Transcripts For CNBC Squawk Box 20240713

370 but did end the day lower. It was the first down day we have seen in five trading sessions well watch what happens today we have a fed meeting coming up. That will be the pla is to watch as we hear from the fomc later today. The 10year just below. 6 a month. This has been the best month for the dow in 18 years because we are coming off of march because that was the worst year for the dow in 22 years. You see these huge swings first down and then up what we are watching in the equity markets the one thing about 10 crude, every dollar it goes up, we could go back to 30 every day. Lets use the dollar every day that might not happen. Equities do seem to do better. Thats a lot of room to go. Maybe. But sooner or later, thats not good either. The move came after data from the American Petroleum institute. Showing that crude jumped. That was 600,000 barrels less than expected. We saw some wild swings yesterday all around these low levels 10, 11 14 today, as you can see market stocks gave back a lot of gains despite seeing positive news from pfizer about an emergency use of a vaccine by as early as fall and others rushing to do that not adown day where the vix spikes that is low and been stable. Andrew, you bring us this news this is depressing every day but it is your read. Every day, we bring you the latest numbers on the pandemic the number of coronavirus cases worldwide at 3. 1 million cases with 1 million in the United States the death toll in tops 50,000. Overnight in china, the government announced it would hold the annual National Peoples congress on may 22. Two months later than originally planned. The meeting usually lasts 10 days it puts a lot of people together in one space when you start to think about social distancing and time lines for our country, maybe we add two months and maybe well get there. Becky. Lets cross our fingers for that President Trump has declared Meat Processing plants Critical Infrastructure and will require them to remain open in an effort to stave off looming shortages of products because of the coronavirus outbreaks at Meat Processing plants. Aiming to give liability protension for keeping workers in the factories it is taking steps to improve safety it has no plans to compel workers to go to work if they are uncomfortable with their Work Environment about 20 to 25 of pork processing is shut down this week about 10 for beef tyson talked about it how they thought you would start to see shortages. I will tell you at the beginning of this, when we were at the Grocery Store trying to get things, there were shortages of meat at that point i remember seeing things when you start to hear more about this, you wonder how that starts to ripple out across the country. That was not yesterday. At least where i was there was more than there has been recently. I had some times you are looking for boneless thin chicken breast other times you are looking for split breast with the skin Everything Everything was there have you been to the store, sorkin we were there yesterday the reason we went in part was because this is what i worry about. I imagine, there are a lot of families like ours who read the news who say, my goodness, do we need provisions for the next several weeks or two and you load up on meat. We happened to go to a fresh market that was bringing in meat separately we stopped at the super market there were a lot of people hauling out with meat. You worry about the runoff of this stuff thats my nervousness. Hopefully, if they can keep these things open and do it safely, we can keep the supply chain running. I have a lot of data points for this i have waited for quite a while with six feet between me and a shopping cart with 30 or 40 people ahead of me i have gone other times where i dont have any problem i havent been in a store in a while. I still have deliveries that are coming brian was talking about it. He had a super market gentleman on earlier and made the point that i do kind of have it down i hope it is working i feel this false sense. Ive got the n95, gloves and a hat, purrell in the car. The last time i went, i did the same routine but it has been a while. The people are fantastic as we pointed out the plexy glass and to get to a cashier, there are people moving you along but keeping you six to eight feet away. No one can go into the checkout lane. I found a Delivery Service that used to deliver just to restaurants. They have expanded because a lot of their business has dropped. They are trying to supplement their own business making sure they can deliver at homes too. You got to deliver in bulk thats okay. Got a lot of mouths to feed. Thats okay. That 100 pound of garlic. I have a one gallon bottle of worst shier sauce. Lets get to the big earnings movers, sant oe starting with alphabet, 13 in the First Quarter. A welltimed quarter for google. The company said it is a tale of two quarters in one. Ad sales did take significant hit in march but that followed two strong months. Device acquisitions fell search activity on youtube and downloads booming. This could bring more things from other tech companies. Not necessarily that they are exactly like alphabet but two months might be good it is not like a retailer. A lot of us are home the Technology Use is not diminished at all. It might have gone up. I think they said it was true the intensity of usage did go up you have to draw the context here for what people are also anticipating massive loss for search going out. With he knew that. Alphabet was a 15 or 20 stock a couple of months ago it was down below 1,500. Everything in the context of trying to, in a hurry, anticipate Something Back to normal april is probably the worst. Can you see things get better from there this is a uniquely positioned Company Growing in size you are seeing a step down in the past quarters seeing the Percentage Rate growth it is all about, can we plausibly say what we got in the First Quarter in march and april is something close to trough activity for Something Like apple, in an underperformed microsoft the market already got to this point where Advertising Companies were penalized and facebook has rallied on the face of that. Maybe ads were not necessarily as bad someone was on facetime 20 hours a day. I guess they are separated and in love. 20 hours a day. Not sure face titime is bein monetized but thats a lot starbucks sales fell. First decline since 2009 the Company Expects the impact of the virus to be even greater. Roughly half of the stores in the u. S. Are closed. Also have some evidence of that. When was the last time you had a starbucks. I had one yesterday. I havent been im not in the zone where i can do the drivethru thing there is curbside pickups too. You go out and there is the door that is possible too we are going to talk to starbucks. Cnbc will talk to Kevin Johnson at 9 30 a. M. Eastern and then boeing is due to report at 7 30 a. M. Eastern expecting another loss it is not the top and bottom line focus investors will be looking for new details. Potential for payroll cuts and plane production which has restarted in certain areas it has needed to borrow money. The outlook for the 737 max. And dave calhoun, in fact, after reporting earnings will be on at 9 00 a. M. Eastern for an exclusive interview. What are your thoughts here, mike boeing, when you talk about big industrials that have been shut in. It is about the Balance Sheet, cash needs, how fast they are burning it, what their expectations are to hunker down and get through it ford was a similar story they are burning a lot and not reopening yet. With boeing, they are already talking about perhaps in the private sector to raise more capital and use whatever they can in terms of their inventory and future cash flows. That is the story there as opposed to in the summer where things are normal. What is fascinating, the fed has not bought a dollar to bonds theyve said they will do it the market itself has opened wide up. That is kind of the hope that you can bridge your way to the point when Something Like ramping back to normal and the default cycle across america okay. Thank you. Later today, will we see the boat whatever it is no. Im not likely to be in that location today how do we know in advance is there anything . Is it a monday, wednesday. I do my best not to allow anybody to know where im going to be. Keeps us guessing all right, andrew thank you, sir when we come back, expectations for fed chair jay powells Conference Today well talk about it, the actions the central bank has taken so far and the options still on the table and later, First Quarter gdp numbers due. Forecasters expecting Economic Contraction of 3. 5 as the pandemic has shut down much of l tt d try. Alofhaanmore after this. These days staying connected is more important than ever. So were working 24 7 to maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. Welcome back the central bank could provide details on the move it has made the fed could also try to provide clarity that the virus has done fed chair jay powell to hold a virtual Conference Today at 2 30 p. M. With us to talk more about the fed and the government response to the pandemic, bringing in former nasdaq ceo, bob is also a cnbc contributor good to see you, bob good morning, andrew. How should we think about what we are going to hear from Jerome Powell today and more importantly, what do you want to hear from him . One, it is remarkable what the fed has done so far and the moves seen this week in the state and local government is clearly a forceful move. It also for the first time gets the fed into a political morace. Is the proper diversity with the states you are helping good move with the moves theyve made id like to see them continue doing what they are doing. What about loans to Large Companies. You said there was a headline of 5 billion in loans. Thats a remarkable level of support. Im not sure where the Economic Indicators have shown we need that at this point in time what we are missing in all of these today are the discussions about moral hazard you heard back in 2008 once you get in further and further into private enterprise, when we talk about Large Companies with large access to capital sources, it will be impossible to avoid that debate. Where do you come down on that debate, given that we are in the mist of it. Should we be bailing out some of these companies . The question is what is the greater good you want to do that as an option of last resort the option is where you are at that last option right now based on the indicators we have today, it is too soon for the fed to get involved with that type of support of large corporations. Right now, the markets are relatively open. There is a lot of Debt Financing available in the marketplace what do you think on the treasury plan and the ppp plan and how it has been rolled out and applied to the airlines. The Larger Program is being applied to the airlines. Clearly, companies thought they could access to try to help employees are finding out maybe they are not eligible. If you read the original writing of the ppp, it didnt point out those points to say the earlier companies did it wrong is certainly incorrect. I think the ppp is a great program. I agree with your point, andrew, that an employee is an employee. Whether it is 400 or 600 people, it shouldnt matter to you on that point, we asked mnuchin about that, bob. He said, no. Those early guys were bad actors in this . I thought the same thing it seemed like it was happening quickly. The question was whether companies would be able to get quick funding. He said, no, they were bad actors i disagree. Ininvestor in a small company. I recertified. I reread the document and it did not talk in any way, shape or form about alternate financing i think thats revisionist history unless i have a different document that was not part of the deal in the document i reread yesterday. I believe firmly the goal post has moved. The question is have the goal posts really been moved because the document itself hasnt changed. We were talking yesterday on air to a Plastic Surgeon in california who makes a ton of money and has a large network. He has 12 employees. He cant do surgeries right now. These are all elective things. Should he be eligible or not he said on piece of paper, it says i should be eligible. If i take the loan, ill be outed and shamed but if i dont take the loan, im probably going to furlough employees. These 12 employees should be taken care of. They did it in record time to give them credit operating with a blunt instrument, you know you are going to make mistakes in this situation, the Plastic Surgeon should be able to get the loan and keeping his employees there. The same situation for my dentist. They cannot do anything routine. Hes down and wants to keep employees on the payroll this is meant to be quick. The Plastic Surgeon is saying, somebody is going to shame me because they know i own a bentley. This is the complicated part about the moral hazard i agree but it is not that complicated when you look at it through the eye of the employees the fact is, it is about the employees for the ppp, who should come first and take that money and not be shamed. Real quick andrew is right, how are you not going to shame somebody in a bentley. You are right. It puts them in a poor position. Poor me, let me get in my bentley and drive away right like i said, the employees come first. What do you think about the airlines the share holders. Delta has a rather huge market cap and the government has come in and not just provided a loan but effectively a grant. Even though there are warrants, it is tiny you gave me an easy question. I thought you were going to ask about the cruise lines, which is more difficult the airlines, we have the process of putting equity into companies through some kind of structured note. The government should come in as an equity owner not like any other. The equity owner of last resort. Those should be some what market tested they need government help that should not be exposed entirely to this. They should represent equity in the cap table. Always good to see you and get your in sights we want to thank you appreciate it. Talk to you soon. Getting over to joe with some news General Electric, up premarket the Company Reported an adjusted earnings per share of a nickel a little below where the street was at 8 cents the estimate was for 20. 