Transcripts For CNBC Worldwide Exchange 20240713

Expected to have a real estate boom he says yes and has the numbers to prove it. You are watching Worldwide Exchange here on cnbc good morning welcome from wherever in the world you may be watching. I am brian sullivan. We are keeping our physical distance but hope you are doing well despite 25 plus Million People out of work and the steepest drop in retail sales in 30 years, the stock market looks forward and likes a bit of what it sees. Futures are higher once again. The dow surged closing above the 24,000 mark for the First Time Since april 17th capping a foursession win streak. The dow industrial average is up 10 this month ahead of the open trying to break a threemonth losing streak. A very different story on oil. Crude oil is lower right now nearing an important level a couple of things wonky going on bare with me i know it is early you have to watch the oil level. We could see selling pressure accelerate because the chicago amerimercane exchange recently changed on that contract. There are 1,000 on the contract of youve effectively got a margin loan. If we break and fall below that, people who borrowed money to buy oil could be asked to repay that quickly which means they would have to sell to raise those funds. Youve got those saying they will preroll their contracts from june to july today ahead of schedule a couple of things happening in oil in the plumbing of the markets if you have the impact there is a disconnect between the stocks and commodities lets look at the xle etf. Looking at the stocks. On pace better than 20 to 25 . Off well depressed levels. If the market does believe there would be survivors more on cnbc. Around the world, mixed picture in asia trying to find its footing as well. A rare saying for markets as of late well get you more on the trade. More now in washington where the president is unveiling new strategy to ramp up coronavirus Testing Capacity claiming that most of the federal governments job is all done as the white house is conducting a, quote, Serious Investigation into chinas role in the outbreak of t we have more with tracie potts this morning reporter good morning. President trump said the United States and other nations are looking at whether this outbreak could have been better, dealt with better if china had given earlier notice of what was happening there back in midnovember some countries like germany are now seeking financial compensation from china as a result of this 140 billion President Trump said the u. S. May seek even more now the u. S. , the federal government is seeking to help states with expanding testing sites into retail and minority communities providing more tests which is something the state hz been asking for. A harvard study found 19 states are where they need to be but others are not this blueprint includes the federal government stepping in to ramp up testing as states are starting to reopen and more people will be in contact with each other saying that is critical while they are helping states on one side, the Justice Department are also on the look out for legal issues with the stayathome orders. Looking at orders they think are overbroad and restrict peoples Constitutional Rights for people to be out and about. There are now serious concerns around the country about your food supply because there have been outbreaks at major manufacturing plants what, if anything, is the government saying or doing about this thats a good question. Tyson ceo has said there are really Serious Problems with food supply. Theyve had to shut down manufacturing plants because people have been impacted by this millions of pounds of meat will not be on store shelves soon because these plants will be shut down and they dont know when they can reopen them. No order from the white house on how or when they can intervene to try to help that situation. Tracie potts, have a good day. Thank you. Around the nation, people and businesses are adapting to the slow reopenings of various states a nervous walk into a largely unknown world. More on that and key business headlines with rahel solomon good morning. Gm, ford and fiat are targeting may 18 to resume production at u. S. Factories this is after shutting down those plants in march. Executives from those companies have tentatively settled on the time line after talks from the uaw. Our own fiphil lhas said there word has been finalized. Fiat chrysler is up 2. 8 boeing plans to restart the plant in south carolina. Workers started returning to the seattle plant last week. Shares of boeing running if we can get those up. Okay nathan saying it will return funds it received from the Payroll Production Program it will return 1. 2 million joining names like shake shack and ruths chris back to you. Thank you very much well see you in a bit back to the markets. A major week for earnings season big tech taking center stage all week long. The trillion Dollar Companies are reporting this week. Googles alphabet reporting. Facebook, microsoft, amazon and apple. A bit of scrutiny growing as of late yesterday was the first day in a long time where the socalled faang stocks including netflix did not close higher on an update of all of the etfs, a very interesting thing to happen. He joins us now, jason, great to chat with you hope you and yours are doing very well. Yesterday, the five socalled big tech names finish down first time that happened in a long time. Does it concern you at all good morning, brian thank you for having me. That doesnt terribly concern given that it is