 billion for hospitals, 25 billion for testing and then 60 billion for an additional Small Business program. This one is a Disaster Relief program so thats 60 billion on top of the 310 billion. Theres a lot in there for Small Businesses the president yesterday gave us this analysis of where we stand in negotiations. Lets see what happens, but we want to put we want to take care of our workers we want to take care of our Small Businesses theyre really the engine of this country i can tell you were negotiating with the democrats you know, they negotiate the things we cant do that we dont think are in the best interest of the people of this country. We are very close to a deal. It does feel like were close to a deal here, becky. Theres a real sense of fear and frustration on the part of Small Business owners who heard those reports at the end of last week that the Small Business fund had run out of money i think lawmakers are going to step up quickly here in order to make sure theres an additional amount of money going out the door in that direction the question is whether an additional 310 billion is enough when youre talking about all of americas Small Businesses facing severe strain here right now the total amount needed to deal with that problem is an unnrn amount well see how that lands as we go through the day today ive been wondering what andrew was just talking about, about those protests taking place, where people want to go back to work in a number of these states where at the same time you have that nbc poll that shows most americans dont want things to open too quickly how does that play out is there any sense of that in washington, what people are hearing back from their districts, back from their constituenci constituencies the president has been linking himself to that protest movement you saw the tweets over the weekend where he was tweeting out in all caps, liberate minnesota, liberate this state, liberate that state. In virginia tweeting liberate virginia with a reference to the second amendment, that is guns the president linking himself to those farright protesters who have been out demanding various States Reopen. Politically that could be dangerous for the president. As you say, were seeing this overwhelming support now for the lockdown effort and for health and safety generally if the president links himself too closely to a movement that is seen by too many as fringe, that could hurt him in november. The American Public here very much focused on health and safety, at least for now now, this is an unprecedented situation and the dynamic could change as we go forward here fascinating to watch the president link himself to something that is an Opposition Movement to what his own administration supports. Eamon, just so were clear, the states he targeted are states that had democratic governors he is hoping will effectively get removed, correct . He interestingly didnt go after ohio, for example. Right, yeah mike dewine in ohio is a republican go ahead, eamon i was going to say, mike dewine in ohio is a republican, the president not targeting him. The president is in a position now of encouraging and fueling a protest movement that is protesting what his own administration officially supports its a delicate political dance hes trying to do here and the payoff might be not good for him in november if hes not careful about it stay where you are, if you could. I want you to comment on this next story going a little out of order but the next story is really actually about the morality to some degree of taking the money, or at least maybe how the public thinks about this money. Shake shack, as you may know, says its going to return its entire 10 million loan from the u. S. Government amid who got access at that fund that was initially aimed at saving Small Businesses more than a dozen publicly traded companies received funds before the program ran out of money. Shake shack executives said they had no idea the fund would dry up so uickly after they secured separate funding they said they would return the entire 10 million. The reason i wanted to raise this story with you, theres a real question about who has gotten this money, theres a bit of a naming and shaming Campaign Going on just over the weekend, Harvard University announced they had taken 9 million of course they have a 41 billion endowment. You can make some interesting arguments on all sides of what this money was for, but how do you think washington is going to see this look, that was a nimble move by shake shack i read the post they put up. Their stepping to the side and dodging any blowback by doing the right thing and giving that money back and saying, this is for smaller and independent restaurants. Were fine and well make sure that some of this money is available for other restaurants. Were all in this together that messaging is probably going to resonate and they avoid any backlash from this problem one of the difficulties here, andrew, is that were not going to have nearly as much transparency in this program as we had, say, in the 2008 bailout era where there was an aggressive effort to target where all the money was going. In this case there may not be any public database where you can easily go and look up who got this funding and who didnt get this funding you may see this in ones and twos as Different Companies are outed, quote unquote i thought it was interesting in the shake shack writeup what they said about this they said there was so much confusion in the early days of this, they didnt know how this program would be structured, who it was for and how best to take advantage of it so they decided to just go for it and see what happened i think a lot of people were in the same boat, but over time, as the Politics Around it and public impression solidifies, Companies May find themselves on the wrong side of it so you may see more companies deciding to do what shake shack did here. Thats what i was going to ask. Do you think well see more Companies Give back . Do you think well see universities, as i mentioned the harvard example is a unique one given the large endowment they have by the way, lots of Ivy League Schools and others took money. Should they yeah. In large part you could argue there are going to be lost revenues here as a result and maybe they would have had to scale back employment if this whole project effectively is employment for all project youd almost want everybody to get the money. Given that not everybody could get the money, it becomes more complicated. Right there are these unsympathetic actors if you have billions of dollars in cash sitting around, the public is not going to be sympathetic to you getting a bailout with taxpayer money. The other big question here is, how practical is this Program Going to be for a lot of these companies . The deal is, you take the loan, its forgiven if you have your employees all on the payroll eight weeks from now but if some of these Companies Getting this money are in states where the lockdown orders are still in effect at the end of that time period, its just not going to tb practical for them to have everybody back on the payroll because theres no business coming in the doors for a lot of companies, theyre making a decision to take a loan in the hope it will be forgiven entirely but putting themselves in a risky position where they be taking on Additional Debt if the lockdown order is still in place in their region when the clock expires on the loan. Its a very stressful and challenging thing for Small Business owners to navigate. Its really causing a lot of fear and a lot of pain out there. Eamon, its not just that some of these loans arent even making it to the people who need it most. The program calls for minimum loan of 1 million the independent Community Bankers over the weekend called for 100,000 lower limit and then there was another group, the american backers association, says it should be as low as 50,000. You would think those are the businesses that need that money the most that dont have anything to fall back on, especially with some of these universities with their massive endowments, claiming they need it thats nuts. The Politics Around this this was put together very, very quickly. All of these unintensed consequences were talking about maybe they just didnt have time to think all of that true. Now the question is, can they go back and change the terms of this when they go back and do this new bill . If you go back and change the terms of it, youll havesquawk from people who took the original deal who say, wait a second, this isnt fair if youre changing whats available out there right now. Its a very fluid situation. Nobody involved in this has ever seen anything like this before so everybody is throwing ideas out there and trying to see what works. The thing that concerns me, becky, just this question of pure scale youre talking about something approaching the size of the total t. A. R. P. Bailout of 700 billion by the time you add up these two funds of ppp thats an enormous program and it may not come anywhere near far enough in order to back up all of americas Small Businesses if youre trying to bail out the entire Small Business sec, to you might need more money than that at some Point Congress will be tapped out and not every Small Business will be able to get a loan eamon, just two clarifications one, my understanding of the disclosure process and all of this is that there was going to be a sixmonth window, meaning you wouldnt be able to find out this information for six months. But after six months, through freedom of information acts and other things, there would be closure or at least the opportunity for disclosure is that not right . Im not sure andrew, im not sure ill have to go back and check the text of the bill whether theres every going to be any one central database where any american i think youre right about the one central database. Right and then the other quick question, this is for Small Businesses out there, if, as you said, eight weeks later you cant keep everybody employed, my understanding was had you kept everybody employed for the last eight weeks that the grant or that the loan would turn into a grant and be forgiven regardless of whether you have to lay them off in the future because your business is still challenged. Right as long as you as long as you get to that point and have the people on the payroll, it will be forgiven. A lot of ive talked to a lot of Small Business owners who say, you know what, we dont have any revenue at all coming in right now it doesnt make sense for me to have people on the payroll i just cant afford to take the risk of not bunkering down and just battening down the hatches on my business as low as i can go going into what is a totally uncertain period of time i think theres a a lot of people who say, we just might not be able to come back at the end of the time period so, therefore, we have to lay all those people off. Ill throw one more wrinkle into this. You have the states and municipalities that need help with this, and that makes sense. I was reading over the weekend how in illinois, i believe its the president of the senate there, is asking for 41 billion, 10 billion to bail out their pension fund, which everybody has known has been under pressure and underfunded forever. Thats where it will get messy and tricky what is something you should shd deserve bailout money for because the government said to shut down and what is something youre trying to lump everything, every problem youveer had, everything you havent prepared for and lump that in to say the federal government should pick that up, meaning the taxpayers should pick that up eamon . Thats a great question, becky. At this point well see all these states and localities coming with their hands out to the federal government so far the Trump Administration and rendz on the hill have thanh the position that its really notal role of the federal government to bail out every state budget everywhere across the country. The president has said, you know, well look at that in the next bill, but they dont want to do it in this bill that is likely to move this week and the question is, if youre new york state, if youve seen Governor Cuomo hold these press briefings day in and day out, suddenly you see revenues go to zero the states cant justprint money the way the federal government can theyre in a situation where they have to play with real money and they have huge budgetary holes to fill. How are they going to solve that problem . It is a massive and unprecedented problem. Theyre looking to the federal government you have a lot of people in the federal government saying, look, thats not our problem, thats not our role eamon, thank you. Well check in with you a little later. Its good to see you on this monday morning. Coming up, Retail Stocks have been battered by the pandemic lockdown. Well i take a look at how the landscape could change bit end of the summer. Todays big number 15. 