2 billion. It came at 20. 5 it looks like. Funny the way they talk about this industrial organic Revenue Growth at minus 5 it would seem simpler, there is a dash five. I assume that is minus five. It would be easier if you didnt call it growth industrial Free Cash Flow there they have a and it is 2. 3 billion quite a lot of comments about covid targeting 2 billion of cost actions and 3 billion of cash actions to manage the risk and mitigate the Financial Impact from covid19 in the First Quarter, covid19 negatively impacted ge industrial by a billion and operating profit by 700 million in the First Quarter thats not far from the lows that we saw when we were we remember so well back in the final crisis i remember that day. I dont know if you remember keith sharon was here. It was really dicey that day we got down to about five. Now, it is down and now we are back where we were basically above that the one thing the company said too the Second Quarter the one we are in right now will see the full impact of covid19. It will be the first full quarter. They do say the numbers will be worse than the numbers in the First Quarter. They expect those numbers to come down. That tells you about where things are guiding and setting up the stock is up by about 11 cents. They are telling people, dont expect better news in the near future shouldnt be a shock to anyone especially with a company like General Electric. Our hopes and dreams probably have to be on digital and virtual things, technology, netflix. It is not going to be this right lower capital costs for sure okay when we come back, a big battle between our Parent Company and chains over streaming. Well talk about trolls and how it did with streaming because theaters were closed we have some images on the Pandemic Impact across america ever since weve gone mobile on the now platform, somethings gotten into the office. I hear you. Feels like theres no barriers between departments now. Servicenow. The smarter way to workflow. But when allergies and congestion strike, take allegrad. A nondrowsy antihistamine plus a powerful decongestant. So you can always say yes to putting your true colors on display. Say yes to allegrad. 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. It started with a few fifty dollars here. Eighty dollars. A hundred dollars. I had good health insurance. Why isnt this covered . Well, then they started getting bigger. Eighthundred dollars. Eighteen hundred dollars. I saved for this. But not that much. Im glad i had aflac. They gave me money when i needed it most. Thats why aflac is here, to help with the Expenses Health insurance doesnt cover. I love that aflac duck. Aflac get to know us at aflac. Com time for the executive edge. New rules for the 2021 oscars. The board approved what they are calling a temporary change saying the commitment to viewing movies remains unchanged but one catch. For a movie have been eligible, it must have previously planned to be released theyve been in a wild battle with streaming Services Like netflix over how this was supposed to work you can see there that this is going to potentially change the game the question is long term does it really changed game so that other films end up being eligible as well speaking of streaming battles, our Parent Company Nbc Universal has found itself in a fight with theaters saying the seek well to trolls had been more profitable because of the on demand release. Saying when theaters reopen, they expect to release films in theaters and on demand leading amc to ban the release globally. Saying theyve made no statement to the couldnntrary Going Forward, we expect to release films to theaters as well as on demand as it all makes sense. I think for 90 days, those theaters have exclusivity. They can take you out of theaters and you have no recourse this is a sign of the times as peoples watching behavior is changing and what the consumer wants is changing too. Trolls worked out have you rented that for the family we did. The day it opened. We havent done it yet. Weve talked about it and hope to the issue is the margin for all of the Media Company yes, trolls has worked to some degree when we talked about it on the air yesterday or the day earlier. The idea that you spend 20 on a film, if you had gone with a family of four, you would have spent more a percentage of that would of gone to the theater. For a lot of these block buster movies with the huge costs, the marketing with them the question is whether the whole economic machine would work i dont think these Companies Want to go without the theaters. I think the theaters just have an iron grip and have sweet heart deals that dont reflect streaming and new situations they would like to keep the grip they have on those things. If you are a Company Coming up with content, you are trying to shift and keep up with the times too. Probably not a surprise that it would come to a head can you see it happening with the paean. Theaters are closed and you cant go anyway. Ly miss the popcorn. You cant rep kate that. You need one of those machines and the fake butter. The nachos and the lava. The yellow lava. That is so bad for you. You can probably feel your arteries hardening i know. You are right. So trolls that is not about what people are writing me about now. No. Different trolls coming up, boeing set to report at 7 30 a. M check out shares of amd. The chip maker is cutting its guidance as lockdown measures worldwide hit supply chains and dend amd ceo lisa su will be on at 9 00 a. M. Eastern. 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. We are kboing going to calla Wellness Company ww, Weight Watchers. The company formally known officially as Weight Watchers. Shared jumped. Joining us, mindy grossman, ceo of ww. I dont know if it is a big surprise you did have better than expected results added more in terms of subscribers. 9 more. I dont know that that was a factor i dont want to make this too simplistic after this quarantine, im certainly thinking about Weight Watchers or somewhere else to help with things because it is definitely getting out of hand hi, joe hope you are doing well. Too well maybe, in terms of appetite and Everything Else maybes it the wine by the way, we Just Launched movie popcorn. Ill get you some. Am i right, when you stay at home, you eat or drink and there is probably an increased demand for wellness or losing weight. Here is what you are seeing, we entered with 5 million subscribers fuelled by the launch of our new food program, my ww as well as the incredible ora around the ww presents, oprahs 2020 vision tour we then saw some demand fall off, particularly made the decision very early on to close our studios to ensure the safety and security of all our members but the team pivoted and i have to give kudoses to our teams around the world in six days, we trained 14,000 coaches and in one day, we launched virtual work shops. In the first week alone, we have 5,000 workshops live weve been able to see behavior in real time between virtual workshops and 5 million members on connect, which is our platform we could see and identify day by day what people are communicating, what they are talking about, what our new members are saying and why they are joining. We are seeing a shift right now. We believe that coming out of this, health and wellness is not going to be a luxury it is going to be necessity. Peopleare really rea phrasing their lives and what they choose to spend and choose to do. Given this crisis, people are more aware of what they have to do themselves to stay healthy. This has allowed us to accelerate our efforts tore Digital Transformation not only have we seen the response to virtual workshops. We hadplanned and talked about it the launch of digital plus Virtual Group coaching that will be launching later this year so as we look to what we are going to do with our studio foot print and when we will row open and being very jude ishs to ensure safety and security well be able now to have a new vertical, give all our members our digital assets, which weve reinvented in. We have new assets launching we have sleep launching. Sleep tracking weve been elevating our content around things like stress and weve added a lot more fitness we are really seeing in real time how people are feeling and what they are doing. How much of your business were you planning to be facetoface workshops and now you are still going to do that with safety but it has to be a different model in terms of transitions and growing that it will be all virtual now weve moved very much to digital. Of cower members, about 25 also choose to have the workshop experience that is the group that weve transitioned to virtual right now. We have 97 satisfaction scores. Not only do they have the virtual workshops, they have their own private groups to keep the Community Together what we are seeing right now, the importance of Community Motivation and people coming together is more important than ever now, we are never going to not have and embrace a facetoface experience but i do think Consumer Behavior is changing. We will look at our studio footprint to determine what is the right balance Going Forward, especially with the new launch of the Virtual Group coaching vertical mindy, interesting the way everyone has to think about things so differently but it seems like you are in a good position to transition to the new world. As i noted in the beginning, i would expect 9 more subscribers to be at the low end of things if we ever do get back to normal i have to do something i dragged out the peloton. I had to get all the clothes off of it. Thank you. Thank you people are going to need to get healthy more than ever i agree thank you. Joe, thanks. When we come back, the ceo of Akamai Technologies will join us next to talk about the impact of the pandemic on his business before we head to break. The navy Thunder Birds flying over new york. See the workers reactions too well be right back. When we started our business we were paying an arm and a leg for postage. I remember setting up shipstation. One or two clicks and everything was up and running. I was printing out labels and saving money. Shipstation saves us so much time. It makes it really easy and seamless. Pick an order, print everything you need, slap the label onto the box, and its ready to go. Our costs for shipping were cut in half. Just like that. Shipstation. The 1 choice of online sellers. Go to shipstation. Com tv and get 2 months free. With people across the United States staying home, there is an increased reliance on being able to stay at home and work remotely. Akamai has seen global traffic increase by 30 . Joining us now is the with you thanks lets talk about what were seeing in the increase in traffic. Whats the good news on that and are there any problems in ramping up and trying to keep up with demand . Pretty much everything has moved online all commerce is online a lot of people, they are using social media to communicate. You have Distance Learning you have pretty much everybody working remotely and this has placed lot of demand on the internet and, you know, with akamais business helping the internet be fast, reliable and cure that means a lot of traffic moving through our platform now as you mentioned huge corrects just in the month of march, and thats now being sustained Going Forward. So, what does that mean, though, as so many people are trying to get on the internet. I know here sometimes around 8 30, 9 00 in the morning, kids are getting online, people are working online, it does slow down the network there are hot spots here and there. In some cities and some carriers when you get a years worth of traffic growth in a few weeks, you know, that can identify areas where theres a lack of capacity now this is where akamai helps we have our platform he deployed in 4,000 locations in 1,000 cities when we deliver that content we can deliver it close to the end user so it doesnt add to the congestion that is, you know, clogging some data centers this is a time where were making a big difference for the internet as a whole. Tom, how do you think about the long term impacts of all of this in terms of investment, investment in more infrastructure families and businesses own investment in higher levels of broadband. Do you think this is a forever situation so youre going to be seeing massive upgrades across the board and big spends on more infrastructure or do people say to themselves this will last hopefully, you know, a month, two, three months and then somehow as people as the country reopens theres going to be less of a need for the back bone to be strengthened thats a great question and, you know, i think theres a pretty strong likelihood that emerging from this pandemic there is much more use of the internet across the board than there was going into it. You know, as people get used to doing their shopping online i think youll see a huge jump there over time. The movie releases are all online as people get used to watching more of the media online, that will persist. Work from home, you know, theres just a huge jump there once everybody gets used to that there are some advantages and youll see enterprises have more of that Going Forward. So i