Transcripts For CNBC Squawk On The Street 20240713

Reopening process going. Look, it does feel that there is a very self confident sense by governors that its time. I think that the president is so oriented towards its time, and the president is soed ed ed eet in having a vaccine by years end, that theres an element of two different worlds here. Theres the real world influenced by the president saying open it up, people want to do it, and the stock world influenced by Warren Buffett who said i sold the airlines because that industry has fundamentally changed. Its a big gulf. Really the largest ive seen amazing. David . Sorry, carl weve been talking about that for weeks. The many phone calls that you or i will have with Business Leaders who are focused on maintaining their liquidity, focused on just being around to fight another day come the end of the year. The many ceos who join us on air who constantly talk about their businesses not coming back to the levels they were prior to the virus for maybe two or three years. Now they may be underpromising on the hopes of overdelivers, even if you discount that theres been a disconnect for some time between what the economic landscape appears to potentially look like, though so much is unsettled and what the stock market suspecting. Thats why i loved the interplay with becky and Warren Buffett this weekend and his discussion, candid discussion about the airlines if the airlines are fundamentally changed what that says in buffetts eyes, what that says is theres a lot of industries fundamentally changed. I keep coming back to that moment when gary kelly said if theres nothing to go to, why should the airlines do well . If he said stick by the airlines, theres going to be a recovery, that might have influenced my thinking i thought he verified what dave and i are hearing, which is guys, if you think its going to come back, you got it really wrong. Maybe theyre doing some under promising, but you layer it on with the president who was so, i believe, overpromising im not fake news, but im listening to every single ceo that really believes in the drug industry and that we can do vaccines to scale. I feel like buffetts overview on airlines makes me very concerned about the nearterm. Yeah. As a backdrop, buffett has a long history in having his thinking evolve when it comes to the Airline Business usair back in the 90s left a sour taste in his mouth about that he came around to them over the last five years and he talked about a mistake. Take a listen. The Airline Business i may be wrong, i hope im wrong, but i think it it changed in a very major way its obviously changed in the fact that four companies are each going to borrow perhaps an average of at least 10 billion or 12 billion each, you have to pay that back out of earnings over some period of time youre 10 billion or 12 billio wos worse off if that happens. In some cases they are selling stock, selling the right to buy stock. That takes away from the upside down i dont know if two, three years from now that as many people will fly as many passenger miles as they did last year. They may, they may not the future is much less clear to me about how the business will turn up through no fault of the airlines themselves. I thought that was devastating. Remember, southwest air was able to sell 70 million shares at 28. 50. United sold 39. 35 at 6. 50. Those are critical levels. The fact that he went on to say theres no reason to own them, so whats the point of just selling some of them made me say i think they very much are a microcosm of a big chunk of the u. S. Economy, not the world economy. I came away thinking the longer term story of comeback is very much in play thats not a lot of analysts thinking even this morning only dow chemical and bank of america are talking about a longerterm decline. Most analysts are trying to figure out if its going to be a v or a u still the discussion Warren Buffett had suggests a very elongated u or an l. He just gave you how about this, no hope near term. Anybody agree with that . Yeah. Sounds accurate to me yeah. Jim, the administration larry kudlow last week was positive on the prospects of a quicker recovery i have not heard that from many Business Leaders at all. Ls, u, nobody is really talking about a v anymore, are they no, i would say theres a huge chunk of the s p that is chugging along because theyre either taking share from industry groups. There was a critical moment when buffett talked about the industry went away thats great for alphabet and facebook we listen to these Drug Companies and their quarters, their quarters are extraordinary. They have not even benefited from the idea that a lot of doctors offices have been closed that will now reopen. So theres plenty of stocks to choose from. They are not a large part of the s p. I thought that question that becky asked warren about, whether hes still sticking by the s p, warren took it as yes versus any fund that takes a percentage or whatever but i think that just the s p set up for its more of an active index than people realize. They have good companies, but in a pandemic Many Companies in the s p would cease to exist i think thats fair enough to say. So, jim, when you assess sentiment this morning, is it about buffett . Is it about wider delineation between a reopening and an economic normalization is it about the president s comments last night and just inflaming already existing fears of u. S. china trade tensions i was all for taking on the chinese when our economy was robust i think the communist party has bad actors, not the chinese. A lot of them love americans, but its really important to recognize the president now seems to want to raise tariffs for the 30 Million People unemployed that is 1932 i was happy that we raised tariffs when the economy was humming. I do believe the economy these again i dont know what happened in wuhan, nobody knows, but i dont want to take them on right now. The president acts as if the economy is doing great, or that its going to come right back. We have to be careful. O there are historical paradigms that are very bad when the economy is doing poorly and you raise taxes. Thats not fake news, thats history. Right the fact is the chinese economy is recovering, its not as clear that the Chinese Consumer is willing to spend were seeing that in the early numbers for regions and parts of the economy, now that much of it is reopened but they are coming back more quickly perhaps than we will. Thats yet Something Else well be looking back at and wondering about, how quickly they were able to rebound versus how long it will take us to and the rest of the western world to a certain extent though there seems to be no doubt that Many Companies are focused on supply chains, and trying to figure that out. Perhaps changing it in a way they even had not thought about during the height of the trade war with china it is interesting to see how Many Companies had these really awful supply chains that are rooted through china and im glad were speaking to marc benioff, the ceo of salesforce, so many products start in china or were routed through china and the president is saying get out of china its going to be hard. China really hooked us now, look, most of our companies are about making as much money as possible and china was the cheapest producer. When you think about it, you think apple. That stock was doing very well until the president really went blister about china. Pompeos comments this weekend basically saying its a vast International Conspiracy by the chinese against the rest of us i dont think its a vast International Conspiracy i think the bats got too close in the wet markets if he wants to build a case to try to get it so people dont want to cooperate with the chinese again, that will cause a lot of problems with our companies. I dont want to represent earnings per share versus patriotism, but we have to recognize what was said this weekend was chilling its not just earnings per share, but this reuters report about the administration turbo charging initiativesinitiatives back supply chains, its all the things that made us want to get supply out of china the first place 30 years ago the questions were pretty good in the Lincoln Memorial what do you i dont know, the live show. There was a moment when someone asked about pills. Look, the pills, many of them are not made in india, they are made in china. I wish the president were more targeted that is a supply chain that they have that they have really, really got their hooks in us but i do think that over the weekend, i said here it goes this is escalating at a level that we didnt think was going to happen with 30 Million People i know the president hates to be criticized in any way, shape or form but history says you have to wait until things are better. We have a lot to get to this morning. Calls on disney, tesla, conoco, and that jobs number on friday well take a break be back in a moment. You should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Edward jones is itswell aware of that. Et. Which is why were ready to listen. And ready to help you find opportunity. So. Lets talk. Edward jones. Its time for investing to feel individual. So were working 24 7 toected maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. Its been a busy weekend of commentary when it comes to a potential vaccine for the coronavirus. Oxford scientists said they hoped to get signals on efficacy by june. The president talked about it on fox last night we think well have a vaccine by the end of this year, and were pushing very hard. You know, were Building Supply lines now, we dont even have the final vaccine. Johnson johnson, if you look at Johnson Johnson is doing it we have Many Companies that are close. I meet with the heads of them, i find it an interesting subject but its so important. I think well have a vaccine by the end of the year. It does echo what youve said, that is that the commentary from these giants wouldnt be so positive if they werent close. J j is spending a quarter billion dollars to build plants all over the world i feel confident they can conquer it its the timeframe its entirely possible that the president says we have a vaccine, but is it scalable . It would be unbelievable the shortest time that weve been able to do a vaccine from start to finish was mumps, that took four years. Remember, polio took very, very long what i feel like is i think the Drug Companies are