such a short period these are High Quality Companies that have weathered the dramatic market draw down lower that secular growth each have enjoyed before and will likely enjoy on the other side of this continue to act as a ball is in the market the quality is a place can you hind out in. These stocks have been winners for so many years and have done fairly well in the decline you have to wonder what kind of valuation these have been put on that have emerged almost in utility in good and bad times. They are very different they are very Different Companies. Amazon, i would argue. In the burbs, we are living on it if i owned a box company, id be a billionaire. As much as we are watching tv and on the web, we know this no new events, no new business no advertising are you worried about the ad revenue for these . Thats a great point. They are all Different Companies and worthy of their own merit and judged as individual Companies Much as we look at the advertising, we have seen alphabet report. I think there is no question about it, ad spending has dropped in the last four weeks and well likely see a rough Second Quarter the company like google is tracking the double digit growth rate we will see a dip in their spend on Digital Advertising over the near term. We are also going to see a separation of winners and losers in the ad space. Theyll offer them a better reach and likely have an easier path through this than some traditional advertising company. Something like google expected to dea decline in the next few months bringing up the economy right now. It goes to one of your stocks. I get it 25 Million People are out of work there is a lot of fear out there. A lot of people are not spending money. They are not traveling or commuting. If youve got a job, you might have a little excess cash and you might be bored and they might google something and buy it on amazon and they are using visa on the back end yes beautiful job tying that together consumers and businesses transition from cash to check and digital forms of payment there is no question, theyll see a dip in transactions. A third of their business is likely to be down given that no one is traveling given the growth in e commerce and shopping and Household Goods that have seen a boost, most of those are going through the dominant player in that space, which is visa in debt and credit we are going to like the near term and long term in the secular growth market. One other thing worth noting is all of the stimulus spending happening at the consumer level. Well see how that flushes out over the short run a lot of economic damage out there. I know some people close to us that may be doing some Retail Therapy as they stay shacked up. Thank you. Take care. Always a pleasure when we come back on this busy tuesday the latest on the mystery of kims health the stock of the worlds most infamous world value could it be a good name for you too . We are back after this across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. Welcome back where is kim jongun more questions than answers on the current state of health and whereabouts of the dictator. President trump coming out saying he does claim to know the health status. Some south Korean Companies are taking particular interest it is a question the world wants to know right now. Eunice joins us to talk about it has there been any developments about the cant whereabouts of jongun . There have been more developments but unfortunately, they dont give us any answers south Korean Companies want to position themselves if there are any changes in the north officials there have said they know of kims location but they havent detected any Unusual Movement the south korean minister of north Korean Affairs told parliament that it is very likely that kim is selfisolating and that he missed his great grandfathers Birthday Celebration because of the coronavirus. The foreign minister acknowledged that seoul had passed information about kim to trump. And that he was told about kims condition but not where he is. North korean state media it in to fan speculation about kims health status. The press has published a letter which they say has been penned by kim to the south african president congratulating the president for a holiday there called freedom day but there were no photos along with that letter or the publication. He has not yet appeared on state tv so still a lot of speculation whether he is isolating, recovering from heart surgery or if he has reportedly passed away there is mention every day of his exploits there is not that either, is there . Not that hes just not on tv not that there has been no mention of him there are a lot of questions here hes usually followed closely by the state media however, to add to the confusion, there have been certain periods where there hasnt been any reporting about him. That has added to the speculation and another reason they have tried to play down some of these reports. Maybe he wants to bath in champaign and caviar the picture of health there. Thank you, eunice. Still on deck, a cnbc report about tesla roadblocks resuming operation in california. But first announcer todays big number, 24,134 where the dow jones closed yesterday the fourth straight positive day and the rstifit me it has finished above its moving average since february 21. Americas oldest lighthouse has weathered many storms. Seeing the break in the clouds before anyone else. Together, well weather this storm. Welcome back it is 5 23 here on a tuesday two rare sights. Companies saying their businesses are just