Transcripts For CNBC Squawk Box 20240713

It took a tumble in less than six weeks and then rebounded 36 of the lows from april yesterday. The s p down 34 from february 19 to march 23, less than five weeks. Crazy to think about how quickly that fall came then we were back up 30 off the low for april. Joe . If you used april then i could get to 82 years i dont think sorkin was listening to me. I was i said, no, i dont remember. You are always saying maybe i wasnt around for that here is my proposition for you, andrew sell in may is a common expression go away ive never felt more like selling in may than i do right now. I have to be honest. It is not just you. Look at the dow this morning down 454 points. Just to test whether this kind of thing works. It would be impossible for me to go long with money what was he, 163 or something. I saw another guy say it is going to be so hard over the next year that we are looking at another 40 drop others that say the average recession that the market doesnt bottom for 11 months although jim paulson is saying everything is much shorter i think it is impossible to think about owning stocks right now. I will bet you the s p is higher the end of may 31 than lower based on where the futures indicate right because right the wisdom now is that it is all going to go down i dont think im going to be right. Im going to owe you back up you dont think it is sell in may and go away. I do. But i feel that too strongly by that measure. Sell in may and go away means you go away for the whole summer forget the expression what do you think happens in the next month i think the markets moved all the way back to what seems looic like a normal level. You think well be lower in may . I do but im going to take the lower. Will you take that okay lets make that worth our while. Ly i will buy you a box of doughnuts if we go lower you buy me a box of tacos if we are, say, above 2850 i dont know where we are going to be. It is a box of tacos. You would eat take out a month from now you think it is going to be safe i eat take out now. I went to chipolte last week. Again, glad we are not sitting by each other. The hardest trend to make is fighting conventional wisdom. Can you think why this market would be above 2,900 end of may trying to reopen the states. It is a learning experience im giving you that opportunity to buy you doughnuts youll be back here probably you can think about it take the bet. How about i buy you a hypo allergenic bond. Two bets. We can do two i dont think, i dont like to say this, i dont think either myself or becky will be sitting there in a month that will be even more interesting. That will mean we dont get back to work. Nobody is rebounding in a v way. Then you should take my bet and say we are going to be lower on the s p. Doughnuts versus tacos. Doughnuts for me. Tacos for you. A big box like 12 of them 12 doughnuts or 12 taco bell tacos. What do you want becky im going to take andrews side on this it is tough unless there is some miraculous recovery. Thats my point i want to take your side too i cant imagine. I want to take your side. I would love for us to be up at those levels plus we have sell in may going. Anyway one thing i did want to point out is that we fell so far so fast, look at those numbers, six weeks for the dow less than 38 . Five weeks for the s p down 48 . That is phenomenal it was a slow bleed in the past. This is where markets came to the conclusion quickly thank you to petter fer for rung those numbers this morning showing how huge those drops were we cant look at marchs numbers. We have to start from the market highs and how quickly we came down from there. You are talking about Massive Gains where we had a shock to the system we want to tell you about a number of important interviews the ceo of cargill who doesnt normally do Television Interviews talking about the strain and shell ceo talking about the strain on that company gileads ceo to talk about the drug remdesivir and ceo of moderna who are working on those vaccines that is the big question that big news could totally change any of this and make what joe says right normally, i would this is an important quarter like the industrial company, they are all important those are the ones i want to hear from today. Cargill, you know why. Because of the food oil that is the hugest question going. The dow component and oil to find out what is going on too with chevron we have a lot of Corporate News some of this may be with the futures this morning lets catch up on three of the digest stories of the day, apple, amazon and boeing mike stoantoli joins us now. Apple saying they see weak iphone sales tim cook pulling guidance, comments says he has great confidence in the long term of the business but in the short term, it is hard to see how the windshield, he says, to know what the next 60 days look like. Mike what did you take away from the numbers or of his tone right the tone is one of essentially not pretending that the company has a firmer grasp of what the next couple of quarters looks like than the rest of the countries has. But continuing to perform in a way that is very steady. Not fast growth. It is holding its form the buy back, probably the middle of the road but less than they could have done in the past the stock, these huge tech stocks they dont really owe you anything theyve outperformed in the nearly 40year outcome, lets not look at todays movement and say it is the markets verdict that something is wrong. But a very legitimate question it is a wait and see situation you have to wait and see if apple can hold on these situations it is getting a lot of credit for being this financially unassailable business at a time when we dont know what growth looks like lets also talk about amazon this morning seeing a surge in online sales and Cloud Business as people are stuck at home. The outlook slamming the stock this morning the company saying, this is one of the great lines ive seen if you are a share holdholder o amazon, you may want to take a seat they plan to spend 4 billion on virus response more covid19 tests for workers, shoring up delivery network, higher wages and more ppe. I think this will solidify their dominance in the space some investors not as happy about it, which im confused by. Mike everything going on right now is going to enhance amazons position in terms of the longer term trend the demand really cant keep up with it. The difference this time is that investors, they are used to jeff bezos saying forget shortterm profits, we are going to invest. This is a little different in that it is not really spending 4 billion for some payoff down the road by creating a new business or marketing or building infrastructure. It is really to deal with the conditions right now it is kind of lower or zero negative margin spending it doesnt change the longterm story. There is a difference and now we are saying we are recovering where we are right now im going to take the other side i dont see it that way. I think if amazon can deliver or can deliver all of the goods it can, it not only buys itself the market share, you think it would buy more you can do the things and do it profitably and do it without political pressure because they are not providing the ppe and the things you would want them to do that the danger and the risk to business is even higher. I look at it as an investment that has more than a zero margin return, if that makes sense. It is still defensive and reactive it is absolutely necessary for the franchise and im sure thats the way wall street will view it over time. In the very short time, lets remember, amazon was at an alltime high. It was up 12 . We are giving back what we built up in this rally, which did get a little stretch and overheated a couple of days ago why isnt it back to the future this is what we learned from them it is back to what we do take my word for it. You are worried about coronavirus impact, ppe and things like that right . Thats what you are spending it on, joe im saying, it is back to the revenue model where you Grow Market Share and you may not be as profitable as you like. Look where it is i remember people shorting it to 1,000. Remember the clowns that shorted it up to 1,000 lets talk boeing. The Company Raised 25 billion in a bond sale the blowout number that says will keep them from taking government aid you got some owe pinions on this no direct government bailout money. It was affirmed and downgraded the price they are paying for the debt is a little bit lower there is a little bit of play there. Clearly boeing feeling like it is worth it and where it will be for years to come. It changes the profile and now looks like it is a pretty indebited company. Thats why it was viewed as well worth doing at this point. Huge demand and blue chip view right now however you slice it you want in on this bet nothing to do with draft kings and not having anything to bet on im not jonesing for action. Lie it is a psychological hedge on your part you want some reward down the way. Thats the opposite i wouldnt mind losing this bet. This gives me something i look forward to either way. Youve watched the market for many, many years i would think i would have to have my head examined to go along. Many times when it is all said and done so what do you want if you win a years subscription to barrons or something i think im still on the list there. You still get that for free thats a huge perk you dont want in on this. You wont take the over or the under . No. I dont want in on a 30day window by the way, sell in may is really about six months of the year you are right i have been looking. Naz car is starting. Who should i take in the first race do you like this Jimmy Johnson guy. My question is phil or tiger . You should be in the option business we are not allowed we are allowed to sell calls or i think we are on a stock, we are allowed to own which has an enviern universe of one. Well talk about what is next in oil after the break. 7 00 a. M. , chevron ceo mike wirth will join us well be right back. Im 53. But in my mind im still 35. Thats why i take osteo biflex, to keep me moving the way i was made to. It nourishes and strengthens my joints for the long term. Osteo biflex. Find our coupon in sundays paper. Seeing the break in the clouds before anyone else. Together, well weather this storm. And. L music fades in . Hey hi crude rallied yesterday after several producers said they would cut outlook the outlook remains cloudy even as opecs new deal is scheduled to go ahead. Lets welcome the managing director for april, you use the word trough do you think it will last two months or do you think thats the lowest it gets im not sure it is the lowest it gets. It is about as low as it can get without disease getting worse. There are tons of Global Demand just disappearing is pretty bad. We are at the reopening phase in the Worlds Largest oil consuming economy. If the 30 states that are reopening now, if they really get back to transportation as usual, we are talking head room of about 2. 5 million a day upside to the loss of about 30 million barrels. S at the same time on the supply side, you are looking at 10 to 12 million a day depending on how much will shut down in the near future. Coming in close to a half of the supply this isnt necessarily the end of the trough. The v shape we saw and to have a lot of other things. It is not going to and will have the delivery it goes to the point that the new normal there is at a very low and implies a scarey supply and demand dynamic for the oil market that no one was expecting six months ago when you look at the lower price of oil, that really underperforms all of the expectations breaking into the 40s. You ask where are we right now if i say, the good news of the story is that we have added a few willing owe bricks to the stack. That means inventories are still expanding. Not good news yet. When you ask where are things going, it happens fast at the end. It starts gradually and then suddenly when inventories rebalance, they are a long way off we are saying 0 of 50 states reopening is no small thing if it goes well if it goes poorly, it is really bad news thank you thank you for being with us. Thanks for having me. Youre welcome. A lot more this morning. Another retailer in jeopardy another big name that may soon file for bankruptcy protection as we head to the break, here are some images of the impact of the pandemic yesterday across america. Flexshares may look simple on the outside. But inside every etf. There are untold hours of careful construction. Infinite what ifs . And contingency plans. Creating funds that help target gaps in client portfolios. Tap untapped potential. