Transcripts For CNBC Squawk Box 20240713

About 2. 4 you are looking at additional declines the dow has improved we were down about 443 now we are indicated down about 366. S p futures indicated down about 32 all major averages saw declines but the dow was the biggest. S p off by 1. 8 . Nasdaq down by just 1 yesterday. A lot of it as we watched oil prices under pressure. Lets check thetreasury market 10year yielding below 0. 6 at 0. 0. 58 . Oil prices yesterday, nobody has ever seen anything like this no. Lead story went to minus 37. 63 a barrel. No place to put it people would like to store it. More people watching june switch over june is not much better obviously. No. I was shocked how much pressure that is under too. Big gain of 80 . Futures, strange things happen not everybody Takes Delivery reflecting the lack of capacity. I think peak oil might have been maybe not a real thing going back we are a wash in oil. Understanding all of the oil not being used crude delivery closed at 18. 27 and went to minus 37. 63 means sellers must pay buyers to take a barrel off their hands. Anyone think about european Interest Rates i dont know these things arent supposed to go negative. The may contract gaining ground now much more negative than yesterday. The 37 i can deal with but 16 on june the supply demand dynamics are out of whack traders thinking this is like hot potato you look a little further out and it is slightly more optimistic watching what just happened and how that played out yesterday, anybody that was holding that paper thinking they were going to trade the paper before the june contract came in, that puts on a lot of pressure you dont want to get caught with the hot potato. Before i get to you, did you get anything about x clear did you get that wire yesterday . I did i saw and thought you are so far ahead. So it kills 90 viruss if corona starts in your nasal passage. This stuff is already available, right . You just spray it it is a mixture. Ive been using it a very long time it is a mix of saline spray and xyletol that makes it harder for bacteria to stick to things. People spray it up their nose, including myself i had sinus surgery last year. The third compound, the combination makes it difficult for the virus to live inside your system. If we are just using hydroxychloroquine for the hell of it, we should use x clear are you trying to get your hands on in bulk the study was a small study we dont know. It is early days we digress. I thought of it. The x clear is the same stuff. I am a xlear fan. I dont want people are going to go out and buy that and think it will save them it is xlear mixed with a third compound anyway, cocacola is just out. We want to tell people about that adjusted profit coming in at 51 cents, 7 cents above many other companies have done coke is withdrawing fullyear guidance around uncertainties of covid19 the change in consumer patterns will have a material effect on Third Quarter results. Becky . Ill let you know a lot of commentary they are talking about. They say they were on track to achieve the full year 2020 targets through february but then they saw significant changes in purchasing patterns in march no surprise on that. They saw substantial declines in the away from home channels. Thinking about restaurants, bars, stadiums thats where they saw the impact they say that will have an impact on Second Quarter results. They said the impact to Second Quarter will be material but they are optimistic about the second half of 2020. All of that coming from the away from home channel. That represents about half of the companys revenue. Thats why it is so substantial. You may have thought people were hording this thats not what they are talking about. This is the away from home demand because venues shut down. Interesting that they are saying directly that they are optimistic about the second half hard to say how they can necessarily say that one way or another. Im not sure any of us know what the second half looks like in terms of going to stadiums, live events they are saying georgia will open up faster than just about anywhere else. George yaia is. That will be a unique experiment we also saw that signatungapore increased their lockdown to june 6. Two unique experiments going on in terms of how to approach all of this. Getting tod. C. Now news out of washington, President Trump tweeting he will suspend immigration due to the coronavirus. Eamon has the latest good morning. The white house not offering any details on exactly how or when this would be rolled out by the president. Here is the tweet he referenced that came in late last night the president saying, in light of the attack from the invisible enemy, which is what he calls the coronavirus and the need to protect the american jobs for u. S. Citizens, i will sign an order to temporarily suspend immigration in the United States the president talking about legal immigration. Hes made a lot about illegal immigration. This would be a stop on all immigration coming into the United States. It is not really about the virus itself if you take a look at this chart that shows the top five countries that are sources of immigration and the total covid19 cases in those countries. The United States has hundreds of thousands of cases already. Mexico with just over 8,000, india with 18,000, philippines, 6,500, china 80 you t,000 and ia not a lot in these countries the jobs aspect seems to be where the president is going and clearly thinking of an economic recovery after covid19 has peaked here. There are 20 million americans out of work. That seems to be what is weighing on the president s mind here we have yet to get details on how this will roll out we are hoping see an extension of that ppp program, the Small Business Lending Program to keep Small Businesses employed. They are hoping that will happen on thursday. Getting additional funding to that program that ran so quickly. One question. There has been speculation on the democratic side that there has been pressure and a bigger push more transparency around getting these loans. Is that going to change, do you think the Second Time Around im not sure if it is going to change this time around whether it will be put into law in this process. I did talk to marco rubios Office Yesterday rubio has been a big proponent of this. He wants to see all the data his office dont have a full data base of where all these loans went and who got all the money. They say the Small Business administration doesnt even have that data yet. That was done by the banks so rubio wants sba to get that and congress to see it ultimately, they would like that information to be made public. They can be aware of where all that Tax Information is going. There is a big effort to get transparency around this program. Okay. Eamon, in washington great to see you as always we want to bring you an update cases in the United States have risen to 788,000 with a death toll of 42,000 new york state cases have topped 253,000 with more than 18,000 deaths we said it yesterday equal to 9 11 and all our troops every day. The number of new cases has exceeded 1,000 in 24 hours they are extending their partal lockdown there well keep an eye on that country for so long was praised for its approach to this pandemic and challenge the other big issue in singapore is to see an increase right now is a problem not only have they had tight restrictions and a lot of testing and called the Gold Standard it is summer time and it is hot there. Getting relief from this as it gets warmer is part of the question we have watched and wondered about what that might mean here. Another story this morning with the turmoil in the crude market, we are taking a closer look at oil companies. A few weeks ago, we talked about exxon and plans. Caller we have over the decade put a lot of priority on maintaining a strong balance street and realize that this industry has its ups and downs over the longer term, to maintain that, youve got to have projects and invest that is key. A lot of our share hoerlds are retail share holders, people that depend on that. Weve been committed to maintaining that and using the Balance Sheet to support it. Primarily, that is to support investments in these projects. That was two weeks ago that he was saying at that point the dividend was important they have raised the dividend for 38 years in a row. And said if things change, theyll continue to monitor the condition. I spoke to someone at the company who said they will continue to monitor. If you want to say things got weird, nothing stranger than with that may contract with things trading down negative 37. Meaning you had to pay someone to take that oil off your hand normally, someone would decide what is ahead of the dividend. There on schedule to release earnings coming out. Company has increased its dividend 38 years in a row they know a lot of companies count on that. They say they have additional leverage they can use. The cap ex is what they were going at cutting back to 22 billion. A shot of the shutin in the perm yan basis is what they were talking about. That will cut into the production this year byabout 15,000 barrels a day but by next year, it will be about a cut of 150,000 a day in the permian a base inn because of those cuts indicated a little lower this morning along with the rest of the market when we come back, well have more on that historic move weve been watching into negative territory with crude prices. Looking at j. M. Smucker citing unprecedented demand. Welcome back we are again watching that historic crash in crude oil. The may futures contract dove into negative territory, meaning you had to pay someone to take oil from you never happened in history. Not during depression or civil war. Lets bring in Brian Sullivan and john who is a cnbc contributor. Brian, well start with you. What happened yesterday . I guess the best way i can say it, becky. You buy something on amazon. Com for 30, the guy shows up at your door to deliver it, you pay him 50 to ptake it back not a perfect analogy but close. We had a small number of contracts with negative tich pricing. That may Contract Trading for some time. The reality is if there is no place to put oil and the contract requires you to take physically delivery, you are going to pay whatever it is to get out of that contract could be other aspects to it seeing funds get into deep doodoo we still dont know. But what an historic day john, we know this happened because Worldwide Oil demand shut down as countries shut down due to coronavirus we have heard from opec plus nations saying they are going to cut by 10 of supply we have heard american producers like exxon and chevron are cutting back we heard it from canada yesterday. When does the actual continued production meet up with the lower demand or does demand pick up first i can tell you here in the u. S. The cut backs are real and significant. You could argue that the u. S. Has already cut 700,000 barrels. We were at 13. 1 a few weeks ago, we are at 12. 4 recently. I would expect further decline the u. S. Rate cap down over 50 since july it has been a meteoric fall in terms of that setup. The opec plus cut, there seems to be a complete lack of enthusiasm among folks to actually cut saudis are waiting to may 1. Others rose production by about 1 i dont know what they are doing. I know sully was talking about the crude oil coming our way courtesy of saudi arabia trying to put the final daggar in the heart of our guys in the permian, thats all i can think of you just cant cut enough in this environment to offset that loss brian, i saw you talking about the tankers on their way here too maybe you can explain. With weve got so much here, why are we still accepting it from other places is it just refineries that need different types of crude there is that there are contracts. Remember saudi arabia owns most of the refineries in texas youve got a situation where it could be less expensive to take delivery on the gulf coast where you need it rather than trying to get it from, say, oklahoma, down to houston would would hic easy if the pipelines are full, you have to take it by sea it is a question of where that is if viewers missed that segment there is according to marine and tanker traffic, 50 mill your honor, 50 Million Barrels of oil coming from saudi arabia, most around africa, a few weeks out. Think about it we talk about filling up at 75 Million Barrels of space this armada of oil on its way here is more than half of the spr. Thats not what well use it for, im just trying to put it in context the president did bring up this idea yesterday. Im sorry, becky . The president did bring up the idea yesterday using this time to fill up the Strategic Reserves it seems like a good idea if they are paying us to take it at this point absolutely. We should look for other places. China is doing the very thing right now. It is the thing to do. Buy super low and keep it until we need it my fear is that as our u. S. Producers have to trench because of the commercial aspect, we could be behind the eight ball before you know it in maybe a year or so where saudis have the upper hand they wont be sending us 50 Million Barrels. Theyll be withholding it. Just when consumers wont be able to handle it and have a higher pump price. It is a dangerous game right now, if you ask me we have to stop taking it out of the ground, becky i dont want to see anybody lose their jobs what time is it . 