fine, thank very much. First up, f5 networks. The gear helps Companies Work remotely while you are working at home, maybe you are drinking a lot more coffee. Shares of keurig dr. Pepper seeing strong Sales Volumes as consumers that stock up on something at this hour is very needed cheers when we come back, new results from an exclusive cnbc survey amid round two of the Small Business loan program. Steve liesman will be here to break that down. And the oil storage problem. When exactly when the world run out of oil we are back right after this 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. Investors bracing for another busy day of corporate earnings and guidance. The stories today is oil and the collapse two things that could send oil negative again and fast. Jay powell and Federal Reserve said to kick off their policy meeting. Well talk Money Managers and what they are saying about the Central Banks response. And a glimpse at the state of housing. Is there about to be a suburban real estate boom as families flee the cities. A firsthand look at some data that is very interesting to hear you are watching Worldwide Exchange here on cnbc welcome back and good morning. Welcome to cnbc and Worldwide Exchange. Hope you have a good day wherever you may be in the world. Despite 25 million plus people out of work and the steepest drop of people out of work it likes a bit of what it sees in stock futures they are higher again. The dow jumped 350 points. Closing above the 24,000 mark and capping off a foursession win streak the dow is now up more than 10 this month ahead of the open trying to break a threemonth losing streak. Remarkable oil is a very different story. Wti crude is down 8 this is important. Watch the 10 per barrel price level. If we break it and stay below it, selling could accelerate quickly. The Chicago Exchange changed their margin requirements on the june crude oil contract. Each is 1,000 barrels. The margin now is 10,000. Do the math. That is effectively 10 a barrel if we break below that mark, we could see selling as people who bought oil on margin loans are forced to sell to meet their loan requirements. Also happening, in oil as the dow jones index is prerolling from all of june to july today, we could see that roll. Call it forced selling, if you will call it that combined with those margin requirements, it could be a very interesting day for the price of oil negative is certainly not out of the question something there to watch is the disconnect between equities and commodities. Despite oils crushing collapse, the price of stocks have held up up from march 30 off a very, very low base. Perhaps a reason to be optimistic for at least some Energy Companies there will be survivors. Lets go worldwide now to see how the markets are doing. Julianna tatelbaum is live with some of the early trade and headlines overseas good afternoon or good morning good morning. Here in europe, it is similar to what you are seeing on wall street similar gains expanding to 1 from yesterday positive momentum building in terms of the split on the down side, we are seeing less support. Telecoms and Household Goods those are trading higher auto, construction and banks sharply in focus of a number of companies. Ubs is one of the key european banks. They reported that a 40 rise in First Quarter net profit thanks to higher trading revenues shares are higher this morning we had a chance to speak to the ceo of ubs who weighed in on the stronger activity they are seeing we saw a huge pick up in the Client Engagement despite the lodgist call challenges. We are seeing more and more looking for advise we have this week to look forward to the ecb meeting on thursday which will be crucial for the banking sectors. Well look forward to that as well as more corporate earnings. Back to you. Thank you state side, the Federal Reserve is said to kick off the policy meeting later on today as they continue to break out new tools, old tools and revamped tools to prop up the economy that has been battered showing that jay powell is getting a fairly solid grade for the job so far here to talk about the fed survey and what is just a slightly different meeting from the last one absolutely. The feeling is that it will be a long road back first, we ask for the outlook on the Unemployment Rate that goes from 4. 4 and peaks at nearly 19 . The december forecast is for an 11 Unemployment Rate. A year later, still not quite double but an elevated 7 . This comes amid expectations that congress and the fed will do considerably more here. They are looking for another 3. 4 trillion from the Federal Reserve bringing the Balance Sheet up to 10 trillion another 2 trillion from congress which has already put in 2. 5 trillion call it a total of 5 trillion we have some mixed grades when it comes to performance of leaders through this crisis here jay powell getting an a. Agreeing with most of the steps taken in bonds that they dont agree with running a lot of this. And President Trump getting a c minus, d plus on handling of the economy. His overall rating fell as did his chances for reelection we have two different ideas for how the economy comes back one is a vshaped recovery, which Robert Morgan says is not lost leading me to think this economy will see a vshaped recovery and that markets are overpricing the return it all comes back to the length of time that we are doing this does it not . Here is the story we are not talking about enough it is hard because there are 25 plus million unemployed. For those of us who are working, we are saving