think the usage of the internet will take a permanent leap forward once we emerge from the pandemic tom, what does that mean in term of the Capital Expenditure that has to be put in to beef up these systems. Can the internet ever break or is there a limit what we can do. How much money needs to pour into it to shore things up theres always a limit which can depend on, you know, where you are and what city, what carrier, what infrastructure is there. You know is akamai delivering your content makes a big difference for example were ramping up our investment we doubled our peak traffic in march just yearoveryear and doubling is extraordinary, more than a couple years worth of growth packed in just to march so, i think youll see a lot more investment because i think the internet is going to be much more in demand who do you think does that investing, tom because all we hear from companies now is how they are trying to cutback on Capital Expenditures because they are so concerned about the revenue that they are losing, about the additional costs they are having to spend to deal with the coronavirus. I think theres a lot of folks who make investments starting with governments. I think the carriers are already investing. You know, they need to respond to the demand in traffic they make money by doing that. And youll see companies that, you know, live on top of the internet and make it better like akamai were investing more to add a lot of capacity Going Forward because thats good for business and its good for the world. Tom, do you think that consumers, those costs will get passed on to consumers in the form of higher prices . Do you think consumers will be more inclined to spend more on a monthly basis on their cable bill or their broadband bill to again upgrade their own service because they are going to have, they are going to want to have less buffering on netflix . I dont think youll see the consumers paying more. Thats not usually how it works. In fact, over time consumers end up spending less but the money is, you know, made on the other end, on the supply side you know, as more watching is done online, as more purchase is done online, that does retail more revenue into the eco system that will pay for the build out. You mentioned that youre spending more. Your Capital Expenditures have increased. I have a tough time finding a Single Company that says it will be spending more this year absolutely. Our company is doing extremely well you know, as a leading provider of security and Delivery Services on the internet, business is very strong for us were growing head count and were growing our capital investment, you know, to be able to support the demand for our services and were very fortunate because youre right a lot of companies are in a position of cutting back right now but very different situation at akamai. Were very profitable so we can afford to make this investment to provide Even Stronger and larger services in the future. How much cap x are you spending our cap x, you know, generally runs in the high teens as a percentage of revenue, and, you know, probably be at the high end of that over the next couple of quarters as we grow our capacity you know but very profitably. But now is a time at least for us to be investing in a stronger future tom, thanks a lot good to see you today. We appreciate your time. Thank you very much when we come back, a lot more on squawk box ahead shares of hasbro on the move the Company Reported an adjusted profit of seven cents a share. Company ceo joins us saitrght ahead. Squawk box returns after this. Its decision day. Futures are higher this morning. Jay powell is giving investors clues how long Interest Rates will stay near zero. That debate is straight ahead. Investors will be watching boeing when it reports Quarterly Results. Those numbers out in 30 minutes. As testing expands so do the numbers of the coronavirus cases. Well be speaking to a doctor about the race for a vaccine and the latest on the pandemic the second hour of squawk box begins right now good morning welcome back to squawk box right here on cnbc im Andrew Ross Sorkin along with becky quick and joe kernen. U. S. Equity futures are up, in the green. Dow about 207 points higher, s p 500 looking to open 35 points higher and nasdaq looking to open about 145 points higher i want to mention one big tech mover this morning and that is alphabet, Parent Company of google shares rising after the Company Reported Revenue Growth of 13 in the First Quarter but the company says it was what they are calling a tale of two quarters ad sales took a significant hit in march and device activations fell as Global Demand dropped but search activity, time spent on youtube and app downloads are booming. Well have a lot more on that story and what it means in just a bit. Joe . The fed will wrap up its two day policy meeting it has made unprecedented moves to bolster liquidity the focus will be on what the chairman says about the outlook for the Worlds Largest economy for now. Steve liesman joins us now with more reporter good morning, joe this will be an absolutely historic meeting as fed chairman jay powell steps to the podium with the fed essentially wearing the two hats regular monetary policy, but also financing the shutdown. This is the first meeting since all of these programs have been established here so the fed does monetary policy, powell does monetary policy. Rates. Regular guidance quantitative easing. Market function. Normal stuff powell steps up as the trillion dollar financier of the shutdown the fed has raised its Balance Sheet by 2. 3 trillion a lot has to do with market function, treasury markets, Mortgage Markets its eased off that just a bit but about to explode the fed has some programs working. But look at the 2 trillion of programs that the fed has yet to launch and were waiting on these. Main street lending. Corporate credit which will buy secondary or speculative grade in the secondary credits assetbacked facility. And Municipal Bond facility of 500 thats just some of what the Federal Reserve is doing put it all together, which Morgan Stanley did, they wrote the federal increase the size of its Asset Holdings by 65 or 4 trillion those purchases paired with the feds credits will bring it to 12 trillion its at 56. 5 now or roughly 50 of gdp by the end of next year thats not even the half of it, guys whats going to be interesting today is powell as the fed chair used to have a responsibility really to market, credit markets, equity markets and by extension to the public. Now he steps up and a lot of the questions will be about where are these programs, how are they running . Its an absolutely new role for the fed chair to play and well see how he handles it. Joe . Actually, steve go ahead joe. Back to you i just had a question, steve. In terms of what youll be listening for from powell, in terms of how long you think these programs will last, what will we hear today i think were going to hear the phrase of whatever it takes. I think you asked a really good question, becky, because theres been some clamoring out there for a really solid Forward Guidance from the fed. I dont think thats absolutely necessary now because i dont think the market is trading with any concern right now that the fed wont be there down the road but im interested in how this sort of pivot from a guy who was or a role where you were responsible to these Financial Reporters about how you do a treasury market. Now the fed has this incredibly different public facing role financing Midsize Companies financing Municipal Bonds. It is now in a place where powell may learn a reason why other fed chairs were reluctant in the past to assume these roles. Steve, thank you. Good to see you. Pleasure. Joining us right now to talk more about the fed and everything going on in the markets right now is rick rieder, hes at blackrock and head of the Global Allocation Team there the thing thats amazing, becky, and i think will be persistent, when you think what the fed is putting in, you think about the fiscal stimulus, the grab for assets is extraordinary. The fed is buying, could take a bounce ever 12 trillion we didnt see this in the great financial crisis you didnt see it for a while. Youre talking about a fed thats buying huge amounts of paper. We talk about the fixed income market as the aggregate index. You see what the fed is doing, they are buying about 20 of the whole agg index. Part of why this equity market keeps rallying and most hated rally in history, one of them, is its not necessarily because valuations are cheap not necessarily things are cheap in fixed income, theres so much liquidity thats been put in and i think that will continue to be the case and fixed equities Going Forward. Rick, when you lay it out like that, thats phenomenal 20 of that market buying 20 of that what would happen if the fed wasnt there so, a couple of things. What steve said is important what the fed is trying to do, they are not trying to be in the high yield market, not trying to be in the Municipal Market what they are trying to do is making sure the markets are operating, making sure they are functioning. When you show the bazooka you dont have to do it. What steve was describing they put so much in there the fed is buying high yield they are not buying yet. Secondly they are not going into different credits. They are doing the top part, so if the fed and i think with the markets myself and everybody in the markets feels comfortable with is the fed is there as an emergency backstop if they are there in case of the system has an issue, the markets can operate. By the way, were breaking records of investor grade credit supply thats coming to market and well do it in may because the fed is doing what they are doing the Public Markets can finance investor Grade Companies and thats powerful if the fed wasnt doing this, it wouldnt be an issue so, last time we spoke with you, you said you said the real opportunities are in the bond market that the better place to be in part because theres less risk there. Those bond creditors would come before equity holders. Do you until feel that way i have to say and in some of these markets think about where equity valuations are. The market is not cheap any more we talked about text markets, we ran up 20 or so percent from the bottom people talk about dont buy anything you had like thats three good years of performance that you had. By the way, equities, when we do valuations, we look at multiples, its not really that interesting. By the way i think it will grind higher because of this incredible liquidity and the need to put money to work and with the fed taking yields solo. There are parts of that credit markets but so hard to say buying high yield, buy Investment Grade i rather by a high yield Cable Company than an investment company. Theres some rescue financings going on theres places where you can get deals that you dont have to take leisure risk or some airline things that are interesting. So i would say theres some opportunities in the bond market now i think its idiosyncratic so, watching what the fed does today i know you said this may be important but you think the next meeting in june is going to be the most important meeting for the fed in maybe ten years. Why is that . What happens next month . I think the steve framed it is right, this is a historic meeting, but it actually everything that the fed has done, everything that the fed has put in place theres a little tweak on the reserve calculation that they may do i dont think well hear a tremendous amount from the chair or from the fed statement it will be significant around implementation if you think if you were the fed youll get a lot of Employment Data between now and the june meeting. Youll get a lot of data on how much treasury will issue including a 20 year issuance in june youll get a much better sense, if i was the the fed, sit back youve done a lot and in june they will lay out the dynamics around average affiliation targeting what the philosophy will be Going Forward specifics around the buy back program, et cetera actually i think the next meeting when they have more data is where well learn more about the intermediate term. So thats the meeting, i think, given everything theyve done now that i think will be really interesting. The ecb is doing a similar thing and its a question whether they will do the same tomorrow or wait until june to lay out more of these asset purchases rick, its great talking to you. Well be getting back soon just to tell us what else youre seeing thanks for your time today thanks, becky andrew . When we come back a lot more on squawk box. We got the ceo of hasbro on the toy business during the pandemic the china supply chain and the state of the consumer. Before we head to break take a look at dow component boeing the companys Quarterly Results. Squawk box returns in just a moment feed a healthy lifestyle, with pure protein. High protein. Low sugar. Tastes great high protein. Low sugar. So good. High protein. Low sugar. Mmm, birthday cake. And try pure protein shakes, with 24 vitamins and minerals. And try pure protein shakes, and. L music fades in . Hey hi welcome back to box stocks to watch. Medical lab operator labcorp is out with its numbers company says it expects to deliver solid profit and Free Cash Flow. However its also suggesting that not just suggesting withdrawing its 2020 guidance due, of course, to the coronavirus. Shares of General Electric are trading lower. The companys industrial business took a 1 billion hit cash flow due to the coronavirus pandemic ge is warning pain will be even worse it says in the current quarter. Joe, over to you thanks, andrew hasbro reporting profit adjusted of 57 cents a share compared to consensus estimates of 58 cents. Revenue was just assembly street