51 thats how much the s p 500 gained in the last two weeks ekf inonstigexs secd raht we ogas. Number of retailers are taking drastic steps after be, hit hard by the coronavirus. Neiman marcus missed a bond payment and is preparing for bankruptcy protection. Nordstrom suspended orders and macys is exploring options to shore up its finances. Joining us to talk about the longterm industry impact, steven sedov, former chairman and ceo of sachs and National Retail federation. What do you expect neiman to do . How would that look . What will stay open and what are you expecting . I think the neiman situation is an example of whats really going on in retail right now where these Companies First were facing major liquidity issues. Now theyre facing the question of whats it going to look like to open. And then what are sales going to be like . Neimans has a situation where they had highly leveraged, much too much debt. It was a company on the edge with its debt before the coronavirus hit and now thaur going to i think that bankruptcy will allow them to wipe out part of their debt. Maybe theyll end up closing some stores. I dont know if theyll liquidate or not thats a possibility there are a lot of possibilities other people might come in richard saks has been talking about wanting to open neiman a lot of that story still to be written. Some valuable assets. I cant imagine bergdorf doesnt emerge from this he this wont close in new york, will they . No. Neiman is a 4 billion Company Making a fair amount of ebidta it has much too much debt. Its a good example of highly level rajjed lbl type of companies do well when theyre growing but when you dont have revenue, you have a fundamental problem with these businesses. One of the issues we have to think about is we went through a phase, the first phase of this crisis is liquidity. Companies laid off or furloughed an enormous amount of people, stopped paying rented. Now were out of that phase. Some of them wont make it through that piece now were talking about how do you open a store thats a big issue because are people going to run be back to the malls . All of the Financial Aid programs have been bridges to allow you to get to the next phase with an assumption that the consumer is going to come back and shop pretty quickly and the real issue is, what is the recovery rate . Is it a v, a longtailed u, is it an l the real question is how soon will the consumer back if the consumers dont shop bit fourth quarter. None of these businesses were built for a no revenue model. What about the malls, is that ever going to be a Business Model that works again or when will that be a Business Model that works again i think thats the fundamental question i think the mall will revive itself outlet malls, the outdoor malls will probably come back more quickly than some of the indoor malls. The a malls, the premiere malls, will find ways to operate well youll have a lot of carnage in the mall industry. Apparel companies are probably the toughest because theyve taken the biggest hit so far youre seeing sales that are even the month of march where it was half the month, they were down 50 what youll have to find is how does an Apparel Company come back how do people try on apparel products when theyre not comfortable whether or not the virus is there these are questions that have to be sorted through. And so i think the mall is going to be slower than some of the Free Standing stores this is really a story about winners and losers and the Companies Providing bake basics, the wall matter, targets are coming back. Theyre doing remarkably well. The mall operators will have to test their way into this given what are the new standards you have to test every employee. What are you going to be doing for people coming to the mall comfortable that its safe steve, thank you. We appreciate it well be watching this week to see what happens on all these fronts, especially Neiman Marcus thank you, andrew. Coming up when we return, well talk about the investment moves that the rich are making during the market turmoil. Plus, stock futures are getting worse. Theyre now down near 400 points well keep an eyes on the market. A programming note, tomorrow on know squawk box well be join joined by former starbucks Ceo Howard Schultz he has some ideas you dont want to miss about the world of Small Business and what needs to happen to help keep them from going out of business. As we head to a break, here are some images of the Pandemic Impact from yesterday from across america boston light, americas oldest lighthouse, has stood strong through every dark hour and bright dawn our country has endured. It has seen the break in the clouds before anyone else. For the past 168 years, weve also stood by you, helping you weather storms like this one, to protect your loved ones. And well do it for 168 more. As the market volatility increased in late march and early april, wealthy investors were busy trading stocks, finding opportunity. Robert franks joins us now hi, robert. Good morning. Market declines have wiped out 7 trillion in stock wealth since february but some of the wealthiest investors saw this as a big buying and selling opportunity. Twothirds of investors lost a significant amount of wealth between midmarch to early april, according to a survey by Spectrum Group a third had a small loss or no loss most millionaires did not change their portfolios leading into and out of that march 23rd low one in five bought stocks. Only 15 sold stocks but the very wealthy were far more active in the period. Nearly 40 of investors with 15 million or more in total investments bought stocks during that period. About half of them sold stocks the selling shows they didnt necessarily time the market well at least not for this latest bottom they might have been harvesting losses for income tax purposes and maybe buying back those same shares either way, there were four or five times more likely to buy or sell stocks than everyday investors. Of course, they can afford it. For now, more affluent investors are staying on sidelines they have a third of portfolios in cash. Thats the highest level since 2009 most affluent investors do not believe the market will return to previrus levels before the november election. Guys one of the lead stories in the journal today, short sellers. Record highs, people that are short the market right i dont know how you interpret that we know what happens sometimes when shs short. Other times you can do pretty well but sometimes short sales need to be covered at some point. Right i think with this group, again, this is people with 15 million or more, its not a binary, im shorting the market or im long the market its really just a lot of activity around, perhaps, rotating out of sectors, perhaps upgrading their portfolios, perhaps some are balancing, perhaps some losses that the wealthy can do for tax purposes to offset income tax gains the point is there were far more churn and trading activity by those well capitalized investors rather than a lot of the experts say, well, just hands off the wheel during this point. Dont panic, dont trade, just stay the long course, whereas you saw the wealthy who again in 2009 came out better because they didnt sell off the bottom and started buying in early 2009 the Lesson Learned here is maybe it is wise to go in and actually seize the opportunities during this period and these market volatility and upgrade and switch around and harvest those losses well, we shall see. Every article ive seen written in the past, like over the weekend is, stock market has the best two weeks since the 30s, since the 1930s and theres x number of americans have been laid off something is wrong here. So, the obvious sort of consensus thinking of people that dont i dont know well see what finally happened. Thats obviously very easy to be bearish right now. Thats for sure. And in 2009 we saw the same disconnect the market was way up and we had 11 unemployment and people say it doesnt make sense but that was because of the monetary and fiscal stimulus. Among other things. Robert, thanks becky . Thanks, joe. When we come back, crude prices plummeting this morning as demand dried up during the pandemic lockdown. Right now as we head to break, lets take a look at the Pandemic Impact on flights in europe comparing airborne flights this year versus last year squawk box will be right back. These days, its anything but business as usual. Thats why working together is more important than ever. At t is committed to keeping you connected. So you can keep your patients cared for. Your customers served. Your students inspired. And your employees closer than ever. Our network is resilient. Our people are strong. Our job is to keep your business connected. Its what weve always done. Its what well always do. Good morning, everybody. Welcome back weave been watching the u. S. Equity futures and theres a lot of red this monday morning looks like the dow futures are indicated down by 360 points a lot is coming because of whats happening with Oil Prices Oil prices down sharply this morning. Wti was trading at 14, but down 26 , so thats putting massive pressure across the board. It looks like an allout panic right now when it comes to oil prices andrew thanks, becky well continue this consideration with wti down so sharply this morning as demand continuing to deteriorate for oil around the globe prices are down about 75 so far this yeartodate on pace for its worst year since 1983. Joining us right now to talk about what comes next is haleema croft and mike santoli you know, joe and becky and i were talking about this even last week. If wti crude was normally at these prices you would not just have an allout panic in the oil market, but allout panic in the equities market. Why is that not happening . I mainly focus on the oil markets. This is an interesting, unique story to the oil market. I mean, what has been hit the hardest by this pandemic has been, you know, vehicle traffic use. People are not flying. They are not driving so, this is a real story about storage filling up well be in a situation now where cushing could reach ten tops by midmay. Theres a lot of concern about what comes next, particularly around the storage issue so what does come next when it comes to the storage issue . I mean, were expecting, you know, cushing to reach ten tops by midmay there are other places you can store this crude, potentially louisiana, but until we get signs that u. S. Gasoline demand is improving, people are going to drive again, i mean, were continuing to be very bearish on the demand outlook for oil now, there was this opec cut last week, this historic cut there was a lot of focus on that thats really sort of turning off the tap in the bathtub thats overflowing the situation could be far worse. The problem is, those cuts dont take effect until may 1st. Theres still a lot of crude thats on the water right now, that is going to refineries that do not need it that is the challenge right now. Those opec cuts are not coming until may. A ton of crude on the water and demand continuing to collapse. Real quick before i get to mike, is your expectation come may, come june, come july, how quickly do you think it gets turned back on are you anticipating it gets turned back on in a meaningful way . Youre in the same position we all are, were trying foto figu out the timeline, right . Were trying to figure out the timeline of the pandemic when do people start driving again . We do think the opec cuts are important because what it saves, potentially saves, you know, the fall, it saves 2021, but everyone will be watching. Whats the trajectory . When is the u. S. Reopen . When are people comfortable driving again. U. S. Demand is the key to the oil market. Mike, you want to weigh in on the disconnect between the oil market and the other piece of this is just how many Energy Companies are going to be filing for bankruptcy at these types of prices what does that do to the larger economy . I mean, obviously the extremes in the near term prices, normally you would think it would create a greater Ripple Effect but the reason its not is the equity market is not giving the markets any more information than what we knew. If you look at june crude futures, for example, they popped back above 20 this is a nearterm indigestion issue. On the high yield point and how many Energy Companies might not make it, the fed is there essentially saying, were not going to allow that to be a disorderly default cycle across all of highyield debt or other stris. You see the likes of, you know, Ford Motor Company and marriott being able to raise enormous amounts of credit. It seems as if thats been backstopped on that side im not going to deny that the equity market is operating in the zone where it feels free at the moment to ignore a lot of the very nearterm Economic Issues even bond yields where they are are not that helpful for equities again, the equity market says, yeah, we got that. Thats why, by the way, lafs week it was the f. A. N. G. Type stocks working, not cyclical ones i think it is a sort of perception disconnect but not necessarily at the root of whats going on in the equity markets is ignoring all that and saying, we understand this and were implicitly making a bet this is a one to two quarter shutdown period. If the equity markets wrong about that, then this rally has gone too far your thought in terms of what happens to the oil patch in terms of the fact that we do seem to have a backstop by the fed. You do have mlps and others that have remarkable yields right now. Is that a safe place to keep your money again, we look at this i cover the commodities. Again, right now, we dont see any nearterm relief for this oil market i mean, there are going to be questions about what more can President Trump do is he potentially going to pay producers to keep the oil in the ground will we start filling up the Strategic Petroleum reserve . That can help incrementally but theres not a lot President Trump can do right now to fix the tee mann the demand situation so we remain concerned about the oil in the near term. Meantime, when we come back, a lot more on squawk box ahead. Well talk about the latest details surrounding the coronavirus. As we head to break, take a look at the biggest decliners in the s p 500 premarket. A reminder, you can watch or listen to us live any time on the cnbc app well be right back afr isteth heres the thing about managing multiple clouds for your business. When youve got public clouds, and private clouds, and hybrid clouds things can get a bit cloudy for you. But now, theres the Dell Technologies cloud, powered by vmware. A single hub for a consistent operating experience across all your clouds. That should clear things up. The best Entertainment Experience. S xfinity x1. Welcome back u. S. Equity futures at this hou indicated under some pressure. Down about 365 points on the dow jones. The s p down just under 40 nasdaq indicated down more than 100 points and then weve got oil, at least in the spot month, down there. Im wondering what happens to future months. I would have asked haleema that. Well see if we see the future months come down to levels like that, which are just unbelievable i dont know where gas can go. There is 90cent a gallon gas around the country. Yeah. The future months, from what i heard, i think its out 20 to maybe 30. But all the way out, those contracts have come under pretty severe pleasure. 