Transcripts For CNBC Squawk Box 20240713

Netflix up and gains by apple and facebook getting help this morning from what we see in oil prices. Youll see wti is up almost 10 . Up about 9. 5 to 23. 34. That is a big come back for wti. Thank you, becky. Oil market market oil thats been a lot of the story want to bring you other headlines. United airlines as mentioned, planning to cut about 30 of management jobs in october according to a company memo that works out to 2,400 white collar jobs and has also warn the pilots to prepare for displacement that it will let go about 30 of its pilots. The airline has accepted aid and if they cant may pay by the end of september 30. This was always the issue, if you are going to give government money and taxpayer money to the airlines, you are going to force them to keep people on the payroll, you are eventually planning to let go of them anyway, there is something off about how this program was structured we want people to stay employed but either restructure to a bridge where they can run the airline and you are not and clearly in advance and united knows in which case, to borrow the phrase, are you really on i bridge to nowhere . What business is not like that restaurant businesses will need all the people they had. Name your business thats you are not going to have 100 retention. Maybe there is a few web stuff and on line. Many, many, many businesses. And working at home on top of that do you do a second stimulus then for the airlines . You cant just keep for everybody. Is it throwing good money after bad with no demand the plans are imperfect we have been trying to figure out how long this is going to last think back to six weeks ago, did you think wed still be sitting here working at home i didnt. I did i think we are making this up when do you think we are going back, andrew he doesnt say when, he says if honestly, when do you think we go back i think america goes back i think our particular job is unique in such that we have to be condition six feet of each other and around a table with guests i think it will be more complicated. Airlines, restaurants, we are in a similar boat all of these things with a vaccine, you could have restaurants packed again we are assuming you are going to have a third of occupancy and movie theaters if you do get a vaccine where everybody feels safe, you may have sporting events where people are sitting in their normal seats 100 , joe if you dont, the ppe, we keep having to extend. We run out of that, we have to get more i understand that the vaccine story, weigh understand so well now because of the guests weve had have discussed that vaccines at scale, even best Case Scenario is a 2021 story. Even if it is a january 21 story. That would be fabulous by the way, if you are asking me, i think there is a decent chance of that happening i think the world may go back to a real sense of normalcy keep me updated i need to know what you are thinking about when the vaccines are done it will make me feel a lot better we have pfizer on to talk about their chief science guy. They are doing a mr a similar to moderna. He might know something about it the simple question lets get to l brand. Both will drop litigation. L brand says it will spin off bath and body work to a separate publicly traded company and will plan to let victorias secret to operate as a stand alone less wexner will remain on the board. Andrew meslow will remain ceo of the brand and l brands apple issuing the chiefest bonds in years taking advantage of the feds to borrow monday on the chief they raised 8. 5 billion selling four different bonds maturities range from three years to 30 years. Apple has a large cash stash if you can baro money cheaply right now, why not good to have a cheap balance sheet. Elon musk looking to have qualified for a 700 million payday putting the market cap at 21 billion at the close that triggers the vesting of the first of 12 traunchs of options that have been granted as part of the 2018 pay package which we brought you and had a vigorous debate about two years ago now in davos there he is getting the money. If stock goes down at this point, he still captures those shares in other news, weworks cofounder adam neumann filed a lawsuit against softbank and vision fund. Frustrated minority Share Holders like neumann expecting a pay out of a billion if you read through the lawsuit, it was similar to another suit brought against the company by this special committee of wework which was representing the minority Share Holders it appears or at least the allegation is that softba purposely tried to upend so it could say certain conditions werent met. There were certain transactions in china, those didnt happen. The allegations were that they went out of the way to ensure this didnt happen so the larger deal wouldnt happen so they wouldnt pay adam neumann and the Share Holders. It will be fascinating to watch. When they get to discovery, youll get into adam neumann and the world of softbank. Get out your popcorn there has been so much written. I feel like i know him well already. Markets focus on rising u. S. china tensions. Eunice yoon is with us this morning. It is really good to see you it looks as though chinas top Intelligence Agency is concerned those tensions will get worse. Last month, researchers presented to xi jinping himself their concerns that the global push back is just as bad if not worst than what it was during the 1989 crack down on protesters reuters was told by sources that the internal report warned that china could see a push back of operation projects this could encourage u. S. And others to step up. Finally concluding that u. S. Would continue to fan this antibeijing sentiment in order to undermine chinas rise in a worse Case Scenario, could lead to an armed confrontation. It is unclear how seriously beijings leaders would take this report. What is interesting is the fact that this report was leaked at all. What is interesting is the leaked divisions about what has become a much