too optimistic im not a scientist. I feel like so many are trying but its just historically, its never been able to be done maybe this is the time they can speed things up because they have Better Technology but i think its important to point out that the president is raising expectations to a level that i hope are not too high and i dont mean that to be critical the scientists themselves, theyre very excited about getting something to us next year but thats next year if i listen to the president , he makes it sound like football season would be great. So does the nfl. Theres an unreal aspect maybe were all just enough people have gotten sick that we should all just accept the fact we can play on, be tough, but i dont think its that kind of situation. I think we have to wait to go to the next level and the idea of the vaccine being ready is different from whether its scalable thats the big question. And, by the way, whether its safe and effective is a more important point as well. The same we rely on the experts, we rely on people who we believe are in the best position to understand these things, and certainly that would be the most optimistic forecast that ive heard, the idea that it could be as soon as the end of this year to your point, 12 months to 18 months would be a miracle in and of itself given the history of vaccines that said, we do have more people and more Companies Working on it with more advanced technology than was ever put against anything in the history of Something Like this thats all good. Sure. What i come back to is what you hear time and again in terms of trying to get people back to normal behavior, this regimen of antivirals, remdesivir at one side of it if you end up in the hospital, but a host of others perhaps that could be applied much earlier in the virus that would emai cancel out the effef the virus, were nowhere close with testing, both the antibodies, understanding who has had it, and maybe Contact Tracing is the thing that gets us opened up right well talk about that with marc benioff. I think that the going back to the vaccine for a second, without the vaccine i doubt that we can return to normal life when will we know that its effe effective . Its when everybody gets the vaccine. You have to think about smallpox there are more questions about vaccine than antivirals. I feel if you go back to what dr. Fauci said comparing it to azt, it says, listen, thats how the aids epidemic, the beginning of the end was the azt thats going to be a long time if dr. Fauci said hes confident about a vaccine by the end of the year, then im confident thats who we all listen to. He cant be owned. I think thats really important. Just buffetts praise for fauci over the weekend was remarkable, too. There was a great piece on cbs about that azt chapter and he recalled every one of his patients dying when he was a very young doctor, but whether its a vaccine or a therapeutic regarding remdesivir, daniel oday of gilead talked about the emergency use authorization and getting to patients. We intend to get that to patients in the early part of this next week, beginning to work with the government which will determine which cities are most vulnerable and where the patients are that need this medicine we donated the entire supply that we have within our supply chain. We did that because we acknowledge and recognize human suffering, the human need here and want to make sure nothing gets in the way of this getting to patients. We have to hope thats a big deal have, very big. But you know what . When regeneron reports tomorrow, i want to hear their Monoclonal Antibody can be a cocktail remdesivir alone has not proven it can get you out of the hospital earlier im waiting for the test that says its not a death sentence when you get on the ventilator we have not heard that yet we want to get back to the markets which appear poised to open lower when trading begins we have some key downgrades that well get to as well when squawk on the street comes right back when you take align, you have the support of a probiotic and the gastroenterologists who developed it. Align helps to soothe your occasional digestive upsets twentyfour seven. So where you go, the pro goes. Go with align. The pros in digestive health. And if stress worsens your digestive issues, try new align digestive destress. It combines aligns probiotic with ashwagandha to help soothe occasional digestive upsets, plus stress that can make them worse. And try align gummies with probiotics to help support digestive health. Salesforce founder, chairman and Ceo Marc Benioff has been setting a tone when it comes to americas response to the coronavirus pandemic well talk to him exclusively. Jim has that dont go away. Feed a healthy lifestyle, with pure protein. High protein. Low sugar. Tastes great high protein. Low sugar. So good. High protein. Low sugar. Mmm, birthday cake. Pure protein. The best combination to help you stay fit. Welcome back to squawk on the street. Airlines will be under pressure this morning after Warren Buffett of Berkshire Hathaway says dont own them anymore. American airlines is your mad dash i want to talk about some things Warren Buffett said he is saying it is a changed industry barclays has a report out today that downgrades american from hold to sell they had been using a 20 price target and now down to 7. Another thing is pension liabilities. 6 billion at american. I think this industry had started to look up then i see that kind of liability, plus obviously what theyre borrowing from the government i say, yeah, Warren Buffett is right. Its the Balance Sheet its not so much the fact that travel has been crushed, but the Balance Sheets have been changed. So you got a doubleedged sword. You have very little demand and the Balance Sheets ballooning. Yeah i could see this stock going to 7 in a heartbeat yeah. Right now as we said, so Man Companies are focused on preserving and maintaining their liquidity. Making sure they have adequate access to capital when they need it to run their business some are getting to solvency thats a different aspect of the crisis yeah. Bob crandall who i always loved from american, he talks about how the industry is not investable, how it should be a utility. I found myself thinking american these stocks were so great at one point after obama let them consolidate those days are over. What youre really looking at is questions by Brian Sullivan asked a money manager when would you fly . I debated flying with my wife this weekend in a socially distant fashion, we talked about how emirates will require a blood test or some sort of test before you get on a plane. I like that idea but its also not that practical for all these Different Companies to do some sort of abbott labs test walking in. It may just be unrealistic yeah. On that note, jim, as youre speaking about aviation broadly, dow jones reporting that ge aviations expanded its job cuts to cover 25 of its global work force. They were at 10 this is according to a memo that dow jones is citing. Larry culp joined us last week, not tsugar coating the outlook. I have the memo, the article is right again, its chilling ge is so challenged on so many fronts, with exception of health care, you cant rightsize these businesses they are gigantic. Its very hard to figure out what the right level and table of employment you have to have the analysts are not forgiving enough to a guy like larry culp who is doing his best. Theyre looking and saying, well, you know, nothing cooking there. Yeah. We all had the i had it in my inbox theres the opening bell, carl yeah. At the big board, eric millan. At the nasdaq, youth inc, a network of nonprofits helping downpeople in new yoryoung peop york city. Headlines crossing now about hog Processing Capacity in this country. They say its been cut in half as the virus closes slaughter houses youre seeing some infection rates, jim, in some of these towns with slaughter or proce processing facilities that rival large cities in states like maryland there was a fabulous book called the jungle at the turn of the century talked about how immigrants were put in meat factories and treated with absolutely no Health Care Concerns at all. Is that happening here at tyson . I think tyson has a lot to answer for here. This is the kind of thing that if we had an Upton Sinclair, he might go to these places this sounds like what Upton Sinclair exposed at the turn of the century. Somebody should be ashamed here, i think. Its largely about beef and pork because of the need for human hands to debone. Its not like chicken where it can be more mechanically done. They did miss, revenue was light. They secured an additional 1 1. 5 billion loan i guess its almost automatic on some of these things right should that many people be getting sick i know that the supply chain is really important, but i do believe that at a certain point ethan brown of beyond meat reports this weak, im wondering and i know david is somewhat skeptical but is that where we have to go this tyson thing, lets call it what it is, its an abomination, who are these poor people who work at these plants i bet its the same people that worked there in the 1900s when the jungle was written i think these people are poorly represented. Theyre treated as if theyre i dont know what kind of health care theyre doing, but what is osha has anyone seen osha wasnt osha supposed to help people if we dont call them out, who will it is kind of shattering you want to go through a list of Government Agencies that are mia . Wheres the cdc . Remember them . The s. E. C. Is coming back in the fall yeah. When it comes to tyson, one would have expected this to be a strong period for the company. The demand for their product is through the roof yet, as you point out, theyve not been able to capitalize at all and having a lot of missteps my travel trust owns it, im ashamed i own it i thought this would be their time now i just want some enterprising journalist to go outside their plants, find out whats going on there. I think they have a lot to answer for maybe theyll say, listen, no, we dont the were doing exactly what the government says. Thats usually the answer these days, right . Hey, the government. Well, i guess so but we need this we need to go back to the Upton Sinclair days where we looked into these situations i would like tyson to come on. Look maybe its like carnival, theres a perfectly innocent excuse. Look, we followed