6 25 the stupidity of what is going on im sorry to be so harsh about it paying to take it out of the ground, take it from us and put it back in the ground. We are paying three times for the same barrel of oil to take it out, move it around and put it back in the ground somewhere. You get the point, it is just dump we need to stop the production so the industry can survive. John, to that point the idea that some of these companies will not be able to survive this weve talked about how it was really easy to turn back on production and shut it off every time they went down. Have we reached the lower limits of that . Because of companies underlying that went out of business . Im not talking the Big Companies that have diversification and lots of cash to access. How big of a problem is that with the oil bust, it was a lost decade for u. S. Oil producers. It is what got us in hot water and triple digit oil in 2010s and many years after that. What is going to happen here is that these independents will go out of business. The Big Companies will pick them up well have a lot more discipline maybe that will be a lot more stable as far as the wild caters and aggressive producers, those days are over good to see both of you thank you for your time this morning. Thank you andrew . Coming up, a lot more on squawk box when we look at todays huge lineup we have coming up. We covered from every angel with special market coverage. We cant afford to miss it some images of the Pandemic Impact from yesterday across america. Isnt just a department. Its a voice on the other end of the phone. A note to say youre on our mind. A willingness to come to you. The world and how we interact with each other is changing. But that will never change who we are at lexus. Now, more than ever, you and your needs come first. Find out what Service Options are available in your area at lexus. Com people first our time now for the executive edge, ibm shares falling down 4. 5 . The Company Reported a mixed quarter with earnings being lower. Revenue did miss revenue withdraw 2020 guidance the new ceo told jim last night on mad money. Demonstrating the highvalue segments we begin with a strong Balance Sheet and add cash float resulting in good liquidity which is lou us to weather the storm really well. Something we should be proud of. Saying 70 of the revenue relatively impacted by the Pandemic Impacting health care and telecom. Coming up, futures pointing to another day of losses. Adding yesterday and today together, the whole remdesivir 700point gain on friday later, shark tanks kevin o heary with us. Stdas p 0 ggt break, a look at yeerys 50bies winners and losers 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. To go beyond ordinary etfs. And strengthen client confidence in you. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Morning. Welcome back here. Lets show you u. S. Equity futures. The dow looks like it would open down about 1. 9 . Looking at the s p down 1. 5 the nasdaq off a little under 1 right now. Volatility still evident in all the markets. Now. Like so many professionals, gabriella, you are just at a loss of what to do unless we get some i dont know clarification on medical issues. I see thats what you are saying here maybe buy good stocks and have strong Balance Sheets but at this point, dont take on a lot of risks is that what you are saying . We have to realize all of the past couple of months has been driven by the Health Care Issue, by covid19 and the shocks it causing around the world that is not over the next year or so is still going to be driven by the Health Care Issue we speak to our clients about how the flattening of the curve is a good thing. It works that is a good thing to so it is not the end of the story this new chapter around reopenening, which will be complicated. We dont have immunity we dont have treatment or a vaccine. We still have a complicated year or so ahead. We are really focused on quality. Focused on income and implies being underweight. On the equity side, really thinking through the Quality Companies and really with a vision of equities over the next few years and the rebound given these uncertainties on the front. We find it too early to add significantly to risk. Weve bounced from the lows, 25 . We had been 30 . I dont know if you told anyone down 30 from here to risk if we went back down there to the lows, would you then say it is time for investors to significantly add to risk or not. What we are saying is that we can till expect to sell off again. Equity and credit markets whether we retest the lows will be in hind sight in the sense that it would better reflect uncertainty and valuations would better reflect that you would say buy there or you wouldnt buy there either . We would have to consider again going back to the Health Care Issues and whether it would be a much more beneficial entry point. Compared with where we are now with variables of 18 times selling estimates. We would have more attractive valuations again. When would you start to Pay Attention to what companies are saying about earnings . Right now, it just matters what dr. Fouauci or Governor Cuomo i saying about hospitalizations than what companies are saying about their results. I would say, yes, driven by the Health Care Issue. Not only what they are saying about the evolution of covid19 and whatpreparations are being made to reopen the economy in a gradual risk that comes to conversations around planning and isolation and being better prepared to reopen the economy that is an important issue in terms of Earnings Companies are feeling like the next 12 months are incredibly uncertain. What we are watching out for are the plans companies are making to offset some of the issues on the top line front what can they do to shore up costs and Balance Sheets, this is where we are interested we are stock picking and really where the attention has drawn again. I dont know if anyone thought about buying smucker incredible yes earning season showing clear winners and losers when we think about winners, we think Consumer Staples if it is a tough reopening process, its more on staples than restaurants and bars. Big winners is health care and also technology. That is still a theme. Thats not just valid for a month or two but really the next year or so, which is still going to be a very different world inle we get that vaccine where would you go on that yield curve or fixed income . Derisk is being a bit underweight equities versus bonds. For some clients, there is no need to do anything. Some market moves already derisk their moves for them especially when you look at fixed income think about the past few years when investors were so hungry to chase yield. That placed them to high yields. Thats not where we want to be right now. To focus on treasuries, mortgage backed, asset backed the diversification and that fed support of a lot of purchases happening at the moment. It is really crucial especially within fixed income. Jeff comes on and i think he has a year end target on s p 500 of 3,300 to 3,400. Approximately what would you say your yearend target is . You know within asset management, we prefer to think a little longer term, so not just the next eight to 10 months or so. What about the next year . Sure. I think it depends on how optimistic you are if you think we recoup that in the next 12 months even if maybe two years, that still implies close to a 10 annualized return. Even if we dont think it is december, it is still worth waiting for and holding on to some equities as long as we are wearing that with some short equity as well normally you are sitting here with us. I dont know what comes first, whether you are sitting back here with us or 3,300. Lets see well have to see well have to see how we reopen thank you well see you later. Becky, i saw talking to mack earlier and explaining early march, i would still go into the super market and they had cheese, Little Things of cheese and crackers that they were trying to sell and you were eating them . I finally stopped i just cant believe the world we lived in. Sometimes i didnt even use the tongs. Ugh you are surprised no. No i remember your habits before this just thinking about to that it is like, did that really happen is. You know what is never coming back salad bars not for the next three or four years. Euro kissing is not coming back on the cheeks. I went through the tolls today no toll people toll by mail now if you try to pay cash, there is no one tli throuhere through thn tunnel i went to the post office they had like a shower curtain between them i thought that was sad. We had that too. It was like, god, you cant afford plexy glass i thought it was impressive the curtain they came up with it quickly. Sorkin, did you get a air cut . I did you know who did it who i did it all by myself. A flobi scissors. They are begging us to go travelers is set is to report in minutes. Wa well break that down when we come back. Razy 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. Confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Theyre all possible with a cfp® professional. The best Entertainment Experience. S xfinity x1. Welcome back to squawk box. This morning, futures about 2. 5 maybe a little longer away from opening. Looks like the dow will open down about 1. 8 . When we come back, well talk to the impact of the pandemic on Grocery Stores well talk to ceos of stop n shop and food giant. As we head to break, take a look at these scenes in seoul, south korea as people return to work with temperature checks. Well be back after this every Financial Plan needs a cfp® professional confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Welcome back to squawk box. Supermarkets playing a Critical Role in the pandemic shutdown. The Food Supply Chain and employing essential workers. Ahold is one of the largest brands, food lion, stop and shop where i shop its ceofrans muller is here. Good morning. Thanks for joining us first i want to start the conversation as a consumer, which is to say in terms of getting product to people, the Food Supply Chain, what have the challenges been like and how secure are you as it stands in the United States . I think the good news is that its all over in the u. S. , enough food in general, so we dont have to worry about this but, of course, enormous spike in demand created shock into the system im very happy to say theres a huge strong collaboration between everyone to get the supply chain back into place were making progress day by day. The supply chain looks much better, has been very robust in two weeks time we should be close to back to normal. In terms of employees making sure that they dont have covid, taking temperatures, putting all of these new procedures into place, talk about what thats like, what the costs are like, how youre thinking about what it is today and what it might look like a month from now yeah. I think its clear that the health and safety of our associates and customers has been and will stay the highest priority for us. Without this given covid, nothing else matters in itself very, very impressed by what our people at the front end do, our associates, in this time of great need so we work very hard we took a lot of Safety Measures in all our Stores Across the u. S. 2,000 stores on the east coast we are competing all the east coast and we did a lot of things like the plexiglass screens at checkouts, ppe for associates, face shields, facemasks, social distancing of course you see much more discipline now in all of the stores so they keep each other safer. We took, of course, quite a number of measures in hiring security staff, special hours for seniors to shop and these type of things we see very strong discipline in our stores to keep each other safe and that is very important for us the other thing is, of course, looking forward as you just mentioned, i think supply chain will come back into place but we will see that Customer Behavior might look different and i think this whole effect of social distancing, the feel of social distancing will stay with us a little bit longer, even after opening of the various markets do you anticipate testing your employees in the future do you anticipate changing the technology with which futures use to pay, for example, the idea that were going to use one of these key pads anymore. Ive seen people put plastic up on top of them i think consumers will be more sensitive to contact in general and i think we take a lot of measures to be on the safe side for both our associates and our customers, but i think we will see more sensitivity there and thats why we also invest in these kind of things we see them on a very regular base i think the distancing will keep longer busy. I think it will have an effect long term. Frans, do you think this pandemic is going to change your view of pay and your relationship with those front line workers i have to tell you, the people that are at the checkout counter working day after day are heroes to me. Every time i go into a stop and shop i thank them, and yet as you know, you were in a terrible labor battle with your employees at stop and shop just last year over pay now you reached a settlement ultimately, but do you think ultimately youre going to start to pay your people a lot more given how clear and how essential we have all, i think, become appreciate what theyre doing in a way that maybe you didnt a year ago or before yeah. We have already for a long time had a clear policy in our company that we pay our people well in alignment with the market not only wages, health and pensions, these types of things i think we have a strong package across the east coast. The other thing is we announced last week that we spend 80 million to meet associate, customer, community needs, if its rewards, extra awards for associates, if its protective material, if its supporting communities, if its donations to hospitals, to research institutes, and i can tell you that our appreciation for our associates is amazingly high and im very impressed and humbled by the action of our associates in this time so we have this not only during covid, but we have this always on our priority list to make sure that our people are rewarded properly. Frans, we appreciate your time and wish you a lot of luck. Thank all of your workers constantly because theyre doing really tremendous things during these challenging times. Appreciate it. Joe, over to you. Thank you very much and thank you very much for stopping at stop and shop. Thanks a lot for your business. You bet. Coming up, huge guest still to come, including Barry Sternlicht whos going to llte us how the economy looks from his vantage point. Stay with us there are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. It didnt take us long to realize. We werent in the car business. At lexus, we were in the people business. We needed to be helpful. Respectful. And compassionate. To treat people like guests. Its what we all signed up for. And now when people need this most, we will do what weve always done. Take care of people first. The rest will follow. Stocks look to add to yesterdays losses amid historic moves in oil prices. Reopening america. What will the new look look like Barry Sternlicht plus antibody testing. We will speak to dr. Scott gottleib as the second hour of squawk box begins right now. Welcome back to squawk box right here on cnbc welcome back im Andrew Ross Sorkin weve got becky quick here joe kernen here. U. S. Equity futures at this arrow because we do have some red arrows across the board. Dow looks like we would open off 1. 