more aggressive and combative style coming out of beijing it is good to see you again i dont know why we dont check in i saw an interesting political piece. Did you see this one china is really proud of the way they handled coronavirus and are kind of laughing at the United Statess response . All the time. I thought you meant in the state press. We see it all the time it is common in the television or papers about how poorly the u. S. Handled this. You ho they had a heads um for two months and how they were able to crack down quickly and were so gracious for the protective gear given from other countries and have been able to handle it so well. Kudoscha. We head to break, check out futures. You are watching squawk box on cnbc 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. Announcing it is imposing rigorous new standards after the agency would face criticism for hundreds of new tests to hit the market without proper review saying the standards will help crack down on fraudulent actors. Coronavirus deaths could rise sharply according to one draft model. Saying the covid19 deaths could reach 3,000 a day by june 1 and could be almost 200,000 cases daily. Joining us now is dr. Scott gottlieb and also serves on the board of alumina and pfizer. Great to see you this morning. This is a concerning report what do you think . Is it fit with what you are anticipati anticipating based on the number of cases now this is a good move by the fda at the same time, theyve proved new tests including a test with 99. 8 specificity. If i did an antibody test, and repeated it eight times. As far as the model that is leaked yesterday to the New York Times cdc doesnt have modlers on staff they work with groups to give those groups data and assumptions. They work with a group at hopkins that works with cdc that gave a sumgss over the course of may after a number of runs and it is not unclear if this is a model of what would happen the number of runs they did looking at different scenarios is it a worsecased scenario . There were models that looked worse than this one. It was unclear we can predict cases are going to go up over the course of may we saw Airline Travel up more where there is still a spread of the virus. You have to expect the spread to go up. They are not going to go down not much that will keep them from going down. The hope is that it will keep them from going up much. We have to look at how that looks and restart activity to give us a sense of normalcy. What it means most of all is weve got to protect those communities and settings with large outbreaks in places where people are crowded together in nursing homes, institutions and even shop floors in places like meat packing plants and in disadvantaged communities that lack access to testing and care and people who live in crowded housing. We need to focus on places that become more more indemocratic. We keep saying we need more tests and equipment. When do we get to the point where, okay, we can keep up with demand or do our best to keep people safe . Probably into june, well have robust testing. I think the issue Going Forward will be where can you go to get tested if the regulations are so ownerous that doctors dont want to do testing because if they have a positive, theyll have to shut down and do deep cleaned. Running through those regulations now to make sure they make sense that doctors offices dont have to go through extraordinary measures i think going into the summer, well start restocking that as well with a lot of capacity coming on line we got a late start on this. Heading. June, we are going to see a different situation when it comes to ppe and Testing Capacity heading into the fall, it will be much more this will become indemocratic over the summer. When you come back to the fall, you could have an ignition in a number of cases. New York State Health department put out an alert of what they are calling a pediatric inflammatory system. They talk about cases of children in new york City Hospitals with the system that they think could be related when it comes to toxic shock syndromes. Do you know about this there are various symptoms weve seen there has been reports in the literature of these kinds of conditions there was a notion that this wasnt really affecting kids it does appear there were kids being affectedby this. We know there were children hospitalized or getting very sick there seem to be unusual phenom nom affecting kids, not in a huge number. We dont understand this virus very well. It is really remarkable. We are still learning a lot about it it leads us to believe this is a more fear some vie raus than what weve perceived and the con kwenss and ability to affect people and how contagious it is. It is more fear so many than i saw about the latest is every day, there is another affect, purple toes and bizarre stuff. But if you do the math of the a symptom magnetic cases we see gae again and again. When you say fear some, dont you need to put that in as a disclaimer with the spread that is contagious that helps early on, those make these things contagious. That is part of what i mean when i say fearsome. Go ahead. Pardon my medical language. When we look at the case fatality rate, it will however between. 