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. For a prospectus containing this information. Heres the thing about managing for your business. S when youve got public clouds, and private clouds, and hybrid clouds things can get a bit cloudy for you. But now, theres the Dell Technologies cloud, powered by vmware. A single hub for a consistent operating experience across all your clouds. That should clear things up. Since 1926, nationwide weve been there in person, during trying times. Today, being on your side means staying home. Nationwide office of customer advocacy. But we can still support you and the heroes who are with you. Were giving refunds on Auto Insurance premiums, assisting customers with financial hardships, and our foundation is contributing millions of dollars to charities helping with covid19 relief. Keeping our promise to be on your side. Welcome back to squawk box. It is time for the executive edge sad for me because i wear this all the time j. Crew preparing for bankruptcy as soon as this weekend. They are working on 400 million in financing the retailer has been struggling under a heavy debt load and sales challenged by the covid19 outbreak of course there were problems long before covid19 for the company. All of it magnified in a world where people arent going to the stores and the stores themselves are closed you wonder how much of this with the retailers go into bankruptcy restructure and are able to come out stronger versus able to look at a different form and shut down all together that doesnt seem like your style, sorkin. It is low end, isnt it . I would say the past couple of years, when mickey were running the place. Some of the goods were really high end i own a couple of their suits. I love their stuff becky, are you a j. Crew wearer . It depends. Everything goes through trends i have a goto shirt that always looks good. It is rare that i need to look good when i go out it is friday, so im going to do one more thing i know there is a pandemic i want to do something. Are you still into lululemons are you doing that every day at home you come in here dressed to the nines. Those abc pants you have, i own a pair i used to use for traveling, now i use for whatever are you wearing them today . I am wearing them today i have a lot of ag jeans or chinos, fivepocket pants whatever they are called you never do that here. You have to go and impress people at lunch typically. Absolutely. It is the way i work. It is not you hes trying to impress. Dont forget the Berkshire Hathaway Shareholder Meeting is happening on saturday. You can email questions to berkshirequestions cnbc. Com make sure you tune in on 6 00 a. M. Monday morning to get at in depth look at the meeting like youve never seen before they are looking at taking questions for a couple of hours, i think. This is what i wanted to mention, today is may 1, the 25th anniversary for john lefante our audio guy. Hes been with the company for 25 years we want to give a shout out to john hes been putting up with me for a long time but joe even longer. He did tell me this morning, one of the big reasons he is here is because of you he mentioned that to me i said why do we go back and forth. If i got you to keep this job 25 years ago, why are you such a [ bleep ] [ bleep ]. He saves your button a regular basis. He comes up with sound effects and music or something in the old days, he used to throw in austin powers or a yeah baby 25 years, that is great he had a family. He comes in and had a great career still has a great career hes been putting up with you longer than penelope has he thanked me it is a longer relationship than with penelope. He did say you are the reason he has stuck around. I had to stick up to him with the bosses like something was wrong with this guy. I think it is brigette shes still here she is. Where was brigette 25 years ago . That went like, snap like the 82 years all right when we come back, well talk about the slide in apple and amazon cara swisher is next plus the ceo of cargil, plus ceos of gilead and moderna thats next. Business as usual. Thats why working together is more important than ever. At t is committed to keeping you connected. So you can keep your patients cared for. Your customers served. Your students inspired. And your employees closer than ever. Our network is resilient. Our people are strong. Our job is to keep your business connected. Its what weve always done. Its what well always do. Good morning welcome back to squawk box. Take a look at u. S. Equity futures. We are in the red. The dow will open down about 421 points the s p down about 55 points and the nasdaq down about 208 points apple and amazon reporting yesterday. The main focus on the calls was the ongoing coronavirus pandemic joining us now for her big tech take aways kara swisher, Just Announced is launching a podcast with the new york times, also a cnbc distribucontributor. And wherever she is, it must be sunny. You are lucky im here, andrew jeff bezos says to his shareholders that, you may want to take a seat the Company Plans to take the 4 billion it was going to make and reinvest it in the business mostly in the form of really trying to make the pandemic better to the extent you can secure ppes and testing for employees. A big deal there the question is, how should investors feel about that, how should the public feel about that welcome to jeff bezos you and i have covered him for a long time. He thinks this is the best thing. His weakness is dealing with workers. That is something that has gone on for a while before this and may go on after this they have to consider the surge in revenue i imagine that bezos that is apparently quite running the company after having step add way. Hes saying, we are going to take advantage of the gains we are getting during the crisis. Of all the companies, amazon is the one, i hate to say it, will benefit the most and get people on to prime and everything else. This is what he does he doesnt think much about returning money to investors as apple does you said you hate to say this because you dont love the idea of market dominance. No. Who does i wonder if there will be a shifting perception of amazon and the tech backlash given the role some of these Companies Like amazon are playing during the crisis does that change the political winds at all i wrote about it today. I still dont like it. It wasnt right before this happened and isnt right after i dont know what change we have to allow one or two companies dominate and not allow as much innovation you saw last week around amazon, a lot of noise out of washington and bills about consolidation and everything else. The combination of this financial mite that companies have that they have the ability to withstand this as everybody comes out and is limping, theyll be running down the highway. You have to think about things before this and not necessarily change them going forward. Can i push back on one thing, i typically dont like dominance either but, a, they are providing a service and a service most other companies are incapable of providing in part because they dont have the size and scale. In a situation like this, you have to look to the giant. Even walmart isnt as robust and have the same type of ability to get to people. It made me actually try to rethink some of these issues rethink what . That you want one company to dominate everything and when everything is open, there arent enough to continue im a competition person amazon has been astonishing innovative compared to other companies. Just like we dont like microsoft dominating or google dominating search. Go back to at t, standard oil, it is not good for one oil company to own everything. It doesnt change because of the pandemic the reason they are really good is because they are dominating post this when we are trying to recover. The inclination will be to let them be giant. Let them all be giant. The implications down the road are not good for innovative startups definitely not for the marketplace and the creation of companies. I just dont see it. What is the swisher hot take on apple you know go ahead. No. Go ahead i think it is maintenance i whaas going to ask you they are doing a good job but what amazon is doing is better china is looking better. Services is looking better i just interviewed dallas about his new book, he called apple a company of confinement i dont necessarily agree. Is there another company out there you think is being more innovative right now i think netflix talk about preparing for something and having the goods when something happened. Their products are great i just did an interview with ryan murphy who they did a big deal with. Netflix to me is a fascinating company. Final question, you have a great blur going on behind you, is that zoom blur or teams blur . S it is skype blur. It is just a blur. It is my closet. My cleaning closet next time ill leave that on, it is beautiful kara, thank you for waking up early with us. Look out for that column today we are moments away from a rare interview with the ceo of cargill about the worlds food supply remember, you can watch or listen to us any time on the cnbc app as we go to break, a look at some of the states that are reopening across america well be right back. Every Financial Plan needs a cfp® professional confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Welcome back u. S. Equity futures this hour are under some pressure. This is the first day of may we saw a very strong month of april. You saw a rebound better than 30 for the s p and for the dow the biggest climb in the five or six weeks ahead of that. You are looking at the dow down about 437 points s p down 57. When we come back, well have a rare interview with the ceo of cargill. Well tell you what you can expect and what he sees happening as things potentially nt yback to normal or ifou wa to call it the new normal all of that to talk about coming up next. Welcome back, everybody. Chevron out with its earnings. The company is talking about earning 1. 93 a share. Something like 240 million for up stroo upstream assets in the philippines. Coming in better than expected 31. 5 billion versus the 29. 38 billion estimated they are talking about how they are going to cut cap ex spending for 2020 even further. You may remember the company came out saying they were cutting the cap ex saying they are further increasing guidance down to 14 billion. They also say they estimate 2020 operating cost will be cut by a billion dollars. They are doing these extraordinary moves to try to make sure they defended dividend yield. Yesterday was 5. 6 based on the Closing Price yesterday. They told us at the time back on march 24 that they would try to defend the dividend. They are taking additional steps to do that today we will have Michael Wirth, the ceo of chevron joining us in about 15 minutes well talk to him about the extraordinary moves the company is taking. In the meantime, a warning earlier this week from a major meat producer. Tyson saying the Food Supply Chain is broken. Across the nation, meat packing plants have closed, fallen President Trump also invoking the defense production act to secure meat production joining us to talk more about this is the ceo of one of north miracle americas largest Food Producer David Cargill joins us we appreciate your time. Great to see you. Thanks for having me. Good to see you too. Lets talk about whats happening and what youre seeing you think the Food Supply Chain is broken . I would characterize it differently. I think the food system is under strain but its incredibly resilient. Its been well documented there are a number of meat producing plants around the country closed due to illness weve been fortunate none of our plants are closed today. We had one plant closed for about probably 17 days its back up and running thats the good news weve got another plant in dan that we expect to have back up and running on monday, but i think the food system is resilient. Particularly the workers, the people in the plant on the front lines are very resilient and very courageous to be doing what theyre doing to feed the country. Do you think the president had to do what he had to do to keep these plants open i think every little bit helps. It allows prioritization for ppe to get to the plant workers, masks, testing equipment and it consolidates Decision Making authority. What you were seeing in meat packing plants around the country was local authorities wanting to intervene and wanting to protect their local populations, which is very understandable it consolidates Decision Making authority and delegates it to the secretary of agriculture, and every little bit helps, yes. Why there have been so many outbreaks at the plants . It wouldnt have been a place i would have thought of ahead of time can you understand nursing homes, hospitals, why are meat packing plants a place where weve seen so many infections . They have large employee populations. A typical shift at say a pork or beef or poultry packing plant might have 800 to 1,000 workers or more on a given shift they typically are close it oftentimes is challenging th to have six feet. Thats one of the things to make sure that they have ppe, weve been putting shields on the line to give them more protection, giving everybody masks the basic reason is if high population working in relatively close proximity to keep the production of meat going you know, we have all been trying to figure out when the economy is going to open up and what that new economy is going to look like will people go to restaurants, ordering as much from Grocery Stores you had interesting thoughts on what happens because the food that is produced for restaurants is very different. It follows different lines from the food that is produced for groceries for customer consumption and weve seen that kind of play out in toilet paper. There hasnt been enough to go around because so much used to be manufactured for schools or offices. Thats different from the stuff you buy on the shelves what do you think is going to happen as we start to emerge well, for sure as you said theres been a shift from consumption of food and food service at restaurants, quick serve restaurants into retail. I went to my local Grocery Store and there was plenty in terms of beef and meat, but there was no soup so i think youre going to see some spot shortages of different products in retail, but to your point, i also think that the Food Service Industry is resilient. People are learning how to do either takeout or Curbside Pickup or Home Delivery and we are seeing some rebound in food service volumes. The point that you made, its a different way to eat the food is prepared differently. But i suspect coming out of this, youll unfortunately see a lot of small restaurants, small locally owned