9 s p 500 off 1. 5 and the nasdaq looking to open down a little less than 1 right about now all of this on the back of some of the moves in oil. Well talk about the big moves in oil before we do that, i want to talk about breaking earnings news becky. Andrew, earnings out from dow component travelers. Its the Insurance Company that actually earned 2. 62 a share. Revenue came in a little below what the street was expecting. The charges that are in this first of all, their catastrophic losses came in 333 million pretax which was up pretty significantly from a year ago. Thats in part because of the tennessee tornadoes that you saw in the first week of march those were awful situations. Big winter storms that occurred in the First Quarter this year then theres covid19. Net charges 86 million pretax, 68 million after tax. This is the company deciding about what they think is going to be coming, things that happened in the First Quarter that those claims havent come in yet because of coronavirus and they have a lot of different situations part of that might be Small Businesses thinking that some of the Small Businesses will go out of business and arent going to be paying premiums anymore then they have general liability lines. Large book of small and midline businesses on a positive note, travelers did increase its Quarterly Dividend by 4 to 85 cents a share. Whats going on with travelers shares, indicated down 2. 3 . Well hear more on the conference call. Thats a quick look at the early read joe . Cocacola, beck, posting better than expected earnings and revenue, but as many other companies have done, coke is withdrawing its full year guidance due to uncertainty surrounding the covid19 pandemic we rousted sara eisen out of like a deep sleep. If its coke, you are going to be there for us, i think im sorry we had to do that to you. You were up. You knew it was coming yeah. Yeah bonus hours. No, of course, i have two little kids, joe. Up at all hours. Hears your big number on cocacola, 25 thats how much global volumes dropped since the beginning of april, which shows that even coke, a consumer staple thats usually recession proof or considered among those stocks is not immune to what is happening as a result of the covid19. The year began strongly at coke. Volumes were up 3 through february excluding china, and then they fell off a cliff so i did just speak to James Quincey, the ceo of cocacola. I got some color as far as the scrapping of guidance, he said theres still tons of unknowns ahead the Beverage Business will grow when things return we were hitting it out of the park before this happened. What happened . Well, they are still providing cocacola and diet coke, traditional brands, he said, which are doing well global factories and distribution are operational, but at least half of cokes business is the away from home its social drinking, bars, restaurants, stadiums, travel. That is what is getting absolutely hurt as a result of all of these stay at home orders he said that Athome Business where they saw people stocked up on their pantries, especially strong in the u. S. In the few weeks of march hecalled it absurdly strong. Its not enough to make up for what they are losing at the away from Home Business we saw that big number for pantry loading in march, but then it kind of dropped off in the last few weeks as quincy said, people started to realize that the Economic Situation and the outlook is not so great so theyre already sort of seeing that recession kind of mindset impact the spending. People in the u. S. Especially. As for china, which they do have a big presence, obviously, quincy said that its doing much better after a very deep drop. That the drop in china was actually worse than the global volume drop that they are seeing right now, but that slowly, slowly it is coming back online. Its not the level where it was before covid19 impacted but it does offer somewhat optimistic view, which i heard also from procter gamble, lor real, starbucks. As far as the business coming back in china. Id say the overall theme from James Quincey, strong brands have been through this before. Theyve been through crises. They have a playbook they are going to emerge strong gi in the meantime, theres no visibility because theres no telling when the economy is going to open up and cocacola is being very much impacted by this cocacola has been an outperformer in the market and it has been a staple and it has benefitted to a certain extent of people loading up on the staples they need, the beverages, but not enough peo e people. Im sure theyre glad they got into bottled water a lot of flavored celseltzers. Thats more of an andrew thing. Some things that were in secular decline are coming back. For instance, eating breakfast at home. That was something that wasnt happening. Now people are buying orange juice. They had simply orange, and thats something thats different and its a change in behavior those are the kinds of questions that theyre wondering are going to be lasting or just temporary as a result of this strange upside down world were all living in. I would have orange juice all the time if it werent 200 calories i have to do the vitamin c to prevent the scurvey. Dont miss a live interview from cocacola ceo James Quincey. If you add a t to sara, you get sarat. That will be a jeopardy question who is sarat sethi oil, youll notice were showing you multiple contracts on the screen today because otherwise it makes no sense. Actually, that makes no sense but theres may. You see june is probably the one to focus on. Near term its still going to be under 17 and then futures, theres a lot of reasons they trade higher the further you go out. Do we recover at all by july the may wti contract expires this afternoon the futures contract plunged below zero for the first time yesterday reflecting the lack of capacity to store all the oil that isnt being used because of the pandemic that would mean sellers must pay buyers to take it off their hands. I just talked about you, sarat sarat sethi. Good morning. Cnbc contributor and weve got mike santoli here. Mike, while youre here, i thought you were back to the ship stuff yesterday now youre i dont know every day its different you just never know where youre reporter i like to mix it up. Keep us on our toes when you see what happened with oil yesterday, can you write it off as just technical, mike . I mean, 16 for june. Reporter yeah. 16 for june is not much better so something demand wise, and supply, but its just unbelievable reporter sure. No i mean, the backdrop, this can only happen even if it is driven by mechanical technical forces at settlement, it can only happen if you have a real time glut and theres nowhere to put the physical commodity thats the fundamental pressure. Theres more oil traded in futures form, paper form than there is physical oil traded were talking about people need to take it if youre long oil contracts, youll just get liquidated it becomes massive off sides call on a lot of people who own oil and so i do think its a mixture of the technical backdrop june settlement, its in four weeks. Thats sort of a may expiration. So its not as if the fundamental story is going to change that much for me, im much more focused on what it means for what financial players are tracked. How much liquidation pressure are there on other parts of the market and obviously the impact on Corporate Credit which has not acted well in the next several days all of that after we got this nice over achieving relief bounce in equities and credit, a lot of that some of that is being giving back in the next couple of days. We talked about peak oil, just sort of raising an eyebrow, santoli. Has there ever been a malthusian bet thats paid off . Reporter no. This isjust staggering. Okay, sarat. You saw the bounce off of those lows you are saying we may or may not test them. What is your gut telling you do we just churn here somewhere up a i little bit or do we go to new lows i dont think we go to new lows, joe. I think the market has found a bottom, and i think as we start the economy to restart again, well see demand come back and i think we have to get through really earnings season for the next at least this quarter if not next and some of the things that are going to throw the market off are exactly what you talked about with oil. There are going to be some unintended consequences, players caught off sides i think thats going to throw the market off a little bit as well fundamentally you have the fed, the treasury behind corporate america. You also have the government kind of looking to corporations to say well get you through until demand comes back. So we are looking at this as, hey, opportunities in your portfolio kind of barbell. Get the good Quality Companies that have become much cheaper in financials it could be the jpmorgans, blackstones, you can buy Health Care Like cvs, Home Products like lowes i think you can add to your portfolio with Good Companies but at the same time i think the volatility is here to stay for a while. Things like oil going negative youre going to hear from Consumer Staple Companies like coke talking about on premise. We like pepsi. We talked about coke just now. Coke is selling a lot of products at home but pepsi also has a huge amount of products they sell right in snacks that come home. Thats really increasing look for those type of opportunities where i think theres going to be secular growth we like 5g in the 5g you have qualcomm, American Tower there will be opportunities. Balance sheets are going to be really important, especially for the companies that i think have to survive and come through this if youve got a junk Balance Sheet, thats going to be a little harder. You dont have the fed behind you on those so, sarat, if you were going to if you had money, i dont know, maybe you didnt like the market three months ago or maybe you sold something, would you buy all those companies today . Would you buy half a position in all of those companies you just mentioned today or would you i would. A full position half position . How would you do it . You think even today you should be buying . Very good question. So if i didnt have any money in the market, i would start with half a percent positions in all of those companies to us those are Core Companies that you want to hold in your portfolio. Market could definitely go down 10, 15 from here, but that doesnt necessarily mean all of these companies are going to go down the market has been carried by a bunch of stocks. Nasdaq is doing really well. If you look at the big boys, the amazon, microsofts of the world, theyre all up for the year. 10 stocks have carried 1 3 so you have to dig deep and say, hey, when i look at financials, theyre down 30 if i look at industrials, theyre down 30 some other stocks are down 15 to 50 . Let me see which ones i can start nibbling on. If you get these for unintended consequences, earnings are going to be much more dire if coke cant tell you about what theyre going to predict, it will be pretty ugly whatever we do, were going to come back. Along the way. Youre going to be happy owning this more Companies Based in the u. S. Santoli, you saw the lows, right . Weve been up 30 . Somewhere in between, you think we go below or above we turn around i mean, look we talk about are we going to go back before. Whats the ultimate time frame before we go back to the old highs . Thats because they both happened so fast so four weeks ago we were at the lows four weeks before that we were at the highs in normal times we dont sit here really kicking around saying, so, do you think the market is going to immediately go down 25 from fridays lows thats a new low down 25 is going back to where we were four weeks ago i think we have to kind of step back and say, it wouldnt be that strange if after regaining half of a huge crashlike move in the stock market, that means a low is in. If you gain more than 50 of that