forecast although its gaming category saw 40 jump in sales toy maker said it was able to successfully navigate disruptions in the supply chain so far and able to weather the covid19 pandemic. The company withdrew its full year outlook joining us now is brian goldner. Is everything good with you . We had a good solid First Quarter and im proud of the team the creativity to get to the consumer were skipping the cart too get to the cars and homes all over the world. Clearly this is a story in the First Quarter of a giant step up weve seen in ecom our partners at walmart, target and amazon are doing a fantastic job as we execute together q2 is the challenge for the year as we look at more store closures and a changing array of where our warehousing is open or closed, where our manufacturing is open or closed. But we still expect to have a good Holiday Season and a good second half of the year. Our teams are ready and raring to go. Depending on how you adjust your operations and your business model, i can see being in a good position to weather this or bad in terms of supply chains, in terms of what retail channels you use, gaming seems better than buying a bunch of gi joes or whatever kids are buying in terms of physical toys. Gaming revenue was up 30 . Thats something youre obviously going to have to be focused on more, i guess yeah. Were really seeing gaming portfolio, which is for us a tremendous portfolio were seeing more people come in to our Gaming Business and facetoface gaming. People want to make social connections and were seeing it across the board this just isnt people fans of the game, were seeing growth in penetration of gaming as people want to make those connections and spend time with family were seeing it across every category from preschool gaming to kids gaming, adult gaming, family gaming, brands like the game of life, scrabble, monopoly then there are older Game Categories were seeing great growth in the First Quarter and a continued shift to online with magic arena. A shift of people playing online we love our portfolio of games in terms of supply chain, china is back up and running and represents this year about 55 of our production, continuing to move our strategic sourcing footprint and our factories like our one thats partnered with us in massachusetts is close to game production so we began to produce ppe, face shields, producing 50,000 a week of face shields that well be distributing in massachusetts and rhode island to help workers. Were trying to be a contributor to our community as well as focusing on our demand and our supply when youve been on recently youve talked about wasnt this there was a different china story. We can go back to that china story. A china story about trade war and you had started sourcing from different areas but still at 55 and now that might be a bright spot that you can get things from there because they are reopening, i guess. I imagine were expecting and partnering with governor baker, and our governor here in rhode island in looking at the way we continue to open back up our operations, phases along the way, and were running multiple scenarios doing a lot of scenario planning to really look how we bring people back to work safely and make them feel comfortable that we have an environment where people can work and continue to engage and having said that people are working online incredibly well and were seeing that across our business from our wizards business to our new e1 business to hasbro. Brian i like the shot we have of you it reminds me of a raging bull youre black and white i expect to see its kind of cool, though who needs color Nuclear Program anyway, what are you on there . Is that a zoom. People at home are going wow look at that fellow. I see its color here, joe. All right, brian. Anyway really raging bull, got a lot of accolades anyway, brian, thank you well see you. Thanks joe. Joe, thanks. When we come back mortgage data released just minutes ago. Well find out where rates are headed right after this break. At 7 30 eastern time boeings Quarterly Results. Well bring the numbers and instant analysis squawk box will be right back. Announcer time now for aflac trivia question. Who owns the Worlds Largest building the answer when cnbc squawk box continues eighty dollars. A hundred dollars. I had good health insurance. Why isnt this covered . Well, then they started getting bigger. Eighthundred dollars. Eighteen hundred dollars. I saved for this. But not that much. Im glad i had aflac. They gave me money when i needed it most. Thats why aflac is here, to help with the Expenses Health insurance doesnt cover. I love that aflac duck. Aflac get to know us at aflac. Com birthdays arent cancelled. Hope isnt quarantined. First words arent delayed. Caring isnt postponed. Courage isnt on hold. And love hasnt stopped. U. S. Bank thanks you for keeping all of our spirits strong. Weve donated millions to those in need and are always here for our customers and employees. Announcer now the answer to todays aflac trivia question. Who owns the Worlds Largest building the answer, boeing their everett, washington factory spans 99 acres welcome back again to squawk box signs of a surprising turn around in the Mortgage Market this morning Mortgage Applications out just moments ago. We want to get over to diana oleck who joins us with the latest details reporter andrew after plummeting for the last month Mortgage Applications to buy a home jumped 12 week to week they are still 20 lower than a year ago but thats also an improvement. Now, its the first solid data to prove what some brokerages and listing allegations have been saying. Theres a surge in demand in just the last two weeks. Now buyers are getting incentive from low mortgage rates. Average on the 30 year fixed fell to 3. 43 . Thats not a huge drop but a new record low on the mba survey and full percentage lower than a year ago california and Washington State both hit hard by covid19 showed strong increases in buyer demand, even new york saw a significant gain refinance fell 7 for the week still 218 stronger than a year ago. Refis are harder to do because of the risk. This made rates for refis higher than rates to buy a home, joe. Diana, just seems like cause and effect they got to look at nuances. When we come back boeing Quarterly Results. Heres one last look at what the street is expecting. Not forever but just before we get the numbers. Squawk box will be right back. Sonds away from boeing results. Stocks ahead of those results is up a little bit. Solid session yesterday. In futures that could be impacted by what happens with boeing futures on the dow up 180 points or so. Mike santoli is here with us whenever i look at boeing i just think about the market its depressed right now amazing you look at some of the other companies that you wouldnt think are worth two and three times what boeing is worth. But the importance of boeing in our economy and just in our lives in general for sure. Its such a change from a year or two ago whenit was, you know, at record valuation. Also record certainty about the outlook. Thats been the big jarring thing about the Investment Case for boeing now were talking about cash he needs. Will they have to build a greater debt cushion and really what the long term impact is in terms of air travel and intensity and usage of planes. The whole story has been turned upside down in the last year it has. Like so many times its not going to be about these numbers here its going to be about Everything Else that i try to prepare everyone for, the most important metrics and when we go phil hell have a lot of that ready for us used to be deliveries, obviously. But actually phil is ready right now. Phil, what have you got . Reporter for the First Quarter we have a loss of 1. 70 a share from boeing. Thats slightly worse than the expectation of a loss of 1. He 61 revenue just shy of expectations coming in at 16. 9 billion so thats the revenue for the First Quarter. Free cash flow negative, 4. 7 billion and cash balance which is crucial over the next several quarters not just immediately but as they start to borrow more 15. 5 billion several pieces of news commercial airplane production rates are being slashed. We forecasted this based on our conversations with sources boeing confirming that its going to be cutting its 787 dreamliner production in half by 2022 going from 14 a month down to seven per month immediately cut it down to ten per month. 777 x going from five per month to three per month in 2021 737 max will ramp production later this year if its ungrounded by late summer, then they go to 31 per month. Thats the expectation for 2021. We are also expecting any minute now to hear a formal announcement from the company about payroll reductions basically cutting employees by 10 across the company, the bigger impact will be on the commercial airplane business this will be a mix of voluntary and involuntary job cuts at boeing well get the exact details and a message from Ceo Dave Calhoun shortly. Couple of other notes. The max we talk every quarter about the costs. Additional costs of 1 billion for the 737 max because of the slower ramp up in production than expected and then also the cost, the impact of shutting down the commercial business in late march and everything that goes with that, thats cost the company 1. 37 billion. But, again, guys were waiting on the specific details regarding the payroll and head count reductions again 10 company wide is the expectation. Well get more details and of course well be talking with Ceo Dave Calhoun thats an. Exclusive coming up on squawk on the street guys hey, phil lets talk a little bit more about this and bring in mike santoli too whats interesting in this release is what they say about thinking they can get funding. They are convinced they can get funding. They say they are looking at a lot of places for it they were looking to line up their own bond financing, that that would be separate than something they went to the government for calhoun has been very upfront about the idea he doesnt want to go the government and have them take a big stake in the company. Also, they are not closing off the possibility of borrowing through the Treasury Department or borrowing through the Federal Reserve. Remember, there is this new facility that really hasnt gotten much attention that essentially is 500 billion going through the Federal Reserve. That is a possibility for boeing i think ultimately what they want to know, becky, what are the terms going if we go through treasury and through the Federal Reserve program. What exactly are those terms theres no doubt they will access the private market as well in term of borrowing, whether its some type of a corporate bone issuance, new lines of credit. They will be doing a mix the private market as well as working through the Treasury Department or working through the Federal Reserve program thats being set up. Mike, what do you think watching the stock reaction to this the stock up 2 . What do you think it is that traders heard that they like there . Im not positive except the cost cuts and production uts i think when you think about the environment right now that also means less negative Free Cash Flow less cash burn in the near term. You can save 10 payroll reduction plus assertion that they do believe they can line up further financing. Everything thats gone on in terms of Federal Reserve support, treasury support is moving in the direction of trying to ensure that, you know, Companies Like boeing have a bridge until things get back to some semblance of normal i think the market is leaning on that idea that the company has liquidity and, you know, perhaps has handle on what longer term demand looks lying the real debate going on around these companies and airlines is what year might we go back to last years level of air travel. Tremendously wide range of estimates i think in terms of people saying 2022 or later or Something Like that. That to me is where the debate settles out. And, phil, also on that point one line in the release about the 737 max which is kind of surprising given how much of a problem that could potentially be for the company they say they are getting back on track what do you hear about when that comes back and how many cancelations youll get in the meantime because its been over a year of that being grounded and that opens up a possibility for airlines that made these orders to back out of the deal reporter they can do that. Once you go over a year, whether youre an airline or Leasing Company with had 100 on order we want to scale it back to 60 or spread out when we take delivery they already had 193 outright cancelations where firm orders where a Leasing Company or airline has said were not doing it were just getting out of our agreement there. Then theres been some accounting adjustments that bring down the number of maxs in the backlog close to 300 i think that will continue you have a number of airlines who have said we just do not feel that we have the certainty in terms of business and in terms of cash to pay for these planes certainly not as many as we previously ordered look theres always been an inflated order book both for boeing and airbus. We would be out at the air show in paris and you would have a southeast airline saying were ordering 100 of these. You talk to people they need 100. Maybe not 100, maybe they need 50 or 60 and several years down the road that commitment might be converted to some other type of aircraft. One other thing, piece of news dave calhoun out with a note to employees. He talks about the state of the company, the Financial Report that comes in for the First Quarter and in terms of the head count reduction they will be cutting 10 of the companys payroll. That is across the entire company but a greater impact will be