restaurants, one in minneapolis that has announced they will not be reopening. Youll see some restaurants that will never open back up again. As a result are you changing the way that you set up your production lines are you making more for the stuff that will go to the Grocery Store versus to retailers from here on out we will have to do that we have reduced capacity dedicated making food for food service. We produce cooked and value added eggs for the Food Service Industry we did take down capacity in a couple of those plants or several of them three or four weeks ago. Again, the good news is we have a couple of those facilities that we have started to ramp up production i think restaurants, food service are getting used to the new way of consumption the new way of delivery. So are consumers so to my point about resilience, i think the countrys resilient. I think the food system, the food supply is resilient were already seeing signs of that david, how do you plan in terms of production on your lines when were not entirely sure whats going to happen, no company is, thats why so many have removed guidance in any of these Public Companies whats been the biggest challenge to deal with that to figure out staffing, to figure out how much product youre going to be dealing with and how you get that shipped becky, i think the most important thing is to focus on the safety, not only the physical safety but the Emotional Wellbeing of our employees. Ultimately the bottleneck in the meat supply has been around having the employees, having the workers feeling confident, feeling safe and obviously being healthy. Again, having the getting quickly to giving them ppe, to getting temperature testing at the front door when theyre coming in, the facility that i mentioned that we had to close, we had to close because of one of the functions in Quality Assurance that it so happened that the people that were in that particular function, they were all ill with covid and had stopped coming into the plant. So i think its not only a function of having the right people there, the people perf m performing all of the functions. The usda people are in the facilities i had asked secretary purdue ensure that the inspectors were there. Theyve been there i think by focusing on the emotional and physical wellbeing of your employees and your plant workers, thats how you keep the system running. Unfortunately its been challenging with some of the facilities having to close as i mentioned, were seeing them come back online again. David, want to thank you very much for your time today we really appreciate t. Its good to see you. Good to see you, becky. Thanks for having us on. Take care andrew . Okay great conversation two big hours ahead. Coming up, another huge hour starting with chevron ceo mike wirth on the companys cuts to Capital Spending well talk about the price of oil. Plus, important interviews with the ceos of gilead and u nwaa. Yodot nt to miss it. Well be back right after this big numbers from big oil we heard from chevron. Exxon mobil is next. Well be speaking with Michael Wirth about what he is telling markets today. That is a first on cnbc interview. Futures indicating a sharp drop in stocks after the best month in 33 years. A breakdown of what to watch is straight ahead. Two Biotech Companies with hopes of beating covid19. We will hear from the ceos of moderna and gilead second hour of squawk box begins right now good morning and welcome back to squawk box right here on cnbc. Im Andrew Ross Sorkin along with becky quick and joe kernen. Take a look at u. S. Equity futures on this friday morning we are in the red. Dow looks like it will come down about 450 points s p 500 off 58 points and nasdaq looking to open down about 316 points, joe. I dont know about our bet. 2850. Im worried that so many im giving you im so worried. Im giving you a little bit of cushion, too, because i think the s p is indicated 2847 so youre already winning youre already winning in terms of the theme no, honestly, andrew im getting a lot of people writing in on twitter. I mentioned jesse livermores book from the 1920s where he makes that point that its just so easy to see whats right in front of your nose that usually doesnt work with and i dont know whats im telling you what i would feel i would sell in may. I dont see how things could fundamentally warrant being back where we were at 2950. I dont see how its possible. I like the exercise, joe. I like the exercise see what happens. Yeah. I mean, i hope that youre right. I dont know that id jump on board with you but i hope youre right. What do you want . You said you were going to get me a dog dont try to weasel out of it. A hypoallergenic dog. Yeah. Andrew gets a dozen donuts. You want the kind that are really degreesy from around here or do you want Dunkin Dunkin 12 glazed dunkin donuts. I want a box o tacos. I want taco bell. You guys have to eat the whole thing during the show, whoever wins. Ive done that. I can do that. You need to stick around after we eat it. Anyway, a couple of no. A couple of big tech moves this morning apple reported better than expected profit and revenue but due to the pandemic, it declined to provide sales guidance. That is the first time its happened in 17 years amazon seeing a surge in online sales and in its cloud because as people remain stuck at home but its the outlook that are hurting the shares this morning. Down almost 6 to 2,335. The Company Plans to spend all of its Second Quarter profits, some 4 million. On its response to the covid19 pandemic beck bring all right, joe. Thank you. Chevron just out with quarterly numbers. Revenue came in quite a bit better than expected the company did announce a number of big changes including a big cut in Capital Spending. Joining us is chevron ceo Michael Wirth. Thank you for being with us today. Youre welcome, becky its good to be with you today. I dont even know on the bottom line how that 1. 93 a share matches up to the streets estimates of 68 cents. I know there were a bunch of missing pieces revenue came in 31. 5 billion versus the 29. 3 billion the street was looking for you are taking significant steps to saying you are going to cut capex and protect the dividend. Why is that . Becky, first of all, our thoughts continue to be with those affected by this virus and also with all the workers out there on the front line keeping people safe and providing for, including those from our company and many, many others. We had a solid quarter in the First Quarter, but the situation certainly is difficult in our industry for everyone, so, look, were in a different place than many others. We were prepared to execute. Our financial priorities have not changed. The dividend remains strong and safe and we know what to do and were doing it, and that includes taking some additional prudent actions to further reduce Capital Expenditures and operating expenditures in response to the environment we see. Michael, obviously in april crude oil prices came under extreme pressure ive never seen anything like it have you ever seen anything like that no. That certainly was a very challenging month, as i think we really have seen demand in places weve never seen before and the market reflects that and supply has been slower to respond to that. So prices reflect the real dramatic impact of the slowdown and in fact shutdown of economies around the world as we fight the virus. So praiicing responded very quickly. As we begin to see things move forward and economies begin to pick up again, demand will gradually return i mean, were looking at the june contract for wti. Trading above 18. 80 and that is a long way back from where we saw the may contract as it was starting to expire and close out. What were you thinking as we watched the may contract go negative people were paying people to take oil from them what did that mean for you well, we know that because demand is off so much that production needs to find a place to be stored if it cant make its way into refineries, not into the marketplace in the Financial Markets these contracts close each month and theres an obligation to take product if we hold a contract, and without a place to physically store the oil, i think you had some people who were caught in a position where they couldnt actually accept delivery and they had to get out of these positions and eventually ended up paying for that our company is a big player obviously in physical markets, not so much in the paper markets. So those two had become somewhat disconnected here with these unusual conditions sort of watch that very closely because the physical market can price off of the paper market. Were not actually a big play zwlerp certainly a never before seen state but its supply is and demand in the marketplace today. Youre one of several companies, i believe, thats leasing space in the Nations Strategic Petroleum reserve. Why are you doing that what does that give you in terms of flexibility well, it certainly gives us some Operational Flexibility as these markets try to find a bottom and recover, and producers are looking for places to temporarily store their oil normally the government buys oil to put into the reserve, and in this case because the money hasnt been appropriated they choose to lease space out to a number of players. As an operational manner, we have production, refining, marketing. We have Storage Capacity along the value chain and an opportunity here to take some storage for a period of time allows us the Operational Flexibility to manage the logistics in our business through this period. Michael, the steps that youre taking today, including cutting capex by another 2 billiondown to 14 billion, is that something youre doing because you have to based on the moves we saw in the lastmonth, which all came after the First Quarter ended or is that something youre taking in case things get worse from here well, we were prepared. You know, the playbook to respond to a situation like this in our industry isnt really a secret what matters is how you execute. So weve already taken strong moves on Capital Spending announcing today another 2 billion reduction so thats 30 or 6 billion off of our original budget. Well actually end the year at a spending rate thats about 8 billion below. So 40 reduction stock share buy backs of 5 billion per year we offered a billion this year and a billion next year. Weve been able to close almost 2 billion of asset sales even in this environment. In a low price situation in a commodity business, revenues dropped much faster than costs adjust and so its important to have a strong Balance Sheet and its important to be able to take the moves and conserve cash through this period of time. We came into this with the strongest Balance Sheet in our industry and have moved quickly and decisively to protect that Balance Sheet which allows us to protect the dividend to our shareholders. By cutting operational costs by a billion dollars, what does that mean in terms of jobs will that impact people who are on the job today or does that mean you wont be hiring people to do additional drilling that you may have planned before these changes took place well, in the short term what it means is weve obviously reduced travel weve reduced a lot of Discretionary Spending we have fewer activities and have constrained a lot of different activities so Third Party Spending on suppliers is down before this began we had announced the intention to further improved returns and become more of that. That work was important before we entered this time its important how to be efficient. There is likely to be some impact to Staffing Levels and work force that was work that had begun even before the coronavirus. Michael, the Trump Administration has said that chevron has to wind down its operations in venezuela by the end of december. I think youre the last ones operating from there from this country at least what does that mean for you . Venezuela has been under sanctions now for sometime, th country, and certainly individuals. We have been in venezuela for the better part of the last 100 years. The Treasury Department has issued repeated 90 day licenses that allow us to remain in the country. We dont actually operate any assets in venezuela. Were a partner in two operations operate the by a different company. We support it with engineering, maintenance and that type of activity and in the past had lifted crude oil in parts to fund the operations of these two ventures the licenses have gradually restrained the types of activities that we can do as a part ner in these ventures the most recent license runs longer than 90 days. It asks us to wind down certain additional activities that weve been previously allowed to do. It doesnt actually require us to reach it, it restricts activities for smaller things. So we intend to comply, obviously, with the requirements of the government, but were not actually winding down or leaving the country. Were winding down certain activities and still able to pay our people, support communities. Its very, very important in this and hopefully preserve it for businesses so were prepared to go forward. Michael, as a Global Company you have a pretty good idea how things are operating in different parts of the world were kind of waiting to see what happens as our Company Opens up again potentially at least in some states to get back to business. What have you seen in terms of demand for the rest of the world . Chinas ahead of us, europe is ahead of us. I guess i just wonder, do you think weve seen the worst of it do you think its going to get easier monitoring shipments of oil from around the globe whats your best take . Yeah. Certainly this quarter looks like in our industry were seeing a bottom, and, you know, demand for this quarter being Second Quarter. This quarter being Second Quarter, thats correct. First quarter we were on a bit of a downward trajectory certainly accelerating as we went through march i think in april and may were finding a bottom in demand jet demand for aviation use is off 75 to 80 . Some places deeper gasoline demand, plus or minus 50 off. Diesel, 25 off. Those numbers are relatively consistent in most regions around the world what were seeing hear in the last few days and call it a week, week and a half, is things seemed to have bottomed and leveled. In certain areas weve seen a bit of an uptick off of these very low levels. I think were still in a place where governments are trying to understand how to allow their economies to resume. Everybody is at a different place. Plus or minus, i think, through this quarter were probably going to see things at a level space and beginning to return. Certainly the data would suggest were beginning to see that, but its going to be a very, very tough quarter. Michael, thank you for your time we really appreciate t. Thank you for coming on with us. Becky, thank you. Always good to be with you good to see you andrew when we return, were going to talk to lynn forester derothschild. And well speak to the ceos of moderna and gilead. As we head to a break, lets get a check on the markets squawk box returns right after this there are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Featuring the Emmy Awardwinning voice remote. Access to your favorite apps, including netflix, prime video, youtube and hulu. 