loss, but it doesnt mean thats good things for the near term you should probably back off, churn, test on some level. Test doesnt mean go back to the tick of the lows in the index. I dont think its impossible to think we turn around sarat mentioned bifurcation in the market the market isnt saying everything is going to be great in two months and the consumer will be roaring f. That were the case, you wouldnt be just buying shopify, walmart, amazon, you would be buying ford, whirlpool and key bank thats not happening i think the bifurcation can happen both ways thats the indication for a choppy, churning testing period. So its not you dont go to that ship whats that called ship slack youre thinking of the word shiplap which is a wood siding not correlated to anything. Just whatever you get up i mean, do you move the you can try to write an algorithm but i dont think its going to work. You can try to make a correlation. No correlation. Sarat, you would be surprised if we churned around for 3, 6 months you think were going one way or another . I think we churn but also, joe, the other thing to watch for is i think the markets really focused on this we get a therapeutic, a vaccine i was going to ask you that and say that to santoli. You can go right up if remdesivir works or Something Like that. Maybe. You get some positive news like that, you saw what happened last week. Then you could see the stocks that mike was talking about really ripon the other side. Okay. Sarat, mike santoli, thank you sarat sethi. Coming up, were going to talk government aid and Small Business shark tanks kevin oleary joins us to talk about the program and who gets loans and who should give back the money. Squawk box is coming right back theres tv. And then theres x1, 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 ] welcome back, everybody the fed has been criticized for main street lending. Steve, which ones of the programs is this reporter right, exactly. So, okay, you have the ppp program, the paycheck protection program, which is the one everybody is talking about, gets all the discussion 350 billion program, talking about scaling up this is a program that hasnt launched yet its a 6 650 billion program tha hasnt launched. Aimed at midsized businesses. Its under criticism let me go through what this facility is here 600 billion program it includes 75 billion from the treasury banks will underwrite 5 of the loans. These are 4 year loans at 2. 5 to 4 Interest Rate right here. Companies, its a Million Dollar minimum loan, principle and interest deferred for a year whats the criticism unlike the ppp, these loans are not forgiven the treasury leveraged this up 8 to 1 compared to 10 to 1 in other programs there could have been more money available here companies have to only use a, quote, reasonable effort to retain workers the overall idea is the government is not taking enough risk here to help midsize businesses here. Companies also, they cant pay dividends or share distributions until 12 months after the loan is repaid. Glen hubbard, frequent squawk box guest, he writes in the wall street journal, the priority has been protecting treasurys 75 billion investment rather than quickly getting Small Businesses the loans that they need now, treasury and the Federal Reserve declined to comment. I guess you could take it from their point of view which is that they had to put this together real fast, never been done before. Theyre balancing the need to get the money out with protecting taxpayer money against fraud. Tremendous reputational risk, especially at the fed. Theyve never done this before fed had a Comment Period 2,000 comments came in theyre working fast, we understand, to get this done maybe it will be launched by may 1st. If it does work, the treasury has more money that it could put in becky . Steve, thank you. Im going to take it back steve, appreciate it meantime, billionaire mark cuban joining fast money yesterday he had this to say about the Small Business loans and publicly traded companies that have been taking money from the Small Business program for Corporate Headquarters, no for individual franchisees, i dont have a problem with it the Corporate Headquarters have many different ways to approach it they dont need to take money that should be available to really Small Businesses. Okay. Joining us right now is kevin oleary. He is chairman of o shares ets as well as cohost on shark tank. Always great to see you, mr. Wonderful. Trying to get your sense on the morality of taking the money thats the question this morning, especially for companies that may not need it in the moment today but maybe they think they need it later. Sort of how do you think about that well, i listened to marks comments i have a lot of respect for mark weve been working together. We never agree on anything and we dont agree on this either. You have a fiduciary responsibility when a government lays out a program to use it because you have no idea how long this pandemic is going to go for, when or if there will be therapeutics or a vaccine. You just dont know. To say you can give to a franchisee that has less than 500 or whatever the employee count is and not make sure the brain of the franchise business is kept intact makes no sense to me whatsoever. Let me ask you a question you have lots of Different Companies and i wonder how many of them are trying to take the money and how many call and say i would prefer to take your money versus the governments money . Yes, all of that is happening. You have to understand the unintended consequences of what that said. It was clear to me that the government asked you to take a snapshot of your payroll feb 15 and june 30 are the same or the june 30 number ishigher, that loan can be forgiven its free helicopter money that changed the entire behavior of millions of businesses that were applying for it let me tell you the unintended consequence which i find fascinating. We cant finance the payrolls of these companies during the period were waiting for the check to come. We dont know if its five, six, eight weeks to come . Whos going to pay the landlord you have no idea how many conversations ive had with the lawyers of landlords, in florida, texas, california, we are basically being told by that bill to keep paying the employees. This will impact the value of reits. I have sold almost all of my reits. All of these companies, just like you guys on squawk box, who have been practicing how to work remotely and youre Getting Better and better every day, these companies are operating remotely were not going to go back were going to dump 20 of the Square Footage i can save 7 to 11 by just whacking the amount of office space i need, and thats exactly what im going to do hey, kevin, thats a great point. By the way, its good to see you. You, too. With mark statements from yesterday, mark cuban, i watched him on fast money. His point wasnt that shake shack didnt want the money. Theyre giving it back because theyre worried, he said, about the blowback, the Public Perception and what that could mean for the brands, too is there some wisdom in worrying about the Public Perception on this maybe they made that as a marketing decision and its valid if thats what they did, but they have no idea how long their business is going to be under stress if i was a shareholder of shake shack, and im not, i would have questioned that decision they have a fiduciary decision to use everything thats in their finger prichbts to do it theyll look pretty fool fisch a year from now were still talking about this pandemic in the same way. Hey, kevin, i have a question you and i have had lots of conversations and debates about the idea of free markets and you have been a free market capitalist and supporter for as long as i can possibly remember, and you look at where we are today and clearly the entire idea of the free market has been about as perverted as you can possibly imagine we have absolutely socialized all the losses, we have privatized all the gains my question to you is does this change your view about all of this and does it change your view as a capitalist about what it takes for companies in the future . You know, we can talk about taxes, for example, corporate taxes, individual taxes, how much we should pay into the system now that the government is ensuring your business, do you believe you should pay a higher premium in the future . No. You know, every time we have a systemic shock to the system everybody, including you, andrew, comes out with brandnew ideas to redefine capitalism theres nothing wrong with it. We dont need capitalism 2. 0 because 1. 0 is working just fine if you want to add on taxes and continue to make everything slower and less efficient than it was before, that will actually hurt the economy. The way i look at it is, look, the governments doing the right thing trying to keep the dna of businesses afloat by keeping their employees intact and the headquarters moving forward, whether its a small or Large Business to completely redefine the mandated capitalism versus what . Give me one other program, one other country doing better than the United States is now we were booming until this hit and we will be booming to get out of this mess its a matter of time. I have to defend the honor of capitalism every time theres a market correction. Thank goodness im here. Kevin, before you go, give us a market call. What do you think is happening right now. Youre an investor yourself. Where are we and how long does this go on for im surprised we havent talked about the thousand pound gorilla in the room now on policy this goes to markets and trade policy when we get back talking to our asian counterparts, you know how i feel about trade in china, we have a new program at the top of the list we must discuss culturally how these pan dem mix are breaking out and put that right at the front of the table the cost of human life, the cost of the economies of all the countries on earth depend on us figuring out how to stop this from happening now, look, i dont want to point fingers, i dont want to mention countries, but if a country sustains a wet market and they say thats where the patient is, that has to have a huge cost because of that country. Im unhappy about this i want kudlow, mnuchin and trump and everybody to think about that. Kevin, theyre playing us out. I need your market call. What do you think is going to happen here . I say up by q1 with so much power you cant believe it the fed is over compensating on what theyre doing here. Theres so much liquidity coming into the market. Hold your ground you will have a fantastic outcome in q1, q2 next year. Mr. Wonderful, thank you for the wonderful view this morning. Always appreciate it. Take care. When we come back, Starwood Capitals Barry Sternlicht will talk to us about what hes seeing from his perspective. Stay tuned squawk box will 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. Dow futures looking for nearly a 500 point drop. Barry sternlicht will join us next coming right back. Every Financial Plan needs a cfp® professional confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Good morning, everybody. Welcome back to squawk box here on cnbc weve been watching thefutures this morning and they have come under increasing pressure. Weve been down all morning after yesterdays big declines dow was down by 2. 4 decline of almost 600 points the dow is indicated down another 532 points s p futures down by 52 and nasdaq off by 103. Protests are taking place in multiple cities as demonstrators call to lift stay at home orders and reopen the economy americans are debating how and when that should happen. Joining us right now to talk more about that is Barry Sternlicht hes the chairman and ceo of Starwood Capital group hes also the chairman and ceo of sh hotels and resorts barry, which side of this debate do you come down on . You know, i was on your show about a month ago, march 13th, the beginning of the crisis. I said it was going to be world war iii for three months were five weeks into that its look being like world war iii but, you know, i said i was the optimist i was the opposite of mohamed el erian. I said this was a flu. Its obviously a flu and we can see the pattern around the world. It goes away i said rates are really low. Tax cut for consumers and businesses, it will help the economy. Youve had a crash in oil, Commodity Prices also a tax cut gasoline prices are, what, 1. 