the rules. Maybe tyson is following the rules. Maybe the rules should be changed and tyson is a good actor hard for me to believe, but im jimmy chill, i can understand it. You mentioned carnival. Im sure you see these crossing now. Plans to phase in north American Service on august 1st. Get some bargains there tough piece in gq coming out soon people want to cruise. They do. Maybe they cruise in a way thats socially distant and cruises are a bargain. Im not going to rail against anyone who wants to take a cruise provided that they are doing the same things that they do on airlines or whatever i just think, look, the government has not said no who am i to say you cant cruise i dont know i dont feel like you know, people want to cruise. When you speak to carnival, the business next years business looks good yeah. They havent done anything rock here. Speaking of travel, leisure and things people plan for around life events, going to a disney park is one of them thankfully weve done plenty of it thankfully with our kids. But this morning certainly a lot of talk around this downgrade of disney citing what theyre calling a long and winding road. They have the stock at neutral no real surprises here in a sense. We talked about the challenges disney will face in terms of the theme parks, not to mention as well the espn network, the lack of sports, lack of advertising, studio being shut down in terms of production. Disney plus the bright spot. But the numbers they put out there are stunning when you look at total revenues and what theyre expecting now. Theyre low on the street now. They think things will take longer to come back. I fwes thatguess thats the easy to discuss it. This year has seen 17. 6 billion in 17. 5 in fiscal year 21 and 21. 3 in fiscal year 22. That gives you a sense of the reductio reductions fiscal year 22 will be a huge increase over 21, but maybe you want to wait if you see that coming to buy the stock. I read this, Michael Nathanson always does high quality work, he starts out by saying weve recommended it for a decade its like what Warren Buffett said, the airlines are well managed, but in this environment they cant do well when i read this piece, david, i said let me think. Is there a way to make it so you could open those theme parks becky quick talked about it this morning. I cant come up with a way you have to disinfect constantly lines are bad. The great thing about disney is that they handle the crowds well well you cant really have crowds i dont know i thought this was a no way out very good downgrade. Very well thought out. And i dont have answers if im iger, i say, well, i dont see anything wrong with this report. I just like to be more optimistic with the same set of facts. Yeah. Obviously furloughed most of their employees at the parks, so you could bring back the employees commensurate with the number of visitors to a certain extent then again people expect the parks to be pristine, which they always are in terms of cleanliness, so many other things it raises a lot of questions about staffing, costs, versus how many people will be walking through the front gates. Then you get to the networks, the Media Networks weve been talking about that for our own Parent Company as well, which the wall street journal reported there may be layoffs. By sports is a key component of disney in terms of espn. We know whats going on there. No sports being played the question is when are the cable distributors going to start to say, hey, why are we paying for this . Why are our customers paying for this ive been hearing maybe come july, we know whether well have a football season, we know whether were having a baseball season, we know whether theres going to be nba playoffs or when theyll be or not. College football that may be the key point at which you see not just the disconnects but the distributors saying come on, you have to make good on this, which will be another hit for those companies that have significant Sports Networks arent you surprised it hasnt happened . Baseball is on a little bit. A little bit ive been hearing that its a conversation, yet i have not really ive been talking to the Senior Management at some of the large media companies, it doesnt appear its come to the point yet where any where the distributors are saying were not going to pay you right it does seem like theyre pushing it a little bit. Youre right i would have expected it to a certain extent given that theyre expensive, and not to mention the rsns, now owned by sinclair in a separate vehicle all of this happening and then no live sports then you get back to the teams, whether theyre liable, the team owners who are in a position now where theyve always been taking money out of their teams, now they have to start putting money in its a negative carry for the partners of all these teams. Theres a lot going on in the sports world that is certainly worthy of paying some attention to i wish there were more Public Companies that this piece addresses it head on and tries to put numbers on it i think youre right carl, we know that sports programming is the programming that keeps the networks getting new people in and advertising. We have not even goneinto the idea that people dont know how to advertise anymore if theres no sports. Sports is what you launch things with yep i was looking at some protocols the koreans are putting in place for their baseball season. If theres one positive test reportedly, the league shuts down for three weeks hypersensitivity to any individual player falling ill. That said, guys, in the next six weeks well get nascar, well get wrestling to some degree, we think. Golf in june so sports in which social distancing is somewhat possible will start to get some air play. Well, i know that were all crazed for live sports we saw that from the draft but football is the litmus test for me theres just so much on the line for football and because its so expensive. We need to know the nfl is deeply committed to a regular season when a lot of people think it will be fanless and not starting on time, the nfl gives you a perspective like the president , dont worry about it. I dont know right jim, were down 350, only microsoft in the green on the dow, just barely lets get to Rick Santelli on this monday. Hi, rick good morning, carl. You know, as equities start to get tired but they had a nice big move from the lows, obviously april was a good month. May is different however treasuries, kind of the same still up a little bit in the long end, down a bit on the short end. Thats been the way lately if you look at a twoweek chart of tenyear note yields, heres what i want you to Pay Attention to when markets give you tells of where they like to trade and theyre comfortable, you make note you really make note when they move out of their comfort range. This twoweek chart, 60 to 62 basis points we want to watch those High Frequency areas as we move away from them or remain inside them. And if you look at the hyg, the high yield etf that the Federal Reserve said hey, i think we may buy that some day, everybody flocked there. They have not gone there yet theres a lot of debate as to whether theyll go there at all, meaning the central bank, the fed. Thats a february 1st chart. We had a lot of volatility in february and march look how sideways that is. We would rather have that going higher than lower. That would be a riskon and good for stocks when we look at the dollar index, same notion we know anything near 100 is powerful over the macro view, but lately, you know, as it dips towards 99, we think its coming off a bit, almost up to 103 not many weeks ago, also from a february 1st perspective, 99 to 100 is their comfort zone. It may remain there. You want to be on guard for the euro strength which could push down the dollar index. Its 57 of the dollar index many notions that shared debt has got to be coming to European Union and ecb and Christine Lagarde has to work towards that end. If that is ever going to come its going to be bullish for the euro, bearish for the dollar in the immediate shortterm once it becomes implemented. Finally our last chart this is bunds. Obviously the bund yields were closed on friday, may day, but theres a detee deterioration te the ecb needs that shared debt because they cantimplement th type of programs that the Federal Reserve implemented here carl, jim, david, back to you. Thanks a lot. Jim, were being led lower by travel names off of the comments from buffett over the weekend. For all the i guess negative things buffett said, he did leave us on saturday with some of that traditional buffett optimism when it came to america at large heres what he said. We found that that nothing can stop america when you get down to it its been true all along theyve been interrupted with the scariest of scenarios when you had a war of one group of states fighting another group of states it may have been tested again in the great depression, and it may be tested now to some degree but in the end, the answer is never bet against america. Jim, how do we put that to work meaningfully . When you start comparing things to the war between the states or the civil war what that says is, you know, buckle your seat belt 500,000 people, some say 600,000 people killed. I know we addressed that thats not an investable situation. The union won the war, but the idea that that was invoked sent chills down my back. The depression, yes. The comparisons between the two well, depression is not as bad as the civil war. The republic both times was in question the republic clearly in question during the civil war because it was split. But the republic also, if you look at the politics of the time, the center might not hold. It did hold. When he compares it to those two, what i say to myself is no wonder he didnt buy when the s p cratered on march 23rd he didnt buy. He sold. Obviously he didnt think this was the level. If its the civil war comparison, obviously youre talking about dow down substantially. So, look, there wasnt america will win yeah, like, 1863, we had a real solid look that lincoln was going to prevail i dont know thats why theres a big monument, it turned out to be a beautiful stage. You know, go back and read some of those speeches. The republic was in peril. I hope its not like that. Started 1864 yeah. Some of those speeches are pretty well known. Yeah. On that note, jim, lets get to bob pisani and get a market look hi, bob. Hi, happy monday. 