30 looks better than 14, but if youre thinking over the long term, months from now, thats a scary outlook if thats telling you something about the demand picture around the globe. Well, theres no demand yeah. Sometimes im sitting outside, becky, and i dont see any planes flying around i know. Its a spooky thing. When i do see one, i stop and look up at it because its such a rare occurrence you do see a plane. I started my car for the first time in a month just to make sure my battery doesnt die. I dont do much, but i have not be you know, get some curbside stuff, go out and pick up some stuff occasionally i heard eamon say that, he hadnt started his car in like a month or something. Yeah. If felt weird. Its such a comfortable seat you forget what it feels like its surreal because it was a Beautiful Day yesterday. It is truly invisible. Trump uses that term a lot, the ip visible enemy, but it just feels unreal i wake up some mornings and think maybe im going to wake up, but i never do this from, you know what i mean its real. Yeah, joe, i was going to ask you, really, what does it feel like in times square we keep seeing the empty shots i jumped out of the car and walk the five feet but i put a mask on because the police are everywhere and everybody ive seen has a mask. So, even people in here, i mean were far away from each other. I was wondering oh, mac i dont want these guys coming in here and yelling at me for not wearing a mask but if they did, then thats next but i told you, i have the cat lack of masks right here, the n95 with the the n95, right all right. When we come back, well talk to the ceo of a hospital on the front lines about the way they are fighting this pandemic. Right now, though, as we head to a break, take a look at the companies that short sellers have targeted most recently. These are travelrelated firms, including carnival, royal caribbean, marriott and wynn resorts. A general report says bets against the s p etf rose going back to 2016 i think the number was only 60 billion at the start this is as high as weve seen based on those charts the. Incredibly high levels well talk more about what that might mean e military community, weve seen you go through tough times and every time, youve shown us, youre much tougher your heart, courage and commitment has always inspired us and now its no different so, were here with financial strength, stability and experience you can depend on and the online tools you need because you have always set the highest standard and reaching that standard is what were made for about 200 patients have received it. Anecdotally as youve said there have been some really encouraging results, patients who have been on a ventilator have been able to be extubated the next day like everything we do at mayo clinic, we need the scientific rigor. Therefore, we will be looking at the first 200 cases and continue to analyze to make sure we actually subject this initiative to the same rigor as any other medication or pharmacological agent. That was dr. Jean ferrugia. He was the ceo of mayo clinic. He was speaking with us on friday when he told us they treated over 200 patients with blood plasma we have an update now. The mayo clinic tells us they saw a surge after that segment on friday. As of last night 700 patients had received the convalescent plasma to learn about that treatment and see if youre eligible to donate plasma you can go to uscovidplasma. Org. Joining us is a guest who is also using the blood of covid19 patients to try and treat others Robert Garrett is the ceo of Hackensack Meridian Health good morning, becky thank you for having me back i dont know exactly what this is. How do you use that . So this is actually a very inspiring story if you think about all of the tragedy thats been out there, all the pain and suffering from covid19. Here just in the last week weve had over 3,000 volunteers who have donated their blood, their plasma, and what happens is theyre tested for antibodies and if they have a certain concentration of antibodies, then those antibodies are put into a serum and theyre infused in patients who are very, very sick with covid19 and as your segment previously showed, there is some anecdotal evidence that this is very, very promising. We just started the study. We are participating in the mayo clinic study but we are doing our own serum as well at hackensack medical center. The early results are promising. I cant think of anything better than this in terms of a hopeful sign if you think of diseases in the past, whether they be measles or more recently sars, antibody serum has really been used as an effective treatment. We are all hopeful that this study is going to be successful and that this will be, you know, a very legitimate therapeutic agent to fight covid19, so very exciting so far. I know its early, but what happens at least anecdotally with some of the patients youve tried this on . So, you know, it is kind of early yet, but we did see as an example, the first patient that we infused was a woman who was 33 weeks pregnant and i can tell you shes doing a lot better now shes had a couple of the infusions. Started about a week ago again, you know, one person doesnt make a trend or a conclusion, but i have to tell you that that was very, very encouraging to see im happy to report both she and the baby are doing better. Some of the doctors are donating their own plasma. Yeah, in that particular week, we used our doctors. Have one of our doctors who recovered from the coronavirus, even one of the first donors and he had the antibody in sufficient concentration that we were able to infuse his antibodies his plasma into this patient so its really great and as i said, you know, 3,000 people have already stepped forward. Were expecting that to really ramp up significantly because this story is being covered by you guys and others out there, i think its just a great way for people who have gone through this experience and recovered to really help others and some of the sickest patients are actually receiving the plasma infusion. So were really excited about it theres also other trials going on throughout our Health Network that are showing some promise. You might have heard about the drug remedicommen remdesivir ans early anecdotal evidence. Doctor, the plasma infusions seemed to work on sars and it seemed to work on h1n1 but not so much on ebola the mortality rate was higher. I dont know if anybodys antibodies worked. That makes sense and then so maybe this will we should be positive about this having positive effects with covid . I think so. I think, you know, again, early, promising signs. Still a ways to go on the trial and im happy that this is actually part of a National Effort because it really needs to be. As i said, theres other therapies out there that are being tested under trial now that look promising as well. I think the idea here is if we can get some therapies that actually are tried and expected to work, hopefully well be ready for the next surge, which as weve heard from dr. Fauci and others, could come as early as next fall, early winter we probably wont have a vaccine by then, but if we can have effective therapies, a lot better at treating them. Doctor, thank you for everything we appreciate it all of us people that live in new jersey anyway, thanks coming up, futures under haessure this morning. Momed el erian will join us in the next hour. Well be right back. Say hi. A pandemic has the possibility of bringing us together in ways none of us would have been able to expect. Im so small said the mole. Yes said the boy, but you make a huge difference. The senate nearing a deal for the second round of funding for Small Business we have the details straight ahead. A crude crash. Oil prices falling more than 20 today as producers run out of places to put it all and a big week for earnings that will give investors a look into the Coronavirus Crisis and the state of business. Well get you ready for the trading day ahead as the second hour of squawk box begins right now. Welcome back to squawk box right here on cnbc good morning, im Andrew Ross Sorkin along with joe kernen back at the nasdaq and becky quick this morning take a look at u. S. Equity futures at this hour on this monday morning it does look like were going to open in the red. Down about 341 points on the dow right about now. The s p 500 looking to open down about 40 points and the nasdaq looking to open off about 90 points maybe you want to check out prices of oil because this is a remarkable number to even look at oil prices on the may contract for wti plunging the futures contract set to expire tomorrow. Among the issues at play, slumping demand as you would imagine and so much supply that space is hard to find just to store the stuff. A barrel will cost you right now 13. 10 joe. Buy it quick though, andrew buy it quick buy it quick. We were at the gas station yesterday. It wasnt reflected in my gas price. No. Thats like the prime rate come on. Comes down a lot slower than when it goes up. On the credit cards, right. Seems the same way with gas prices you know, that expiration cant come soon enough tomorrow well be talking about it at 22 its weird, isnt it, the futures . But it is 13 right now, which is just unbelievable. Im trying to figure out, 1999 i thought we were partying like its 1999. Maybe we were worried about y2k. No, princes song was way too early. Maybe its pets. Com the lady, shes somewhere else, isnt she . She has a new job . Yeah. Big week of earnings. Well get an idea of some important metrics and outlooks some of the names that could get us into the crisis netflix, intel, cocacola, American Express among dozens of s p 500 companies that are set to roll off results. And the s p is coming off its first backtoback weekly gain since february and quite a backtoback gain it was the best since the 30s. The nasdaq, the s p and the dow are all about 30 above the lows hit on march 23rd. Joining us on the news line, Savita Subramanian bank of America Securities head of u. S. Equities will you be selling into this 30 gain, a . Thats the first question. B, did you tell anyone to get more positive on march 23rd . Well, you know, on march 23rd i remember i think i actually went on tv that day and i said i think this is a stock pickers market there are some stocks that have been beaten down so much and been sold off so summarily that theres an opportunity to buy them at what well look back on as alltime lows now i did not call the market bottom that day but i did call the bottom in stock selection. So i do think that weve seen that sort of play out over the last few weeks here we are today. Pe multiat this point lgs at m. Two thingshave happened, the market has come back pretty aggressively from the lows second thing thats happened is earnings expectations have been marked down. If you look at the price to earnings ratio, its at almost the exact same ratio it was at at the market highs which is interesting, maybe a little bit unnerving. One of the things that were noticing right now is this earnings season isnt necessarily driving as much clarity as we would like. To your point, if we get a break through about medication or some kind of sign that were going to resume business as usual or something is approximating it soon, i think that would be the up side risk. Savita, why would the market be factoring in a vshaped recovery when not a single expert thats coming on here is forecasting a vshaped recovery. I dont know if theyre listening to the experts. Thats a pretty good idea theres nothing more consensus now than its going to i guess its not going to be a light switching on, its going to be the sun coming up is the way people are characterizing reopening things. Right right. Right. In the best case theyre talking about a u. Theyre talking about a u that goes out a year or even 18 months yeah. Yeah yeah the markets i dont think its going to be like that heres the way you should look at stocks. Look at normalized earnings. How much do normalized earnings change from precoronavirus. Right. Not that much well see depends on which stock youre talking about. Movie theaters, those normalized earnings are probably going to change cruise ships, those normalized earnings are never normalized. Normalized earnings are going to change if we never go to the movies again, so thats what we need to figure out if we stop going to the movies for a couple of quarters, normalized earnings dont change all that much. If we stop going to movies, 50 of us stop going to the movies, then normalized earnings takes a hit. Thats what we need to figure out. Our surmisable is that normalized earnings dont change that much from precovid a couple of things happen. We dont travel as much. We use tech more on the flip side, the positive there is that we Pay Companies have lower costs theyre not going to have as high travel budgets. Theyre going to have bigger margins comingout of this because the cost of labor is likely to be lower and the cost of, you know, doing business is likely to be lower maybe we dont see as much demand for commercial real estate, but that translates into wider margins. So i think thats the calculus, the math we need to do is figure out kind of two years out what is the world going to look like relative to today . And chances are its not going to look that different i mean, think about 9 11 9 11 happened. We all said nobodys ever going to fly again, then a couple of years later we were flying again, more than we were pre9 11 those are some of the things we need to think about in which case i think stocks still look like a better opportunity than bonds. Youre getting a lot of healthy dividend yield for stocks that are like four or five times the amount that youre getting in the ten year i mean, thats a Pretty Healthy amount of income for income starved investors. Savita, you said were going to have lower costs for labor. Does that mean yes. That youre also anticipating a lot larger unemployment number yeah. Or you believe companies are going to be paying employees less where are you coming up with that part . Probably both i mean, think about whats happening this year. Weve already seen the Unemployment Rate shoot up i think our economists are forecasting 10 Unemployment Rate by the end of this year the big problem coming into this year was a very tight labor market, and