81. Stimulus kevin oleary mentioned 13 of gdp here almost 19 in japan. We are over stimulating the economy so that will get us going again. Then medical breakthroughs was another big positive for me. If you are an optimist, youll say well have a vaccine whether its 12 months, 15 months, 18 months whats the slope look like depends how we reopen the economy. We have to do it zip code by zip code let the mayors help, let the governors do their job i think people at risk should stay at home you should social distance and look around the whole world today to see best practices around the world on how to do this last night there was a call among several real estate executives that have been asked by the Trump Administration to help with the opening and we decided we ought to do as a group was come up with the best practices of reopening sectors of the real estate industry, like the apartment sector, obviously for me the hotel sectors, even the retail sector. David simon was on the call from Simon Property group we dont have to wait for the government we should come up with our best practices sector by sector because we know the nuances of our asset classes. We can open up, i think we should open up, i think america wants to open up i couldnt disagree more with kevin oleary on prior points. Let me ask you at the start, barry. I think youre probably right. If we get a vaccine in 18 months, fantastic. If its 12 months, even better its just a question of the slope between here and then and what kind of carnage is created by the deepness of that damage between now and then you said we should open up zip code by zip code not everywhere looks like new york, new jersey, connecticut area that seems like it would be problematic for the Hotel Industry how do you know that the people who are coming there, me as a consumer, you can open up but the question is do i feel comfortable thinking am i protected . Am i going to be staying in a room that someone came from one of these areas came from how do you play that out thats a big issue. Absolutely its an issue. Thats why we need a gre green housekeeping seal of approval we have our housekeepers cleaning the room to the appropriate standard we could even temperature test guests as they arrive. I think the Hotel Industry, yesterday the Wynn Corporation put together a 32 page booklet on how to open a casino. I think the Hotel Industries will come back with the transient business first and the large group houses second and later. I think drive to hotels that are on the roadside, they will open first because people will get in cars before they get in planes they will return to normalcy you are arguing about the slope and how fast do we get back . You can lay bets down as an optimist buying stocks and Debt Securities if you think were going to get back to some semblance of normalcy and how fast. If you get a drug, a medical breakthrough between now the market should do better faster the front of the market, this market is a little bit ahead of itself ive been very optimistic that well get through this, and we will get through this. I think the Biggest Surprise for me at least for the last five weeks has been the amazing spirit of the American People. People are out walking, kind, talking to each other saying hi to the person who bags your groceries. Its a nice reflection on an economy and a people that really will the power of the people will open the country. We will do okay. My mom is 86. Shes up in North Palm Beach in her house. I talk to her twice a day. Shes fine being home. Shes bored. I send her packages and books and ive taught her social media and face time, but shell be fine and when its safe for her to come out, shell come out. Ill make sure she comes out for now she should stay in her house and im ready to work. We are working remotely. We dont like it wed like to be in the office. Barry, we all want to get back to work, and everybody is trying to come up with a strategy to get back to work im a little worried that hope is not a strategy. Testing is a strategy. Having infrastructure is a strategy having real access to ppp is a strategy and those things today and likely over the next 15 days are not likely to be in place and so im i just dont understand when we hear especially from Business Leaders like yourself that we all just need to get back to work when these things dont exist, and even when the statistics in certain markets would not suggest that we are coming down so rapidly that you would say, well, theres no risk out there so we should do it anyway look, again, i think there are people at risk if you have diabetes, my son has diabetes, he should be super careful. My mom should not leave her house. I think the recovery rates, as you know, the mortality rate is lower than people thought given that some people are apparently somewhat immune to the disease theres so much noise in the market that 85 times the people in california have the disease than we think or have been through it so my brothers a doctor the testing isnt a perfect answer either. There may be a second wave even if you test, its not a perfect test we should test as much as we can. I also think there is a financial suicide and the death of companies and Small Businesses and restaurants and the economy and the Global Economy, that has to be weighed against we shouldnt force anyone to go to work those of us who want to take the risk, open our restaurants, open our hotels, you know, were going to have to learn i was talking to the ceo of one of the hotel companies, were going to have to learn to run hotels at 35 occupancy, 50 occupancy. The full Service Hotel will be a limited Service Hotel. We wont have the restaurant open youll see an experiment youll see georgia, new york will come on later my call is to the industries. We should open with a set of best practices you see the supermarket open if they were facing themselves, i was at the publix, why cant you do that at a gap store and the mall or macys you may not call that Mission Critical, but its Mission Critical that macys and their 100,000 companies whether get back to work otherwise theyll die. You wont be able to reopen them there will be carnage against that you have to look at that against the human cost, which i know is awful. In floor darks my zip code is not good right next door theres only 23 cases in the whole county. They can open. They have to watch the results of opening yes, we may have to restaff the hospital and we shut it down, but we have to get going we have to get going the cost is too great. The country cannot carry a 23 trillion economy and they cant do it. Go ahead im sorry, becky. Hey, barry, thats okay, yesterday the president was asked at the press conference what they thought about extending Liability Protection to Business Owners he said they havent gotten the finalization on that theyre talking about it theyre considering it what would it mean to you if you reopened if you didnt have that Liability Protection and somebody gets sick at one of your hotels . Would you reopen without the Liability Protection no, its super important. It was raised yesterday by the real estate leaders and we all talked about it. We do need that protection although i suppose we could have guests sign wavers when they come to the hotel. Or the same at a store we were talking about testing our individuals. We had people with the regular flu come to the office and we freaked out and thought we had people with corona, the virus, so we should the offices down not because we had a coronavirus but we had two people with the flu that we misdiagnosed i think hotels have to do what they need to do, and thats why we need to have all of the Industry Leaders weve been talking to, like i say, 50 differe different, it will be new and doable and it should be done by sector one thing i wanted to mention from kevin oleary, the office markets, people paid almost all of their rent. 95 of our 40 million square feet the only thing is a group, they did it selectively, wework and regis. They used it as an opportunity to rationalize their portfolio the apartments were 92 . Weve been paid almost entirely. You can only see 3 have asked for forbearance. Retail is all over the place and industrial is fine. Barry, last time you were on you were great hope might not be a strategy but is panic a strategy . I dont know if you have to pick one hope seems like a much better strategy. Joe, were going to come out of this, right i dont know. I dont know youre going to have pain maybe not before november if you dont open the economy at some point soon, the damage will be severe and unrecoverable. Right so i think my brothers a doctor, i have a mom whos 86. Great shape but i want to see her live to 106. I just think we have to be smart about it the country is showing that resilience now i am comfortable in the country. I want to talk about the market. The market has been highly con sell traited concentrated the russell 200 has been lagging dramatically the broad market has not rallied like a dozen names that have really taken off i think thats where the fallen angels, those are the companies were worried about. Were not worried about amazon, were worried about everybody that amazon is destroying and whether they can come back or not. Every retailer could not survive no revenue for how long its a tradeoff. Im not unsympathetic. Theres at least a moral argument to not destroying the net worth of americans or the Global Economy all right, barry. Thank you. Sure. Well see you again soon. I like that panelling. Very hopeful anyway, beck okay. Thanks, joe. When we come back, dr. Sttco gottleib will be joining us to talk more about coronavirus. Welcome back to squawk box. There are 788,000 cases confirmed in the United States joining us is dr. Scott gottleib cnbc contributor and serves on the board of pfizer and lumina very careful and measured. Never goes out on a limb im going to try and change that right now. Give me your gut feeling on what the how do you know how do you know where im you dont even know what im going to say, scott. Come on. Just be open to this you just heard how many cases that were talking about in the real world, what do you think the number of cases in this country really are given what weve seen with some of these anecdotal studies. Would you be surprised if it was 10 times net would you be surprised if it was 50 times it probably is 10 times were probably diagnosing 1 in 10 to 1 in 20. The studies out of california, both the santa clara study and the one out of usc, theyre using the test for antibodies, what people produce when they are exposed to the virus where theyre claiming that the specificity, the ability to detect antibodies is higher than any test on the market most of the other tests that fda has reviewed are 95 accurate. That doesnt sound like a big difference when you are dealing with a test probing for a low probability event and having been exposed to coronavirus because not that many have been exposed, small differences in the specificity of the test have a big difference on the reliability of the test i think you need to put those particular valuations in perspective. They might be pretty off, but most of the evaluations we have now, whether its from seattle, europe, the ones out of new york suggested anywhere from 1 to 5 of people in hot spots have been exposed to the virus if you apply that to new york, it might be that upwards of 1 Million People have been exposed to this now in new york city and in the metro new york area inside new york city so that puts us at a case fatality rate of around 1 , perhaps a little less what weve been figuring all along. But theres certainly under diagnosis going on beck . Dr. Gottleib, we just spoke with Barry Sternlicht a little bit about what the administration is now discussing with Business Leaders, this idea that they should be indemi need, have liability not have liability for anything that happens once they reopen their business either for employees or customers. I can certainly understand businesses saying we cant be held liable for this, for everything that happens, but at the same time if you indemnify them from all of that, doesnt that potentially give them Carte Blanche to not take things as seriously . To not offer as many protections as they should how do you balance the two sides . Its not clear what risk youre trying to mitigate. We have risks of disease in society. Businesses arent necessarily held liable for outbreaks that occur when people come in and are undiagnosed and pass on an infection. You have outbreaks of measles, flu, outbreaks of chicken position, outbreaks of multidrug resistant tuberculosis and these happen in close settings, amusement parks and they trace back to those locations. We dont have liability being assessed all over the economy for those outbreaks. Im not sure why this would be treated any different from a liability standpoint or indemnification standpoint im not sure how we would do that. Doctor, what do you need for herd immunity . Whats the minimum do we need 50, do you think . It depends on the transmissibility of the virus. If we are not, each individual case is 2 you would need 50 of people to be infected. If we say the are not is 3, you get three new cases for everyone case that gets diagnosed, then the are not needs to be around 66 . Then youd need herd immunity, youd need 66 infected. Looks like the are not is a little bit higher than what we expected the case fatality is going to be a little less than 1 the transmissibility will be a little higher. It might be above 3. Some of the modeling shows it should be around 3 the series on asymptomatic spread. When is the remdesivir, the broader study, im just wondering. We saw the beginnings of some coming out when is that due just wondering, for us to keep an eye on it. Theres three studies were watching one is in 400 patients with mild to moderate disease. That should read out within weeks or a week. There is a larger study that was originally 600 patients. Been up sized of severe patients it will take longer to read out. There might be interim data coming out before the study is fully enrolled theres the study by nih, National Institute of allergy and Infectious Disease thats a randomized placebo study. That should read out in may. Thats the study people are looking for for a definitive answer that will give us a pretty good indication of whether or not the drugs having a treatment effect doctor, real quick, georgia, as you know, is going to be reopening, partially reopening on monday including gyms given the numbers there, is this advisable . Well, gyms, nail salons, bowling alleys, hair salons, tattoo parlors, it feels like they collected, you know, a list of thebusinesses that, you know, were most risky and decided to open those first. I think we should focus on trying to bring people back to work in factories, commercial settings, offices first and open some of those businesses that are providing services providing, you know, Discretionary Services secondary second. Notwithstanding the fact that i understand there are a lot of Small Businesses behind these professions that are being badly hurt you want to get the economy going and you want to bring back the businesses that contribute to gdp first, if you can. Okay. Dr. Scott gottleib, always great to see you we will see you again, i hope, tomorrow a big hour ahead here on squawk box. Connecticuts governor is going to jn wh oiusithis take on reopening the economy. Stay tuned youre watching squawk on cnbc a huge 60 minutes ahead for you. Were going to speak with the governor of connecticut on getting that states economy sofi on the state of fintec and Howard Schultz on rebuilding business in the wake of the american pandemic. Squawk box begins right now. Good morning news is apparently breaking again. Were going to try and fix it. Im joe kernen along with becky quick and Andrew Ross Sorkin u. S. Equities down 577 points. The nasdaq indicated down over 100 and the s p down almost 55 take a look at crude prices. And we need to look at the whole complex i think to get an accurate viewpoint on whats really going on. You can see the may month for delivery is up 89 after closing way down in negative territory its still at minus 3. 