2,800 on the s p we were at 2,939 a short while ago. Were 5 off of the recent highs. I watched mr. Buffetts comments, im surprised he didnt have any bargains out there. Wasnt doing a lot of buying you can see the impact on the airline sectors. Jets is the big etf there. Thats down. Energy is weak banks, retail. All of these had great rallies in the early part of last week theyre the ones declining now utilties was the only thing in the green at the open, now its in the red now the hard part starts for may. The rules of investing have not repealed, so it does matter. Were only 17 off of the highs now. The risks and things out there, we had massive fiscal monetary stimulus, hopes for treatment of a vaccine and reopening hopes. Those are sort of the risks were seeing now the risks are clear. We talked about them on friday the reopening would go slower than expected. We saw talk over the weekend of longterm closures now in california, maybe 50 of the restaurants may not be able to stay in business even if there is a reopening the risks out there, if we put up the next full screen, theyre quite real earnings revisions are real. The market is comfortable with a 25 decline for earnings in 2020 but not 35 or 40 we dont know if thats going to happen thats a real risk now and of course theres some issue about whether or not the fiscal stimulus will keep coming there. We heard discussions about how much aid there should be to states and local government is, and finally china tariffs. Its tough to get a handle around stock valuations and what we should do in may because of lack of guidance lets look at today. 114 companies have suspended guidance thats 25 of the s p 500 has no longterm guidance, and were only 60 through earnings season that number will grow. 79 have suspended buybacks, 31 have suspended or cut the dividends, thats mostly in the Consumer Discretionary and energy space this makes it tough to figure out the right valuations and why were still getting 400, 500point moves in the dow on a daily basis. We are still getting companies withdrawing guidance today air canada, gatx, a transport company, national retail, one of the big reits, they also withdrew guidance. Going to be tough figuring out valuations in may. Carl, back to you. Thats for sure thanks well take a break here. In just a couple of moments, cramer with benioff on reopening america. Dont go anywhere. I came across sofi and it was the best decision of my life. I feel cared about as a member. Were getting a super competitive Interest Rate on our money. Were able to invest through the same exact platform. I really liked that they didnt have any hidden or extra fees. Sofi has brought me peace of mind. Truly thank you for helping me prepare for whatever the future has in store. Can 2800 hold as the s p heat map shows a sea of red . Travelrelated names getting hurt after buffetts comments this weekend in a couple of minutes, benioff with jim dont go away. It started with a few 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 find a stock basedtech. On your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. [female vo] restaurants are facing a crisis. And theyre counting on your takeout and delivery orders to make it through. Grubhub. Together we can help save the restaurants we love. Lets get to jim in stop trading. Goldman wants you to buy the oils again the way theyre doing it is to say quality is on sale and theyre highlighting conocophilips. They downgrade chevron but only because of how great the performance is from fixed buy to buy. The goldman stuff is interesting. Have the oils gotten down enough, is it the bottom or not . And i know that mike worth, the terrific ceo at chevron said its the bottom. Im much more circumspect because i want to see demand, and id like to see supply ratcheted back russia brazil says theres about 1 Million Barrels coming off per day in the u. S. , but were still not seeing the decline its hard to shut down a well. Theres factors involved including transportation agreements to be able to ship. But you have conocophilips if you love oil gas buddy said demand on saturday was up one sixth, taking you back to mid march has people are driving around. Its warmer. I mean, do you not believe at least, were seeing a bottom in the month of may i do. I think thats why i mentioned it i feel that i dont really like the group at all, but i think if you did like the group, its had a very big move off the bottom really big now you have to be very selective. Because the market, the oil market really anticipated this the oil stocks started going up the same day the oil went to minus 37, and i believe that minus 37 was a complete anomaly, and now i feel that you know what this goldman once you buy them, but you have to be careful, because the balance has been incredible dont get carried away the other thing we didnt get to were elon musk tweets from friday and adam jonas today taking it from 440 to 8 680 maybe exferrari, the Fastest Growing oem. I know there are people who show you, like irrational exuberance in green span, where he didnt do the right call. I go over what i think that elon is being very lets say critical of where they are i mean, i think he wants to have germany fly. He was very upset about what happened in california therefore, you would think that if the fascists, so to speak, as he said, dont change their way, then maybe tesla is expensive. I come back and think can you imagine you have a football season and ford and gm, they spent all that money on advertising and tesla doesnt need to advertise . Because word of mouth. Thats been the strongest why i like tesla so much i really like it sorry, elon, i think youre going to get your way in california eventually. Well, his tweets were also interesting for any number of other reasons including his decision to potentially sell almost all his worldly possessions, although he wants to be careful with gene wilders house. Make sure you sell it to the right person fascinating. Isnt gene wilder great yeah. Yes. Young frankenstein, Blazing Saddles y. Willie wonka. Went from buy to hold right . We mentioned we talked a lot this morning about aviation for obvious reasons given buffetts comments and Everything Else we also mentioned briefly ge and that memo that was sent out by vice chair and president david joyce issued earlier today developing the employees theyre developing a plan for permanent reductions to their Global Employee base that brings total reductions they anticipate to as much as 25 . And we spoke last week, of course, with larry culp about the situation in aviation. He pulled no punches in describing how difficult things are. The first and most important step we take as a company in the face of this pandemic to make sure we come out on the other side a better, stronger ge is to embrace the reality of what were seeing clearly the pressure is going to be no greater in the shortterm and maybe over the median term for us than it will be in aviation, given the airlines are trying to conserve cash. Parking planes, bringing flight schedules down postponing in some cases, orders of new planes. That hits us yeah. I mean, no shortage of challenges there for companies that were, again, in ge, we spent a lot of time talking about the remaking of the company that had been underway under the leadership of mr. Culp and the fact they were starting to see some momentum, and then well, like so many other companies, completely out of their hands the things theyre now dealing with but they have 47 million. They did raise the cash. Theyre using a lot of cash. Health care is good. But no, it is like buffett said, this is this event that people didnt ensure against, and look, i think that larry is going to come out okay. Larry culp but i think this industry is not a 2021 story it just cant be too soon yeah. Well watch that one its a big story for us today. Its 10 00 good morning, everybody. Welcome to squawk on the street. Im quintanilla with sara and jim and david. Were getting factory orders right now. Lets get to Rick Santelli rick carl, were going to have a date with history on both these numbers. On the march read on factory orders, down 10. 3. This series started in march of 56. The lowest ever month over month negative change was august of 2014 at minus 9. 7. We beat that minus 10. 3 if we take x transportation, thats down 3. 7 durable dpoods orders, they started in february of 92 in their current rendition. The smallest number, month over month was minus 14. 4 we beat that minus 14. 7, another date with history. And, of course, we look at the internals, extransportation down. 4 capital orders nondefense proxy for Capital Spending down. 1 my guess is thats going to get worse as time goes by. These are march finals it also means that minus 14. 4 gets removed that was a mid march it gets replaced with minus 14. 7 and if we look at orders, it switched to shipments, shipments are down. 2. My guess that also is going to fair worse over time both the number series are the biggest month over month negative change weve ever seen. The response in the marketplace, counterintuitive tenyear note yields go up a basis point. Obviously markets have the data points factored in jim, back to you thank you so much, rick thank you for all the stuff you do that explains this to us. Joining me now, marc benioff with an incredibly Important Initiative i think this is one called work. Com that is to me what if i were running a company, i would be sorely in need of because it puts it in perspective for your company marc, welcome. Jim, thank you so much. Im delighted to be with you this morning you know, jim, weve had so many conversations now, and our hearts remain with everyone who has gone through this traumatic situation with the virus over the last several months. And as this has unfolded for us, what weve seen is three phases. Weve talked about that on your show the first crisis phase were in, its really this 90day phase when weve gotten everyone in our homes and weve taken shelter. Thats when sales force actually has now purchased over 60 million pieces of ppe and distributed it to several hundred hospitals all over the world to help bolster our defenses against the virus but jim, during this crisis, weve learned something very important, which is that as we move into phase two, the virus is going to still be with us, but were going to reopen this how are we going to reopen safely thats whats been on our mind at sales force