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To their community and to the planet davos was all about stakeholder capitalism and so we have a move among corporate that this is morning, however, from an investors point of view, unless the metrics about how a company is taking care of its people and planet are standardized and assurable, you really cant invest properly. You cant really be an employee who understands the difference between employee treatment at the Different Companies in the same industry and as a consumer you dont really know. So what im arguing for is lets get standardized metrics that are material and are not overly costly to companies because right now trying to do this on a voluntary basis, and we have Great Companies in this country who truly are taking care of their people and their planet, but they put out glossy reports and theres happy talk its very difficult to sort out the best and create a real race to the top, not only on Financial Measures which are, of course, important, but also on these nonFinancial Measures so im arguing that government should create a body to create these metrics. They wont be perfect but theyll be something lynn, let me ask you this though in this environment given the challenges of the economy, and we talk to a lot of investors. Is esg more important or less important, a lot of investors say its more important or as important than ever. However, you then think about the Balance Sheet and you think of the deltas of the world who have committed to spend 100 million a year on climate and Carbon Offsets you think about microsoft and the plans that they have can we really expect companies in this environment to actually follow through with some of these proposals, not because they were disingenuous proposals but because the world has changed and made it that much more complicated and difficult if the real goal was to help employees, as you know, i want to help the climate, too, you have to start to think about where youre going to allocate your resources. Of course thats true and that decision is different for Different Companies in Different Industries its different for tech than it is for retail, for instance. But the point is that we went into this with an inequality where the top 1 10 of 1 of americans own 23 of our wealth, thats 160,000 americans who own wealth that is the equivalent to 290 people in america. If we get out of this with people employed, that is not an environment that is safe for businesses so of course you have to make decisions and you have to be proportionate among all of your stakeholders, not only your employers but obviously also your shareholders. If any board is not thinking about the risk of Something Like occupy wall street times 1,000, if we dont begin to give the public real true understanding that our best companies are the ones that are taking care of their workers and their customers and their planet, and thank god there are a lot of them that are doing it. Andrew, did you ask about Climate Change and Carbon Offsets. I guess it is interchangeable to a lot in esg you just answered that entire question based on income and equality. The climate issue, i agree, joe, that is another one that is very important for the long term that is the one andrew asked you about. You are able to so fascile go back and forth with esg people, to me it just sounds like any of the virtues signaling things it doesnt even matter which question that someone asks you, you go just as easily between Climate Change and income inequality. I dont know i just thought it was funny, he asked you specifically about Carbon Offsets and we came back that were going to have occupy wall street. Joe, ill take it go ahead. I just didnt understand it i thought andrew was doing really well because i dont know how with oil down where it is right now and we just want people employed and we want people, you know, to be able to get a paycheck and we want our company to be competitive globally, so its going to be hard to make that transition to much more extensive, renewable type energies at 20 oil it doesnt seem like the time i know all the climate people say a good crisis, this is the time to see what it would be like if everyone stayed home for the climate. Doesnt seem to be a time to think about that and we want to get people back to work and energy needs to be as cheap as it possibly can. Okay. Thats a shortterm view, and in the long term we have to protect our planet and i do think we have to deal, frankly, with the inequality problem and the climate problem concurrently its complicated and a lot of businesses that are in alter alternatives are some of the most innovative in the world and they are going to provide energy that is clean because it is an existential threat over the long term so we understand that. Before we let you go, one question you talked about what may happen on the other side of this pandemic im curious how you think this is going to change business, dare i say capitalism, taxes, all of it in an environment right now where clearly there are at least questions about whether there is a free market given the government has come to rescue not just here in the United States but around the world. You could argue this is corporate welfare at the moment. The question is, you know, how you think that changes the conversation after. I think it changes capitalism forever, just like leon cooper man said on your show last week. When government is called upon to protect on the down side, it has a right to regulate on the up side. I dont think its a winning argument to use neoliberal arguments against regulation when we are putting trillions and trillions of public money into the private market. I think we have to reform capitalism, and its the same thing that happened after the depression capitalism changed and it, therefore, saved capitalism, but when we have the private sector getting trillions of dollars, it can expect government to regulate for those 290 people Million People lynn, great op ed go out and read it thank you for joining us this morning. Appreciate it very, very much. Thank you thank you becky, over to you. Andrew, thanks. When we come back, hopeful signs in the battle against the coronavirus. Gileads remdesivir drug showing hope this week the company is ramping up production and the ceo will be joining us take a look at the futures on this first trading day of may. April was a huge one for the markets. The s p is pointing down 65. Well be right back. Time now for todays aflac trivia question. What day did the dow first close above 25,000 xonnun bcsqwkcn ua bo cties w smaller bills. 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 dont forget the Berkshire Hathaway meeting is this saturday they can email questions to berkshirequestions cnbc. Com well be asking hours of questions to warren buffet and greg able. There will only be warren and greg on stage. That will stream on yahoo live. Well stream it at 6 a. M. Monday morning. Well get all of those questions and answers coming up. Joe . Look forward to that, becky coming up, exxon set to post quarterly results. The numbers in the analysis next and then two of the major players, two really some of the most major, first modernas ceo. Its the coronavirus first modernas ceo and the companys plan to ramp up vaccine production and gileads ceo daniel oday on the remdesir stay tuned squawk box will be right back. The two companies are teaming up to find a large scale cure for covid19. It will be great to scale this up the way that you do it, platform, using messenger rna to generate an immune response has a lot of advantages. It scales up quickly first tell us about the numbers you think that you could deliver you are talking about a billion doz doses with Vaccine Development with lanza. Yes, good morning, joe. Thank you for having me back im very pleased to announce this morning, if you think about it, were trying to do three things we are trying to get a vaccine as fast as we can. It will be announced on monday of this week its a phase 2 study with the u. S. D. A. And start dosing as we get the green light. And the third thing is manufacturing. If you only can make a few million viles, its not going to be helping the Global Public health issue we have we have a plan for messenger cells and we have said that these plans can do up to 100 million doses per year, and this is, of course, great but its not enough we asked ourselves how can we do 10x. We have the best contract manufacturers in the world in the space lan zwas tza was the partner. Its 100 plus year company they have sites around the world in the u. S. , switzerland and singapore. Many more countries. Were able to move very quickly. We have announced were transferring the process to New Hampshire in the u. S were hoping to start making product as early as july. Stephane, we want to make sure the vaccine has the desired effect and immunizes people. There are a lot of competition with this. We heard from Oxford University, were hearing from pfizer as well with your technology, its kind of interesting and i look more closely at it. With an rafael nadal virus, you have a big advantage because you dont need 1,000 times the dose to get into the nucleus to have it expressed its 1 1000. My question is do you put in the entire genome of the coronavirus and then some of it is expressed into protein which is where you get the antigenic response, thats how it works. Why is it that putting in the whole genome can create an actual virus why doesnt it actually cause you have coronavirus . Why is it attenuated which is what we normally need to do. In the case, this is not attenuated what we do is we give the messenger rna that instructs only one protein, the spike protein. We do not give the entire genome we give you the instruction of that protein of a virus. The full thing but no more what it does when you inject it into a muscle, you have human cells with the messenger rna and the immune response being very powerful. I understand. Thats very good its a protein that is essential. One of the i dont know how not that many made. Very small genome. Its a protein essential for the coronavirus to work. Yes. Go ahead. Sorry its the protein that allows the virus to get into the cell so by being able to have an antibody that your immune system makes to bind to the virus, we anticipate that will prevent the disease. Meg, this has worked in other rna viruses, i think theres a proof of efficacy, i think. Its been done before. You go ahead with stephane, but should we be highly hopeful this is effective, this vaccine, meg . Well, it is a new technology and has never been brought to market before but moderna has showed in other viruses promising earlier results. Stephane, i want to ask you more about the manufacturing youre doing with lonza they are manufacturing in the u. S. And switzerland how important is it where the manufacturing is done to which countries will receive the supply what kinds of pressure are you getting for different governments around the world to be sure you can supply vaccine to them . Yes, good morning, meg. As you can appreciate, every government is very worried for its health and economy were working in collaboration with many governments around the world. Phase one in the u. S we have manufacturing sites that moderna owns and controls in the Central States up and running. New hampshire is going to be next in the u. S. We think its the importance where many nodes of manufacturing around the world where we can provide as many as we can locally in each geography. Thats what the governments looking for. So you mentioned that lonza will be doing it in the u. S. And switzerla switzerland. Are you planning on supplying this in asia our goal is to make it available around the world we intend to do as many cycles as makes sense we want to make sure not to do too many locations because of the know how and the race against this virus and so we will work very closely with the governments and lonzas management and manufacturing to get the best use of sites. Reporter tell us sorry, joe. No, go ahead, meg. Reporter stephane, i wanted to ask you about the phase 2 study you filed for approval to begin