91, b 3. 9t probably more appropriate to look at june and beyond that well see that as we look forward and try to figure out how, when and where to reopen the economy, whether that 16 number really is something that we need to get used to, andrew okay. And weve also got a number of big earnings reports to tell you about just now cocacola beating analyst estimates on the top and bottom line for the First Quarter the dow component withdrew its full year guidance and sent a shift in habits and said the coronavirus would materially impact the business this quarter. Coke said its hopeful of a second half rebound. You can catch an exclusive rebound today with cocacola ceo James Quincey. That will happen at 9 30 on squawk on the street. Travelers falling short for revenue and profit announced a 4 dividend hike travelers results were hitby higher catastrophe losses and the company took an 86 million charge related to the coronavirus outbreak then theres shares of ibm they are falling this morning after the company withdrew its Financial Guidance for the rest of the year. Companys new ceo was on mad money last night and told jim cramer he has confidence the company will emerge Even Stronger post pandemic our results demonstrate the high value segments that we have chosen to be in. We begin with a strong Balance Sheet. We add to that good cash flow. We have access to markets which results in goodly quit at th lid thats something we should all be proud of. Arvind krishna saying this will celebrate the Artificial Intelligence faster and could have been predicted before over to you. Andrew, thank you. Seven states in the northeastern part of the United States are coordinating closely to try and reopen their economies together following the worst of the coronavirus they include the epicenter of new york as well as new jersey, rhode island, delaware, pennsylvania, massachusetts and connecticut. For more on this lets speak right now and welcome connecticuts Governor Ned Lamont thank you for being here today good morning, becky first of all, give us an update how are things going in connecticut . Hows your constituency going . What kind of numbers are you seeing at this point where do you think we are in the curve . So fairfield county, southern connecticut, was really part of that whole new york City Regional pandemic. They got hit first hospitalizations are down so thats a big plus, but the virus is moving right up the metronorth, i95 corridor and theyre hitting hartford, connecticut now pretty hard. Theres still going to be some flareups i think over the course of the next few weeks we know that you were working with other governors in the region and realize why thats important. You dont want to open in one area and have residents in one place come and potentially spread disease there where do things stand right now . Where are you in the talks of when we can start to see things reopening . Ive got a may 20th date as a decision im told schools were not going to reopen before may 20th. Im told generally speaking our businesses dont expect any big changes before may 20th. Between now and may 20th were going to do a lot more testing and well have more of the surgical masks we need theyre so key for stores, retail to get them going again. What has to happen between now and then for you to say, okay, may 20th is the day we start to open . And what does that look like what opens first well, the president ial guidelines i think were pretty responsible. They said, you know, 14 days, then 28 days of declining infections, declining hospitalizations that gives you a yellow light to cautiously start opening things up and, again, like i said, if we have more surgical masks, that allows us to allow those smaller businesses to get going more safely my instinct is were going to first focus on our big manufacturing and outside construction something that connecticut never closed down, by the way, but make sure they can do that safely and continue to expand there. Then well look at other retail. Right now the retail can do everything on a takeout basis. We never stop that look cautiously at opening them up on a limited basis. What comes later . What things will still remain shuttered as far as youre concerned . I think the things that come later are the things that georgia opened up first, which surprised me those things that have very close personal contact you know, bars restaurants where youre close in probably even a barber shop, nail salons, places where you have close personal contact. There i think we have to wait until we have a little more testing and more masks governor, what kind of economic damage has been done to your state at this point where are you seeing the most pain what kind of help are you seeking from the federal government obviously Small Business. Main street business small retail restaurant, bars theyve been devastated. Obviously the revenues disappeared, and i think the c. A. R. E. S. Act did good by Small Business we need to true that up. They need more money connecticut got about 18,000 loans to Small Businesses so maybe that was 30, 40 of the total work force that was the start weve left an awful lot of people behind and that ramps up your unemployment. What will you do if it looks like theres a second outbreak once things start to reopen . How closely will you be measuring . What would make you think, wait a second, this is too much too soon we know there will be potential outbreaks in places as we start to open up its inevitable. I think its inevitable but i want to do it cautiously i dont want to have another big outbreak likes of which you see in india, singapore and other places that would be a body blow to the economy. Lets stay if we can keep on a steady track as best we can. Look, ive got smart thermometers out there right now. You take your temperature, blue tooth to your phone, up to the cloud so we can track, you know, fevers on a regional basis and see whats going on. How we feel, thats a slight lead where weve got thousands of people logging on to that app so we can have them test their symptoms we have thousands of people, they will be able to track things early on so we dont have to wait for the pcr testing which we are going to ramp up. You said schools are closed through may 20th what do you anticipate is that something you will see. I cant speak to that but were going to have a lot more information so well be able to speak to that. A lot of places are considering opening up places so you can do that on a regional basis where you cant do bars and restaurants on a regional basis. All that means is everybody will drive to that one bar thats open thats no good. I guess my question is where does it fall is that one of the first things to go back, the school or one of the last it does relate to people being able to go back to work. If the schools are closed, its difficult for working parents with children to be able to go back to work yeah. I would do schools very cautiously the guidelines coming out of the Pence Commission said you need 28 days of declining metrics maybe then and only then do you even consider opening up schools on a limited basis and, governor, i realize youre working with all of these other governors in the region very closely there must be times when theres tension that comes up between you all, too, because you each have your own concerns i remember a few weeks back when the governor of rhode island was using the National Guard to track down anybody who came into her state with new york plates because she was worried about the spread of the virus there. What are the areas where you work the best and what are the areas where maybe theres a little friction . Well, you described one where maybe there was a little bit of friction i think we work best right now, we have a regional consortium. Im talking all the new england governors in a few hours sharing data, sharing testing protocols, whats working and not working when it comes to correctional facilities, nursing homes, those places that can be such a hot bed right now. We think along the same lines in terms of bars, restaurants, anything that would mean cross border travel, which is something were trying to discourage. Governor, i want to thank you for your time. Realize youre putting in a lot of long hours and trying to make sure youre protecting your citizens we do appreciate your time today. Nice to see you, becky. Thanks, everybody. Youre welcome, governor. Thanks for coming on. Coming up, were going to dig into the role of the Fintech Industry and getting relief out the door to businesses and getting american businesses back on troord with former starbucks ceo Howard Schultz taking a look at the price of crude oil. Look at the complex not the complex, but the different months theres may, june, july and august you can see that the may contract has rebounded quite a bit from its low of minus 40 yesterday. Now the june contract is dropping sharply down almt os1 4. Stay tuned, youre watching squawk box. Every Financial Plan needs a cfp® professional confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Welcome back to squawk box, everybody. Been watching the futures this morning. Right now were just at about our weakest levels of the morning. Down roughly 600 points which would be a mirror of the decline that we saw yesterday when the dow was down 592 points. Right now dow futures down by 614 points the s p down by 60 the nasdaq down by 109 joe . Thanks, beck. Across the Financial Sector companies are moving billions of dollars in cash to support Small Businesses during the pandemic joining us is one fintech ceo of what hes doing. Here anthony nodo, ceo of sofi bring it to us this is not out yet. Anthony, in terms of this acquisition. First International Acquisition for sofi and the second one second acquisition in the last month. Hey, joe. Thank you for having me this morning. First, i think its important to acknowledge the incredible challenges the American People are having by this unprecedented event. Our objective is to help those people deal with the daytoday challenges and make it easier for them to conduct their Financial Lives during these difficult times. We have been fortunate that weve been planning for the last 2 1 2 years for a recession but no one could plan for what were experiencing now our company has been able to operate 100 from home at this time and give people the ability from their phone to borrow money if they need to do that, to pay their bills, deposit their checks, pay their friends and also if they have the time to invest which is a critical element long term. Were very proud to be able to announce our first acquisition outside the United States. Were going to be entering hong kong, the Financial Hub of asia. We think its a unique opportunity to bring it outside of the United States its an important step in our ability to do this at this time is a reflection of it to build out our strength in the u. S. And give people a complete suite of financial tools on their phone. During this situation when everyone is on their home, you say some of the guidance youve given, what youve lost in some areas youve actually gained in other areas as i understand travel youve lost its netnet business for sofi is actually okay at this point joe, i think what youre referring to is the spending of consumers through our sofi money account. People can deposit their income, their direct deposit from work in a sofi account. Using that for a debit card to buy online, things delivered to their home so the Spending Amount per individual through sofi money has remained relatively constant weve been able to operate across our lending businesses, we provide unsecured personal loans. Refinanced Student Loans and allow individuals to invest. If they want to do that all on the mobile app and were trying to meet the needs of those people from our products as well as Small Businesses indirectly were not in the Small Business lending but weve supported and created a marketplace for the ppp program and weve been able to do that overall weve been able to manage through the challenges of the environment. Had to be a little bit more cautious on where we lend, how we lend. So far so good so you would say that in terms of a lot of businesses, this has been an environment that your