thats why today were introducing a new product line to help our customers reopen safely we think this is going to be a critical part of allowing our customers to get pack to work and do it safely when i look at work. Com, one of the things that strikes me is besides the demand center i like, its a process theres a procedure. Weve lacked company after company is anecdotal about what to do. And one of the things i think is really incredible is that if you were able to get Public Health involved with say, what google app were doing, Contact Tracing which is available, then we would actually know as employees who is sick, or without any privacy invaded, you were the first person your Emergency Response Management Section that really makes me feel like we could be taiwan taiwan being the single greatest country onnette when it comes to this you have a taiwan going on when it comes to work. Com do i read that correctly when we go back to work, we have to bring in ppe not just to hospitals but work spaces. Thats why were talking about having masks in the workplace, for example. Things we can do to reduce the spread of the virus in the workplace, because when we get back to work, the virus is going to be there, but we want to mitigate our relationship with the virus so ppe will be important, and of course, were going to have to maintain social distancing that will also be extremely important in the workplace thats going to be a critical part of getting back to work and of course, well be checking fevers before employees show up at the office. But we will also use Information Technology in a smart way to mitigate the virus that is we can do things to help people be safer at the office. An example is very much what you just said. We knew that the person that you are sitting next to yesterday called in today and they were tested positive for the virus. And when we talk to them, they said they met you, this employee, that employee, the other employee and were calling all the employees back thats Contact Tracing the idea that we can talk to and inform and manage the relationships that we have with those who may have been affected and, of course, like you said, those employees will have to be selfquarantined i think that were going to try to get the accessibility of a key part of your plan. New resources. You got doctor daviding a us who is sensational dr. Scott gottlieb will you be able to access those if youre a good client of sales force or is that videos and really just no one on one . Thats live today on work. Com were capturing the best advice, best words from those doctors like you mentioned but also tremendous business organizations like the business round table and others who are telling and informing businesses heres a safe way that you can reopen those important elements of our community are critical and we want to bring everyone together in a place where they can talk and share this critical information as well so they will have a community. They will have apps, and they will have advisers and we hope that the combination of these three things in work. Com will give the ability for our customers to reopen safely all right one last question. I know youre on a council the president set up will you share this with the president . A lot of these things could be done by our country and could be valuable if everyone played . Well, i think this is something every company is going to need who wants to be able to have a great relationship with their employees and their customers. We know that were going to have to create these kind of new tools, next generation capabilities, but this is the beginning of a journey theres no finish line, jim, when it comes with battling down this virus and i think that work. Com is kind of going to be a very critical part of entering phase two which is what i see happening over the next couple of months. All right thank you so much. Good to get those at 1 00 a. M. This morning im always happy to get woken up by you its good if its value able, and it always is marc benioff, the ceo of sales force. Great to see you. Jim, that was good stuff. I guess were going to see more on mad tonight yeah. I cant wait to talk to marc i got some sleep after marc woke me, 45 minutes it was fantastic jim, thanks for sharing some of it. I cant wait to see more mad money, of course 6 00 p. M. Eastern time guys, interesting session here as the low for the session was down 362 as we started a busy week, a lot headed our way over the next coming days whether its earnings or data the jobs number on friday and so forth. Yep jobs on friday its going to be ugly when it comes to the numbers as far as whats setting the tone this morning, what you guys have been talking about, Warren Buffett, no question the caution he expressed, the microcosm of the selling the airlines without knowing when revenues would come back and people would be back as far as the number of others from statements he made that may have been more subtle, our colleague has a great column on this this morning in the New York Times jux have a posing what buffett said during 09 when he was buying when stocks were crashing versus now where he seemed more cautious saying they have to protect fort knox. Worth a read potentially having an impact on psychology here, not just the airline but the markets overall. And the comments on china which continue to get tough from the president , from mike pompeo who pushed this idea that the virus may have come from a wuhan lab and the fact that we could be launching more tariffs and more trade tensions in the middle of whats already been a pretty dismal economy as we head into an electionwhich very well could be a referendum on who is trusted to be tougher on china, joe biden or donald trump . And we know where that goes in terms of rhetoric, at least. The question is is there going to be a policy response . Yeah. And to your point, theres not that much different between at least the two parties, it would seem, on their approach to china at this point, but it may be worrysomefor t wor worrysome for the world economy. There was one area where there was at least sort of bipartisan support in terms of trying to punish china or level the Playing Field as people say. But weve talked a lot about the impact this is going to have even without the rise in hostility, there are going to be companies that do believe they need to change their supply chain, even in a way, carl, they hadnt previously during the height of the hostility during the backand forth over trade its remarkable i mean, three big stories today, david, regarding bringing back supply chains, the president promising a conclusive report on the origination of the virus, and this dhs report, according to the ap, which says that china did, in fact, cover up the extent of the outbreak to stock up on medical supplies those are three big stories well keep our eye on. Jim oneill joins us this morning, Asset Management chairman its great to see you, jim, welcome back thank you sara sort of laid out some of the reasons for this sentiment that stocks are expensive whether its china tensions, whether its the disconnect between an economy thats reopening versus an economy thats normalizing what do you make of all that yeah. To be honest, i havent got a clue i read something a few days ago that you yet again after 40 years, following the markets, they remain as mesmerizing and fascinating as always. And i can see the same bearish case that it seems to me the overwhelming number of experienced market cparticipants think is going to happen, but i also, and here i suspect i might differ a bit i can see the cases to why the markets recovered and why the bearish trail might be wrong theres a lot of huge unknowns about whats going to happen it depends on a lot of policies still to happen. I remind you when this all first started in january, it was just as big if not bigger concerns. This would be definitely similar in terms of economics and markets. To what happened with sars as difficult as that may be, i dont think it is entirely impossible interesting to the degree youre turning to, you would turn to a more bullish case, is it based around unlimited support from central banks, robust fiscal support, or is it just behind the sense that Economic Activity probably cant get any slower than it was in april, and will be looking at at least sequential gains in activity in the quarters ahead i think its ill take them possibly in reverse order i think its almost definitely the case, the absolute worst of Global Economic growth has put in some form in the past two weeks. As im frequently fond of saying on this program and many others, over the past decade about 0 of gdp has come from the u. S. And china, 80 china seen the worst of its decline back in march. And while some of the stories about italy and spain and all these places they were horrific, beyond huge generators of global gdp growth bear that in mind, and if you look at how so many countries are now coming out of the lockdown, its being done. Well have some of the economists, whether its the states or many parts of europe i think we probably will start to sequentially come away from this horrific trough that well be in in the second quarter. Thats, of course, assuming theres not some kind of second dramatic and then thirdly right you said weve had enormous policy stimulus, particularly in the states, much bigger than we had in 08 jim, want to ask you your perspective, not just former ahead of Asset Management, but you advised the British Government on health care. And i think worked on antibiotics in particular. For every bearish headline, it feels like theres a bullish headline and todays is roche with an antibiotic test at 99 specificity. More accurate than the other tests. Im wondering what you make of the advances from the global pharmaceutical giants on treatment and testing and vaccines and how quickly it can bring us back. Well, one of the other of the few positives in all of this, and by the way, linked to what you just said, this popular notion that globalization is over, i think its not completely without any foundation, but most of it is. A lot of the best examples links to what youve just said the global pharmaceutical industry is the numbers are demonstrating a degree of agili agility, speed and cooperation that in my limited experience, as a result of you wouldnt have thought was imaginable. And the least of the other 100 vaccines that are