5 and 1 . Clo closer to 1 not below one given theliterature weve been looking at. I think weve been saying on your show, given what weve been saying, it is probably closer to 1 at 30 to 40 , we dont know. We dont know how much wer diagnosing we are diagnosing one in 10 and one in 30 days 1 is i dont want to do the math, obviously. Thats why we are mitigating and have something, either antibodies or a vaccine or something. We dont want to do 1 pes. 1 . We will what are you seeing now as the hospitalization rate not the death rate right the number of new cases is also skued by the fact that we are testing much more and turning over more cases. That rate is falling the challenge is rates are going down naturally you still see hospitalizations going up that said, they are a lagging indicator that tells you what happened seven days ago. The troubling sign is that we see them going up. You cant conclude that it is reaching its peak. National, it is still growing. On a very personal basis, people think, what is the chance im going to have to go to the hospital not whats the chance im going to die. We see it is around 10 so far, weve been saying about 10 end up getting a severe infection. Okay. Dr. Scott gottlieb, always a privilege to spend time with you. Thanks a lot. We have a lot more ahead. United airlines preparing for job cuts and the plunge in travel well have more of the details as we head to break, images of the pandemic attack from yesterday across america 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. Clean i a feeling. Its the satisfaction of upgrading to a bidet seat, just like that. And the simple joy of washing your hands, without ever touching a faucet. We think its the Little Things that matter. And we know you do too. Thats why we create moments to feel kohler clean, every day. I know that every time that i suit up, there is a chance that thats the last time. 300 miles an hour, thats where i feel normal. I might be crazy but im not stupid. Having an annuity tells me that im protected. During turbulent times, consider protected Lifetime Income from an annuity as part of your retirement plan. This can help you cover your essential monthly expenses. Learn more at protectedincome. Org. Confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Now white collar job cuts are coming to United Airlines. Phil has more. Good morning this is the first we will likely see for the entire Airline Industry yesterday, united told all management and administrator, about 11,000 in the company that at least 30 of those jobs will be eliminated starting october 1. The rest of the company, another 90,000 were also receiving a memo and that said there will be changes. Also reports that separately pilots wither told 30 of their jobs could be cut. Just a couple of weeks ago, they received 5 billion in the cares arkt 3. 5 billion in a grant in addition to the loan from the treasury department. The condition of that loan is you cant fire anybody or have mass layoffs before september 30 to be clear, every Single Airline has been forecasting there will be job cuts down the road they needed this money to keep everybody employed through september 30 but after september 30, united is now saying at least 30 of the white collar jobs are going youll see thousands more. They are also trying to as much as possible cut the costs here they told them your hours will go down 25 . Going from 40 to 30 hours a week guys, this is what the Airline Industry is doing right now. It has the money in place to keep operations in place unless things change and it is not expected to anytime soon, there will be other airlines discussing similar type job cuts in the weeks and months ahead. In terms of being able to cut hours, does that count too saying we are not going to lay anybody off . That is contractual allowed allowed by the airlines by the contract between now you are getting to the spirit of the law. At the time it took out the cares act that we will not cut hours or pay or jobs they are not cut the jobs. In terms of the pay, you are getting in a gray area in the contract between the machinists and United Airlines. Saying, look, we are allowed to go from 40 hours a week to as low as 22 hours and the union weve told could go down to 30 hours a week there machinists are not happy they said, look, this is contractually allowed. We have an airline here. They are not the only one. You will see this with almost every airline. They do whatever they can to cut things quickly this go back to the debate saying at the time even, there was an expectation they would have to lay people off as they were taking the loans . Yes as we were saying, weve said it on the air many times. This program saves the shareholders but doesnt save the employees. The airlines could have gone through bankruptcyand kept the planes in the air with less employees. How are the airlines going to respond to the public when 10 plus employees are no longer on the payroll come the fall . Theyll keep doing what theyve been doing since day one. We were at the white house when the airline ceos were called in. Every single one said the same thing. They need to make dramatic changes. We have thousands of employees taking unpaid cuts of absences they even said at the time, the money is appreciated it is helpful to keep us from going into bankruptcy immediately. We will need to make changes in how many people work for each airline. Is there going to be backlash . Absolutely the airlines are not loved about many people. This will be one more where they say, they took the money and then took the jobs they warned all along these cuts would be necessary it was known six weeks ago at the time yes it was known as they walked into the white house. It was known as they walked into the white house. Yep exactly. Okay thanks, phil you bet andrew was right. When we come back, finding out wh hate means when he says the pandemic isnt changing everything thats next. These days, its anything but business as usual. Thats why working together is more important than ever. At t is committed to keeping you connected. So you can keep your patients cared for. Your customers served. Your students inspired. And your employees closer than ever. Our network is resilient. Our people are strong. Our job is to keep your business connected. Its what weve always done. Its what well always do. High protein. Low sugar. Tastes great high protein. Low sugar. So good. High protein. Low sugar. Mmm, birthday cake. And try pure protein shakes, with 24 vitamins and minerals. The pandemic has shut down economies around the globe our next guest says it is speeding up trends his latest book the 10 rules of successful nations has released we had you on to talk about optimism there in terms about how United States and other countries will emerge