felt in the commercial Airplane Division which is not surprising given the fact that the backlog is coming down, youre seeing airlines ordering fewer planes or deferring deliveries and you saw it with the production cuts. They are cutting their wide body production when the max comes back on 31 per month next year. Jut for point of comparison before it was grounded they were building 52 per month. Thats a big change that they are going to be seeing there mike asked the right question is how long do you think it goes before we see Airline Travel back to the levels that we saw last year . If you had to guess, you say out one year, three years five years at least two, more likely two to four. Nobody i talked to in the airline industry, none of the executives at leasing companies, nobody believes that were going to see this come back within the next couple of years now its going to gradually increase from the second half of this year but it will be gradual. Not a snap back in demand. International travel, i mean thats dead in the water for the foreseeable future here. Youll see some International Travel but certainly not what we saw before all right phil, thank you very much. Mike, thank you. By the way, folks, dont miss boeing Ceo Dave Calhoun coming up live squawk on the street at 9 00 a. M. Eastern time and thats an interview to watch to see how he reacts to all of this, what he says now about government programs, what he says about the liquidity that they do think they can get to fund their operations and how these cuts will play out andrew, ill send it over to you. Coming up when we return well talk about this morning, stocks to watch. Names you need know before the opening bell in the next hour will fed chair jay powell give more insight into the string of actions during the pandemic. Well ask Glenn Hutchins up next dr. Scott gottlieb will talk about expanding testing and the race for vaccine as we try to reopen america as we head to break check out the dows winners and losers squawk box returns after this. [narrator] soon, lights will come on. Soon, people will be walking back through your door. Soon, life will move forward. Well welcome back old colleagues, get to know new ones some things may change, but well still be here, right here, so you can work on the business of getting your business back. At paycom, our focus will always be you and well see you soon. Welcome back squawk box futures are indicated higher dow superby 200 points we were up even more than that an hour ago up by 300 points youre seeing strong gains as were in the Early Morning trading. Yesterday markets gave back those gains during the course of the day. We have heard from several Companies Reporting earnings, most recently boeing and that has been helping the dow s p futures up by 30 points nasdaq up by 132 what youre seeing in equity markets is tied to oil prices. Oil prices rebounding after big pressure on wti crude. June contract is up by almost 17 , 14. 40. Andrew some stocks to watch this morning. Take a look at mondelez. Maker of oreo cookies some stockpiles they are withdrawing their full year forecast due to the impact of the virus and questions about whether things will pull forward. Ford posted a bigger than expected loss and warned its 2 billion loss during the quarter would more than double during the current quarter. The automaker says that it has enough money to weather the pandemic through the end of 2020 then fireeye shares reporting better than expected numbers but gave weaker than expected forecast and announced it is laying off workers as well more stocks to watch garmin shares beat expects a mixed quarter for yum. Global same store sales fell many restaurants had to close or limited to take out. General Darrell Armstrong is taking a hit in premarket trading. Earnings in revenue fell short delayed deliveries of their gulf stream Business Jets you might think itwould get more play at this point, wouldnt you think, sorkin, long gulfstream no one is ceos and important people need to travel. No one, no shareholder at this point will say why do you need fat cat travel at this point you got to go i dont know. It depends what industry youre in the youre laying off employees you better not be. Im laying off employees and ill take the private jet. I always believe them, you know, long before this that if they got places to go all around the middle of the country, that arent readily accessible by, you know, by major airports and they need to go to these places, for whatever reason, that it makes more sense than the delays for ceos to make sense to at least lease one from our pal warren, i think. I cant imagine this is bad for victor either. Not everyone can do a wheels up. But if you had to be if you wanted to go to florida right now, i mean how do you go . What do you do thats thing. Need or want to. You better make sure its for an actual real business reason and not something youre building in to your private time i think were under estimating the outrage that will come so at this point you would like to do it that way but the economy may not allow people to make that choice anyway. And the optics is not great. And Business Travel look were fining ways to do everything on the internet, remotely theres fewer and fewer reasons you can cite you can say i have to travel for especially when you tell employees they cant travel, captain come in to the office you better have a really good reason as to why youre traveling and be able to back it up and say this is urgent for me to get to these places if thats the case, fine if not good luck selling it. We heard yesterday from the biggest producer about how truly wealthy people see it on their statement, but its hard to effect the way that they live, and i cant imagine that they are not going to use gulfstream the people that are able to use gulf streams in the first place are probably going to use them more thats the question people who are able to use them is a declining number of people too. Declining number of people there are some people who will be doing that. 0. 001 are not declining from this i think they are moving into even more expensive bunker youve seen those stories on the website. They are moving into bunkers and not leaving them when they do leave they are not going to fly on a commercial flight coming up going down to one of those as testing expands so will the number of positive cases i wouldnt get on any boat well hear from dr. Scott gottlieb what the numbers are saying about the spread of the coronavirus. First check out boeing after the companyrelts sus. Stay tune. Youre watching squawk box thats going help the dow right there. Dad, im scared. Its only human to care for those we love. And also help light their way. Its why last year chevron invested over 10 billion to bring affordable, reliable, ever cleaner energy to america. So were working 24 7 toected maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. Welcome back to box. U. S. Coronavirus case have topped 1 million and while states plan for reopenings dont take shape, former fda commissioner dr. Scott gottlieb says the time frame that people are expecting will be much slower than they think dr. Scott gottlieb joins us with more now this morning opinion hes a cnbc contributor and serves on boards of pfizer and illumina lets talk about that timeline and we saw that tweet, about the experience in china when it comes to demand. Yeah. If you look what happened in china the consumer really hasnt come back. China restarted its economy, manufacturing sectors restarted. Factories are open people go to work and go home. They are not going out on weekends hedge funds are taking photos of parking lots to gauge what consumer activity is like. Consumers are not going out because theyve been hurt by the coronavirus there. Consumer confidence is down. They are scared to go out because theres low Level Circulation of the virus theres a risk here in the United States if we cant reduce the spread of this virus and get it to a level thats low enough that people feel confident they wont be at risk if they go out we can face a similar situation here where consumers are worried about going out. You wont see consumer activity return do you think culturally there may be a difference. The reason i ask you see people on the other side of the country, were on the east coast, obviously around new york where theres been lots and lots of case and weve seen death and known people who had it. You go out further in the country and im not sure thats the case elon musk tweeting free america. Im just wonder wlg you think people are more inclined and have more confidence to take that risk. Whether thats a right risk to take we can debate but whether you just think culturally we may be different well, its a great point that the experience with coronavirus across the country has been very diverse. A lot of parts of the country that have not been harbor hit. Thats why its important to leave it up to local officials to reopen aspects of their economy. There are parts of the country where they are further ahead cases are coming down. Five states need criteria that the white house set for reopening but theres 25 states with case counts are still growing now albeit some cases have low level of cases but see a growing number of cases. Even if its only the dense urban centers where people are more fearful about going out we dont see a quick snap back. They drive a lot of the economy. You could see slow going heading in to the summer and certainly the fall if we see outbreaks in the fall swliekly. Hopefully we can restart the economy and people go back to work certain things arent coming back with the same vigor until we get to a vaccine or different level of spread where this is really in the background and people arent worried that they are at risk of contracting it. We need to prepare for that kind of future where this remains a low level threat pfizer yesterday coming out with news saying that they could have an emergency vaccine ready or a vaccine ready for emergency use by the fall. Thats exciting. What are you hearing about this . How would you handicap that. If thats the case how long before we get to a situation where were going see mass in inoculations what ill say is i think there will be a number of companies that have taj doses available in the fall and if their vaccines clear early stage trials and show they are safe and they indicate they couldbe efficacious American Companies would be prepared to deliver vaccines in taj numbers. Enough to use in large cale Clinical Study physician you have an outbreak at an American City where you deploy the vaccine in an experiment protoc protocol so we could be on an accelerated timeline for getting to a vaccine. The biggest challenge is manufacturing. Trying to scale up manufacturing so you can get the tens if not hundreds of millions of doses you need to provide a solution to tups bhe United States but or global friends i see on the internet how we talk about some localities have to stay closed, other get to open up. I get that if youre in an area that you havent been hurt opening some sections and not others is like having a peeing section in the pool. Is that true not every state has the same capacity to create risk for the entire United States a lot of states are more rural where you dont have a lot of travel in and out of the state i think states and cities connected to the other parts of the United States are subject to what they do seattle and Washington State ended up seeding a lot of the country. Sequence work looking at strains here in connecticut where i am look like they originated in Washington State when you have a state or city where theres a lot of connections to other parts of the state or country and that state or city doesnt do the right steps that could put the whole country at risk. Parts of wyoming, montana, states in this country where they are rural and not create risk for the entire United States doctor, as youve been speaking, cramer is watching our program. He tweeted out youre giving a positive view of the accelerated timeline on the vaccine which is true but i want to understand one piece of this. As weve seen headlines cross over the past couple of days about the potential for a vaccine, you they are oxford study thats taking place with monkeys. They talk about how they can have a million of those Vaccines Available potentially as early as september in terms of being able to get this out en masse, at scale, so you can take care not just of people on the front line but the truly vulnerable so that maybe others will have confidence to go out or frankly to get it to everybody so everybody feels truly confident, they just wont get it whats that timeline look like thats late 2021. I think in terms of having a vaccine available late 2021 late 2021 definitely 2021. Perhaps late 2021. You know i dont know the exact manufacturing timeline for these Different Companies but definitely well into 2021 in terms of having a vaccine available in the hundreds of millions ever doses that you would need to mass inoculate well into 2021 until anyone will have a vaccine available and the kinds of quantity that would be required to inoculate the entire United States or entire european continent. Were a ways off in terms of having a vaccine available at scale, at that kind of scale in doses of millions it could be available much sooner than that. Dr. Scott gottlieb, always great to get your insights and helping us all understand this better thanks a lot becky, over to you thanks, andrew. When we come back the fed in focus. What will jay powell and company say about the Central Banks unprecedented move well discuss about Glenn Hutchins thats next on 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. Theyre all possible with a cfp® professional. Featuring the Emmy Awardwinning voice remote. All the apps you love, including netflix, prime video, youtube and hulu. And the most 4k content. The best Entertainment Experience all in one place. Stocks looking to bounce back. Major index snapped multiday winning streaks yesterday but this morning they are on the rise once again. Earnings reports are coming fast and furious Quarterly Results this morning from boeing, General Electric, big defense contractors and health care firms. Were about to get a look how the entire economy did in the First Quarter just as the coronavirus was reaching the u. S. Gdp data is just 30 minutes away the final hour of squawk box begins right now good morning im joe kernen along with becky quick and Andrew Ross Sorkin u. S. Equity futures are up, just under 200. What were seeingfor most of the premarket signatures. Treasury yields, not been so compelling to watch. Kind of watching paint dry but are employee. 