being to my knowledge, at least ten of them have hope. Two separate ones here in the uk, and a number elsewhere, and as you just mentioned about roche, all sorts of treatments with astonishing speed and that in itself, is obviously probably going to result in some kind of effective treatment quicker than would typically be the case it also raises in my mind that thats the kind of ingenuity that modern human beings are capable of, and its true whether its the heads of private businesses its certainly true when it comes to fiscal and Monetary Policy makers. I find my mind thinking this weekend that perhaps a number of countries, not so applicable to the u. S. But elsewhere, might finally result in some broader idea of policy than just inflation socalled nominal gdp talkers, for example i wouldnt be surprised if that started to happen. Because many of the policy ma r make makers, we need them to try to commit themselves to ensuring that we get a strong vshaped recovery all those things are not impossible obviously i can easily see all the reasons as to why so many people are bearish and i think its very delicately balanced i terms in terms of today actually is a big day for the s p given the big recovery in how we got up close to 3,000 last week and then it failed straight away the bears come back for restoring everything you can hope for, but if we end up in positive territory, i think that i think its delicately balanced and im trying to keep a very open mind. Well, i wonder how i mean, you mentioned globalization is not dead when it comes to the global pharmaceutical industry and some of the work being done behind the scenes from the doctors on coordinating. At the same time, protectionism is rising. Its not just the u. S. Playing the blame game with china on the virus. We heard comments from the uk as well do you think all this results in some policy action you think its right to think back and go back to history backs at smoot hol lee and looked a what happened when you launched tariffs in the middle of an economic recession thats where you get your extreme bears, and i worry that donald trump and those close to him seem to be digging themselves a very big hole about this china stunts that theyre going to they might see some political advantage, but it doesnt make a lot of sense to me other than some shortsighted politics i also read something a couple weeks ago about this whatever china did, and its pretty clear they did at least a couple of things wrong you know, why is it so on saysive obsessively important that the u. S. Keeps banging on what they did wrong. Its pretty clear the 2008 crisis was cause d by a mammoth valuation in the United States and last time i looked i didnt see any following country trying to blame the United States and paying for the carnage that caused for the world, and most people wanted the u. S. To get out of it and back to normal so i dont really understand why its so appealing for the u. S. To go down this path, but its very unhelpful just as were talking. Im not sure how much you focussed on it on the show, there was an interesting voluntary initiative being driven essentially down the welcome trust, the policy that sponsored a review which is essentially getting other global governments to try and volunteer funding to come up with the 8 billion to 10 billion money to accelerate that development and treatments and diagnostics that should have happened two weeks ago at the g20 meeting. But of the u. S. s stance on the w. H. O. , nothing actually happened and the contrast between that and 2008 and the leadership the United States played through george bush officially in 2008 is astonishing, and frankly, that is part of the bear case, and its very disturbing and i really dont understand why its so logical for the u. S. To go down this path its not in the u. S. s interest at all. As youre talking, jim, Peter Navarro is on fox saying buy american for medical products will soon be required. Whether its that. Whether its supply chain issues with our own meat processors this this country, is your head anywhere close to considering inflation a major problem . Theres also ultimately the key issue for this all thats in place the idea that comes with every time we have some kind of global shock, people jump to the view that globalization is over at the end of the day, particularly with technology and the internet, human beings basically want the best they can get as consumers, and usually the most affordable price. And given that the u. S. Economy for most of my lifetime, i was going to say adult lifetime, but the whole of my lifetime has essentially been driven by the u. S. Consumer wanting to acquire and spend and enjoy when it comes to anywhere around the world at the most affordable price unless this die america is going to translate into everything being at least as cheap, that doesnt make its great rhetoric, but it doesnt really make a huge amount of sense, and again, just getting out of this crisis right at this moment, the best vaccine developments is not coming from inside the United States its coming from outside the United States. So what is the u. S. Going to do about that if somebody else has the magic vaccines to solve this problem, the u. S. Isnt going to want to use them i cant imagine thats true. Right jim, its good insight major questions. Were nowhere close to answering. Look forward to talking to you again soon good luck, guys nice to see you all. Warren buffett holding a virtual meeting. It was done virtually over the weekend. We have the highlights and a break down of some of the bigge biggest headlines. The show went on, but it was a little different than we usually expect none of the crowds of the 40,000 or so shareholders who are usually there to watch all this. Warren buffett took the stage in fact he was joined on stage by vice chairman of berkshire, and he went on with his message. It was pretty positive saying you should never bet america he even put those words on the screen to make sure he emphasized them. However, saying never bet against america is not a call for average investors to go ahead and plow money into the stock market buffett said he doesnt know whats going to happen over the next month or year even over the next five years and thats a message he was holding onto himself just talking about what hes doing with his own money right now berkshires cash position is 137 billion thats up from the end of last year thats because he says right now in situationslike this, cash i king we want to be in a position at berkshire, well, you remember the streetcar name desire . Thats before many view. But she said she didnt want him. She said that, shes depending on the kindness of strangers, and we dont want to be dependent on the kindness of friends even, because there are times when money almost stops. And we had one of those, interestingly enough, of course, in 2008 and 2009 but right around the day or two leading up to march 23rd, we came very close, but fortunately we had a Federal Reserve who knew what to do. In fact, the Federal Reserve, buffett credits the Federal Reserve with the quick actions as a way of stabilizing the markets. He said thats part of the reason that more companies havent come knocking at berkshires door they can get prices and financing in the markets at a better level than they would have gotten, than they would have come if they had come to berkshire. Thats different than in 2008 and 2009 maybe the biggest news coming out this weekend was the news that berkshire has sold the 10 stakes that picked up in all four of the Major Airlines over the last few years we knew there were some sales but what was newsworthy is they sold every share they had, 10 across the board for united, american, delta and southwest. And heres why he explained on that the Airline Business, i may be wrong, and i hope i am, but i think it changed in a major way, and its obviously changed in the fact that their four companies are each going to borrow perhaps an average of at least 10 or 12 billion each. You have to pay that back out of earnings out of some period of time youre 10 or 12 billion worse off. In some cases theyre having to sell stock or sell the right to buy a stock at these prices, and that takes away from the up side and i dont know whether its two or three years from now that as many people will fly as many passenger miles as they did last year they may and they may not. But the future is much less clear to me an how the business will turn out as a result of no fault of the airlines themselves he did not think this was the fault of the Airline Companies he said all four of the ceos are excellent. He also said all four of the companies are wellrun companies. He just said hz assessment of the business overall changed thats why we went ahead with these moves. Back to you. A sharp reaction in the share prices for the airlines. I wonder if its too much to extrapolate given how important airlines are for the economy and how travel demand is key for the k economy, whether this is a bearish statement on how our economy can bounce back. It could be, but i think the airlines are in a particularly difficult situation. Just the thought of travel when you have people who arent even going to work at this point, youre not going to see business travel, and that makes up not only 45 of the overall volume for airlines or had been up to this point its 55 of the profit levels, too. And i think its going to be a while before people feel comfortable. Youre going to have to see this play out and see if not only the consumer is willing to start but if businesses are willing to put their employees on some of the trips. That may be what you see playing out. The stocks are not off as far as they were early this morning at one point i looked and all four of the airlines were down by about 4 the other issue is what kind of role the government is going to play and what that role means to existing shareholders. Those are questions that have yet to be answered becky, thank you. Great stuff again. Were watching all weekend lets bring in gordon baa thune on Warren Buffetts moves or not airlines. As someone is an industry veteran, do you agree with the assessment here . Well, absolutely. I think hes probably understating the problem in that the supply chains of boeing goes around a little and there are a lot of other Public Companies depending on boeing business to make their target earnings and their expectations