that was starting to impact margins maybe that continues this year as a lot of companies have, you know, kind of committed to retaining their work forces, but i think the further this drags out, the more slack in the labor market we see. Thats typical. Play that out, savita if you have a larger unemployment number and the consumer is what has kept this countrys economy afloat for so long, what happens so thats the question, is this going to be a v or a u . Lets say this is just a temporary dislocation to demand, flight this is a temporary dislocation to demand that hits the economy in a very major way. When we come out of this, one could argue that theres a couple of things that happen as is typical of coming out of recessions, margins are much wider because companies have cut costs and theres more slack in the system theres some deflationary pressure from a recession. Coming out of this, what we need to all think about is whats going to be different post coronavirus versus precoronavirus. Maybe people dont bias much, you know, big ticket items to your point, there could be areas within the Consumer Discretionary sector that buffers. Weve downgraded the sector on those concerns but i do think were going to be in an environment where we still demand a lot of tech we still demand Financial Services there are still sectors that are going to come back from the dead and those would be the areas that i would be deploying capital. I still think this is a stock pickers market and were going to look back even today and see good opportunity. Savita, thanks. We appreciate it thank god for the internet thats held up pretty well saved me for the weekend season 3 becky, you have ideas for me you know i can see you again. I can see everything i know. I know. Im watching andrew. Thats fine. Andrew, im spying i can see what youre doing at all times. So what were you watch out. I can see you too. I might pick my nose. We just found that out today. We know youve been spying on us for five weeks. Andrews had one all along. That doesnt surprise me. Ive been telling everybody, the producers to get you the access to this thing so we can all see each other. You were the first to have it anyway, beck, what honestly this morning i found out andrew was spying on us for five weeks let me tell you guys real quickly i did not change my snow tires. Youve been driving your car . No, i dont drive heres a hint i just i started mine for the first time in a month yesterday, and im reading somebody sent me on twitter something from Consumer Reports that youve got to do more than just start your car the gas, it actually starts to go bad in three months, maybe less it gets gummy. It can gum up things from your fuel pump to fuel injectors. I guess you have to go out for a joyride to make sure youre not doing damage. Another reason to own a tesla in addition to saving the world. What can i say . Anyway, weve got a lot more coming up on squawk box. When we come back, weve got a big interview. The ceo of roche is going to join us on antibody testing. You do not want to miss this before we head to the break, take a look at furutes this morning. Squawk box will be back rate after this hope isnt quarantined. First words arent delayed. Caring isnt postponed. Courage isnt on hold. And love hasnt stopped. U. S. Bank thanks you for keeping all of our spirits strong. Weve donated millions to those in need and are always here for our customers and employees. Weve donated millions to those in need featuring the Emmy Awardwinning voice remote. Access to your favorite apps, including netflix, prime video, youtube and hulu. All without changing passwords and inputs. The most 4k content and movies and shows on any screen. The best Entertainment Experience all in one place. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] here we are, matt. The two of us. Welcome back to squawk box. Making headlines, novartis has won a bid to conduct a trial of hydroxychloroquine it will begin in a few weeks and will report the results as soon as possible. Andrew okay. Other pharma news, roche developing a test that can detect antibodies. Joining us is roches ceo. We wanted to welcome you back to the show thank you for being here tell us about the state of play with these antibody tests. There are so many questions about both the quality of the tests themselves and what it means to have antibodies we are very excited about our new test it will be a very reliable test and that is important to see whether somebody got infected by the virus. And that will allow us two things first, it will enable us to monitor the development of infections and, second, it will allow us to monitor whether people achieved immunity from the infection. Well, severin, i want to go to the immunity piece first. Theres so much interest, obviously, in finding out if people have immunity are we convinced that if youve had covid, that you have immunity and for how long . Its a new virus and as such was do not have the best data yet, but its very likely that people who got infected also developed immunity, at least for a certain time, because we see that happening also with other coronaviruses. Were also hearing about reports of all sorts of tests that are flooding the market, many which have been coming from china, similar antibody tests were sent to the u. K. And a lot of them dont work how should the public and the Health Community think about these tests and whether, a, to take them and, b, what the result actually means . This is actually a big topic, and unfortunately a number of antibody tests which are already on the market are not reliable and the simple reason is that you have to take enough time and validate these tests with patients thats what we have done we are now very confident to bring a highly reliable test to the market the beginning of may. How quickly does the test come back . And talk about the scale in terms of how quickly you can scale this test up given how many people are going to need and want to take it . Thats a very important point, and unlike with molecular tests which directly measure to virus and where upscaling is a big topic, with antibody tests, actually the scaling is much easier from a technical point of view plus, there is an enormous install base of instruments and platforms out there. So we will be able to scale up quickly. As far as roche is concerned, we will put use into millions in june. In june several million does it scale i dont want to say does it scale like covid but when you think about september, for example say that again. Already in june we will put use in the high to upper millions so this is really enormous upscaling, and we are not the only company who will be able to offer reliable antibody tests so this will make a big difference. And to take this test youll have to go to a doctor is this something you can do at home how easy is it how quick is it . No, you have to draw blood so typically you would go to a doctor or a nurse would take the blood and then send it to the lab. And how quickly typically does it come back . As far as the testing time as such is concerned on our platforms, the test is performed in a few hours, but then, of course, you also have to take care of the logistics. I would say typically you should have the results the next day. And what is the cost of the test we have not communicated pricing for our test, but in such a pandemic situation, pricing will not be any hurdle for access so we cannot comment then on the final price because there is also a lot of costs by the lab itself, but as far as our price is concerned, it will not be a hurdle to access okay. Severin, we appreciate your time and all the work that youre doing to get these tests rolled out as quickly as you can. Thanks so much thank you very much becky when we come back, the recently passed c. A. R. E. S. Act can help people access their retirement money penalty free. But will all qualify probably not well have that story when we come back. Then Mohamed El Erian will be up. Oil prices down by 26 just today. First though before we get to a break, lets take a look at those oil prices right now it looks like things for wti, we did see them below 14 a barrel this morning. In fact, now were below 13 a barrel down 29 to 12. 89 a barrel this is something to watch well talk to momeabhad out this and much more. You are watching squawk box on cnbc 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 to squawk box. Cnbc has partnered with acorn. Its called invest in you, ready, set, grow the recently passed c. A. R. E. S. Act can help people access retirement money penalty free. We are joined by Sharon Epperson with that story. Shar sharon. Reporter andrew, if someone has contracted the covid19 or if your Family Member has contracted it or if you have faced Financial Hardship due to the coronavirus pandemic, you may be eligible to partake in a couple of options in the c. A. R. E. S. Act the first option is to take a penalty free withdrawal of up to 100,000 or 100 of the balance in your ira or 401k. You can do this without having to pay the typical 10 early withdrawal penalty if you are under 59 1 2 youll get three years to pay taxes on the distribution or replace the money and owe no taxes on it. The second allows you to borrow 100,000 on the 401k and the previous lone amount was 50,000. You can delay payments for a year these are not automatic. Your employer has to implement them and many are sitting on the fence now. A new survey shows fewer than half of 401k sponsors, 45 of them, say they will allow the 100,000 distribution. Analysts in 1 3 plan to increase the loan amount to 100,000. For someone who has been laid off or furloughed, paying back the loan may be very difficult to do and also the more viable option may be to take a withdrawal we talked to Kevin Collins who has Retirement Plans at t row price. People want to find out more about the distribution the average distribution amount that theyre asking for is about 18,000, but there are some that are asking for that full 100,000. Back to you. The other question that i was curious about is how can you find out if your 401k plan has the options . Do i just go online . The best thing, go to the Retirement Benefits portal on your companys website contact your companys Hr Department keep in mind its only been a couple of weeks since the c. A. R. E. S. Act has passed. Theyre trying to figure out what the administrative costs will be for them, what the administrative hurdles will be for them to implement this and also what their employees want collins was telling us hes seeing more retail, travel, Hospitality Industries adopting some of these provisions, but some Companies May adopt one and not the other. You may be able to take out 100,000 of distribution and not take out that much in a loan some may not offer either one of them Retirement Plan consultants told us participants should advocate for themselves if this is something you need and your company has not allowed that yet, advocate for yourself and say its needed and perhaps that will come through for your company as well. Okay. Sharon, thank you. And for more on what you can do, you can go to cnbc. Com investinyou one last thing we should note, Nbc Universal and comcast are investors in acorns. This is true. Thanks. Still to come on squawk box, allianz chief Economic Advisor Mohamed El Erian later, well have the latest on the bailout. What companies are going to conserve cash. Plus, boeing is restarting production in Washington State before we go to break, a look again at oil once again, amazing. Its got a 12 handle prices plunging over the glut, ene demand slump and nowhere to ev put it thanks to the virus. Squawk box coming right back welcome back to squawk box. Unbelievable shot. That is what it looks like out there. Mack, will we ever have the ball drop on new years with 1 Million People again here are the futures this morning. Youre very optimistic thats good. I appreciate that. Futures this morning down about 407 points oof backtoback weeks with gains in the equity markets. The biggest gains in two weeks since the 30s, but we are sharply lower. Just about on a percentage basis, not that much nobody is waking up on monday seeing 400 points down, but thats where we are. The other big story this morning is oil which is obviously the i think some of the european markets have been up when you have oil at 12 and change even though it is kind of a spot month, it just is so disconcerting. There it is. If you get imported beer, andrew, you definitely pay more, 5, 6 for a sixpack than a barrel of oil. I know. Unbelievable. Social oil. I know. Joe, where are you sitting . Which shot im in my normal spot im in my normal spot. Theres no coffee cart behind you anymore. Theres nothing anywhere except ive got some of new yorks finest, which we appreciate most of them en masse. But theres nothing happening out there. Just really isnt. Just nothing happening we are shut down were shut down. I like that shot. Sorry, andrew its okay were going to get over to Steve Liesman because investors are not only focusing on corporate earnings as you would imagine but also on when the economy would reopen. It is the trillion dollar multitrillion dollar question Steve Liesman joins us hopefully with some answers with his results from cnbcs rapid update steve. Reporter andrew, thanks. You were interested with a new drug that came out that seemed to show some effects on friday, and the idea that the president was talking about reopening the economy did economists gather any of that optimism in their survey . Unfortunately, the answer is no. The Second Quarter decline is worse than we originally thought. A little bit better on the rebound. Well go back and take a look at this about a 6 decline forecast for the First Quarter. 