6 oil prices have seen a lot play in terms of influencing different markets up 15 today thats getting some strength at least early on to the equity markets. Okay. Huge morning, joe for Quarterly Results. First up we got boeing reporting they missed on the top line from q1 larger than execute loss Company Announcing plans to cut commercial jet production rates. Also planning to reduce payroll as it tries to deal with the pandemic slow down in its business and the grounding, of course, of the 737 max well talk a lot more about boeing later this hour and dave calhoun will be on cnbc in just a little bit at 9 00 eastern time you dont want to miss it. An exclusive interview with the companys ceo. General electric out with Quarterly Results. Industrial giant saw an 8 decline in q1 revenue compared to last year its coe said coronavirus materially challenged ges First Quarter results and company said it expects q2 to be worse. Hell be on squawk on the street at 10 00 a. M. Eastern time becky, over to you andrew, thank you. Lets talk a little bit more about how the largest American Companies are weathering the coronavirus from a health and financial stop joining us right now is Glenn Hutchins hes north island chairman and a director at the new york ferksd on the board of at t glenn, thank you for being here today. Good to see you. Good morning, becky and joe and andrew how is everybody doing good. How do you think american businesses are doing right now you know, were going learn about that over the course of the quarter. What ive been thinking about and ill talk a little bit about how as we get in this new phase of gearing up Economic Activity again does it took like . What does it took like and i think it will come in a bunch of phases. Businesses will experience this in different ways. But, you know, we have to remember that even if the economies are down 15, 20 we have 80 of our activity occurring. But may 1st, very much pent up demand Everybody Needs hair cuts. A bunch of new demand, i think for, going into the workplace, san contiguous supplies. Testing. That will ramp up very rapidly those industries will do very well a bunch of activities that well scale in slowly as we can do them safely. Air travel is one that youve talked a lot about on this show. There are some activities that will go way. Were learning how to do more with less right now. And as an example a lot less commercial real estate as people work more from home. You talked on your show new ways in which movies will be distributed and that movie supply chain will be severely constrained. Parts of that wont come back. A lot of new innovation. New goods and services that will be responsive to the new ways in which we work, educate thats where ill be investing and maybe ill stop there. But i think that will be a fair amount of resorting as a consequence of what goes on with Side Companies what they do and dont do were seeing that already in earnings that youre reporting on as a consequence what the market will reflect that. The one thing, huge amount of Capital Expenditures that are slashed by companies this year they are dealing with watching revenue decline in a lot of cases. Dealing with higher expenses as they figure out how to handle coronavirus and protect their staff. If youre seeing a big crop in cap x from every company across the board what does that mean just for the broader economy and knock on effect from that . You broke up a little bit, becky but i think i got your question i think it will be two things some will be temporary because that cap x will come back for companies that have ability to finance it there will be some brandnew cap x. Going back to work, Everybody Knows now youll need a whole host of personal protection sanitation supplies as well as testing equipment. That stuff will be investing very aggressive plus therapy and vaccine pipeline then some things which youre right cap x will be reduced, but right now i dont think you can judge that by the drop right now because such a sudden stop in Economic Activity that and companies cant see through the glass door you understand what the future looks like we have to make the pause. You said there are a few areas with rapid changes, like how we learn you want to explain that a little bit there will be fundamental changes now in the way we work, in the way we educate, in the way we commute, the way we entertain, and the way we commute. And entrepreneurs right now are thinking through in forming new companies. Everybody knows about zoom nobody knew about zoom in january. There will be a whole host of companies that will be filling that gap that will be net new innovation i think they will be largely based upon technologies, largely be using Cloud Computing and mobile computing, will be running across the 5g network and those companies are just being formed and thought through right now. So as i say thats where im spending my time the next six, nine, 12 months trying to out how to invest there. Anything you see that you can tell us about now or still early going . Stay tuned. Glenn let me ask you as an at t board member we just got the news last week, randolph will be stepping down. What does that mean for at t and how is the company doing right now with all the demands for its services but what huge change weve seen in the environment . Im going to let randall and now john talk about that, the companys prospect, performance prospects. Ill say that the Succession Process was a long deliberate process and should not have surprised anybody and i think one of the great things about this crisis has been the way the networks not just at t but the others, the networks that held up and been able to scale up so that we can continue to not just do things like this, but that our hospitals, First Responder networks and market activity, all the Mission Critical things that need to happen to allow enough Economic Activity to continue during this time period to have a business on which to build has been facilitate. Were relying on networks and theyve done a tremendous job. Youre also a director at the new york fed and today we do have the fomc meeting, the announcement coming out, jay powell expected to be talk were all watching the incredible moves the fed has need shore up just about every market out there and really saying it will do just about anything what do you expect to hear from jay powell today what do you want to hear from jay powell today well, tilds fed is i wouly the fed is in a base at the end of the beginning programs they have put out there have been very good ones we now need to kind of fine tune them give you a couple of examples. The ppp program was, had some significant start up difficulties as we talked about the last time i here one wasnot able to reach the unresourced community that didnt have banking relationships. In this most recent program weve been able to open up that channel. And other ways, alternative channels to get money out to needy companies in under banked and nonbank markets. The fed has the right set of programs in place but they have to be scaled up and have to be fine tuned a bunch of things that need to be fine tuned. For example, theres been a lot of innovation in the last, since the financial crisis in the Way Companies finance themselves weve been very good right now addressing companies that are smaller, by the ppp and Lending Companies and Larger Companies a whole bunch of companies they might be too big for one program and too small for the other and financed themselves in innovative ways. Through clos and others and using rating agencies that might not be the big three that might get lost in the shuffle and still have very important people who products and services that are provided by people who value their jobs every bit as much theres a part of the economy and Financial Markets you need to make sure gegts addressed glenn, were about out of time but i did notice yesterday your Family Foundation was working with c. A. R. E. S. To make sure they are addressing the needs in the new york area right now so many people are in need of food you guys are stepping up to do some of that i want to thank you for that im very proud of my team we put together c. A. R. E. S. Its making nutritious meals and handling distribution and were going distribute 35,000 meals over the next two months into needy communities primarily harlem and bronx for people in need plus Health Care Workers who live there its our attempt to try to do something constructive during this crisis. Thank you we appreciate your efforts on that good talking to you, glenn my pleasure take care. Still to come, were going to talk to Tim Armstrong and talk about google before we go to break, i couldnt get over this elon musk tweet, andrew. You glossed over it so quickly in that discussion with dr. Scott gottlieb you certainly are a big fan of elon musk except for the flame lower the. Im just wondering in your eyes does this diminish your viewpoint of him do you ascribe based intentions for why he wants to free america or open up the profit incentives hes been much more aggressive on this issue what do you think of it if you follow his tweets, i think hes much more inclined to think that this is either a lesser issue or would take more of a swedish approach to trying to build some kind of you dont agree with that i mean you pushed back on others but with someone you respect so much look i have an enormous amount of respect for him because hes changed the world and is changing world. I dont have to agree with everything he says you respect his opinion is it possible he might have a legitimate point or not . I think weve discussed this. There are parts of america that probably should be open in a more meaningful way than they are and there are parts that shouldnt. The hardest point to our country is th is that we were so far behind in the beginning. Okay. Thank you. We got to go to break. Well be back with Tim Armstrong. Stay with us. Feed a healthy lifestyle, with pure protein. High protein. Low sugar. Tastes great high protein. So good. High protein. Low sugar. Mmm, birthday cake. Pure protein. The best combination to help you stay fit. Pure protein. And. L music fades in . Hey hi welcome back to squawk box alphabet the parent search giant of google took a hit on growth revenue. Reven the ceo said quote the decline in our search and other ad revenue was abrupt in march and although were seeing some early signs at this point that users are returning to more commercial behavior, not clear how durable or monetizable that will be. Joining us now with a lot more on alphabet and how Online Advertising is holding up and what the world looks like is Tim Armstrong, who is doing a lot of great work with mount sinai. Tim great to see you this morning. To the extent that we can take away something from the report and what ruth said in terms of how they are seeing in terms of google being a bellwether if you can think about that for the rest of the economy. Andrew, great to see you guys thanks for all the stuff you guys are doing every day i would the summary on google frl what i saw yesterday was short term pain, long term gain. Google looked to me like google had probably two years worth of consumer growth in two months. While advertising got hit, i think google generally is the last company to get cut on someones budget be the first to come back. If youre longer Term Investor and not short term, i think you just have the largest education cycle of google products, number one and number two, you saw their strategy on cloud and some of the others areas that are decoupled from their consumer business with really strong growth i walked away from watching their earnings thinking, you know, long term, you know, probably very powerful Freight Train of revenues will happen over the next two to five years. Maybe some short term pain, but that was my takeaway thats what i was going to ask you whether investors should look through it. We had barry diller on the program and he said expedia spends 5 billion annually they will be lucky if they spend a billion. I imagine most of that money is going google and facebook. Im involved with multiple companies and talked to multiple ceos in the last month and weve been work with 40 different brands so i have pretty intimate knowledge of what people are doing with their marketing budgets. People are cutting their budgets in very, very deep ways but generally google is the last to get cut and digital is the last to get cut wherever theres Consumer Usage and accountability and transparencies are really important. I would in the Commerce World also google mentioned commerce on their Earnings Call yesterday i think theres some very big trends in commerce coming out of covid. If you think about the financial crisis in 20082009 it was also the launching pad for mobile and tilds launching pad for dtc for direct to consumer commerce will