from this. In the meantime, you point out that a lot of trends were 5 0 celebrated not new trends but trends in place whether nationalism, slow down of global trade Video Conferencing and working at home. That is a little bit strange we were already on that path and this has moved us more quickly down the same road caller exactly i think that is the strange nature of this crisis which is a coincidence that change already taking place, some of those trends i spoke about at the beginning of the year that were likely to dominate and those have been 5 0 celebrated and the nature of this crisis is such. The polarization in the market between a few super Aggressive Growth stocks doing well is another trend we entered a decade with has also been accelerated with it is happening across the world. Trains in place had a dramatic wind we thought would april over fi 5 or 10 years have happened in 5 or 6 weeks the same thing after the spanish flu or the roaring 20s on the other side of that is the Great Depression too do you think in some way we are building up to that because of all of the debt weve built . Caller the parallel weve made is that in the mist of the crisis we want to extrapolate what has happened to date. My point is not always what happens next is determined by what happens today it could be spanish influenza that it was such a devastating impact and yet, it told us not much about what would happen in the 1920s. Similar the 1958 pandemic which killed more than 2 Million People worldwide, larger than anything projected with the current episode with its current share and yet, nobody even remembers that 57 58, the hong kong flu and no one really remembers. Thats the point im making that when we are in tmidst of the crisis, we think the world will be turned upside down. Being looing at the trends, will not tell you many about the future or that trends will be accelerated. That is the point i would make on the panel discussing the flu from 1918 1919 thank you keep writing well have you back on all of these things in the future k u. Yo coming up, this mornings stop corporate news. We are coming 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. Confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Welcome back shares of hertz global plunge this morning on a report that they met with an advisor t discuss bankruptcy proceedings stay tuned for more here 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. 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. Plus vitamin d for immune support. Welcome back to squawk box. We have some new developments on a potential vaccine for covid19 pfizer and its german partner starting dosing for the first u. S. Participants in the experimental trial they are going to be testing four different vaccine candidates with a Similar Technology with what we have heard about from moderna they already started their trial in germany on april 23 they are not the first into the clinic in development but pfizer is the Biggest Company to get this far in terms of their manufacturing plans, they say if all goes well, they plan to have millions of doses this year and potentially hundreds of millions available in 2021 with sites in massachusetts, michigan, missouri and germany back to you. Meg, stick around we want to continue this conversation and bring into our guest, doctor, thank you for joining us this morning. In terms of the time line which is what everybody is so focused on is the success rate of the vaccine and how quickly it can get out. Meg just talked about millions of doses this fall is that late fall . Err wi early fall what are you looking for to know if it is working over this summer during the testing phase . Thank you with pfizers contribution in this devastating pandemic has put in place plans to have millions of vaccine available by october. The plans ramped up for this year and the potential for hundreds of millions in 2021 it is a very quick plan. We are dosing healthy participants in u. S. And germany. Germany. And in terms of how you would prioritize the drugs going out in october, how do you think that would work . Well, this is a way of working, a new way of working given the urgency here so a lot of the work is done in parallel Current Study will be close to 400 individuals dosed and up to 8,000 are planned in just a fe months and we hope this data will show an effective and safe vaccines and combined with other data make it probable that it would be a benefit to protect the individuals. And pending regulatory dialogues, we are at risk for manufacturing to help dosing greatest need in the regions most affected and expanding if things go well to have a vaccine for entire population in continents and countries and potentially globally. Reporter dr. Dolsten, how much time is required to be sure of the safety . Especially a new technology and a new virus. Folks have brought up that other vaccines for denge, for example, have actually made the disease worse. How much time do we need to really observe the safety of this vaccine in people who do encounter the virus to know that its going to be safe when deployed to millions of people thats a great question for us its always safety that comes first and, of course, we have put in place a rigorous way of monitoring it in clinical studies. We think this platform is unique in many ways when you face a pandemic of this size. Its very rapid. You can do in weeks what for normal vaccines take months. You can redose multiple times. So with this approach, meg, we think we will have several thousand, 3, 4,000 participants and people at risk for the disease dosed in as we come to october, and we think if you combine that with preclinical studies, that it has the potential to show good safety and probability of effectiveness in humans with all of the data currently the regulatory agencies are using emergency use authorization for a product that needs to move fast or accelerated approval so i think from having several thousand individuals, we put safety data, it can move