34 is now the average of our 11 forecasters for the Second Quarter followed by a 15 and a 13 q3 and q4 rebound. Not too bad, but if you put it altogether, the average for 2020 is still for a 4 decline. So we dont get back in those two quarters right there in the second half what we lost in the first half ill give you some of the individual forecasts out there barclays now has the prize for the most pessimistic forecast. Forecasting a 45 decline in the Second Quarter followed by a 35 increase goldman at 34 decline followed by a 19 these are quarter on quarter annualized it is both the rebound and the decline are amplified by making these annualized citi right in the middle, 28 decline followed by 23 increase constraints that economists look at, do we come back . How many businesses are closed permanently because of this downturn a lot of this depends on the effectiveness of the Small Business loans how much retail gets shuttered permanently . There was a trend already of Closing Retail stores. Do they come back or does this accelerate the trend of closure. Oil production will be the big deal it was the marginal producer, the marginal Capital Investment dollar in the u. S. Economy before the shutdown. Will government stimulus follow relief its thinking about whats happening as simply relief and not stimulus jpmorgan writes over the weekend, even once areas reopen, the amount of Economic Activity will depend on peoples willingness to go out and work and spend money. Our forecast still anticipates that restrictions will remain in place through april and may. Activity wont pick up on the National Level until june. June would be great if we could get it back by then, that would be in time for a Third Quarter rebound. Why do we follow this . The economists themselves say theres a lot of doubt in this what were doing is following the trend. Is the idea of the downturn getting worse or better . Is the rebound getting stronger . Unfortunately, that is the case. Stronger, deeper decline followed by a rebound. Not enough for what were going to lose here, becky. Yikes steve, its a lot to try to get your head around a lot of number crunching. Thank you for doing that joining us to talk much more about the economy, the markets, steve, stick around for some of this, too. Mohamed el erian is allianz chief Economic Advisor what do you think of steves numbers and what we can really expect for the rest of this year as steve says, this is really uncertain. I agree with the direction of movement my own numbers unfortunately are a lot worse. The imf numbers that i have here are a lot worse. If you take the year as a whole, the imf projects minus 7. 7 growth for the u. S i think maybe at minus 10 to minus 15 for the u. S. This is a big hit. As you see from the oil market, even the benefits, Lower Oil Price means more dollars in consumers pockets even that doesnt work in this economy. So im a little bit more worried than what the consensus of the economists is out there right now. Mohamed, just over the last month you get to this crisis point where you hear Companies Like Nieman Marcus might be filing for bankruptcy as early as today you hear that with other restaurants, other places. A lot of retailers say if this lasts throughout the month of may, they have to follow suit with that. They are continued to be closed down across the country with no place taking in any revenue. That gets to be a much tougher scenario i guess what are the cumulative effects the longer this goes on. How do you figure out some of the black swan possibilities thats what scares me most, becky. We are going to have a series of bankruptcies and a series of sovereign efaults. We are going to see people unable to pay because theres no revenue coming in. You heard that earlier on your show from the former ceo of sax. Models are not built for no revenue coming in. So the big risk out there is that we get defaults if you get defaults, then policy has to make really difficult decision who do you bail out and what terms . Thats the treasury. Then on the other side, you have the fed now in the higher market do they pick names do they pick winners and losers . What do they do . So defaults and bankruptcies are a big risk and one that we have to keep an eye out for that is a major risk factor out there. Its real i dont, andrew. Its out of our own imagination. I care about the Balance Sheet i have no problem with them taking on the Liquidity Risk i have no problem with taking on a credit risk. Taking on default risk in a big way is what im worried about. I dont see it, andrew, but i wouldnt have seen high yield. Mohamed, how do we prevent these types of bankruptcies youre talking about when a small number of firms gobbled up all the money that was out there already, the ppp there are lots of others waiting in line and the minimum loan of 1 million that was originally set up makes it so that lots of very Small Businesses wouldnt qualify for that money how do we keep this going . Because the amount of money weve poured out to this point is mind boggling, and then you get to the point where we have to deal with the states, municipalities okay, weve only done this for eight weeks, we need to do it again after that how do you start getting your arms around the idea that theres not going to be bankruptcies like that thats the problem. We are all assuming this is a oneround game if you use game theory if we just keep them going for six, eight weeks, maybe ten weeks it will be fine. If it turns out to be a monthly round game, we have to revisit policy approach. I think its really important that were going to replenish the ppp. Its also very important for us to improve the way it functions. Small business are critical not just to the Economic Health of this economy but also to the Public Policy Health Issues. So thats critical you have to see washington move on that. Small business deserves a lot of support. They cannot access the Capital Market they dont benefit from the fed support of Capital Markets so they have to have a Program Designed for them and limited to them and beyond that, mohamed, if thats your case, what would make you think, okay, things look better . What would be the game changer that makes you think, okay, never mind, this is much better than i thought it would be the game changer will come from two out of three Health Issues the vaccine, immunity, is what we want. We wont get there quickly enough to avoid the issues were talking about, becky we need to see first better confidence in states ability to identify and contain the spread of the virus thats about testing thats about whats going on right now. Just better containment of the spread then the second thing we need to see is this is better. We need to see Critical Mass on one and two which allows us to reopen the economy safely, avoid a w which im concerned about. We reopen for economic reasons, then we have to shut down for Health Reasons that would not be a good idea. So we need progress on these two issues were getting there. Every day is a win we need Critical Mass on these. Mohamed, one thing to put into your all the things that you consider, just a couple of those anecdotal pieces of what the background level could be of people that have positive antibodies one was out in california and it was, i dont even want to say, i thought it was as high as i think it was 20 or something. Even above that. Then there are women that were tested i think it was 19 that had positive antibodies. If it is, indeed, much higher than we know, we could get herd immunity maybe quicker than youre factoring into your assumptions. Thats something to put into your assumptions that might surprise you as a positive you can think about it now so it doesnt surprise you if it comes down the road. Also, were going to get that re remdesivir the way that it works, as dr. Gottleib says, it should have some type of action on viral replication because just the way that it works, and we get a much bigger study done instead of that small study that was leaked out, that could be something, too. Yes, absolutely i go on an emotional roller coaster. I get really excited by what youve just said and i participate in calls like you do during the week with medical professionals. So i get really excited about these things and then they tell me, japan, singapore, be careful. So, you know, we are on an emotional roller coaster its very hard to figure out what we do know, joe, is important, every day is a win. We get a lot of information. Just if we can contain the economic damage long enough so that we dont do permanent harm to the economy, the health side will come through. Mohamed, if the numbers of asymptomatic numbers are higher the mortality numbers are horrific theyre 40 times a flu its like 3 or 4 . You know that probably isnt based on however many cases what is it, 800,000 now or whatever it is that could come down, too, the mortality if the actual number of people that have seen it and didnt even know they had it goes up. Anyway, as we always say, mohamed, hope springs eternal and, i dont know, i made some plans to go somewhere the end of the summer im just hoping to do that, you know what i mean some day do something sometime on a golf course somewhere we all want to go back, joe in the meantime, everybody stay safe. Exactly all right. Thanks, mohamed. Coming up, the impact of the coronavirus on the movie industry and theaters. Tough. Imax ceo richard gelfan is going to join us you can watch us live on the cnbc app coming right back. Dont forget to subscribe to our podcast. Youll get interviews, original content and behindthescenes access look for us on apple podcasts or on your favorite podcast app and subscribe to squawk pod today. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Well come back to squawk box. Futures are at session lows. The dow looks like it would open down 500 points. The s p 500 off 50 points. Nasdaq opening down 100 points the ceo of imax and the effect of the virus on the movie industry we have starbuckss former ceo, Howard Schultz will join us to discuss retail restaurants and what it may take to reopen the economy. Squawk returns with all of that right after this. I know that every single time that i suit up, there is a chance that thats the last time. 300 miles an hour, thats where i feel normal. I might be crazy but im not stupid. Having an annuity tells me that im protected. During turbulent times, consider protected Lifetime Income from an annuity as part of your Retirement Plan. This can help you cover your essential monthly expenses. Learn more at protectedincome. Org. 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. Now look at oil prices 11. 32 on may, obviously, crude. Wti crude. If i knew how to take delivery and had a place to that is unbelievable a barrel is a lot of oil i dont know what you do with it a barrel is a lot of oil its now 11 Pretty Amazing the futures arent liking this the equity futures are down 500 points thats the worst weve seen. You have no place for oil, i dont think, sorkin. Maybe up there at that spread in connecticut, you probably have live cattle. You could put a lot of stuff on that property from what i understand. Were going to start stockpiling the stuff up here. Like a strategic sorkin petroleum. Strategic reserve at 11. At 11 i mean, that is unbelievable weve got to get to june weve got to get to the june futures contract this should be interesting, andrew, theaters lets talk about the film business, particularly the imax film business. April weekend would normally bring Strong Box Office numbers. Studios have stopped reporting them as Movie Theaters in the United States remain closed. As china is opening, they are looking to imax. Joining us right now is richard gelfond. He is the ceo of imax. A lot of people looking to you and whats going on in your business to try to understand what may be coming to the United States and when we may all open up and what that even looks like because movie going has long been part of what it means to get back to some semblance of normal help us with how youre seeing all of this. Andrew, the conclusion one has to draw is nobody really knows. I guess im in a position talking a lot for the studios and the exhibitors in asia, europe, and the u. S. To be in a decent position to make a guess, but i dont think its yours. The deeper you dig, the less confident you are. So i think in china the theaters are likely, most of them, to open in june whats going on there is the schools are just beginning to open in china next week. Mostly the seniors and the high schools. After that theyre talking about the junior high schools and the Elementary Schools i think youll see a beginning of the opening in may, but most of them opening in june. In north america its even harder because, as you know, were six weeks behind china, but i think most of the studios that are dating their movies and most of the exhibitors, all of whom i talk to on almost a daily basis, are thinking probably july maybe if theyre lucky, late june. And things come back to normal in mid to late july and august richard, one of the things we keep hearing is what it may mean to go to a Movie Theater whether there will be seats spaced apart, youll take temperatures, youll do testing out the door what are you anticipating and what are you hearing is going on over there i think we might have just lost richard. Richard, can you hear us we are going to try to have richard try to dial back in. Were going to take a quick break and hopefully get him back on the line. We were mid sentence, of course, but welcome to the technicalities and difficulties of the covid19 life coming up when we return, futures right now. Down about close to 500 points what we talked about earlier oil down and looks like equities may be trading off of that were back hopefully with the ceo of imax after the break. Its putting that hard asset as an insurance you might say against the paper dollar. Thats why i bought gold. Its not for my insurance, but its for my daughters and the grandchildrens insurance that i felt like that generational aspect of passing down gold is securing them a future. Of course, nothing is without risk. And that being said, i feel that by diversifying with precious metals, that i am covering my bases. Its a hard asset. You can turn it back into cash. Whereas keeping a lot of cash in your bank account can really almost end up being nothing. You have these dollars over here sitting in a bank drawing practically zero interest. I think gold and silver has a greater potential for increasing in value. I mean, you have to keep cash. But you dont have to keep everything in cash, and you dont have to put everything in the stock market, and you dont have to put it all in a bond