for their shareholders so were not only going to have a depression on Airline Investors and the airlines themselves but all those people that are the component makers and equities are going to suffer thats going to temper not only the business viability, but youve also got what warren mentioned as the confidence factor youre in a 250 seat tube sitting next to whom and what do they have . So do you feel you have a vaccine thats going to immunize you, youll never feel the comfort you have you have a huge backlog of airplane parts so boeing doesnt need to make anymore airplanes because they cant afford the ones theyve already sold, and number two, youve got a creeping so you cant make it happen confidence issue that people have to have before they go its just not its just a next three years are going to be bleak. So what are you saying . Its going to take three years to see what . The demand for Airline Travel that we saw in to 19 2019 i pulled that three years out of my tail end im just knowing that fear is an unreasonable thing, and theres a lot of unreasonable fears. You can see it with some of the bizarre behavior people go to Great Lengths to say stanitized the economy was hitting on all cylinders before this. The airline was expanding new routes and new opportunities for business and all of a sudden that just got shut down. And until up until the governments and of course the constituents, the people, need to get back on airplanes, and feel theyre going to be safe doing it, its never going to happen to the extent that it has in the past. And i dont know how long that takes. Youd have to be a personal meter. Your guess would be as good as mine i know its a year or two before there are no more covid19 picked up, flying someplace. That really set us back. I got to say, its even more bearish hearing this from you because youre always a defender of this industry and of these companies. I know you probably would agree with buffett, its not a fault of their own i wonder how unique the Airline Industry is and some of the operational challenges and financial and Political Considerations versus other industries that have been hit and other parts of our economy that are suffering as a result of this pandemic well, as warren mentioned, theres four big boys and all run by smart people. Part of the plan Going Forward has been what are we doing in the case of a black swan event like this covid19 and their fleet and how it matures whether the leases expire or they can sell them, all that fleet ability to remove that data off your Balance Sheet, its important. So you see lots of airplanes parked youre going to see greater returns. Youre going to try to manage that fixed cost which is horrible and, we have only until september 30th has the government bailed out the employees. So september 30th, all that free money thats been paying their salaries were doing nothing, essentially the past few months, is going to disappear. And so thats going to be catastrophic i mean, to a lot of families but swim upstream and go into who made the parts and how many Spirit Corporation in kansas makes the slots. They dont have a customer until they get orders for that airplane and who is going to be buying airplanes in the nearterm i dont see a really rapid up tick in equities and the airlines i really feel sorry for my friends stuck in this time its through no fault of their own, but this is like i said, more of a black swan event than i think ive ever faced in my life yeah. I think a lot of people obviously agree with you, gordon kran dal was on earlier this morning. He did say that flight, commercial flight is a national imperative, that it needs to be ensured by a nation to make sure it exists, and i just wonder if you see us going to more of a dubai like model where its state supported and fair structure looks different because of the regulation that would follow you know, i have the upmost respect for bob krajds, but im talking about human nature its not the government. If some politician says its okay, carl, what do they know . You want to see the covid19 is gone you can get on and get a common cold anywhere, but until you reach the airlines, just like on a subway, or taking an uber to eat dinner, its not going to be the same of course, the cost of the airline, its not the cost of the tickets. Its really come down given the really smart competition and the way theyve grown. So that ability to go where you want to go and get back the same night is going to be even faired as well as your own desire to go in the first place bobs right, but i dont think the government can fix this. Its not a government issue. No. But to carls question, and its david, are we i mean, listening to you for the last five minutes, it sounds like we may get to a point where the government has to make a decision as to whether nationalize almost the airlines. Do you see that as a real possibility . Do some of these become like amtrak or for some period of time become wards of the state until the environment changes enough that they can be Profitable Companies again i think theres always that possibility. Thats pretty draconian. Amtrak never made a nickel if you want to drive into that part of the income stream, i think just to have the airline take it over, theyre not going to run it any better than the people that run it today what it is, is they get a confidence factor in our economy. That you are going to get the order for the seats. All the things around the world go back to work, and once you go ba back to work, you have to fly because business is 45 of the traffic. Thats going to happen the government is saying were going to own you ensures its going to be a National Drain on our economy. Quickly, gordon, were seeing a little bit different share price reaction southwest is only down 7. 5 . The others down more than 9 theyre not all created equal. They have different Balance Sheets some of them are more indebted than others and have different exposures in terms of the routes would you differentiate your prognosis based on the different carriers the worldwide boys, and i count southwest as worldwide theyre joining the club theyve got the territories covered. They really made the investment on the equipment and the expansion. And i think thats poor. I mean, if you could go back to your grandmothers day when there are only three car makers in the United States, that was planety f plenty it gives you lots of opportunities to go anywhere in the world. I think theyre going to go where the money is if traffic to london picks up, theyll put more capacity in there c but theyll have to follow the traffic the traffic is not going to dictate whats going to be the best route the people who want to fly that route are going to decide, and they vote with their wall let and feet i think theyre prepared i see long lines of parked airplanes and i know how much they cost. When you have that much fixed cost, its grueling. And of course, they can borrow money, but its a fixed term as warren points out. So real solution into remaining the confidence that the vaccinations will stop you from getting infected no matter if youre on the subway or airplane once that happens, then its back to open season and people will go swimming we pray for those days. Gordon, thank you. Thank you good luck. Lets get to sue herera for a news update. Hello heres whats happening at this hour confirmed cases worldwide of the coronavirus are now above 3. 5 million. Even as concerns about undercounting persists europes center for disease prevention and control says the eu has passed the peak of the pandemic as commuters go back to work with enhanced safety procedures at train stations in italy and other countries. Jay crew has filed for bankruptcy it is the first major retailer to do so amidst the pandemic the company had been struggling under a heavy debt load and falling sales before the pandemic j crew will continue to say stan business and will reopen stores as soon as its safe and in colorado, paul kerri came out of retirement to fly to new york and fight the pandemic. He caught covid19 and died of the disease a month after going to new york. He was a paramedic and firefighter for 30 years in aurora colorado. He was 66 years old. As always, for more on the coronavirus coverage here at cnbc, you can always go to cnbc. Com sara, back to you. Sue, thank you lets hit our etf spotlight. Today a look at the Communications Services sector xlc is the etf its down this year but outperforming the overall market one of the groups top holdings, disney downgraded to neutral from buy the firm citing economic pressures stemming from the outbreak the earnings are due out after the bell tomorrow. Overall market, down about half a percent. Energy, technology and Consumer Discretionary positive so is the nasdaq dow is down 200. Making ulop st ground. Were going to take a quick commercial break stay with us were committed to making college more accessibley, by making it more affordable, thats why were keeping our tuition the same through the year 2021. I knew snhu was the place for me when i saw how affordable it was. I ran to my husband with my computer and i said, look, we can do this. [narrator] take advantage of some of the lowest online tuition rates in the nation. Find your degree at snhu. Edu. Featuring the Emmy Awardwinning voice remote. Access to your favorite apps, including netflix, prime video, youtube and hulu. All without changing passwords and inputs. The most 4k content and movies and shows on any screen. The best Entertainment Experience all in one place. Some businesses and states are reopening but how far down the road are we . Steve liesman has the numbers. Carl, were able to use Realtime Data to track the reopening or in this case the continued closure of america were finding very little impact this is the roadback barometer of the reopening of america. Were looking at three metrics specifically the first is yelp store closings compared to a week ago the latest data shows 14 more Stores Closed and thats in every single state there were no reopenings 107 is the average number of infections relative to the longrun average were running higher we are testing more. The number of infections were finding remains above the long run average. Finally, traffic as a percentage of normal traffic and it is still running just 22 lets zero in on the store closings state level data from yelp the Stores Closed 0 to 8 , those stores compared