through to tens of thousand. That will ensure you have a vaccine with a benefit safety profile that can merit the broad rollout. Doctor, im interested in the four different versions that you have its since youre using the mrna technology, are you pitching different stretches of the viral genome to express like i guess youre probably picking different genes that it would be expressed in terms of a protein and then youre seeing what the best response would be to which of those that youre using . How many genes are there in the entire genome . Cant be that many in the short genome of the coronavirus . Yeah, no, youre absolutely right. We focused on the gene coronavirus has genetic code rna inside its an envelope around it thats crucial connected to human cells and infect us. And on that there is sticking out what we call a spike protein that seems to be the crucial so one of our approaches is to have the spike protein and the second one is to take the head of the spike protein where all the actions happens when the virus infects our cells, and these two approaches coupled with a few different changes in the mrna, i think we have a really unique opportunity, the winning format and choose the right dose thats the story you explained very well. Thank you the other thing, this doesnt seem like it would be a very long stretch nucleic acids its nothing like the way we used to make vaccines. How quickly can you duplicate that little stretch . What does it take to manufacture large amounts of that little stretch messenger rna . I think currently, you know, since its manufacturing process that havent been tried at this scale, but you need to remember pfizer as a company have tremendous experience to go from small scale to hundreds of millions of doses and we have 7,000 people in plants across the u. S. And the world that could do up to a billion doses in the field of biological so, you know, we will have to fine tune the manufacturing process, but youre talking about a number a month thats why we say were starting around this period, early may, with some early preparatory work before we could have millions of doses in october, tens of millions the end of the year and hundreds of millions next year i think there are very few companies that have that track record and its a unique team with biotech and pharma with this experience and deep capability in vaccines. Hey, doctor, a geopolitical question i wanted to raise with you. We learned just a couple of days ago, maybe yet even, that Gilead Sciences which is behind the remdesivir drug, that is going to be controlled at least for the short term by the u. S. Federal government there are some concerns about that my question is whether the u. S. Government has come to pfizer and said they want to take control of this vaccine or whether youve heard that happening elsewhere and how that would work given that some of these studies are obviously taking place in germany. Yeah, you know, this is a partnership with a German Company and, you know, we obviously will have capability to manufacture the protein in the u. S. And as well as germany. We have very good relationships with virus levels and the agencies i do think they understand it takes great experience, deep expertise that you need to build over the years i think having pfizer lead it will together with our collaboration is the best path to success everyone realizes this is not something you do once and think it will go well. We are very skilled to collaborate openly doctor, we want to thank you. We want to wish you all the luck in the world because your luck will hopefully become our luck and we thank you for what youre trying to do here. Thanks again for joining us this morning. Becky, back over to you. Thank you. Want to thank meg tirrell, too. She is an incredible reporter on this beat and she has brought us all of these guests including the doctor. When we come back, futures this morning are pointing to a higher open. Youre going to see this morning that the dow is indicated up by 162 points big drivers for e thday ahead when squawk box comes right back , and especially your awkward ones. Thanks for sharing your cute kids. And your adorable pets. Now its our turn to share. With the geico giveback. A 15 credit on car and motorcycle policies for both current and new customers. And because were committed for the long haul, the credit lasts your full policy term. So thanks again. One good share deserves another. You have the support of a, probiotic so thanks again. 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. Featuring the Emmy Awardwinning voice remote. All the apps you love, including netflix, prime video, youtube and hulu. And the most 4k content. The best Entertainment Experience all in one place. Good morning as stores reopen, will the economy bounce back in the second half of this year investors are saying yes weve got the latest on the economy and reopening of america. Thats straight ahead. But the Auto Industry is dealing with a car glut. Former ford ceo mark fields is going to join us with the inside story on that. Plus, from supplies to the battle for the pandemic to your latest order from amazon there are Cardboard Boxes everywhere were going to speak with the ceo of International Paper about the Cardboard Box indicator and if it says what it used to. Well hear from a Trucking Company whose job it is to get boxes to your door second hour of squawk box begins right now good morning, welcome back to squawk box right here on cnbc im Andrew Ross Sorkin along with becky quick and joe kernen. Take a look at u. S. Equity futures at this hour were 2 1 2 hours before the market opens dow looking to open 195 points higher the s p 500 looking to open 21 points higher. Nasdaq looking to open about 72 points higher. Meantime, investors are focused on the reopening of the economy. For more on the prospect for a u. S. Economic rebound we want to bring in Gene Sperling he is the author of the new book economic dignity. Gene, we appreciate you joining us this