come out of covid. Consumers are getting highly educated on dtc. You know, really big brand, big retailers they dont want to rent consumers they want to own them which means they need to go direct to consumers. So were, you know, theres a lot of human effort and work needed to get the work done to get the economy restarted. When you come back out of it digital, big digital brand will get stronger and youll see etale and dtc are two components of future commerce coming out to be really strong tim, so much of the direct to consumer world, though, is discretionary spend at the moment a lot of it is clothing and the like what do you see in term of the companies that youre involved in, in an environment where frankly all you have to do i am wearing pants today thats the good news and i am every day. The point is most people arent seeing other people so the idea of guesting dressed or buying new clothes or new fashion seems hard to imagine. Yeah, i think like all other businesses, andrew, the dtc companies, the ones that have the right leadership, the right really crm relationship with their consumers and really the right Balance Sheets, when they get through this they will be stronger i know that from Human Behavior, covid has changed a lot of Human Behavior but as Human Behavior in how people look and feel and their products and services they buy, you know, are going to come back and they will come back strongly after covid and two, theres other things that people arent paying attention to which is if you look at the Digital Payment apps and things that fueled dtc those grew by 60 in march. So while you see the kind of, the lowering of commerce overall and Consumer Spending behind it, the really strong foundational pieces from payments to people understanding what dtc brands are to delivery to people building their chr systems is why we bet on dtc long term and why dtx were so bullish on it when i look at the secondary statistics i get more bullish after covid that a lot of these brand will excel some brand, i mentioned the last time i was on. They do inhome mani pedis and have the successful business and now they have and the. That out across the United States those are the businesses, the dtc businesses that are built, that have direct relationships that will only get stronger. Tim, before you go, when you joined us last you announced a program to give back to mount sinai. We have the flow code that you put up on the screen and i think it worked. People were doing it tell us what happened afterwards, after that so look, andrew, one of the most incredible stories out of covid is how leaders across the economy are coming together to solve really big issues and dr. Ken davis and rich freeman head of the trustee board at mount sinai wanted to change how mount sinai has relationships with consumers. So, we got together with them and they trusted us to launch mount sinais first direct dtc, direct to charity for small do for months and something amazing has happened over the last three weeks since i saw you guys which is mount sinai has turned into americas hospital and weech gotten go weve gotten donations from all over the United States and china, kay men islands, brazil and had major fans that mount sinai didnt know they had, people like Gwyneth Paltrow and jimmy fallon got behind us we had 10,000 individual donations in the last three weeks. And of those, andrew, those are all new donors to mount sinai and the Hospital System at mount sinai are at the epicenter when you talk about front line fighters mount sinai is the center of covid and its really just really heartening and amazing. Able to put flow code across Many Tv Networks we partnered in a big way with the Discovery Networks there was a poker tournament this past weekend. Massive success, 50 of the giving was outside of new york region and having sat in on mount sinai meetings and talked to some of their doctors as well and we kicked this off with them i cant tell you the amount of effort, work and innovation that mount sinai has couple with in the last three weeks and first Antibody Test approved by the fda. This is truly one of the best stories. I want to say thank you. My team, we pivoted our entire company from dtc commerce to dtc charity in a matter of days. Its been a Game Changing experience were thrilled about the work that youre doing and were thrilled about the work that mount sinai is doing on behalf of new york and, of course, now well call it americas hospital and thank you so much for joining us joe im participating in that poker tournament over the weekend as well. I have to send it to becky when we come back well break down this mornings First Quarter gdp number and talk about whats going on inside the fed as it gets ready to conclude a big two day meeting. Coronavirus closes leading to a 10 drop in global same store sales for the coffee chain last quarter. Hnn. T miss sar bucks ceo kevin joso hell be on squawk on the street this morning stay tuned squawk box will be right back. Coming up when we return our initial look at First Quarter gdp. Its expect adonacon ctrti of 3. 5 data and insubstantiate reaction and analysis coming up stay tuned. Instant reaction and analysis coming up stay tuned. And insubstantiate rn and analysis coming up stay tuned bost. Light, americas oldest lighthouse, has stood strong through every dark hour and bright dawn our country has endured. It has seen the break in the clouds before anyone else. For the past 168 years, weve also stood by you, helping you weather storms like this one, to protect your loved ones. And well do it for 168 more. We hope you find our Digital Solutions helpful helping you weather storms like this one, to bank safely from home. Deposit a check with your phone or tablet. Check balances, pay bills, transfer money and more. Send money to people you know and trust with zelle. Stay safe. Stay home. Together, well get through this. Pnc bank welcome back to squawk box Rick Santelli here waiting for breaking news we dont see any today yet. What were waiting for of course is our first look at First Quarter gdp. Most Analysts Expect the number down between 4 and 5 our last look of course doesnt matter at this point it was up 2. 1. But i dont see any of the data on the various News Services well dance in place here for a second rick, while youre dancing in place let me bring you some news about gilead gilead was halted for trading. It is aware of positive data emerging from the National Institute of allergy and Infectious Diseases study of the antiviral look at the dow watch this. The remdesivir drug has been treatment for covid19 remember this has been all over the map. You heard the positive things coming out of the university are of chicago study couple of days later we heard from World Health Organization china was ending that study. There wasnt enough patients to continue this. This is the nid story. Dow up almost400 points on thi news it looked like that study showed there was some positive news using remdesivir for treatment of covid19. The trial has met its primary endpoint and provide detailed information at an yum coming briefing this is the one that meg was talking about, we were waiting for this knew it would come this week no control group not perfect. After the china news put a damper on that stat report that came out about those 123 patients that had much better few more fatalities then the china study came out as you pointed out. It was ended not because it wasnt working necessarily, ended because no patients cramer said do not remember that day he was vociferous in not listening to china. We still dont know that much. Meeting a primary endpoint thats a big deal meeting a primary endpoint thats again for the niaid study. Remdesivir, gilead had been running a second study its own study for a second shorter five day therapy, the one were talking about today from the government that one is a ten day study treatment course that was evaluated in trial gilead had its own data coming out for the four and five day dosing of remdesivir thats coming out in may dow futures up by 365. I havent seen where gilead shares are haltd remember also opened up again they opened it . We asked dr. Scott gottlieb about this a lot he pointed out theres reason to believe it could be effective. With ebola it was somewhat effectish but not as, of course,ive as antibiotic drugs for ebola. It was being used on very sick patients very sick patients are sick because of the autoimmune response in their lungs. So you would need to use Something Like this presumably before the virus had actually taken hold where youre hurting vital replications to use it earlier. It might not be expected to be quite as effective with very sick patients. Joe, the complicated batter this remdesivir drug, is, in fact, we need to watch for it. If it needs used early as you know this is introduced in a pill form not yet. So if the whole idea if its success is about its early, its early use that becomes more complicated again back to this issue of we want a drug that will give people confidence. If you need to take it within the first 24 hours or 48 hours of getting it that becomes more complicated. You dont know you have it. We do need to see sort of what at what point and what stage you need to take it for it to be effective. Thats a big part of this. By the way this stuff the doctor studies havent been used on people early doctor from the mayo clinic the other day mention ad lot of these things being used prophylactically as well if it was a pill and i dont know i have no idea whether thats potentially possible. But, you know, better than gilead coming out and saying it didnt meet if youre hoping we do get something but its better in that respect, bad if you dont want anything to happen and if they had bad news. Lets get to meg terrell on this gilead news. Meg, take it away. Reporter hi, joe this is not the information we were expecting from gilead this morning. What we were expect is for gileaded to read out its own trial results in severe patients with covid19. In fact thrkts may actually be better news because the nih trial is the one thats considered the Gold Standard because it was double blind and placebo control where as gileads trial was not placebo control. They are aware of positive data emerging from that nih trial it met its primary end point and nih will provide detailed information at an upcoming briefing and have their own data shortly and will inform whether the correct dose is five days or ten days which would dramatically impact how much supply of this medicine could be available. If its a five day course you have twice as much of the drug to give to patients. The fact that nih study met its primary goal is very good news because that is the Gold Standard study well wait to hear more when this briefing from the nih comes. But a good update and not what we were expecting to hear from gilead we should get more data in the next day or two from gilead itself i was referencing it wasnt controlled this is not that this could actually be more positive since it was double blind controlled so thats now when do we expect to hear from the other stuff, the stuff we were expecting from gilead . Reporter were expecting to hear today or tomorrow so were expecting the nih trial by late may. This is a month ahead of schedule for the nih trial to read out gileads first trial was supposed to read out today or tomorrow and probably still is were still waiting on that data were getting the nih data a lot earlier than expected and they are saying it was pose episcopal its not trading but watching the dow futures the doufs up about 400 points when this first came out now up by 351 points you did see automatically a huge boost in the dow futures overall and markets overall. Wondering what happens to gilead shares that stock closed yesterday at 78. 68 lets get back to rick santo santoli Rick Santelli reporter great news. Minus 4. 8 is first look First Quarter gdp. Thats weakest since march of 09. If you look at consumption, consumption really dropped down 7. 6 which actually is the worst going back to 1989 which is as far back as my database goes on the current form of this number. So neither of those very good. We saw Interest Rates, well 54 is the all time closing low yield for 1031 intraday. Get down high 50s, 59 for the high number. The reason im saying that sits fed day. Theyve obviously eased back on their purchase boy Interest Rates certainly seem to be going up even though were throwing a lot of money, of course at the covid effects within the economy back to you. Rick, stay with us. Lets bring in Steve Liesman steve, what do you think reporter i think rick is right the gilead news is more important to the outlook for the than the First Quarter gdp number durable goods down 16 Business Investment down 5. 6 reflecting the shutdown of the economy. Exports down 8. 