with the fda youre ready to start dosing to get the green light. When are we going to get the results of phase 1 trying to do this on top of each other in an expedited time line. What have you seen about the phase 1 and when will we get to see the whole results . We are starting the phase 2 based on safety of phase 1 as weve communicated two weeks ago when we got it from barda, the phase one is fully enrolled. Three different dose level 45 subjects in seattle fully enrolled what we announced two weeks ago now, we have added 6 new cohorts to phase 1 healthy adults, elderly, 70 and above. The same dose level tried in healthy adults 18 to 55 years old. So as you can see from that, it seems that the safety first data looks positive its not a surprise to us. As you know, meg, we have a platform we use the same chemical in all of the nine vaccines we have in clinical studies up to completed phase 2 in the past. So, one, we always want to be careful about safety, especially for vaccine thats unique for Healthy People it has never been something we have worried about very careful on the efficacy side, like any vaccine, we should be able to roll out phase 1 to get very good indication of whether the vaccine will be likely to work we take blood from the volunteers in that study, analyze that blood to see if we can make neutralizing antibodies to bind to a virus to prevent rope pli case. That will be important and that should be out soon. Thank you, meg and stephane well have gilead on i would ask you. You know the technology of pfizer, oxford and others. Do you think theres an advantage in efficacy or the ease of production for modernas version . Its interesting to watch this race because its a race to really try to save the world we wish all of you god speed do you think you have an advantage in both efficacy and manufacturing, stephane . Yes like you, joe, i want many vaccines to get to the finish line no one company can help the entire planet. Many of us need to get there i think its extremely interesting. It mimics the virus without giving you the virus the scale is impressive. I think its interesting technology. Thank you, stephane we hope to see you soon. Thank you, again, meg. Well see you with gilead. Becky . Joe, exxon out with results the Current Quarter results on this company is not going to be as closely watched they came in with a loss of 14 cents a share. Street was looking for them to earn nothing, flat, flat, flat all the way across that loss of 14 cents include charges that total up to 67 cents for a noncash valuation for lower Commodity Prices and asset impairments. If you strip that out, its a gain of 53 cents again, i dont know where the street comes down on this or if that matters the bigger news coming out of the company today is they are cutting capex by 33 . They are cutting their cash operating by 15 earlier in the week we learned that exxon would be maintaining its dividend of 87 cents a share. This is a playbook we heard it from chef rorch vroo Michael Wirth. Andrew thanks, becky when we return, the ceo of Gilead Sciences is goi tjongo in us to talk all about it. Stay tuned were back after this. Gilead, maker of experimental coronavirus remdesivir it spent 50 million on remdesivir research and development focusing on making the drug accessible. Joining us is daniel oday and meg tirrell stays with us. Mr. Oday, thank you for being with us this morning youve seen instances where the entire stock market surges based on news that comes out about this drug, remdesivir. The importance i dont think can be overstated. Can you tell us what will happen this week why that is significant . As you pointed out, it hit its primary end point and it did it on the shorter trial, which doubles the amount that you have ready to go. Both of those things have been important . Yeah, very important, joe first of all, thanks on behalf of all of the colleagues at gilead that have been working day and night, this is an important week for us to see the two study results. So there are basically two studies that were announced this week as a result of those, one was the Gold Standard placebo controlled trial from the nih that was part of our suite of studies to determine whether remdesivir would be effective for the covid19 virus and the second is the study of five and ten days of dosing both read out positive what that means is remdesivir significantly reduces the Recovery Time for patients, again in the hospitalized setting were talking about, and then many patients in the hospital can benefit from a five to tenday dosing course its obviously a benefit for patients but also for the Health Care System because if you can free up hospital beds at this time, thats absolutely fundamental. Were just humbled and pleased by the results this week as a starting point for therapies in covid19 as a starting point, and thats something thats been pointed out on our own, dr. Scott gottleib has pointed it out. Its active against the virus. Is it going to be similar in the view to what some of the other viruses thats been tested, whether its sars, mers, even ebola where it did show activity but maybe an antibody drug in conjunction with it would actually be more powerful in dealing with the disease do you expect it to be one arrow in an arsenal of therapeutics or much better than that . Well, i mean, were hopeful i think these are really significant results on their own, i would say were not done yet we have trials that will read out in more moderate patients in may to determine whether we can have an impact even earlier in the disease coursefor hospitalized patients. As you say now, the nih and we were pivoting to know new clinical ideas in terms of anti virals being one way to treat this disease could it be supplemented and complimented by different mechanisms being used beside that we have a playbook in antivirals that shows that oftentimes combinations of medicines is exactly what one needs to take the next step in terms of treatments were going to be focused on both of those things expanding the use of remdesivir and through different formulations and looking at how remdesivir might be able to be complimented by other medicines. Earlier might work since its not attacking the problem of the late stage patients with the cytokine storm if it was given earlier, it might work better than what youve seen with some of the more the diseases that have already progressed more in people. Well, thats right, joe i think, you know, its you know, maybe its a little bit of a surprise to us that this medicine also worked quite well late in the disease course as well right so, you know, many of these patients in the nih trial were on mechanical ventilation. Maybe 30 . Those are the most severe patients interestingly remdesivir had an effect weve seen the totality of the data of course well see that data being broken out by subgroups in the coming weeks, im sure the point is, yes, one would think that it might also work even better earlier in the disease, but i think the surprise is that it also works late in the disease. I think thats something that is has a big impact for patients, of course, with so many hospitalized patients in such great need. Meg reporter thanks, joe hi, dan. You mentioned that two studies hi, meg. Reporter hi. There was of course the third one from china, the incomplete trial where they couldnt finish the enrollment because case numbers were declining the full report in the lancet this week. A lot of groups are focused on that even though the trials werent finished and it wasnt a positive study one thing analysts show is that it doesnt appear the drug was effective in the viral load. How are you interpreting that and putting them into the full context of what remdesivir has thanks, meg i know there has been some confusion out there. I hope i can clear it up a little bit frmpt our perspective, we see tremendous consistency across all of the data weve seen so far in remdesivir that has data from our compassionate use programs and data from the inconclusive china trial. If you like the validated data, the most important from two randomized trials this week which really trumps that other data earlier on. Just to make sure we set the record straight on this as well. Wcould you use awq it was halfway recruited when the disease in china was contained great news for patients. The result of that is you have an inconclusive trial. You cant make interpretations for that trial when one looks into the trial, you saw some of the same trends that you saw in the nih trial. So you saw around an early but inconclusive 23 improvement in patients time to recovery, whereas, the nih we saw a validated statistical improvement of 38 i do think one has to turn their attention to the trials that did complete and that did have the full patient dose. Now to your point on the antiviral component of this, were still theres still so much about this disease were still learning and whats clear in some other work weve done with the nih, the sampling of the virus activity may not be the best predictor of clinical outcome. In other words, sampling, you know, the virus nose and nasal pharyngeal pathways may not be indicative of whats going on in the lungs. I think we have to learn about this disease and in any case the most important thing is are patients Getting Better . And patients are Getting Better with remdesivir in this hospitalized, very serious situation. Thats what were focused on and were focused on building on that early convincing data right as you build on the data, you are also undertaking a massive effort to increase supply of this medicine, something you began months ago even before knowing how well it worked in this disease very complex drug to manufacturing and takes a long time we understand that your scientists have already been able to shorten those time lines. There was a note from rbc out suggesting that by their modeling gilead will only be able to supply enough to cover u. S. Patients with covid19. How are you looking a the the ability to supply the globe with this drug and what kinds of pressures are you already feeling from governance . Let me first of all acknowledge the tremendous work of the scientists at gilead. Its only been three months since we kind of became aware of this virus, and we immediately pivoted our attention to the Clinical Trial work and to the manufacturing supply work. Completely understanding we didnt know if the medicine worked but if it did work, we would need a lot of supply and so what our scientists did, actually, in the past three months is took, as you mentioned, a very exacting comprehensive chemical process that is 20 to 30 steps, much of it has to be done sequentially and not in parallel, they took it from a 12month start to finish time and brought it down to a sixmonth start to finish time that has allowed us to have exponential growth because we took the actions already in january. So we are focused on making sure on a global basis that this medicine gets into the patients that need it and were focused on how best to allocate the medicine, you know, in these days than how to convert that to an allocation where we have more supply. The supply we have in our hands, the 1. 5 million viles of remdesivir which equates to around 100 to 200,000 patient courses depending whether its a 5 or 10day treatment, we will completely donate. We didnt want anything to get in the way of it getting into the hands of the patient that donation is a global donation we will work with countries and Health Care Systems around the world as they make this medicine available to their citizens based upon their regulatory requirements to do our best to make sure we can allocate that accordingly. Then come up with the right plan for how we then move from these hundreds of thousands of treatment doses to millions of treatment doses. But this is a global pandemic. Its a global problem and we understand our responsibility here and i know youve said its too early to say where youre thinking about pricing this after that initial donation. You told analysts on your Conference Call last night theres no playbook for this weve never seen anything like this in the history of our existence or lives on this planet but you are investing up to 1 billion in the trials and your stock was downgraded by three different analysts based on the lack of visibility of revenue into remdesivir. How do you as the ceo of this huge publicly traded company trying to serve the world the first drug that works for the pandemic, how do you balance the pressures from wall street and providing this drug in a pandemic meg, you know, its a very natural thing at gilead for us to be able to focus on access and affordability and making sure that patients in both the developed and developing world and finding creative ways to get this medicine to patients. If you look at the history of this country with hiv when they took different approaches to get the hiv medicine to the developing world, those are the same lessons well put to work as we think about the right, sustainable model to make sure that we can both invest in the future manufacturing and the Additional Research that needs to go along with determining whether this medicine can get to different patients, perhaps different formulations that can allow us to go earlier into other parts of the world, easier we understand a responsibility both to patients and also to shareholders and well be balancing that its early days, right i mean, its been three days since weve gotten theClinical Trial results. We need to digest those. We need to understand what patient poch populations this s going to serve we need to understand the regulatory processes around the world and where will this go and the patients treated with this those