morning. We havent talked to you in quite some time. You went through the crisis of 08 and the aftermath. How does this compare in your mind how do you think about the policy measures that were taking thus far . Well, look, its not as scary in the sense that youre not looking at a global Bank Meltdown that could go into a long standing Great Depression on the other hand, it is more dramatic the numbers that were going to see on may 8th, this friday, on the Unemployment Rate and the numbers of jobs that are lost, numbers weve never seen in our country. This is dramatic i mean, andrew, i cant imagine you and i ever talking about 20 million jobs being lost in a month or 20 Unemployment Rates or a Second Quarter that would be down 20 or 30 or even 40 so in that sense it is more dramatic it takes a more sustained economic response. What i dont know is whether our policy makers have grasped that this is going to be more long standing youre talking about is the economy coming back in the Third Quarter . Well, those type of economic terms arent going to mean that much if you go down 40 in the Second Quarter you could have growth, so called, in the Third Quarter and it could still be coming up just a blip. Think about this, the Congressional Budget Office projected that after losing growth at 40 rate in the Second Quarter, growth would come up 40 in the Third Quarter and unemployment would still average 16 for all three of those months and i think for us to be serious about this, weve got to try to make more people whole for a longer time. I think that means not coming back with a brandnew package all of the time but having an Automatic Extension of things like the robust Unemployment Insurance or a more bold payroll protection that goes on until we start seeing these numbers come down from such, you know, truly dramatically high levels, 10, 15 employment for as far as the eye can see. Right gene, do you think there will be the political will for that . On both sides of the aisle, we have an election coming up, president ial election coming up which will play in all of this at the same time there are questions about our debt and our debt load. How do you think it plays out . Well, in terms of our debt and debt load, we obviously cannot afford to be wasting money. I think people are going to question a lot how much of the 2 trillion in the previous tax cut were really necessary when we see ourselves in a time of crisis on the other hand, this is a moment where certain fiscal concerns can be highly counter productive if you have states that are going to be drained of a half a trillion dollars in revenue due to the crisis, not issues they did, if you have people that are not whomade whole and are not a to pay their rent, lose their home, go into decline, thats not only a humanitarian travesty to me, but thats also going to mean less people buying, less people being in strong situations so, you know, i think the best way to ensure we have the political will is lets put in place something now that says unemployment thats going to come close to making whole your check is going to stay until there is certain until we get down to the levels that were more used to hearing, at least 7 or something of unemployment. Certainly not trigger off at 15 or 16 , levels we really havent seen since the Great Depression, and have those things go automatically. So instead of saying were going to do something for the next two months and then we discover, oh, my god, theres a second wave or, oh, my god, a 70 partially open economy doesnt feel so good, we have to rush everybody back to congress, lets put something in place now that says were going to help keep people whole, keep Small Businesses lights on and not having to layoff teachers and state troopers lets say were going to do this to a particular economic level i think that would be a smarter way for us to deal with this really unprecedented downfall in our economy. Gene, i want to talk to you about two things one about the book i want to ask you real quick about bailouts we had the Airline Bailout we learned United Airlines planning after the september 30th date in which they have to keep the staff on that theyre intending to lay people off, this is something that we anticipated was going to happen, but i think raised the question in this instance, of course, were saving the shareholders, were saving the airline, were saving hopefully some of the employees. How do you think thats going to play in the public when people look back at some of these things whats that going to do to the politics of our moment well, i dont think theres any question that people are willing to do whats necessary, but when they see unjust enrichment, when they see Companies Taking that benefit for that looks like its for executives or even shareholders and not for employees, theyre outraged to be quite honest, they should be im not saying that these companies have done anything wrong in ways we might have thought of the larger banks a decade ago, but still the fact is that when were providing that public resources, were doing it to keep people whole during this pandemic when one can show that money is being used, every penny, to pay for workers who otherwise would have been laid off, to help them keep their health care that they would have been disconnected, i think youll see support, even for aid that could potentially flow to Larger Companies but when its just money going in, there is no connection to helping workers. Theres no sense of shared sacrifice and executives taking a cut in their pay then i think there is going to be a lot of outrage, and i dont blame them for happening all right but i will say, when money is going to where it should, to people to keep them whole, that is money well spent. If we pull back too quickly and we see falls in gdp stay, if we have an entire year down 10 gdp, that hit will be much larger than anything were going to spend gene, weve got to run. The book is fabulous you should go out and read it. Im going to ask