market. You do a little bit of everything. And then you sleep at night and dont worry about it. In fact, i sleep better with gold than i do with the stock market. Because its tangible, its there. If youve bought gold in the past, or would like to learn more about why physical gold should be an important part of your portfolio, pick up the phone and call to receive the complete guide to buying gold, which will provide you important, never seen before facts you should know about making gold, silver, and platinum purchases. With nearly two decades in business, over a billion dollars in transactions, and more than a half a million clients worldwide, u. S. Money reserve is one of the most dependable gold distributors in america. Breaking news. Futures dropping sharply as we get ready to start the trading week premarket numbers have worsened over the last few hours. Helping to drive the pessimism. A crash in the price of crude oil. Losing more than 1 3 of its value just this morning. Were going to tell you whats driving the selling. And were going to talk with florida senator marco rubio on the push in congress to refill that critical Small Business aid fund after the first pot of money ran dry. The final hour of squawk box begins right now good morning, im joe kernen along with becky quick and Andrew Ross Sorkin u. S. Equity futures now down 500. Even 500 points on the session 499 as you can see there the nasdaq indicated down more than 100 s p down 54. Still lots of earnings expected this week with comments about the future, whatever clarity the companies can come up with not a lot obviously. Theres treasury yields, down. 63 . Becky will tell us about oil someone wrote in a lot of cars now, the mpg, you know, the months per gallon, becky yeah, thats the new measurement were talking about, that and the spr, the sorkin petroleum reserve. Hes a sly dog. I bet you hes already got some. Hes averaging down. Smart want to draw your attention to that price of oil. As joe mentioned, its under a huge amount of pressure. Crude oil, wti for the may contract down close to 40 not for the week, not for the month, not for the yeartodate, thats this morning on continued concerns about slumping demand the last time the wti was at levels like this was in march of 1999 we should note the prices for the may futures contract which, by the way, expires tomorrow the news isnt as bad looking out. The june contract, last i saw, was down by 12 . You are seeing an enormous amount of pressure on pretty low prices june is sitting at 22 22. 09 wti for july delivery is down 7. 5 this morning and august down by 5. 74 . All the way up for august because of the demand picture, wti is trading at 29. 41 a barrel thats come down pretty precipitously as the economy around the globe has shut down and killed any demand out there. The may number, by the way, as we mentioned, is set for those deliveries tomorrow. A lot of tankers have been out there, storage tanks, off shore ships that are holding oil all of those are nearing their physical space limits. You just have nowhere to put the oil. New production cuts for key players arent set to kick in for a kweweek and a half. People are saying, where else can we stick this stuff . Absolutely. Lets continue the conversation on the markets, get a little more granular and start this hour talking about the tech sector check out this wild year to date chart. Tech stocks are more than 15 over the past two weeks and only about 12 off the alltimehighs right before the coronavirus hit the United States. Joining us to talk about where things are looking for opportunities is Richard Green Founding Partner at lead edge capital. Good morning to you. Good morning, andrew. You look at these numbers and there are some people out there that are scratching their heads. It is fascinating we actually ran an analysis late last week when you looked at what the top ten components of the s p from like mid february to like last thursday, they were down like 7 the other 490 were down 25 and thats obviously led by big tech, facebook, google, amazon, microsoft. Its actually incredible fairly valued in your mind . I dont think theyre crazily expensive or crazily cheap a lot of those have Balance Sheet risks. If you werent amazingly were hearing new people are coming on to ecommerce so for amazon, its booming, people are sitting home Companies Like wayfair are booming. Companies like zoom, you know, are great companies. Im going to argue theyre a little crazily valued at the moment its a Great Company providing an Amazing Service in this environment. What do you think about advertising . Facebook and google. We had Barry Dillard on the program last week. I know this may be a particular segment but, you know, he owns expedia. Thats a company that used to have a 5 billion budget for advertising annually he said hed be lucky if they spend 1 billion this year you have to imagine thats going to happen across the travel sector i imagine it may happen in other parts of the economy as well, which would have a real impact, i would think of the on the facebooks and googles of the world. It is surprising me how well facebook and google are hanging in there were going to have an advertising slowdown the head of sales at google, he said he thinks this will be worse than 2008, 2009 slowdown for advertising. Probably will because youre going to have theres like travel, like Consumer Retail that have big slowdowns, i think. I dont think its going to be only internet advertising, i think its advertising across the board. We have apple up on that screen its taken a beating its an interesting one. It matters how the consumer will hold up given the price tag of some of the products and of course the services. Where do you put that on your list of buys or not . Apple is not a name that we know, that we focus on really well its an amazingly wellrun company thats very global were not involved in apple at all. Where we are seeing some interesting value just to segue is in some of the small and midcap software Companies Like sale point, we were involved in crowd strike for a while especially in the securities space. Find companies that are not only you can get good value in them but, two, that are like Critical Infrastructure that companies are going to be forced to buy, theyre not discretionary purchases, because the world we are living in today, all companies, i dont care if youre affected or not, are taking a really good look at their cap ex budgets. Where do you land on uber its an interesting one. Were out of it. In the covid world. I own a lot of it we own a lot of it in our fund we are slightly down on the position what do i think of uber . If you divide ubers business into two things, uber eats and then ride sharing, then think about it from a demand supply perspective, look, demand for uber eats has never been better. You have huge numbers of cons e consumers using it who have never used it before you have tons of new restaurants that are signing up for it that have never used it before. But on the flip side, you dont have rides which are down 80 plus percent in most major markets in the world its starting to recover in some of the markets in asia of course, the ride sharing has been decimated it will come back when things get better, i think youre going to see less competition. I think youll see more rational youll see more rational competitors but actually the most important thing for uber is on the supply side of drivers. Uber no different than mcdonalds or walmart or wendys or home depot. Any companies that relied on lower wage 10 to 20 an hour workers. Last couple of years the labor markets have been really tight so companies, they couldnt find the workers. Unfortunately now for uber, they have 25 Million People so theyll spend billions that they were spending on driver incentives, driver recruiting, it will go away. I like it over the next 24 months. Mitchell, appreciate your perspective. Stay healthy absolutely. Thanks over to you. A key player in restructuring the Auto Industry. After the financial crisis well talk airlines. Federal bailout money with harry wilson thats next. Well check in with former fda commissioner dr. Scott gottleib on progress the u. S. Is making to flatten the curve and reopen versus the stay guaranteed debate. As we head to break, take a look at the biggest premarket decliners. A lot of Oil Companies in there as crude prices plummet. Stayun ted, youre watching squawk box on cnbc ere. I wish my Trading Platform worked like that. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. 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 to squawk box, everybody. Weve been watching the futures pretty closely this morning. They are under quite a bit of pressure right now it looks like the dow is indicated down by 473 points. Thats all coming as oil prices for the may delivery, that contract coming under pretty extreme pressure this morning. We are looking at wti for may delivery down to 12 believe it or not, thats off the worst levels of the morning. Joe . Thanks, becky important day for boeing, which is resuming wide body plane production in the seattle area phil lebeau joins us for more. Hey, joe got a couple of headlines that happened this morning with regards to boeing. If you look at shares of boeing, under pressure premarket. Lets see if it ends up being that way today couple of reasons why. You have citi downgrading the stock to a neutral today then theres a chinese leasing firm that has cut its leasing order for the 737 max by 729 they will take a number of maxes but bringing it back by 29 if you take a look at shares of boeing, it had moved back higher in the last week compared to where it was in the middle of last week. Commercial production in the seattle area it was shut down essentially for a month when were talking about the wide body line when you look at boeing and airbus, both of these companies are in the midst of saying whats our production rate going to be Going Forward . How many planes do we expect to deliver. Whether or not they can increase the production in the Second Quarter remains to be seen many believe boeing will cut the commercial production by a third. Another by boeing, airbus, airlines, this comes from united united is selling 22 planes to an asian leasing firm. This is a sale lease back. Whats happening is united is selling its commitment on the future aircraft, then its going to lease them back from the firm it is scheduled to cut its schedule in may by 90 this is what were going to see from all the airlines. How can we adjust . How can we bring back our commitments in terms of future aircraft this week we will get some earnings report. We are likely going to hear from delta as well as southwest thats on the docket what everybody is going to be focused on with the Airlines Earnings is, how great is the loss whats the outlook thats what were going to be focused on. Hey, phil, with all of the additional planes that are going to be out there as airlines dont need as many, whats to stop another competitor from picking up and, you know, once things get a little better, going out there and competing against them with lower costs . Reporter im a little bit confused by your question, becky. Are you saying somebody can say if you are not going to have as many aircraft coming in, if youre not buying any no, there will be a lot of aircraft out there. Reporter yes, there already are. You have about 2 3 of the worlds commercial aircraft parked right now around the world. 2 3 of them. So what you have is an industry that realizes this is going to be a slower ramp back to what people would consider a normal flying level could take two or three years and as a result the airlines are all saying, we dont need as many a, do we cut our commitments in terms of what were buying do we defer or cancel orders do we go back to the Leasing Companies and say, look, we need better terms the real area of concern is southeast sharon you have a number of airlines in the last six or seven years that really ramped up the order book for boeing and airbus. Look for those orders to be slashed dramatically. Phil, thank you well continue to watch this with you. Right now for more on the governments involvement in helping the airlines stay solvent, lets bring in harry wilson hes the founder and ceo and he served on president obamas Restructuring Task force its good to see you this morning. Good to see you, becky. Good morning what do you think about the situation with the airlines and the help that theyre potentially getting from the government obviously some of them a little concerned about whether to take the deal and what it means yeah. A couple things to think about the first is obviously there is a private Market Solution unlike in 2009 because for now the credit markets are wide open so the airlines could go down that road. There are two big challenges of that the first is the likelihood that will get them through the crisis absent a vshaped recovery is pretty low having them back this summer in all likelihood the second, the government terms are quite Company Friendly very little equity dilution. This aid is more a function than the pandemic than mismanagement, i think thats not inappropriate, but its actually pretty can have friendly what happens if, as you suggest, we dont see a vshaped recovery, if we dont see big numbers of people going back to flying towards the middle or end of summer . Yeah. I think this is the central issue that not enough people are talking about, that obviously the first and foremost issue is the health crisis. We need to attack that as vigorously, aggressively as possible but when we get to the other side of this, i think unless people feel confident that their jobs were being attacked and that they can go out of their house without Significant Health risk, demand will be really subdued. I think it really comes back to how we solve the Public Health crisis as quickly as possible in a way that people feel comfortable. Treatment is first and foremost. The only thing you can do is preserve the safety of the passengers or customers. For example, testing security or at least temperature checks. Obviously social distancing on the plane. Things like that that need to be done in order to get people comfortable