Business Model has been more effective in dealing with the state of affairs right now . Yeah. Joe, weve both talked to each other through three financial crises now 2000, 2001, 2002 2008, 09 and 10 i was with businesses that got hurt by the lack of demand Financial Services products is what people absolutely need. Being there 24 7 for them is also critical. The demand for what we do is high because these are unprecedented times in peoples lives where they cant get out of the house and they shouldnt get out of the house and they need to stay sheltering in place and our product uniquely can be done all at home across your entire life whether we offer you that product or some of our partners offer you those products well navigate through it. Its not without issues. Were dealing with unprecedented things like the rest of the people in the world, finding new ways to do business, but so far so good. It will come back in certain areas just to be cautious, make sure we manage our liquidity, dont over extend ourselves with the recession thats obviously impacting the economy globally so far being able to service our members 24 7 is something weve been able to do. Were looking for new, unique ways to help were in contact with the fed and the treasury and new programs we think can help americans. A large percentage of our users are doctors and lawyers and Small Businesses and for the first time in their lives they had zero income at no fault of their own. Were seeing really unprecedented desires and needs, but because were on the phone and we have the complete suite of financial products, we can meet some of that demand unfortunately we cannot meet all of it. If the title of the article is this is fintechs greatest opportunity to go mainstream, you would not disagree youve doubled your brokerage accounts so this is a crisis and an opportunity for fintech. What weve seen is unprecedented counter intuitive of people want to invest more. We saw a pretty significant surge in investing in the First Quarter. We still see strength in the Second Quarter our desire to go international reflects the desire of young people, beginning and new investors to invest in new markets. Our acquisition was built on the back of that millennials and gen z want and need to invest so acquiring securities in hong kong focuses on a very large gateway to the asian markets for Financial Services its a product we know that asians want that are with the gen z just like in the United States first important step to your point about the headline, this is a chance for the Fintech Companies to step up theyre Building Products that are mobile and without fees. Our product will be commissionless you can trade stocks, etfs, do auto investing and we have a whole product line in hong kong like in the u. S. It will be our first product in asia and the first market. Anthony, thank you. We appreciate it and well get back with you and hopefully well have more acquisitions to tell us about. We appreciate it thanks coming up when we return right here on squawk box, former starbucks ceo Howard Schultz is going to speak with us about the trillions in bailout money allocated by the government the debate over who deserves cash and who doesnt as we head to a break, check out the price of Wti Crude Oil may contract expiring and well off the lows next contract for june is much lower this morning stay tuned well be right back after this 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. Theres tv, and then theres the best Entertainment Experience. Xfinity x1. Welcome back to squawk box. Futures on the dow down just under 600 points nasdaq down almost exactly 100 s p indicated down 555 shares of labcorp rising received emergency use authorization from the fda for its athome covid19 test kit. That means you would have to be approved for a test which uses nasal swabs to determine the presence of the virus. The companys website lists the price of the test including twoway overnight shipping at 119 i heard, becky, the president describing the way youre supposed to do it, you have to go way up in there. Yeah. Up around and down. Someone described it. Huh. Somebody described it as feeling like youre poking your brain. Id rather do a blood thing, you know i know. Also to be sure. The nose or the brain . Everything is exit only when we come back this morning when we come back this morning, were going to dig into the historic move in oil with prices going negative for the First Time Ever for the may contract yesterday a top Portfolio Manager will join us just ahead next, our exclusive interview with former starbucks ceo Howard Schultz on trying to see what it will do for American Companies to make it through coronavirus and get back to business stick around squawk box will be right back. At leaf blowers. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Welcome back to squawk box this morning we have moved a little bit here. Actually, more than just a little bit weve been moving down all morning and were going to keep our eyes on that this morning. Meantime, states across the country are making plans to reopen for business whats becoming clear though is for different speeds joining us is Howard Schultz. Good morning, andrew. How are you doing . Were good. Were all trying to get by i know youve been spending an enormous amount of time talking with Small Businesses across the seattle area and across the country. Youve developed the plate fund with your family to help people in the area, but lets talk a little bit about the challenges of reopening i know you have a view about whats taking place now and whether the loans that are being given out by the government will go far enough. Well, you framed it perfectly for me so i appreciate it. Lets try and level set and get common language on the industry at large Small Businesses and independent restaurants represent about 48 of american jobs one out of every five american works for a company with less than 20 employees. Now there are 500,000 restaurants, independent restaurants in the country employing about 12 Million People now if you look at ppp, which i think was good intent but flawed in terms of the execution, the mass majority of restaurants did not qualify, did not participate, dont have a banking relationship and did not have any engagement with ppp ppp really was a twomonth band aid. I understand the intent. Pay the employees. The real issue for the independent restaurants is not a twomonth band aid the real issue is they dont have the resources, the money or the training to reopen what is needed for the entire industry is really a vaccine im sorry, a bridge to the vaccine. And specifically the question i think that should be asked right now is it would be uncalculable if 30 to 40 , i think thats a conservative number, of independent restaurants and Small Businesses dont make it through. So the question is what are we going to do in this period we believe we have a 2 to 3month window right now before these independent restaurants are forced to permanently close. So whats needed is not another version of ppp again, good intent but its the wrong medicine whats needed is really a massive opportunity to a bridge to a vaccine, which is a trillion dollar number its large, i understand it, but that number is going to be much, much less than the uncalculable number of 150,000 or 200 Small Businesses, independent restaurants closing and millions, probably 3 to 4 million more americans who are out of work, not to mention the social fabric of every community which the independent restaurant is so linked to. So we have a moment right now where we must save these independent restaurants. Now unfortunately the independent restaurants do not have a massive lobbying organization like the airline industry, like the agriculture industry the Restaurant Industry is larger than both of them combined, and the government must understand they must be saved. The other issue is and moral one. These are hardworking people who have put their life savings in these businesses. They deserve to have some method to be saved. Dont let them go. And it will be the wrong signal for go ahead. Sorry. Howard, how would this work youre talking about a trillion Dollar Program is this a loan is this an equity stake investment that the government would take in these Small Businesses what does this look like well, to me i think it sounds simple to me now im not the fed. Im not the banks. But to me its the government acting as a backstop for the banks to give every Small Business and every independent restaurant a bridge to the vaccine, and that is the money and the resources to make it through. And, you know, these independent restaurants, most of them, dont have a banking relationship that would have allowed them to participate in ppp the banks, unfortunately, did not have access to these companies. I think youve seen some pretty shameful acts by Large Companies to take advantage of the system, but the government the government are not operators they think ppp is the answer its not from an operating point of view, i understand this, especially since starbucks is making is trying to do the same thing, make it through. Small restaurants dont have the capacity to make it through. They dont have themoney they dont have the resources. These Companies Operate on very thin margins theyve operated on a monthtomonth basis we must save them. Howard, in terms of saving them, one of the Big Questions is the duration of how long this is going to last and even what it looks like on the other side. The state of georgia, for example, going back to business next monday. Kroid, colorado, for example, doing the same thing unclear what that looks like in a social distancing world. You talked about a bridge to a vaccine. There are some Health Experts that dont think were going to see a vaccine for 12 to 18 months what do you think that process looks like and how would you layer these loans and put them in place for these companies . Do you want the restaurants to all stay in business at full capacity do you furlough certain employees . How does that work well, first off, andrew, i just want to go back lets make sure we frame your question, which is the right question, but link it to the other issue, and that is whats the cost to not doing this and the cost of not doing this is 150 to 200,000 businesses going permanently close and 3 to 4 Million People on unemployment and these businesses will never be heard from again and the social fabric of every community is going to be dramatically affected now youre asking a very important question, which ppp doesnt address, and that is these restaurants are probably going to operate at 30 to 50 capacity for a couple of quarters as things become normalized, that is why they need a bridge to the vaccine, because they wont be able to operate effectively because there will be very little profits. Now what you are seeing around the country is the entrepreneurial spirit of these restaurants doing everything they possibly can to stay afloat, to do takeout, to do delivery there are also things going on in every community in america where restaurants are opening to feed the people who are hungry, to feed their workers. These are Extraordinary People and when you think about the spirit of the country, it would be immoral to let these companies and these people fail. Its not 150,000 businesses that are going to go out of business, its 150,000 families and so many others, a rippling effect of this that will be it will be so dramatic and so we cant just save the airline industry, we cant just save the farmers, we must save these independent restaurants across the country yes, its a trillion dollars, but it will be more than a trillion dollars, thats the point, if they fail. Now theres many mechanisms to do this. Ive just suggested one. That is the federal government acts as a backstop to the banks and the banks are given a mandate to save every business, every restaurant in the country. Thats what we must do now this is an extraordinary time it requires extraordinary levels of decisiveness. What i learned in 2008 and 2009 as starbucks was trying to navigate through the cataclysmic financial crisis, when youre leading a company or a situation, sometimes you have to make a decisive decision in order to save the company, in order to do whats right this requires the kind of decision and the government and mnuchin, theyre trying do do very good things but theyre not operators. Ppp is just a band aid none of these companies can make it through howard, you had mentioned that you thought that there were certain people taking these loans and it was shameful that they were doing so you saw shake shack just yesterday having taken a 10 million loan say they were going to return it were you referring to them what were you thinking about in terms of because there is a big moral question right now for companies that may be teetering, may not be teetering but obviously are eligible for the loans. The question is, of course, should they take them . Well, i dont want to name names because ive got respect for some of those people who i know but i read that story and i felt, god, what are they thinking listen, these are Public Companies with 100, 200, 300 million on their Balance Sheet they dont need the loan the independent businesses that are trying to make it month to month is what ppp was designed for. As flawed as it is it was designed for them and so the Big Companies and the industries that have lobbying organizations that are able to effect change are in the front of the line. The independent businesses and restaurants when i hear the politicians talk about the fact that Small Business