money. Not traveling, not eating out. At some point, that money might be reinvested at a quick rate back into the economy. That is a possibility the thing you are trying to figure out here is a pronounced supply shock the problem is that the hair cut you didnt get, you cant get two of them. You may do an extra doctors visit if you have some pent up medical needs. Not saying anything to you specifically, brian. You cant go out and visit quadruple the amount of restaurants. You cant get stuff now until you start to resolve the issue of bringing workers back there has to be a jump in the savings rate in this area, you are not buying monthly new Jersey Transit ticket, paying tolls, going out to eat brian, you raised a great economic point that that savings is something that can be spent down the road or after a shock like this, are people going to feel like, hey, i need more in the bank in order to feel comfortable with my finances goi going forward. We have to feel comfortable with what level do people feel comfortable at id like to go out to dinner and, yes, not cut my own hair in my garage. I have a fishing vacation planned, brian that is a big thing that keeps me going im still going on that vacation the end of may. You will go fishing again, my friend and a river runs through it now to the oil market and the only question that we have now, when will the world run out of oil space on shore and off shore. We are joined by the head of market analysis. Thank you for joining us on cnbc in the United States how soon do you think we are truly going to top out every ship, bank and hole in the ground good to be on the show. Yes, it is a very good question. A couple of elements, you mentioned you have your onshore storage and offshore storage. The onshore is very location specific talking about the pressure on wti. We see a couple of weeks in terms of cushing given the rates and barrels that it should be reported or expect to be reported in the stats that gives you 10 Million Barrels in cushion. Thats why they are talking about the june contract again. In the gulf coast in the u. S. , we still see storage when you go further, weve got about 800 Million Barrels or so of capacity yet to fill held by commercial operators, so that is nongovernmental storage. The issue is, it has been tied up if you were to go out and lease those tanks, it would be incredibly expensive or just not available. It is kind of gone weve seen the builds over the last two months. Weve seen the build of just over 200 Million Barrels in tanks on shore to your point about oil on the water or offshore storage, weve seen an increase of 160 Million Barrels currently sitting on vessels that is not just let me jump in, my friend it is early state side we have a lot of numbers do you think midmay, late may at this rate, we are finished, no more storage . I think in cushing, you are talking early may. Very much the delivery point for ti, you are looking at early may. Further afield, we should see low pressure by midmay. We are seeing a bit of a slow down in crude going into those banks. In terms of how quickly can you get crude into those banks you will see regional pressure certainly by midmay we appreciate it very much. Midway for cushing, oklahoma will there be a housing boo as families look to leave the cities as we head to break, saudi arabia apparently loves rock concerts live nation soaring 6 as the Saudi Sovereign Wealth Fund taking a big stake in that company. You are watching Worldwide Exchange. Dow futures are down oil is up. We are back after this so. Lets talk. Edward jones. Its time for investing to feel individual. Yeah, everything is runningis smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. Thats why i take osteo biflex, to keep me moving the way i was made to. It nourishes and strengthens my joints for the long term. Osteo biflex. Find our coupon in sundays paper. Welcome back a look at the latest on the coronavirus outbreak j jetblue is the latest to ungrade safety requiring passengers and crews to wear face coverings along with delta and more that will require face coverings. Cnbc has exclusively learned that tesla is now walking back a request it made last week asking several employees to return at the freeman plant. Limited operations are expected to extend back to may. Tesla shares are down today. Shorts under way in certain parts of the Housing Market but showing a potential shift of where we will live especially for millennials. Single family Home Builders are suddenly seeing more interest sales of newly built homes fell sharply 85 by that fourth week. In the past two weeks, the numbers have started to climb. Demand is primarily coming from renters in urban payments. The reason i think we are seeing an increase specifically in the new home market is the aspect that it is safe, clean, new. It is easy to show at this point. I spoke to a small builder in the d. C. Area who said everything stopped for about a month. In the last week, he sold three homes. Socalled spec homes people want to move quickly. People will need more space for office, kids and exercise. The demand being from young renters. We are seeing some of those only urban millennials saying enough of the dense city and tiny apartment. We are getting out numbers from d. R. Horton, best positioned for demand of youngbuyers they have an entry level brand called express homes these numbers will be for february, so before any of the pandemic hit showing how strong home prices would go into this making perhaps the biggest investment of their lives at a time