on a plane, restaurant or any other establishment. One is, how should we think about the treasury making money or i imagine in this case not off of this program . Yeah unlike the bank loans, for example. Yeah, its a hugely different situation, right i think it was appropriate for treasury to be commercially focused in 2008 and nine because the problems were trying to solve are largely selfinflicted in the banking sector. It was appropriate to have consequences associated with that in this case the vast majority of problems are driven by the pandemic which is obviously not selfinflicted in that world, the question is whats the goal were trying to solve. I would argue the goal were trying to solve is preserve the livelihoods of as Many Americans as possible who are unwhiting victims and do it as cost effectively as possible and quickly as possible but not, per se, to be as commercially minded as we were in 08 and po 09. I think thats a fundamental distinction. How do you think about the, quote, unquote, morality of taking the money especially companies that might be better funded than others we were talking earlier about shake shack actually returning the money given the financial position theyre in, but we were also talking about how Harvard University with the 41 billion endowment took 9 billion from the government theyre going to have losses and they want to keep people employed you look at the endowment and you see there are people who are much more in need than that. Sure. So a couple things one, obviously ppp is too small. I said it needs to be much larger and move much more quickly. They invest in their entire career thats a fundamental piece of this as a general matter, if you dont need the government money or a private sector alternative, you shouldnt take the money so thats a function of just kind of really kind of contributing as a citizen to the crisis the last piece of this is there will be, you know, extraordinary losses there already have been, obviously. The question becomes for the government in terms of this question of cost of it, what are we trying to preserve. I go back to the same principle of trying to preserve as many jobs as possible, which is mostly going to be focused on Small Business because larger businesses have generally more options. Harry, again, how would the stakes of this change if this goes on for an extended period of time and even after the government lifts all restrictions it turns out the people dont feel comfortable or theyre worried about having enough money or job security to be able to start flying like we used to. If were looking at a new normal earnings picture for these airlines, what will the government do . Whats the second stage of this all look like . If this time around its been relatively friendly to the companies because they didnt do anything wrong, you question how long does the government continue to try and support all of that or are there new solutions that you would expect to see no, its a hugely important question, becky. It goes to the fundamentally clear question of how do we get through this there are promising treatments out there. Remdesivir and others. The challenge with all of them is not just efficacy, which is first and fundamental, but second is is there enough capacity to get them out broadly so people feel safe . Thats something that the government can be investing in today. Bill gates has been doing this the government has far more resources to increase capacity today for promising treatments so that some of them will ultimately not succeed obviously, but those that do succeed can be rolled out much more quickly it comes back to your question to the extent we have treatments that can be done in capacity that will be successful, that will be the single most important thing to getting people confident and get them back in the air to restaurants, et cetera. Thats why i think so much of the focus has to be on what we look like on the other side to how can we move as quickly there as possible given the Public Health constraints first and foremost harry, very quickly before we let you go, you know the Auto Industry so well how do those Companies Look to you this time around to weather the storm . Sure. The good news is that a lot of this work thats been done over the decade has really paid off youve seen a tremendous amount of liquidity at the oems, a lot less leverage. Capital markets are open for them i think youll see one or more oems to pad their cash values in the coming weeks barring a demand structure, they should be fine the question becomes how long does it go on but theyre already seeing i think you will see most of the oems restart in a safe way with people on the assembly line, the ppp across the workers in early may. If you do that, the question becomes are they actually selling to are there enough customers buying cars to justify that production. Sales were down between 55 to 60 in april, which was extraordinary. As long as people feel comfortable they wont lose their jobs, i think it will rebound and should keep the companies more than solvent. Harry, thanks so much really good to see you we hope to have you back again soon thanks, becky thanks. Andrew coming up when we return, florida senator marco rubio will join us to talk about getting more cash to americas Small Businesses now that the Paycheck Protection Programs been fully tapped next, a real estate report you need to hear why home prices may fall only in some areas in the United States, not all of them. As we head to a break, take a look at crude oil right now. It is remarkable 11. 78 right now stay tedun, youre watching squawk on cnbc ever since weve gone mobile on the now platform, somethings gotten into the office. I hear you. Feels like theres no barriers between departments now. Servicenow. The smarter way to workflow. But when allergies and congestion strike, take allegrad. A nondrowsy antihistamine plus a powerful decongestant. So you can always say yes to putting your true colors on display. Say yes to allegrad. Welcome back to squawk box this morning the futures right now looking like they would open down about 2 across the board. The dow off about 457 points s p 500 now weve put them fully in percentage terms for you here dow and s p off close to 2 . Nasdaq off 1 . I want to take a check on shares of United Airlines reporting preliminary First Quarter numbers with a 17 drop in revenues. This is to be expected an overall First Quarter loss. It expects to get 5 billion it says from treasury from the payroll support program. It has 6. 3 billion in cash and Cash Equivalents united will report full quarter numbers on april 28th. Joe . The Housing Market now where home prices could be starting to suffer, but only in certain spots. Diana olick joins us from washington with more diana, youre outside. Reporter yeah, joe home sales have obviously slowed dramatically in the past month prices were very hot at the beginning of the year going into this the expectation is they will not fall as sharply. Unlike the subprime mortgage crisis when there was a glut of homes, there is an increasing shortage in the first two weeks of march new listings were up 5 . By the second week in april they were down 47 , that according to realtor. Com. April is usually the strongest new month for listings theres also a slowdown in asking prices. In early march median list prices were up 4. 5 . In the first half of april they were up just under 1 . Thats the slowest growth in seven years. All real estate is local prices will be under the most pressure in areas where the economies depend on leisure and hospitality. It points to las vegas, miami, orlando. In addition it lists houston as high risk. Markets where affordability where it was already stretched like the top three in california and seattle, theyre at higher risk of price declines there will be pentup demand but Consumer Confidence will play a much bigger role than usual in housing. Back to you guys i guess it was the end of february i saw in my neighborhood some open houses. There was not a single maybe it was march i cant imagine theres any activity of any kind reporter no. Theyve all gone online. Theyre verdict actual the National Association of realtors launched a whole platform for touring it and most sites have virtual they are doing this now, theyre asking people if theyre going to put an offer down, you get the offer, you get the ask price, you make the deal but it doesnt close until they allow the person to go to the house by themselves most of it is virtual and sales will be low for quite some time. Another industry that theres nothing that just netflix. Thats the only thing that i dont know, amazon, i guess. There are some winners, but theyre so far and few between thank you, diana becky . Joe, thanks. When we come back, former fda commissioner dr. Scott gottleib will join us to talk about the critical coronavirus testing. How much more do states need before they can safely reopen he has an op ed out in the wall street journal well talk to him about that. Disney is suspending pay for more than 100,000 employees as parks reinma shuttered stay tuned, squawk box will be right back welcome back, everybody. If you are just waking up, you need to check this out crude oil prices are collapsing. We may say terms like that frequently, but not for the things like this wti down 35 not for week to date, not for month to date, not for year to date, this is this morning down 36 to 11. 67 lets bring in an analyst this morning. Doug terreson. Whats happening here . Good morning, becky our report was called a dogs breakfast. Thats extremely messy as we reach 20year lows. Expectations for oil demand are falling and by 10 times what we normally see in a recession. While the equity market is suggesting that were going to have a coronavirus solution in coming quarters and that demand will recover, and we all hope that is the case, the problem is that in the near term, meaning the Second Quarter of 2020, supply is going to be over demand by around 15 Million Barrels per day or so combined with the 7 Million Barrels in the First Quarter puts us in a scenario whereby were not going to have enough storage to accommodate the supply in this scenario prices are going to remain very weak. Theyll be around variable production costs which supports our call for brent 25 in the Second Quarter wti as you referred to a minute ago will be 70 to 80 of that amount if Global Economic recovers, opec and other supply cuts hold, well see inventories decline. Record levels to the middle of this year to maybe 60 days at the end of this year and 50 into 2021 this is high in relation to 40 years historically recover the brent 40 by the end of this year, but we have to have some help from the demand side. We should just point out, doug, that this decline that is so sharp today for may wti is because the may contract expires tomorrow so people have to take delivery of this they have to find someplace to store it the ships that store this are virtually full storage tanks in the United States are virtually full. Thats why you see the may contract so low. June is trading around 22 what do you think a fair price is for june and july delivery . Youre right. I think your point is this looks really bad on the screen, but its worst in the technical market youre absolutely right that crude oil today in the stock market in alaska, canada, balkin, permean, 10, 15 a barrel we think that until we see additional supply cuts materialize, were probably going to be around 25 brent. Like we said, maybe 70, 80 of that number for wti during the next couple of months. Okay. Doug, thank you for your time today. Youre welcome. Joe. Coming up, former fda commissioner dr. Scott gottleib on a potential new way to use big data in the fight against coronavirus. Check out the futures. Just down 500 but crude is down a little, down 470 now on the dow. Reminder, you can watch or listen to us live on the cnbc app. Stay tuned, well be right back. Dont forget to subscribe to our podcast. Youll get interviews, original content, and behindthescenes access look for us on apple podcasts or on your favorite podcast app and subscribe to squawk pod today. Life isnt a straight line. And sometimes, you can find yourself heading in a new direction. But when youre with fidelity, a partner who makes sure every step is clear, theres nothing to stop you from moving forward. Welcome back to squawk box this morning take a look at futures market looks like its down close to 2 across the board maybe a little less than that. Dow off about 270 points at one point it was closer to being off closer to 500 points s p 500 off 50 points and nasdaq off about 100 points becky . Andrew, thanks u. S. Coronavirus cases now number more than 3 4 of a Million People with more than 40,000 deaths reported this morning we are getting a message from tech titan about a big data ability to fight the spread of that virus writing in the Washington Post Facebook Ceo Mark Zuckerberg says researchers at Carnegie Mellon university are publishing a survey asking facebook users about covid symptoms the idea is to use the 1 million u. S. Responses a week to get an early read on where the disease is spreading and where that curve is flattening. Joining us to talk about all the latest on the virus developments is dr. Scott gottleib. He is the former fda commissioner hes a cnbc commissioner and he serves on the boards of pfizer and i willumina. I want to ask you about your own op ed, how to keep workers healthy on the job you lay out how to do this in the new world. Whats step number one the idea here is for businesses to start thinking about what their back to work plans are and what they can do to create a safe workplace looking at ways to provide alternative forms of transportation to mass transit shared surfaces have been a source of the spread in boston, new york trying to create a safe environment, access to testing for people who have very mild symptoms who might not present to doctors liberal cleaning of shared surfaces one of the things we recommend, if you have a cafeteria, continue to operate it but operate it under safe circumstances. Youre better off offering food than going out to a corner deli. So we lay out a number of measures that businesses