is the engine of the economy. They keep saying that, but youre going to let it fail. You know all too well the line too big to fail. These businesses are too small to fail and they are so engaged in the fabric of our community and the social construct of the country, we cant let these independent restaurants fail hey, howard, two last questions. One is, on the other side of this, and we have to hope that there is another side of this, how do you think this changes the business landscape, the relationship between labor and employers . We were having a conversation with the ceo of the company that owns stop and shop earlier, they had a big labor dispute a year ago over how much the people at the cashiers line should be getting. Of course, you look at those people, you look at the people in some of the restaurants and Small Businesses and theyre doing heroic work. I just wonder whether the debate and how that relationship changes over time. I think youre asking a really another important question, and that is, you know, the fragile balance between a companys pursuit of profit and doing everything you can to elevate the humanity of the company. In this case, the spirit and the heroic actions of people and their ability to get compensated. And i think in this new era post covid, i think those companies that do the right thing and honor the individual employee and recognize that those employees have to be valued and compensated in unique ways in which the culture, the values, those companies are the ones that are going to win im very proud of starbucks paying all of our employees through the end of may, and were probably one of the few companies that have been paying rent these things matter because you are imprinting a set of actions and decisions that demonstrate the appreciation not of value but of values. And i think your question speaks to the importance of values and humanity and the fact that every business is going to understand that its not business as usual and youre going to have to do everything you can to elevate the humanity of the country and do it in real actions and not just rewarding the value of shareholders but balancing that and doing everything you can for the psychology and economic value of what employees bring to your company during this period and post covid. Before we let you go, tell us whats going on in seattle i know you have put together a plate fund for employees thank you, andrew what we recognized in the last two, three months is that 100,000 restaurant workers, because 3,000 restaurants have been closed in seattle, were out of work. Many of them have still not gotten any government assistance and we created a relief fund to give them 500 of cash weve distributed 7,000 500 cash payments. These are not loans, this is free money to people who need it most in the research were now seeing that the majority of people who got 500 were the most needy the issue there is, this speaks to what could happen if these restaurants dont permanently close, these people were already facing food insecurity, housing instability and, again, we cant just let these people fall by the way side we have to help them and the before i leave you, we have a two to threemonth period, a window of opportunity to save these independent restaurants. If we dont do it, they will permanently close in two to three months, and im pleading with the government, im pleading with the banks to understand the moral obligation to save this industry and to save the independent restaurants at a moment of crisis. Howard schultz, thank you so much for calling in to the show this morning we appreciate it always good to see you and wish you lots of luck thank you so much. Thank you, andrew stay safe. You bet you, too becky, over to you. Andrew, thank you. When we come back were going to check in with jim cramer as we make our way to the opening bell futures are under significant pressures. Dow futures down by 600 points thats very similar to the decline yesterday for the dow when it was down 2. 4 . As we head to a break, take a look at Car Rental Company hertz global hertz global says it is laying off 10,000 north American Employees as it tries to cut costs as it deals with the economic fallout this is like disney yesterday furloughing 100,000 employees from its theme parks and hotels. These businesses are being shuttered. The longer it goes on, the more pressure they face stay tuned, squawk box will be right back at t knows you have a lot of things on your mind. Staying connected shouldnt be one of them. Thats why were offering contactless delivery and setup on all devices. And for those experiencing Financial Hardship due to this crisis, well work with you to keep your service up and running. Hi because at at t, were always committed to keeping you connected. Welcome back to squawk box. Futures right now down about 600 points as you can see there. Nasdaq down over 100 s p down about 59. Maybe we can bring up the look at oil and well talk to jim cramer who joins us now. Jim, im just wondering, if you have to pick the actual price of a barrel of oil given a, b, cor d, could you come up with one . I guess it all depends on where we are and what happens, but what do you think the real value is its what youre willing to pay for it on any given day, i gu s guess. Reporter i think the july contract shows too much enthusiasm ju june is probably right 100,000 contracts traded at the minus 37 price thats a lot of oil when you consider that each contract is 1,000 barrels. So, i mean, somebody i mean, it was all paper trading youre not supposed to trade any physical yesterday, so you can see this was just one shenanigans to another, one hedge fund to another. Didnt rally but the prices you see further on, those are actual barrels and you can see maybe somewhere between may and june is where it might spike. Can i ask you a philosophical question, jim . Do you mind . Reporter no, sure. Maybe we dont stay down here forever. Obviously some day there will be demand again, but how do you transition to all of these alternative sources of energy when even at 40 oil they really werent quite as competitive i mean, isnt this going to be very difficult to get off of fossil fuels if theyre 15 a barrel reporter well, thats funny. I asked James Quincey from cocacola, a lot of their stuff is sold in convenience stores. The idea is once you bring the economy back, those prices are unrealist unrealistic, hence, why some people want to take a tanker full right now for, say, august delivery so that thedelivery, so the prices will be something that only a few people get i think the state of georgia is really worth watching. Georgia will try to go back to normal and lets see what the prices are in the state of georgia. Thats going to be the greatest test case in the world the i wish them the best of luck its not exactly where i think we should be in new jersey well find out what the price of gasoline is real soon. Yes from down in georgia thats some case, isnt it . April 24th look, if it doesnt work, theyll go back. We needed someone to do it right i dont want it to be jersey, but we needed georgia to do it lets see what happens i know a lot of people on the left think that the governors are completely wrong right i think the governor is doing something that could work out, all right . I think the most important thing is, joe, we want it to work out. We dont want to bet against them we want this to be something that says, look, were further along than you realize jim, we need to really were lucky. Here we are. Were working. We need to get out of our own skin once in a while amen. Try to figure out what its like to have no money coming in or to have to be going to work in a dangerous environment were really if you did it by zip codes, and you included some of them where there are not a lot of cases, and you include some social distancing and some washing your hands, all the things weve learned, and keep it real then you do need to keep testing as well i hope, joe, that we all knew whether we had the antibodies. A lot of people say the antibodies mean nothing, but a lot of scientists think at least you get six months of immunity i would love to have this vanguard of people who got tested, they have antibodies and theyre ready to go. Lets say this for georgia, they have seemingly enough of the equipment that if it gets out of control very quickly they can take care of people. I initially was thinking, wow, what is this man thinking . Is that illadvised . Ive come around to what youre saying cosmetologists, should they just lose their jobs and be destitute forever . Lets give them a shot if things go awry, we now how to handle things in that situation. Im not im hopeful but skeptical. Yep okay all right. Good hope yep thank you absolutely. Well hope is good well see you in just a few minutes. Thank you coming up, who gets hurt the most by collapsing oil prices . What do they mean for your investments . Well speak with a top Portfolio Manager next as prices for the expiring may contract still negative as we head to break, look at some of the biggest premarket laggards in the s p 500. Nobody wants to be a laggard squawk box will be right back. Welcome back a glut of oil, not many places to put it, has been punishing crude oil prices, sending crude into negative territory for the First Time Ever yesterday. Though negative by 4 this morning, believe it or not thats well off the lows we hit yesterday when we were down by 37, meaning you had to pay somebody 37 to take oil off of your hands now traders are searching for signs of relief in the nearterm. To talk more about this, lets bring in rob thummel, Portfolio Manager from tortoise. We knew things were bad, but to watch people panic for the delivery date, today, the may contract the june contract, last i saw, was around 16 whats happened here what would you do in this scenario yesterday, in oil markets you have physical buyers and you have financial buyers in this scenario, we had a scenario where these financial buyers were going to become physical buyers at the contract period. They had nowhere to put the oil. They had to unload contracts, that created a lot of selling pressure and there were no buyers thats where we ended up what that indicates is we got too much oil, not enough storage, and this is a temporary thing, but no doubt that storage is temporarily filling up over the next couple months, or maybe over the next six weeks well end up with storage levels near the tops and until we see demand come back that will be the opportunity then to see those inventories start to decline what happens in the meantime . Who gets hurt the most thats a good question. So, if you have Commodity Price Exposure, specifically Oil Price Exposure so the Oil Producers that have direct exposure, their reaction has already been seen, like conteinuenta continental, they shut off the valves so production will come down if you dont have a hedge, youll receive less cash flow, youre not getting much price for it so temporarily, the Oil Producers that have Commodity Price Exposure will be the ones that are most impacted rob, we spoke with the chairman and ceo of exxonmobil a couple weeks ago, he laid out how important the dividend is. Listen to what he said at that point. We have, you know, over the decades put a lot of priority on maintaining a strong Balance Sheet. We recognize that this industry has its ups and downs, its a capital intensive commodity business over the longer term, to maintain that Balance Sheet you have to have projects, invest in advantage projects thats a key priority. A lot of our shareholders are retail shareholders, people who depend on that dividend. Weve been committed to maintaining that and if necessary in the shortterm using the Balance Sheet to support it but primarily that Balance Sheet is to support the investments in these industry advantage proj t projec projects rob, i spoke with the company yesterday. They said theyre still evaluating market conditions, theyll be meeting the board will set the dividend before the Company Reports earnings, next friday, may 1st. What do you think happens with the dividend in this scenario for the big, diversified companies that are not as reliable on the price of oil, but watching what happened yesterday it was unbelievable. Yafrnlg yeah. In exxons case, theyve been paying a dividend for several decades. They want to keep that dividend. They have a Balance Sheet they can support for a while, and probably keep the dividend in place and like chevron does as well for dividend stocks, our focus is on mid stream these companies are resilient. They actually generate their cash by the volumes transported through the pipelines and dont have the commodity price pressure we encourage them to look at mid stream stocks like williams, t enterprise products. They have sustainable cash flows. Even in this market environment they can sustain dividend yields that are high. Investors are looking for dividend yields in this market, i think. Rob, great talking to you today. Appreciate your time thank you, everybody, for joining us that does it for us today. Make sure you join us back here tomorrow right now its time for squawk on the street. Good Tuesday Morning welcome to squawk on the street. Im Carl Quintanilla with jim cramer coming to you live from various locations. Were coming off the biggest drop of the month, adding to some losses as we getover the collapse of that Oil May Contract the senate may pass a Small Business expansion today netflix reporting tonight. One of the big stories will be georgias attempt to reopen really starting on friday. I think this is the biggest story there is