are very, very important inputs to determining the model that we will move going forward. So i can tell you we take our responsibility very serious towards patients and we understand our responsibility as a company as well and to our shareholders we will deliver that answer and that information as we can process this information so we can find the best way forward, i assure you. Daniel, as you know, the world looks at a drug like this. You saw how the stock market reacted the day that the report came out as a new sense of confidence, this idea that people will feel more comfortable hopefully in the future knowing that if they were to get this that they may be able to get protected or at least not have some of the dire consequences that we know so well about currently this hasnt been used in a hospital setting. Youve also made this reference to other formulations, and i was hoping you could speak to that, whether this could ever be in a pill form. Weve heard maybe it could be put in an inhaler form and how quickly you think any of that kind of work can get done because to the extent this can be done outside of a hospital setting, that would be that would be a material game changer even beyond the game changer that youve created already. Well, yeah, thank you were really focused on making sure that the iv dose, which is the dose and mechanism by which the Clinical Trials ran out this week, that we scale that up and that we get that focused and out to patients in need. But at the same time the same way our scientists back in january started thinking about manufacturing and increasing that supply, we also started to think about, you know, should this be effective, what are other ways we might be able to deliver this medicine to patients its still early days on that and we hope to have some information relatively soon, but because of the nature of this medicine, its not appropriate for a pill formulation because this is heavily metabolized in the liver which means that its not suitable for an oral dosage form to get the levels in the body that you need to suppress the virus. However, looking at subcutaneous formulations, looking at potentially inhaled formulations to get it right to the source of the massive viral replication in the lungs is something that were firmly focused on now. Again, gilead scientists are some of the best in the world at taking, you know, chemistry processes and determining the best way to move those formulations along and then our medical doctors find the best way to treat those we should have more information on that shortly, but i want to make sure that doesnt distract from what our really primary focus is right now, which is to ramp up the supply for the intravenous medicine, get that in hospitals around the world, make that available for patients that are in severe need at the tail end of their the process of the virus replication in their body hey, dan, i want to say thank you for taking your responsibility so severely and for agreeing to donate so much of this up front and making sure it will get to the right places. You are thinking about all of the right ways to do this. Weve never seen Something Like this where the globe gets shut down, countries everywhere dealing with fallout from that and i just think this might be a little different than what weve seen at other times with hiv or any other disease that has been taken on before. I know you have manufacturing and supply chains in different places i wonder if you can explain where that is, where you need these components from and whether any country has moved to try to say youre going to help us first well, thats a really important point,and weve already begun that process and we need to continue it that is weve learned lessons, by the way, you know, from other pan dem mix and outbreaks like with influenza, that its extremely important to make sure that you have a very robust supply chain with a lot of duplication in it, meaning that we have to think about having a supply chain thats global, that provides endtoend manufacturing in different parts of the world were working, of course, with lots of partners on this this isnt something that gilead does on its own. Were grateful to have relationships with high quality manufacturers and chemical and pharmaceutical manufacturers around the world as well as other regular Biopharma Companies that have stepped up and reached out and asked how they can help. Its been so impressive to see how the bio and Pharma Companies have done to see if theres anything they can do to help with this virus. Im very proud to be working with people doing everything from treatments to vaccines and dropping everything to get there. This is critically important for us, and we are scaling up that Global Supply chain right now. Its exactly what were going to need to be able to be successful to meet the demand of the patients around the world. Dab yeniel, has any country e forward and put the screws to you saying, you have to deal with our Country First and our people first we have a terrific relationship in the United States and i can only say the government officials have been bending over backwards from regulatory to supply to distribution here in the United States and around the world. Ive been amazing at the outpouring of obviously interest but also support so the types of discussions ive been having with individuals around the world are productive conversations, theyre conversations saying how can we help how can we expand the supply chain in our part of the world and, you know, really focused on patients, which i think is important. Those are the types of conversations im having these days daniel, just one quick followup given your that youre going to be donating this drug, at least in the beginning. What do you think should be the Business Model for all of the other Drug Companies out there that are working on these endeavo endeavors . Well, i think thats exactly the question that were asking ourselves. Meg mentioned it before. I think there is no playbook for this situation that were in today. I think this is the time for us all as an industry and especially gilead to do the right thing. The thing is to make sure we can get effective medications to patients we have to transition to a sustainable model that allows us to manufacture this successfully, allows us to make sure we can continue the investments. The reason that were so ready today is because of decades of investment i think thats really important to point out you know i mean, remdesivirs story started ten years ago. Gileads story starts decades ago in terms of antivirals this is not an issue of taking something off the chef, this is something where we had invested in the Science Behind emerging viruses, where we tested remdesivir in a variety of different viruses as they came along, and thankfully because of the broad antiviral nature of it, when we tested it against the coronavirus family, sars and mers, we saw strong activity of this in the lab, and then we saw it with covid19 so we were prepared for this but that preparation takes investment and it takes scientific know how and knowledge built up i do believe that a sustainable model for this is the reason were prepared today at gilead as an industry and thats something we have to factor into as we think about how to get these medicines to patients around the globe. Dan, as weve heard from a lot of your Peer Companies this week on the earnings Conference Calls, there is some hope from people in the trailer, it will reset your public image. As you talk about the new pricing models, do you think that there is going to be a resetting of how the industry thinks about pricing drugs in general as you do aim to regain the Publics Trust well, let me say, meg, too, you know, i cant be more proud to work in this industry i feel privileged to have worked in an industry that has made such a difference to patients, thats literally really cured different forms of cancer in the case of gilead cured hepatitis c and hepatitis c is now taken care of. I recognize and acknowledge the fact that from a public sentiment standpoint we have work to continue to do its a complex system around the globe in terms of access making sure that patients dont feel the burden of the prescriptions is something that we at gilead are very focused on working with Health Care Systems and governments to find ways for that to work i do believe this is a time to make sure we communicate the investment that we put into the these, the Access Programs and thoughtfully coming up with pricing models and reimbursement models that allow us to make sure these get in the hands of patients and also allow us to continue to invest in that type of research that produced remdesivir in the first place. Daniel, it could have a positive effect in other ways, too, in that some of the misguided kneejerk proposals we have about maybreying back price controlled drugs because they arent able to recop their investments. If they are able to recop it in a big way, maybe we would realize its better to recoup drugs than in hospitals in terms of our Health Care Needs we need the innovation, patent protection if companies spend 2 billion, weve protected that the Trump Administration seems to lose its way at times about what really makes sense but make sure we have innovation in the future well, i mean, joe, i just think its absolutely fundamental. This industry has produced such a benefit for patients but also for the Health Care System i mean, when you cure diseases when you turn diseases into chronic, manageable illnesses, you have a big impact upon the Health Care Systems and, you know, i think thats thats at the core of what we do at gilead i mean, our ability to focus on transformational medicines, to focus on the science, to disproportionately invest in research and development is exactly what its all about. Yes, you know, we have work to do with policy makers around the globe to remind them of the nature of how that works the fact that 90 of everything that we take to human beings fails. You have to have a strong will and a lot of optimism to work in this industry and, again, im proud to work in it. The model works. When you disproportionately invest and when you have patent protection for a limited period of time after you make those investments and im really proud of what gilead has done here with remdesivir. Im just privileged to be a part of this. Privileged to have you on and update us on all of this and hopefully we can see you with an update, you know, soon wed like to hear whenever this moves along. The entire world is watching thank you. Meg tirrell, thank you. Thank you. Youre very welcome lets get to dr. Scott gottleib for a reaction to that interview. Hes the former fda commissioner, cnbc contributor he serves on the boards of lumina and pfizer. Were you able to hear the entire all of mr. Odays comments, scott . Most of it. Most of it. Okay do you have a top three things that you were struck with in listening . This is an important event. Weve said all along this drug is not a home run but it will be beneficial for a certain cohort of people with covid19. Theyre going to have more supply than what we initially thought. Theyve been able to compress the time it toiks to manufacture this drug. It seems theyve cut the time it takes to manufacture this drug almost in half from what it was originally theyll be able to stretch it and they may get a five day course versus ten day course it showed no measurable difference between five and ten days if theyre able to dose this from five days to over 10, the nih study looked at ten days if you get it down to five days, thats going to effectively double the supply. Heading down to the fall, youre going to want to stretch the supply of this drug. This drug can be used for treatment. I suspect were going to look at using it for prophylaxis for patients exposed to covid19 maybe a limited duration it might help prevent the onset of symptoms, prevent people from contracting the virus. Well start to use this potentially in different waste if it makes it to the market and i think it will in short order. Be nice to have the inhaler. Nebulizer. Nebulizer, sorry. Yeah, look, its into the an on tow mall drug by any means. Its an intravenous drug right now. Needs to be delivered in the hospital but, you know, thats not that much of an impediment because most cases youre going to be using this drug in patients who have more advanced covid19 or patients with a higher risk of a bad outcome theyll be hospitalized. Were a long way from having a tami flu outpatient drug, safe taken as a prophylaxis for people who are exposed as well as early treatment. We dont need that for the fall. If you couple remdesivir it will change the risk profile of this infection. Were going to get back becky wants to get back to talking about remdesivir i want to quickly bring up this ft article today, scott, where in china 3 5 of the new coronavirus cases in china show no symptoms. 