you 30 seconds to answer one final question which is the book is about economic dignity and the policies that are required to make it happen the question is, how were going to be able to do that in a post pandemic world well, quickly, we have workers right now that we are recognizing the dignity and value like we never have in our lives and the question for us as a country are are we, as Martin Luther king going to recognize the dignity and value of all work with unjust applause or are we going to have policies to treat people with economic dignity . I think when we see farmers and workers without insurance are we going to treat them to a means without an ends . We can do that with universal health care, universal paid sick leave and this is the moment in our country where were being forced to ask ourselves how can we rely on these workers to save our lives, not just now, but even before the crisis and after and not treat them economically with the dignity that all people who come to work and work hard for their families should have okay. Gene sperling, book is called economic dignity. We appreciate you spending the morning with us. Good luck with the book. The ceo of Trucking Company xpo, the fate of china and the industry and what the uny cotris doing to weather the coronavirus storms squawk box is coming right back need help like never before and wells fargo employees are finding ways to do our part. By helping people stay in their homes, through mortgage Payment Relief efforts. Helping local businesses in their vital role in the american economy. And helping hundreds of local organizations provide food and other critical needs. When you need us, wells fargo is here to help. 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. Transportation and Warehousing Company Xpo Logistics posting a bigger than expected drop in earnings. Can you go back and walk us through the chronology march started okay and where are we on may 5th . Good morning, joe it started in china. We had most of our warehousing capability in western europe and in north america we have single digit millions of square foot space in asia and actually have some warehouse capacity in wuhan. It started in january for us in a small way and then it started hitting italy in the end of february, early march and then it started hitting spain and france right after that. And then the u. K. Came about a week after that. Hit us middle of march thats been the chronology of it your operations are i dont know how impacted they are. Everyone is safe thats the first thing you must have thought about, everyone continues to show up for work every day, you need to thats priority number one. Priority number one, priority number two and priority number three. The safety and health of our workers is the action focus that weve had the last couple of months its the most important thing weve got going. Weve been very, very concentrated on what we can do on hygiene how do you run a warehouse with people six feet apart . No one trains you for that when you get a degree in supply Chain Management we had to quickly improvise on that how do you run a cross dock facility and ltl Service Center with people not coming into contact with that. We had to get our arms around the ppe, the wipes it was a big venture the team rose to the occasion. Im proud of the 100,000 employees in 30 countries that took each others safety and health as seriously as their own. Compared to the boom times that we were in, what are you where are you . Are you 60 . 70 . How would you characterize the operations at this point so in china its 95 back in europe its farther along than we are here in the United States, recovery is. Not surprising, joe, because it hit there a couple weeks before it hit here. So if you look at our ltl vol e volum volumes, less than truckload vol use, the last week in april to the first week in april, if you go to france and look at the number of pallets coming into the network, its up its up 26 in a threeweek period thats very remarkable its a sharp v if you go over to spain its up and its up 13 comparing the same two oneweek period its significantly up. If you go to the u. K. , its up but not 4 it hit the u. K. After it hit france and spain if you look, we run the largest Transportation Network in the perimeter of france, u. K. And spain, very big window whats going on there it tanked. It went down dramatically when the whole shutdown took place and in the last four weeks its come back dramatically, very fast, very furious very encouraging were also the largest provider of ecommerce in europe there we have about 400 warehouses, and we saw the trough around april 14th the reason i pick april 14th is because i look at the number of warehouses that our customers closed, they took offline. At the worst moment, april 14th, we had about 50 warehouses close, 49 to be exact. Fast forward to today, there are about half of that closed, about 25 so, again, you see a nice increase now come over to the United States, its not the same story. The United States weve seen it come down sharply and then it stabilize. It stabilized over the last few weeks but its not Getting Better just stabilizing at the bottom lets see how that plays out over the next few weeks. Might get better. A billion in cash plenty of borrowing 2 billion in cash, joe. 2 billion yes we completed a high yield offering. That added to the billion a lot of your debt isnt due for over a decade. Some of it in 2022 but most of it later than that youre fine. You have no concerns ly quit at this concerns zero. Were sitting on 2 billion of cash in the banks. Were going to agagenerate in t first quarter, it was a real surprise the amount of Free Cash Flow we had. We were expecting to have Something Like negative 100 million of Free Cash Flow. We ended up reporting positive 100 million Free Cash Flow. Almost a 200 million swing in positive Free Cash Flow. Thats not surprising because the model is working we always built the company so that when you go into a downturn, when