to a week ago up to greater than 22 whats a worry is the red states theyre red because theyre Energy States. Oklahoma and rr rr, what that suggests maybe is that you have another round of store closures, perhaps for economic reasons whereas the first round of store closings might have been because of the covid crisis, there may be another round for economic reasons. You can see that in the Energy States three elements of the road back. First state governments lifting restrictions weve seen some of that. Second do businesses feel safe enough to open third, do customers do carl, were able to track in realtime if they open it, will they come . And so far not a lot is open and not a lot of people have vent e ventured out its a good way to look at it keep us posted lets hit insurance. Usaa returning another 280 million to the members totaling 800 million in dividends with fewer drivers on the road because of the coronavirus joining us to discuss this, and other ways insurance is battling this, wayne peacock. First, how insurable is an event like this . A pandemic well, lets come back to what we do every day which is personal lines and serving members who have Auto Insurance, Homeowners Insurance and their renters products. I think those coverages are straightforward and were well prepared to serve there. I think whats interesting right now is that all of the data that you would use to determine how often folks would crash and how much those cost, the crashes cost, are thrown out the window given the demand shock and all the stay at home orders that are resident around the country. So thats why youve decided to return this money, this Auto Insurance to your members . Is it making a big difference . It is we are built to help our members. We serve every day and work hard to serve well in times of great need what weve seen through the middle of march through today is that our members are not driving because of stay at home. The result of that is well have fewer costs to serve those auto products this year, and were able, capable, and willing to deliver some of that early to them in the form of distributions. So we did that a couple of weeks ago for two months at 20 . About 520 million and last week we announced that well do it for a third month. It brings it to about 800 million that well be returning back to ussa members part of our Broader Mission to helping when folks need us most. About 700,000 of our members have accessed programs across insurance and banking to defer payments or suspend interest, to suspend fees and not cancel policies during this really tough time and were really prepared to continue to do what we have to to help our members at this time well, wayne, you mentioned it it is a really tough time. So were always looking for good news i would guess there is some based on the accident rates, and fewer deaths on the road i mean, what do the numbers look like and what are your expectations in terms of when america gets back to more work are things going to increase commensurately well, its interesting, david. I think on average its been about 40 to 50 fewer accidents for us over the last few weeks the numbers vary a bit week to week the last cup l weeks weve soon an uptick in the rates. Not because stores are reopening as Steve Liesman was talking about a few minutes ago, but i think theres either a cabin fever or string fever in the air, and were noting if you drive around, there are more cars on the road and were seeing that statistically in our accident rates as well just really in the last two weeks. It will be interesting over the next few weeks as States Reopen and relax those orders, what the driving patterns might be, and how quickly we do or dont get back to normal wayne, your company came under criticism in the news a few weeks ago when the government stimulus checks started being mailed to americans and your primary members are veterans and military personnel were you actually withholding those stimulus checks from those members to help them pay off debt well, i think what we all know is that these programs came down very quickly. The right thing to do to get money in the hands of everyone in america who needs it, i think to the letter of the law, the process that we used made sense. But it certainly wasnt the right thing to do. And when we became aware of it, when i became aware of it, we got it right it took us about 24 hours to make that change, and i think one of the lessons in the pandemic is you make the best decisions you can every day, and you adjust and adapt quickly, and we did that in about 24 hours. Wayne, on traffic patterns, one last question on that as well some of these mobility trackers were getting out of dwogoogle o walking and driving is ticking up a little bit. Mass transit looks more lshaped i wonder if you think you might be looking at a step function in longterm Motor Vehicle traffic versus buses and trains . Well, you know, its one of the great things for today were trying to make good decisions today and then pressure test and scenario plan for the future i think some very interesting macro trends to consider, will urban dwellers move to the suburbs because they want more space and escaping concerns from the virus. Will folks go back to driving their own car as opposed to using uber or sharing rides . Will the concern about mass transit say theres more be more focus on driving personal cars, all i think very interesting questions with a very wide range of outcomes associated with it were studying all of those and scenario planning for a future through and then postpandemic finally, you know, wayne, how do you think how many losses youre going to face across property and casualty as a result of this pandemic and do you think it would be appropriate for congress to act to step in and help your industry during this tough time . Well, heres what i would tell you we built usaa to take care of members and to be there when they need us most and we ethically every day act to do the right thing and pay what we owe and i think we have an upstanding industry broadly and i think the markets will function really, really well i think youre seeing already all of the major carriers made some decisions to return premiums back to members, recognizing that they havent driven as much as everyone expected this year and then i think we have to step back from Auto Insurance and recognize although Mother Nature may be in one side dealing with the pandemic, she isnt really connected well with the weather and weve already had a very tough tornado season through the springtime with the expectations that there will be a tough Hurricane Season as well for all of us, managing this group of risks, managing them really well, connecting them back to future premiums, is what the Insurance Industry is all about. Its got a very long history of understanding risks and pricing it well and i think were she strong advocates of having the markets function and function the way they have in the past. Wayne, thanks for joining us, from usaa. Thank you all very much stay safe. You too we have the s p off the lowes of tlows down about 1. 5 . The nasdaq is up led by the likes of amazon, netflix more squawk on the street right after this earnings from ride sharing rivals lyft and uber could provide an important read on consumer activity and the economy. Find out more on tradingnation. Cnbc. Com more squawk on the street coming up. Welcome back to squawk on the street. Im eric chemi stocks are trading lower to start the week with most sectors in the red real estate stocks are among the worst performers today even as parts of the United States begin reopening Shopping Center operators remain the big laggards within real estate. Companies like vornado, federal realty and kimco are all down at least 3 today these retail reits have underperformed the broader real estate sector which itself is under performing the s p 500 by 4 in 2020 sara, ill send it back to you eric chimmy, thank you. Were going to take a quick commercial break checking on some of the winners, f. A. A. N. G. Doing well also coming up on the closing bell well talk to tyson foods cfo on what was a dismal quarter. Of course the potential meat shortages in this country, plant closings and the president invoking the defense production ac cinupat well be right back. We hope you find our Digital Solutions helpful to bank safely from home. Deposit a check with your phone or tablet. Check balances, pay bills, transfer money and more. Send money to people you know and trust with zelle. Stay safe. Stay home. Together, well get through this. Pnc bank are we risking lives to reopen the economy elon muy has more on that this morning. The entire Meat Industry is facing a worse Case Scenario how do you keep operating even in the middle of the outbreak the Trump Administration can mandate the processing plants remain open even as the cdc finds 4900 meat and bopoultry across the country have tested positive one of the hot spots is on marylands Eastern Shore and its home to purdue farms. Marylands governor has called the outbreak a threat to the nations food supply and local mayor jake day said profits shouldnt come before Public Health. We want that momentum back, the wind to once again be at our sails, but we cant do it at the expense of someones life. We cant do it at the expense of someones grandparents life we have a sense of obligation to protect our workers. Pure due farmers told us, quote, we remain focused on the health and safety of our people. Even within this new hot spot some residents are starting to push back against the lockdown orders just this weekend there was a rally to reopen local businesses carl, the good news here is that a new drivethrough testing site is now open in the area and the cdc is on the ground back to you. Elon muy with the story thats happening around the country, the natural process trying to figure out how to reopen market. Thanks. Good morning welcome to squawk alley. Im Carl Quintanilla with Morgan Brennan and jon fortt coming to you live from various location ps market does want to test 2800. We got 2797 this morning, bounced off of that as we continue to look at various reopening scenarios, buffets comments on saturday regarding stocks and the airlines and then renewed u. S. china tensions as well. We are going to begin this morning focused on the markets joys chang, jpmorgans chair of global research, joys us now joyce, good morning. Good morning, gre