60 asymptomatic i went back and forth with sam waxel whether that means the virus is mutating to a lis virulent form or whether all along it was 60 and there wasnt enough testing to know that yeah, looks like theres a High Percentage of patients that are asymptomatic 60 is the high range. If you look at the french Aircraft Carrier where it became epidemic, that was around 50 . There was a very good study done in northern italy looking at a town and they found 40 of the spread was asymptomatic. Diamond princess was 30 there are studies that have looked at the percentage of asymptomatic spread and you have confined settings and you have seen how much of the infection is asymptomatic versus symptomatic. Youve had epidemic and enclosed space. It ranges from 20 to 55 on the high end theres been probably a dozen good studies thats within the range. Its within the range. Were probably diagnosing one in ten to one in 20 its probably 1 3 of the infections are asymptomatic. We should work on the assumptions when we do our modeling becky dr. Gottleib, back to remdesivir very quickly. When we had the ceo on i asked them twice keeping in mind the op ed you had written how we need to make sure we have manufacturing for some of these things to make sure that our population can get access to it. Asked him twice about whether hes been pressured by any country, either in the manufacturing areas or along the supply chain who has said to him youre going to take care of our population first he didnt really answer the question which to me sounded like a yes, but what do you think . Do you think the country that might be pressuring him rhymes with blima or blomerica. I think they have a complex manufacturing supply chain that probably takes certain components of this outside of the u. S. They dont have entirely a u. S. Supply chain so long as theyre dependent on other countries for starting ingredients to that drug most companies are most have starting ingredients to their drugs that come from that including china they have to make sure they supply the markets i think theres going to be enough doses heading into the fall unless we have a major epidemic if we have something on the proportion of outbreaks, large outbreaks in American Cities or even something approximating what weve just gone through, i think were going to have hundreds of thousands of doses that we would need getting close to millions of doses initially they were talking about having a million doses by the end of the year. Now theyre talking about having multiples of millions. They can compress the supply chain in the manufacturing cycle. If you get it down to five days from ten which i think you can, thats going to stretch their supply chain even further. I think its going to be there the other thing youll see is other companiesstep in to star helping them manufacture this. I think gilead is going to get assistance from other Biopharmaceutical Companies to look at different components both domestically and abroad hey, dr. Gottleib i want to ask you about something completely different which is a report that came out yesterday which is that in switzerland, swiss officials are telling people that Young Children under the age of 10 can and should or are able to hug their grandparents what did you make of this report did you see this i didnt see that particular report there was a study that came out about two or three days ago that seemed to suggest that children both arent getting infected and arent passing on the virus. There was one study, some limitations to t. There were other studies that showed the opposite i think this is very inconclusive i have a hard time believing in the absence of really objective data that kids arent vectors for this i happen to think theyre getting infected, theyre getting subclinical symptoms that could be because i have three young kids who constantly get me sick so im biased in my analysis i believe that the kids are vectors here until you have really objecttive evidence proving that theyre not, its going to take studies where you are actually evaluating children, swabbing them at large scale to see if its circulating among kids, those are going to be hard to do until we have that kind of really objective data, i think we should work on the assumption that the kids are probably vectors for the virus and getting colonized with it. Weve seen kids getting sick weve seen autoimmune reactions from covid19. Some unusual types of illness. We know kids can get sick from this, just at a much, much smaller proportion than what were seeing in adults hey, scott, do you have an opinion on the way to approach a vaccine . And have you looked into the different platforms enough of lets say Oxford University versus pfizer versus moderna have you looked into it enough to form an opinion on which technique is going to bear the most fruit and easiest to manufacture and quickest to prove efficacy do you know . Well, i dont think anyone knows right now. Oxford is a similar platform to what j j is doing. There are a couple of Companies Including pfizer doing mrna. Some companies are using traditional approaches, flu block, like sanofi merck seems to be doing something off of the ebola platform there are multiple platforms in development. I think whats going to end up happening is probably more than one is going to make it over the finish line. Youll have some heterogeneity and some will have different attributes to make them successful we need more than one manufacturer if we only have one manufacturer, we will be severely supply strained i like the fact that theres multiple approaches underway gives us multiple shots on goal. We dont know whats going to be the most effective vaccine, whats going to provide the most immunity having all of these approaches underbe way i think is very good for development and very good for sharing risks. Dr. Gottleib, thanks once again for your quick analysis and joining us today thanks coming up, were going to go inside big quarterly reports from apple and amazon. Both stocks under pressure in the premarket. Then Dallas Mavericks owner mark cuban talks about businesses reopening in texas well be right back. Life isnt a straight line. And sometimes, you can find yourself heading in a new direction. But when youre with fidelity, a partner who makes sure every step is clear, theres nothing to stop you from moving forward. 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. And. L music fades in . Hey hi welcome back to squawk box. Dow looks like it would open down 464 points right now. S p 500 looking to open down 63 points the nasdaq looking to open down 223 points on the backs of reports from apple and amazon last night becky . All right, andrew thanks lets get to one of the biggest reports of earnings season cnbcs josh lip ton joins us live with all of the details on apples latest quarter josh, good morning so, becky, i got the chance to catch up with apple ceo tim cook i asked him about iphone demand in china such an important part for them. Can we use china as a leading indicator for other markets. Tim cook saying there was a significant, steep falloff in february that began to recover some m march and weve seen further recovery in april. So it leaves us room for optimism its hard to tell if thats a leading indicator, was his point. There are differences. The u. S. Has had a bold Stimulus Program and i think that will help im optimistic in the pace of recovery in the United States. I asked cook about that work from home trend. Obviously millions more people working, learning, playing from home how does that really impact demand for apple products. Cook telling us its clearly helping the ipad and the mac for that reason we envision both of those to have improving year over year performances in this Current Quarter. If you look at apple tv , as an example, weve seen a significant uptick in the number of people viewing content as well as engagement with content. I did ask cook about those stores when will more reopen around the world. Cook saying, listen, more country by country and county by county he thought the first store in the u. S. Could open by mid may well have to have a much reduced number of people in the store so what we envision is a store having a certain capacity to it and well gate the number of people in that store to that number guys, back to you. Okay. Josh, thanks so much joining us right now to continue the conversation about apple is lams moan. He reiterated his buy rating i want to bring in mitchell green, founding and managing partner of lead edge capital good morning to both of you. I dont know how much time you spent looking at the numbers so much as the tone and the words of tim cook as to what the future may look like what were you focused on yeah, thanks, andrew. Thanks for having me good morning i was really focused on understanding if management thought there was enough visibility in the future and being able to maintain so far. We walked away with the impression, yes, things might be very marginally delayed. Were holding up extremely well with only possibly 2 down for this pandemic for revenues in the first half of calendar year 20. Its amazing considering theres so much hard work in the business secondarily, i think the fact that they did not have eligibility. The company went out of its way to provide a lot of visibility on every product, on services with a lot more detail than they normally do. So i think that this was a quarter that apple just did not want to die because there is a black swan issue the last quarter after reporting it indecember and i think they dont want to be easy about that hedging their bets but i dont read it as anything that is impacting the business from a secular perspective. The multiple moves up relatively quickly. Mitchell, does that make sense to you yeah. I would agree with that. Look, andrew, apple is not a name we follow as closely because we follow more elite commerce, software stock, but its an Incredible Company the demand for their devices is going through the roof, as you know right mitchell, what did you make of amazons numbers but also its decision to take this 4 billion in profit that it would normally make and say its just plowing it straight back into the business look, the top line numbers for amazon are incredible. 1,000 basis point improvement. 1,000 basis points better growth in the Online Retail 800 basis points for third party. Aws is growing awesome amazon is riding two big waves this is going to put it in the turbo charge mode. And then just the movement to cloud which were in the early innings of i think its smart what hes doing. The reality is the stock is where it was two days ago. It hit alltime highs yesterday. Theyre making absolutely the right what do you think the stock is right what was that a lot higher than it is today. 3,000 bucks a share. 3,000 is that a year from now, two years from now i think within 12 months. That doesnt mean its not going to for the next 12, 15 monthmonths but i think if you look at it, two to three wamsi i was going to say if you look at it over the next three to four years, i think the stock can double wamsi, you know, thats a remarkable thing do you think the apple stock could double well, look, i mean, andrew, there is a stock here that were talking about that has gotten a trillion in market cap when you look at the sheer scale of it, it will be contingent on how a lot of other stocks do where is that money really going to come from apple already has soaked up a lot of capital from a lot of other places to say the stock would double is not sort of within our forecast period range it could happen obviously, but at the same time when we look at where numbers are today, we think the numbers could approach between 17 in earnings a share which is where people were for calendar 21 what does that really mean can you put a 22 multiple on a stock like this because earnings are actually holding up tremendously well . Sure that would get you close to a 400 stock can you imagine and construct scenarios that are quite bullish. I think the services will have to be a much larger component from where they are today to justify the doubling of the stock. Wamsi, mitchell, thanks for joining us this morning. Thanks for having us. Thank you over to becky. Thank you. When we come back, Dallas Mavericks owner and all around shark, mark cuban, is going to join us live well get his views on the governments second round for Small Businesses and what he thinks of texass reOpening Programs dont forget, the Berkshire Hathaway meeting tomorrow. You can email any questions you have to berkshirequestions cnbc. Com well ask questions of him tomorrow tune in to squawk box at 6 a. M. For an in depth look. Yahoo will be streaming that ll ve lsaturday wehaots of highlights on monday morning squawk box will be right back. Theres tv, and then theres the best Entertainment Experience. Xfinity x1. Que welcome back, everybody. Joining us is mark cuban hes the owner of the nbas Dallas Mavericks hes chairman of axs tv. Mark, its great to be talking to you today what do you think about how texas is going about this at this point how are you feeling . You know what, i dont feel bad about it and ill tell you why. Weve had good success with pick up and delivery for restaurants. The governor expanded it to any business, thats a good thing. Thats more of an extension than an Opening Program on the second part of that, he said you couldnt open up a business and open it up for more than 25 of your capacity, which really for most Small Businesses means youre probably notgoing to open it up at all what were seeing is a small subset of businesses making themselves available to the public that will be some good knowledge for us and well see what happens. Youre right in thinking that a lot of businesses wont open if they can have 25 capacity. Some restaurants said please dont allow us to open up for eatin dining because it means we have to hire more people and being dinein will only take the money were getting now from the people who are taking out. What do you think . Who is going to open up . Youre right. There are a lot of problems associated with it this is more for perception than reality in terms of trying to create the perception youre opening up when youre not really because theres a lot of downstream problems for Small Businesses one, if youre going to bring back your employees, then they have to come back. They cant remain on unemployment and particularly for tipbased employees, unless the employer is going to