should be thinking about in how to create a safe Work Environment i think businesses need to do this they need to think about what they are going to do when there are positive cases in the workplace, because there will be positive cases you need to deal with that and how you do Contact Tracing and get people access to testing you know, a lot of workplaces are dealing with that question right now if theyre operating, emergency services, no common places, trying to limit the number of employees there. It makes sense to try to maybe circulate some different employees so people dont get too burned out or too stressed out on issues. You raise the issue by doing that, making sure you are bringing more people into the work space whats the right plan for that should there be go teams different locations for the teams . How should it work businesses need to think about that some are easier for people who are Office Workers than people who work on a shop floor in the office you can split your employees, half can work from home, half can come into the office you should continue to telework. You can use zoom calls inside the Office Rather than convening large meetings have people have meetings virtually. On the shop floor, things are different. Its harder to social distance you want to think about ppe. Let people wear masks. People need break rooms. They need to come off a shop floor and go into a break room you may want breaks more to stagger them more. Smaller rooms to take breaks and dont congregate you want to keep shifts apart. If you have an illness in one group of employees, it doesnt take down an entire work force you want to doing this and operating with smaller teams all of these things businesses should be talking about. Ive spoken to a number of folks where theyre starting to get the plans in place may is coming up, and i think a lot of the ability to protect consumers and workers is going to be on the part of what businesses do to try to protect their work forces. Scott, the journal, just reading an article about if you need to go to a grocery store, heres the things that you need to do. That piece makes the point that most likely its aerosolized virus from other people that you inhale that you need to worry about the most you were talking about leave the cafeteria open, people dont have to go out and contact someone else if you ingest something that has some of the virus on it, if it goes to your stomach, is that less of a problem than if you inhale aerosolized, something in the air that goes into your lungs . Yeah, probably. I mean, this isnt an interic virus. Its not through an oral route its from inhailing respiratory dropless or conjunctiva or getting respiratory droplets in your eye this is how its spread. Its not the balance between respiratory dropless and contaminated surfaces. I think when the analysis is done, it will be through contaminated surfaces here. It is you think you should wipe down anything. If you go to the supermarket and buy a bunch of stuff off the shelves where people have been, you know, doing whatever, sneezing, coughing, whatever, then you need to wipe anything you get at the supermarket, you need to wipe that down really well because you would touch it and then yeah. Go ahead. I think the bigger risk here is things like subways, tables in restaurants that were not adequately cleaned buying things is a risk, but its very low risk im wiping things down where i can, but i think you can only do so much. I think the bigger risk is shared surfaces in where people frequent, doorways, subway handles. Wash your hands. Be very conscious of not touching your face when you go out. Scott, let me ask you how realistic is it logistically to talk about doing tests at the workplace . I mean, are you going to have shifts where everybody shows up and get the tests back and that happens every day . Your larger employer working with a local facility. The testing. They might just have signs of a mild cold. Presenting to a doctor its not sick. As many people tested. There are not a lot of cases at least initially as we come through here i dont know. Come do half your shift and then go get a test and find out if you have it. Thats right. But, remember, theres back to work were not going to test everyone to go back to work thats not going to happen then theres just life with coronavirus. What does life with coronavirus look like . Life with coronavirus over the next 12 months looks like theres an environment where we have to be very careful with people who have mild symptoms. We should be over testing with this if people show up to a doctors office, they should get swabbed. We might want to routinely present to everyone. Thats 3. 8 million visits a week we might have the capacity to do that a doctor puts a stethoscope on your chest and swab you for coronavirus. Thats how well start to catch the people with very mild symptoms or asymptomatic spread. Remember, 30 of people are asymptomatic we want something in place, some kind of sentinel surveillance that lets us catch a few folks as well. Thats how well prevent small outbreaks from becoming large. Real quick if you can help us with this. Right now were told that these tests are only 70 accurate. Do you see that changing over the next month, two, three at scale . Then those are the tests just to find out whether you have it then theres lots of reports about we talked about it in the 7 00 hour with the ceo of roche. The antibody tests coming from china, many of which are not working at all yeah. We have to be very careful with antibody test. They dont have a high specificity. They can say you have high antibodies when you dont. It has a very higher rohr rate a lot of people who say you will get back tests and have antibodies dont the one out of santa clara last week, you have to look at it cautiously in terms of the pcr tests that look for active infection, the accuracy is highly variable. Its high for a lot of machines. Some of the point of care diagnostics might have low sensitivity. It might be on the order of 75 . The gene expert, some of the more accurate machines can be close to 100 precise with a decent sample. A loft of the variability isnt in the machine itself but the sample prep. How good of a sample are you getting and how effective are you in extracting the viral rna in that sample. Dr. Scott gottleib. Always good to see you thank you for seeing us. I know we will see you tomorrow. Thanks a lot. Jim cramer joins us from cnbc headquarters. Jim, theres only one word to talk about this morning i think and its oil i imagine the rest of the world is going to key off of that. What do you think is going on here i think becky got it completely right this is the rollover of the futures. This is where you actually have to put the oil somewhere, otherwise its just a big paper contract my friend rusty brazil has been so good with me at rbn energy. Hes saying perhaps the next month it might go to zero because there really is no place to put the oil and no ones stopping to produce. Its funny, theres no up side no ones talking about the good news of it i think thats because no ones going anywhere to take advantage of it, so to speak you watch the Airline Stocks go down that used to move up so almost everything that happens is viewed as negative in the physical commodity world but are you of the view that this then ripples across the economy insofar as the oil patch and the energy space gets decimated by this . Are you of the view that because the Federal Reserve is coming in and helping on the high yield side its not a problem . I think this industry gets hurt you have Companies Like ocasiocortez with a occidental with a 33 price. Are you going to produce a barrel for 33 and lose a fortune on every barrel . Companies will have to reorganize theres kind of a dream world where it was sensational when oil was at 60 and it was okay at 50, 40 was getting tough 30 was a loss. At these prices it pays not to produce anything you want the oil in the ground for better time. The oil people just know how to produce. They dont know to shut in the slumbchlumberger call on fry very bearish what youre seeing on your screen is a lot of jobs being lost right jim, well see you in a couple minutes and hear more of your perspective on what will happen today. We have florida senator mark yo rubio standing by on the race to get more money to suffering american Small Businesses. Well talk to him in a minute and dont miss our interview tomorrow as well with Howard Schultz on getting the u. S. Economy reopened stay tuned, youre watching squawk on cnbc President Trump says democrats and republicans could reach a deal today on funneling more money into the governments Paycheck Protection Program for Small Businesses senator marco rubio joins us now. Hes chairman of the senate Small Business committee thought maybe it would happen yesterday. Whats happening where are we at this point in time i want to confirm you can hear me. I lost you for a second. Im hearing myself like six times. Yeah, so were i think we have the outlines of a pretty good deal here its a deal we could have had a week ago i want to caution everybody, even if that money is approved on wednesday, it will take some time now they have to redo the sba website with the new parameters for the money set aside for banks. What im asking them do is start doing it now not to wait until thursday or wednesday when this passes well have on thursday when this opens up, youll have 800,000, 900,000 applications hit the system at once well go back to the same problems we were having in the early bdays of the launch this is the price for whats happened here, this delay in fundin funding. Its going to happen today, in your view well, the senate i hope will vote it out today unanimously unless somebody flies to d. C. And blocks it. Well see. The house has different procedures then you have to relaunch this they have to redo the website, the etran system, the online portal im asking them to work on that now. Just assume its going to pass and get ready for it dont wait until its signed to do that. We cant afford to waste all these days what is most important, to make sure people who get it get it, or entities who dont get it dont get it or how do you do that theres criticism on who is getting it, who doesnt, who deserves to get it heres what happened. We were asked to draft this to cover as many people as possible not just Small Business for not for profits, 1099s, independent contractors. Then we were asked specifically to include restaurants and the hospitality industry, hotels, because they were the first ones hit. A month ago, they were hit with closures then we had to write affiliation rules. These hotels, it may say marriott, hyatt or hilton but its actually owned by an individual the same can happen with restaurants and franchises there have been some people approved some companies i believe should not have been. Even under the intent of the law. That comes down to the certification process, how they were certified into the system there were glitches made, no doubt about it in the end, take comfort in the fact that the money has to go to the workers. We want to keep them employed this is not a bailout of a company. Certainly the goal here is to get the money into the hands of businesses who dont have anywhere else to go for money including the stock market, shareholders, other sort of credit lines we want to talk about Harvard University, a 41 billion endo endowment taking the money, and whether you think they should give that money back yeah. I dont know the details of how they qualified for it, how they got it we thought about putting a need test on the front end. The more requirements we came up with, the harder it was going to be to get the money out the door the goal is to get money out quickly. We erred on the side of expediency the biggest mistake we can make is to move too slowly. What about the transparency piece . The transparency piece and having an Inspector General on top of this given the fact we dont have transparency and the president is now planning to remove yeah. There is an Inspector General. The sba has an Inspector General, a very good one theyll look at this program as they do every program thats done in addition to whatever c. A. R. E. S. Act does and in addition to congressional oversight. Let there be no doubt. They made 14 years worth of loans in 12 days when you do Something Like that so rapidly there will be unintended consequences, issues you didnt see and probably things would have done differently. So were dealing with an emergency here and trying to push money out as quickly as possible into the hands of workers. In becomes a loan that you have to pay back if you dont get it into the hands of workers. Senator, what do you think of some of the protests that were seeing we had someone refer to those protesters as i dont know, far rightwingers or something do you think you have to be a far rightwinger to get back to work no, i dont think its ideological. I will say this, heres the thing, if you hear people out there talking about we should keep things the way they are now until the virus goes away or until its at a certain level, i agree theoretically thats the right approach its also not realistic. Its important for leaders to recognize there will come a point where no matter what rules we come up with, people will stop following them. So its a balancing act here it should put pressure on leaders to expedite the things well need to make reopening safer. The Rapid Testing is important thank you very much thank you thank you for bringing us up to date that will do it for us make sure you join us tomorrow becky and andrew will be here. Right now. Thank you time for squawk on the street. Good monday morning. Im Carl Quintanilla with jim cramer and david faber coming to you live from separate locations. Breath taking numbers to start the week futures are weak on what is shaping up to be the worst day for wti since the contract was created back in 1983 ahead of expiration ibm, netflix and coke coming at us this week well look for a deal to extend the Small Business loans, but crude will get the attention at the outset and you did say on twitter on friday that investors still had time to sell crude before this