like this, brian. It is a big deal and a scarey time for families in the city and they may be looking to get out and get that yard. Thank you. Let us stay on this topic now. Joined by robert, he is the cofounder and ceo of compass listen, the idea is this, it is tough enough in america with the lockdown with families with young kids in new york and d. C. , the playgrounds are closed they are thinking about getting out. Do you think that is a shortterm or a real shift i think it will be a real shift. What we are seeing is that the curving has flattened, we are seeing a proportion flattening in a curve in activity in the Real Estate Market which declined in the last month we have seen a 20 increase week over week in new listings and contract listings. We are seeing a 40 increase in searches for Single Family homes and a decline in vertical condominiums siege three times as many searches for pools and outdoor space. All of this reflecting a shift in interest from densely populated cities to the suburbs. 40 jump in Single Family home searches, some of that is people searching my god, lets get out of this and get the yard how much of this is sales versus rentals. Are these people looking to buy . These are looking to buy and rent the activity i highlighted was just for sales weve also seen the minimum Square Footage requirement in our filters up 10 you are right. People want more space they want a yard, i presume you mentioned the pool plus, you are dealing with this demographic trend there, the millennials. The number one age in america is 27 or 28 thats the age you start to think about the tiny apartment in brooklyn maybe isnt so cool. You have a kid, that apartment is maybe too small then you have the demographic shift under the lockdown the big winners well see are the suburbs right outside the cities in new york, we have gren itch, connecticut, in francesco, we have east bay, marin and the second winner is the second home market over the next year and a half, they wont be thinking about International Travel but domestic retreats and their second homes. Interesting, a 40 jump do us a favor and come back early and often on deck, whether or not investors missed the buying opportunity of a lifetime. Dow futures are up, oil is down. We are back right after this high protein. Low sugar. So good. High protein. Low sugar. Mmm, birthday cake. And try pure protein shakes, with 24 vitamins and minerals. High protein. Low sugar. Tastes great high protein. Low sugar. So good. High protein. Low sugar. Mmm, birthday cake. Pure protein. The best combination to help you stay fit. The retest of the low is very plausible a lot of viewers almost fell victim to our historical experience and assume the retest of the dow jones below 19,000 industrial average i dont think that will happen i think people dont understand the magnitude of social im not going to say unrest but unease that will happen when you have whats now 26 million plus people have lost their job double line ceo speaking yesterday as the dow looks to snap a threemonth losing streak welcome. Good to see you. Do you think we could retest the lows the market has been pretty strong it would take a heck of a news event for us to retest the lows hes a very smart man but all that said, i feel with some states going back to work right now, it seems as we get to early may or june as we have this jointed ba bei jointed back to work and some states not going, thats the time we are most vulnerable. Thats when people are going to be a little upset in the states that arent going back to work it will take a while to start rolling back as an economy overall. I own a factory in this state that is open but i own a factory in that state that is not. Yesterday, faang stocks all fell does that concern you . No. You know the sector that did so well yesterday is financials technology will hang in there. If we can get the Financial Sector rolling, thats what we need rates will keep them down that is body blow after body blow that was a really bullish type of day for exactly the reason you are talking about. All of those stocks were expected to have a great day financials came play they led the way i thought that was incredibly good help us to get smarter and answer a question. 25 plus Million People unemployed 150 of the s p 500 are higher from this time last year the market is not down very much how is that possible that is amazing you know what, with all that said, yesterday, the Biggest Surprise besides financials is with oil getting smashed, Energy Stocks doing well also a couple of things rates, people are looking for those. Stocks that pay dividends, people are attracted to. Many well capitalized stocks are well the best game in town particularly as we start to age as a population. We have to leave it there out of time. Well see you tomorrow squawk box picks it up after this and. Lets get started. music fades in hey hi stock futures are surging. We have seen big swings in crude prices well tell you why 10 a barrel is an important number to watch. Zero, even more important. A busy morning merck, pfizer, caterpillar will all hit the tape this hour and returning Small Business rescue aid is getting longer the latest additions, nathans hot dogs and the l. A. Lakers squawk box begins right now. Good morning, welcome to squawk box here. Im becky quick with joe kernen and Andrew Ross Sorkin lets check out u. S. Equity futures. Dow futures are up by 325 points s p up by 37 and nasdaq up by 120. After big games yesterday saw a gain of 1. 5 for the s p 500 and the dow and pushed the