guarantee them a much higher rate because youll have diminished number of customers, then theyre not going to want to come back to work theyll want to stay on unemployment that creates one problem if they do come back to work because you feel you can make the numbers work, depending on where your employees live, they may have to take Public Transportation in dallas, that could be the bus system, that could be the rail system now youre adding a big load onto the rail system and youre increasing their risk of catching covid which is not going to benefit your business if that happens. Then theres the cost of trying to make sure that you can get your business open just to keep it safe. Do you have to deal with your hvac system, sterilization, disposal of masks and other things what about all of these downstream issues that havent been addressed and Small Businesses havent been provided the support they need. I think its more show than go but lets see what happens. Mark, lets talk about the second wave of loans that are going to be available for Small Businesses i think all of us have seen an evolution in our views of what should happen with this. Everybodys got their own nuance i think in the beginning you were very adamant this should be going to Small Businesses and not Large Businesses a more nuanced take. The companies you invest in shouldnt be penalized for having a wealthy investors they should be allowed to go to the tranche and say theyre a Small Business and qualify everybody has their own perspective on this. It does get more complicated as we follow the money and see where its going. It depends. With the affiliate roles with the Small Business administration are complex and confusing. What i was trying to do with the sba and treasury is get clarification. For instance, i have Shark Tank Companies im not involved in the daytoday activities but because i have 20 of them, lets just say i gave them 25,000 for 20 of the company, theyve been precluded in some cases from being able to apply and so then the natural response is, well, youve got mark cuban as an investor try to give them money is either going to dilute them, becomes a loan or if i want to grant it to them, then i actually have to pay taxes on that as a gift. I have to pay the gift taxes for it that creates its own set of problems again, its a set of circumstances where i think it hasnt been all the way thought through. Thats not a surprise given how it has been done i was trying to push through clarification more than anything else mark, i was curious about what you thought about how some of these ppp loans are going out. One of the things thats been quite surprising is in states that have been the hardest hit, obviously am a new yorker, but new york, new jersey, the tri state area obviously, some of these the percentage of ppp loans that are being approved are something on the order of about 25 . I mentioned yesterday nebraska is getting, you know, 90 or 80 of their loans approved. Youre looking at 70 rates in montana, minnesota, wisconsin. Thats exactly what you should expect. Thats what you expect the way the program was designed because what happens is the banks are the ones doing the approvals by definition your banks in new york and any dense area with a lot of businesses are going to have more customers, more applications and its going to be more difficult for them to get these loans, whereas, in smaller communities it will be easier for them to process the loans and youll get more approvals. What ive suggested to everybody that will listen is if youre a Small Business and you happen to bank at a big bank, its okay to go find a Small Community bank and apply there as well. Theres no rules against having multiple applications. You just cant take multiple loans. If you are in new york city and theres a smallback with a hism bank with a high approval rate, you already down on the list, apply as many different places as you can thats part one. Part two is theres still a lot of confusion for independent contractors. Thats where the real problems occur. For independent contractors you have to go and show your 2018 and 2019 tax returns i think it is and that creates a lot of problems because the independent contractors who are not making money right now have been given the ability, like all of us, to defer filing our 2019 tax returns. So a lot of them are in that catch 22 where you need to have a 2019 tax return. If you havent filed it yet you dont have t then youre part of that race to get funded. Its created a lot of unintended consequences again, now with the second tranche, give that 2019 payroll tax 2019 income tax filed filled out it doesnt even have to be filed, go to a bank. All of these complications, you have to keep applying and find the right bank to help you. Mark, do you think its the banks fault or how the sba is deciding which banks to no, its not anybodys fault. Yeah, its not anybodys fault. Ive actually heard that some of the big banks have loans that are waiting to be processed that have been sitting there. Theres a couple things there. With the second tranche the sba wants big banks to be able to throw hundreds of thousands of loans into the system so they put some governors into the program where i think they can only file 350 loans at a time in order to give some of the Smaller Banks a chance to get in the cue, right the big banks have automated the process and were just sending a boatload of applications so they wanted to make it so Smaller Banks could have smaller customers. That was good in some respects for Smaller Banks but if you were a couple at a larger bank you were kind of stuck because at 350 at a time, they may not get to you ever. Law of unintended consequences the sba was trying to make it fair, but unfortunately they made it more difficult and put large banks in a hard position it wasnt anybodys fault, they were just trying to find a solution and they didnt you know, i recommended to them, i recommended to treasury that it should be a lottery so that whenever anybody applied, it goes into a central repository treasury treasury randomly picks 50,000 loans to approve they see what the total is and, you know, however much money left they have, they go to the next 50,000 until its gone. Thats the only way to be objective and fair trying to be subjective saying you have more need than another is almost impossible thank you thats thought full. Mark, appreciate your time good to see you. Appreciate it thanks, becky. Thanks, andrew. Thanks. Coming up when we return, were going to check in with jim cramer, head of mays first trading day. Find out whether we should sell in may, go away. Talk markets with john rogers. We are in the red this morning dow down about 457 points. Nasdaq off 208 s p 500 looking to open down 61 points stay tuned, youre watching squawk on cnbc every Financial Plan needs a cfp® professional confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Welcome back to squawk box this morning the dow just finished out. Gains since 1987 the s p posted its third biggetbig et gest monthly gain. We are joined by john rogers its great to see you. I dont know if you saw the top of the show, at 6 00 a. M i know youre in chicago it may be early. We had a big debate, we made a bet about what may was going to look like. The question is do you want to sell in may and go away . What would happen to the market at the end of this month given that so many people think that the market is overvalued that seems to be the prevailing thought. Every time theres a prevailing thought, the market seems to almost always work against you well, you know, im convinced of the markets are still reasonably valued. So much of the markets are smaller, Midsized Companies that have been devastated this year the markets have been propped up by the big f. A. N. G. Five stocks. So i think when you look at the overall market, theres a lot of bargains, a lot of opportunity were out there buying so youre out there buying. You think if you were going to take the bet on where the market was at the end of may with us, i get doughnuts, joe gets tacos, and becky gets a hypoallergenic dog potentially whats your gamble i think i wouldnt be surprised to see the market up were long, longterm investors. You never know month to month. I do tend to think as we move into may and we see the states opening up slowly but surely, and the death toll, the tragedy starting to unfold in a way that will be much more positive, there will be a lot less deaths, a lot less cases, that will start to rebuild confidence in america with our consumers, and the Overall Economic system. So you were talking about how you saw opportunity right now. What areas are you looking at . Were loving to look at the areas that have really gotten crushed because people are afraid that people will not come back to certain sectors again. So we like some of the places like vail. We think people will ski again weve been buying Madison Square garden entertainment pe people, we think, will go back to the garden one day and watch concerts, basketball and hockey and they own lots and lots of land there around the garden its a great real estate play, too. Our favorite name is envista its a cheap stock most dental offices have been closed, but well have to maintain our teeth, it will be something thats really important as people come out of this crisis. Probably people need more dental services because they have been delaying so they will be well positioned. Given that youre going to travel spaces like vail and other places like that, what do you make of retail weve not been investing in retail for a long time were very cautious. We think that world has changed so dramatically. You can get whatever you need from amazon or direct from the product manufacturers. Im on the board of nike, they have great website, you can get the greatest Running Shoes that way. So i think retail is an area that well be very, very cautious about another question is what do you make of tech right now as you said, the market is being propped up in large part by a handful of tech names. I think right now when ever you see a handful of names dominate the s p the way the f. A. N. G. Stocks have, its usually a sign that the markets are going to change dramatically what works coming out of this environment we think will be different than what worked in the last environment i was talking abouted ethis wit the ceo of lazard, and they said when you come out of this, its a different type of environment. Active management is going to work again just buying the stocks that were up in the past will not be the play for the future. John rogers, always great to get your insights and perspective. Stay safe and healthy. Thank you lets get to cnbc headquarters, i wish we had more time, jim. I dont know where you want to start. I was thinking of the overall sort of conversation about how the drug industry is viewed. My view is if they get us out of this with innovation and everything else, well understand you need to invest longterm in drugs to get them, and they wont be on the losing end of the pr battles. Can you and i go after the people who criticize thin industry thats what i was sort of thinking of. Theyre sacrificing profits for lives. Theyve always been viewed as capitalists. That over. That dialogue if it comes back, well have to punch them in the nose thats figurative, not literal that was my take on this. Weve seen what happens if you dont fund your drug industry around the world its the reason the one thing, jim, in the past they have extended patents with some joke xl, and then you see it on tv, thats the way they get the patent protection. Theyve abused that. But overall if you can get a drug instead of going to the hospital, its so much better. Isnt it these companies that interview was so unbelievable. What was he really saying . Listen, well lose some money, you know why were Drug Companies, thats what we do right that was the narrative. I tire of the people who criticize this industry. Yes, mylan had some epipen the this is about a pandemic thats 100 million lives how about sell in may you want in on this bet . Its impossible you had the best april since 87. Thats what i mean. Reversion of the mean. Exactly can i say your interviews this morning set the whole tone anything else you read in the papers or what anyone is saying, forget about it. You got all the stuff. The combination of gottlieb a day, basically told you we made our first inroad maybe we have our first part of the cocktail those who thought we should trust the chinese study, i dont know if you were reading the chinese study, i dont think you would give anyone this drug. How would they be doing if they didnt have it last time i believe them. Didnt believe a whole lot coming out of them i like the drug industry. Well see you in a few minutes. Hopefully you continue on along that line. Dont miss larry kudlow first on cnbc interview, National Economic Council Director larry lo thats at the top of the hour stay tuned squawk box is coming right back 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. Lets take a fanl loinal lot the markets. Dow down by 447 points wti, oil prices up sharply we spoke with chevrons ceo mike worth later on today he said he thinks demand for oil has bottomed wti trading up by almost 7 . Well be back on monday with thoughts from Warren Buffett right now its time for squawk on the street. Good friday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer, david faber live from specific locations futures are weak on this first day of may as we watch earnings out of apple, amazon, exxon, chevron. Got an increase in u. S. china trade tensions as well with the president threatening additional tariffs. Oil up 6 . All kinds of reasons given for