7 . Inside that equipment was down 15 inside the investment numbers. Two quick points one is that i wonder the extent to which the forecast for the Second Quarter which are in the down 30 or 40 are including these partially reopen. Weve done data crunching here at cnbc. 18 of the population is now in states that are partially reopened. Another 18 will be in states that will partially reopen in the first week of may. That could create i hate to say that in this, some potential upside to the economy if these partial reopenings work and dont have to shutdown again theres some upside for that back to the gilead news where there could be more potential upside thank you very much, steve. Joe . Lets add a couple of other voices to this conversation. Were join by Mohamed Elerian mike santoli, mohamed you want to talk about remdesivir, maybe that changes your viewpoint on things or not . Look, its great news all of us want Health Advances and the gdp number tells you why we want it its bigger than expected contraction suggests that a minus 40 contraction in the Second Quarter is not out of the question just very quick back of the envelope calculations show that thats the extent of the hit of the gdp. So the southeastern we can get over this health emergency, the sooner we can ensure we dont get longer term damage to not just growth but growth potential. Mike, how far do you think this takes things in terms last time gilead was out that was a pretty big number in terms of advance but now at a higher level now. Maybe were getting close to a high end of a range before we know more . Starting to feel that way roughly upward bias. For benchmarking yesterday high for s p was 2911 this premarket pop we didnt get to yesterday mornings high. The market has been voracious, were getting sooner than later side as prices get higher, cyclical stocks linked to the economy do better it raise tleshs hold for what we need in terms of good news to feed that. So i think its all pretty constructive in terms of how the markets me at th metabolize thes joining us on the squawk news line, dr. Scott gottlieb. Doctor, just with what youve seen and im sure youve been able to read the release itself, how could this actually change someones outcome that has covid19 right now when could that happen does it need to be used early before you know you even have it you call it effective but never thought it would be the home run drug that was going help us out of this mess right im still in the same place. I think this is an antiviral thats a first generation antiviral thats active against the disease based on what weve seen so far. Not a home run not a cure bath drug potentially that if you use it particularly early in the course of the disease, you hang it in the emergency room, someone comes within covid, especially someone with risk factors that might predict they will have a worse outcome from the disease it can reduce their chance from having a bad outcome. Thats what weve seen with other antivirals, how theyve been used with tamiflu we use it in the emergency room when people come in with the flu. I think remdesivir can be used in a similar fashion so far all the data weve seen does suggest theres a treatment effect its not robust but active against the disease based on what weve seen. Certainly suggests that data what weve seen today or the announcement is another data point that continues to move the in the store same direction. You get more clarity when gilead releases results from its own trials that certainly is true. Theres three studies under way. Theres the niaid study. That study met its primary endpoint more today from i think, i believe dr. Fauci at a press conference theres also and im getting this right now theres also data thats going to come out from the openlabel studies that gilead is conducting not randomized studies i think maybe we have more news on this meg, you have a different study or more analysis on this one no, joe, i have exactly what dr. Gottlieb was referring to. Gilead just put out its own study results. Thats the one we were expecting today. This is in severe patients with covid19 as dr. Gottlieb mentioned an openlabel study and not placebocontrolled data are difficult to draw conclusion from. But five day and ten day doesing regiments appeared similar its a compliment to the nid study. That one was placebocontrolled. Nih results are ones that will tell us how well this drug worked but what gilead is saying those two dosing groups did appear similar that could increase the supply of the drug. They are also saying in a release here that earlier treatment did appear to be better for patients. They say patients who received remdesivir within ten days of symptom onset had improved outcomes compared with those who received it after ten days pulling data across treatment arms by day 14, 62 of patients treated early was able to be discharged from the hospital compared with 40 of patients treated late because this is not placebocontrolled we dont know if those patients would have gotten better by themselves. Thats why the niaid results are so critical to hear later today. Can i ask go ahead hello scott, you were starting in were trying to figure this out on the flash you had results. Meg was bringing us new stuff. Theres one added piece here and im getting this right now but i think that theres going to be a press conference later today with tony fauci where they talk about the results its possible if that trial does show a trend towards a positive outcome fda can authorize this under an emergency use authorization or approval fairly quickly but i expect them to have a press conference to provide more information later today. Which gets us to the point that, meg, you had said earlier the good news is five day treatment is just as effective as ten day effective that means twice amount of this drug to go around but do you know what kind of supplies we have for remdesivir, what kind of numbers youre series, how quickly things could ramp up to get more of the drug made yes so gilead has put out what supply it expects to make is by may they expect to be able to supply 140,000 doses of the medicine if they can cut that a five day regiment for patients that will increase the supply. They are looking to formulate it into a pill or an inhallable drug but not a slow process. Dr. Gottlieb would have more insights on that so how long would that, is that difficult to do an oral formulation . It would be difficult because of the complexities in manufacturing this product theres some speck laying that can you develop a inhaled form of this drug right mow the issue will be ramping supply gilead has been working with Contracting Organization to increase supply but its a long manufacturing process. Its a complex drug to manufacture. Well be supply constrained. I think youll see more information coming very shortly from federal agencies and the company talking about these results today, talking about the process Going Forward and how this drug can be made available more broadly either under accelerated approval or emergency use authorization which would allow commercial distribution of the drug to make sure more people can get access to it in the setting of the current epidemic well have to stay tuned well get more information today. Scott, where is remdesivir manufactured i dont know for sure its manufactured in multiple contract manufacturers right now. I know that the company has been working with a lot of different manufacturer theres not a single location where its being manufactured. But is it manufactured gilead says here. Go ahead. Ahead sorry, becky. I was going to say gilead says in its release about supply its increasing capacity with partners in north america, europe and asia. That gets to your question about where things are made in order to supply these kits dr. Gottlieb, you had that oped earlier this week raising concerns about even if a cure or vaccine is developed, not having it manufactured here might mean americans dont get it first i dont think that the entire manufacturing process is totally within the United States right now. There might be components of it or there might be some supply that you can do totally within the u. S. , aspects of the supply chain for this drug come from other parts of the world to your point, becky thats why gilead has worked globally to make this drug available, particularly in china where i think some of the supply chain originates the company has been working and the United States government has been working to domesticate more of the manufacturing and supply here its a complex drug to manufacture. In some ways its not an optimized drug it cant be formulated into an oral agent easily. Its complex to manufacture. It needs to be delivered intravenously. It is not a perfect drug what it is is a drug on the shelf, a first generation antiviral against coronavirus that can be effective for a certain number of patients this is not a home run, a cure by any means, this can be very effective in the context of better treatment for patients, better understanding of how to treat these pains and hopefully other drugs that will come on to the market in the fall this is part of the better toolbox weve been talking about. Better testing, better treatment. Doctor, we talk about the timeline with you all the time and the ability to try to give confidence to americans and frankly those all over the world to go back to work, to go back to some sense of normalcy and we talked about a possible vaccine, bringing that kind of sense of normalcy how does this change the dynamic . Do you think this drug, based on what you know will create the kind of confidence and when that people would say to themselves, you know what . Maybe im willing to go out and do what ill do, if i get this, ill have the confidence to know i can take this drug and things might be okay. Tim in the same place ive been when we had this discussion, this drug, coupled with other drugs, coupled with much better testing that well have, the ability to test millions of people in a week heading into the fall that could be a robust toolbox. That could mitigate the risk and reduce the fear that if you get this, its a race to the bottom. Theres nothing there to help you. Were also learning how to treat patients with covid much more effectively in the hospital. Were learning what interventions to do and not do all of this will put us in a different posture for the fall this is a part of that toolbox we talked about that can reduce the risk in the fall and allow us to get back to some semblance of our normal lives even with covid circulating in the ba background dr. Gottlieb, meg, Mohamed Elerian, thank you all. Lets continue this discussion with jim cramer over at cnbcs headquarters not a Silver Bullet, but this is the best news ive heard in a long time. Agreed. There will be no Silver Bullet until we have a vaccine. I want to thank joe, because remember what the chinese said initially . They said the problem was they couldnt find enough people. At the same time we got that good news from chicago and mass gen, we heard from the chinese, it was toxic, killing people and thats why they had to stop it not that it wasnt working, it was killing people the heat i got in believing in the university of chicago and harvard versus believing over the peoples republic of china was extraordinary. American ingenuity is alive and well two, believe in america. Dont believe in the prc over america. They may not be telling us as much truth as you may think. Thats not the only instance of certain entities taking chinas side versus taking the u. S. Side or this administrations side. Th you can go there. You can emigrate right to the prc if you want to this is good news. I regard this as the beginning of the end of the true nightmare which is that its a death sentence if you can take off the death sentence and make it so its a death sentence for people who might have died otherwise, what happens is you eliminate the fear of becoming a society that its terrible to congregate in we know crowds are still bad, we have to wear masks, you take off the death sentence, people approach life differently. Its realistic for the dow to go up and for people to think maybe i can lead my life differently and not feel like its dangerous to walk down the street. Thats very good what do you think, 78 is where gilead was halted. Gilead is a great company, theyll give it away, joe. They wont try to make money off of it. Yeah. Some of these companies, theyre spending fortunes not to make money i think this industry, which has come under such fire over the last decade, i will personally punch someone in the nose who takes on this industry when this is over. Ive never seen so much money lost in one cause. This industry gives away money mnuchin doesnt give money away like this powell doesnt give money away the way this industry does lets remember this moment and be proud its worth it. We havent had that much to be proud of lately. I guess its hard to make, but its not a biologic. Its not like a new biotech its a chemical thats why theyll do it. I know fuji is ahead on the pill form thats something they have not talked about fu fujifilm drug, thats a good drug iv is the way you start, you work towards a pill. You know that better than anybody. If it works in iv, you can get to pill. If it doesnt work in an iv or if its like the chinese saying it kills you, maybe the chinese were not as close to this as we thought. Maybe they had puts. All right thank you well see you in a few minutes later this morning, dont miss the interview with speaker of ate house nancy pelosi ths coming up at 10 45 a. M. On squawk on the street. Stay tuned, squawk box will be right back welcome whacback stocks jumping on news from gilead that just crossed the wires about possibly some help as far as a therapeutic goes and some potentially positive news on remdesivir. We had it a couple wooeeks ago, then it seemed to not be as positive as people thought based on studies in china, but studies released today on both fronts by gilead and by a Government Agency so waiting for gilead to open. Closed at 68. 67, and its halted premarket. So that will be interesting when that finally happens were out of time. Time for squawk on the street coming up right now. Join us tomorrow good wednesday morning welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber live from separate locations big show this morning. The ceos of boeing, amd, starbucks, spotify and ge. Futures have doubled on these positive data points about gileads remdesivir. Stock is still halted. Q1 gdp down to 4. 8 fed decision at 2 00, jim. The First Virtual presser at 2 30 it does seem like remdesivir will dominate the conversation for the next maybe the open i think that weve all been