you go into slowing, you can immediately push levers and throw off cash the biggest lever is throttling back capex. When this hit us march 13th, march 14th, we had an executive meeting. Our first decision was lets do everything to enjoy the safety of our employees and come back to capex. Stocks holding up pretty well off a little pretty sharp snack back. Looks like almost an s p chart good luck. We appreciate your time this morning, brad. Thanks great to be here. Thank you. Still to come this morning, Weworks Adam Neumann is suing softbank why that matters dont forget to subscribe to our podcast, squawk pod. You can catch the best stories and interviews all in one place. Subscribe and lienst stay tuned, you are watching squawk box on cnbc 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. That triggers divesting of the first of 12 tranches, options that were granted to musk as part of a 2018 pay package andrew thanks, becky dramatic turn taking place in the wework saga. Founder and former ceo adam neumann now suing the companys biggest investor, softbank, which took control of the company. Deidre bosa. Reporter dramatic in the latest saga. Adam neumanns complaint alleges that softbank, quote, doubled down on their abuse of power and argues that its deteriorating financial position influenced its decision to renege on the obligations. Adam neumann would receive 970 million as part of the wider bailout. The lawsuit even calls out massa son himself. This is a very far cry from how adam neumann described his relationship to massa son a year and a half ago something beautiful about masas and my relationship about how we communicate if i have something to change, we call each other we prefer facetoface meetings. Its a real partnership. I think the longer we know each other, we can build it masa is one of the best high Growth Investors in the world and im pleased he chose to invest in us. Now even then there were still signs of a fraying relationship less than a month before this interview. Softbank had reneged on another 16 billion offer for the coworking space this goes back some time, but certainly a dramatic twist deidre, just in terms of the time line of what takes place next and what we find out next in this lawsuit, we were talking the last hour about it, and it seems like discovery, going into the files to try to actually see what really happened and whether massa son tried to up end some of these which allowed them to say or claim that the closing conditions didnt exist, how do you think were going to see all of that . It sounds like theres going to be fighting over what gets public reporter certainly this isnt the only lawsuit. The special committee which involved early shareholders has filed a lawsuit. Well see what comes out of this, but remember, too, wework is in a world of trouble this year it said that it had 4. 4 billion as of the end of this year in cash and cash equivalent its got to make it through this year and through a recession potentially most likely. Being in a fight with its biggest shareholder does not bode well. Wework is part of the vision fund there are many other companies that masa son and others are invested in that are having funding issues one of the main tenants is that weworks financial position excuse me, softbanks financial position led it to renege. How that comes out will be interesting. Guys, ill ask you both this. The idea that adam neumann is bringing this, does he just have no shame he doesnt even recognize how ridiculous it looks that he didnt walk away with an additional billion dollars do you want to take it, deidre reporter sure. Ill certainly take that well, 970 million, absolutely i think that there is so much involved in this a source familiar with the matter tells me that that 16 billion that wework was supposed to get back in 2018, that money, much of it had already been spent because there was a commitment and only the eve of sign, which was december 24th, did softbank back out of it. So that is what a source familiar tells me what led to that ill fated ipo they had already spent much of that money they had to go public in 2019 which led to a lot of the embarrassing disclosures in the s1 look what happened. Reporter absolutely. Some might argue they might not have paid the costs if masa son and softbank had said heres 20 billion. You may be a bad manager . Becky, the complicated part i think about this whole situation is that effectively softbank came in and said were going to rescue the company remember, there was potentially a competing bid and part of the softbank bid was were going to buy out all the minority shareholders, of course which includes adam neumann getting or supposedly getting that billion dollars. They effectively have gotten majority control of the Company Without actually paying to do so, at least as part of the transaction that they agreed to. You know what, that might be what its worth. Look around. I know, look around. Today clearly right. Even at that point people would argue how much was it worth. What i think this whole thing is going to rest on though is two things one is, how buttoned up was that contract, and i think it might have been a lot more buttoned up or more so than the victorias secret deal, well see, and the secondary component is did masa son try to do something on the other end to up end something so he could walk away theres nobody out there whos feeling bad for it. There arent too many sympathetic characters here. Reporter this gets all the headlines, 970 million for adam neumann. This is a 3 billion tender. Others would argue theres early wework employees who are getting hit by this. Thats essentially what adam neumann is arguing, too, its not just him, its others. As we said, we pointed to deals in the past that have been reneged on the eve of signing. Okay. Well be watching this soap opera, deidre bosa, and youll be bringing it to us thank you. Weve got a lot more on squawk box still ahead an auto inventory glut sending shock waves through the Auto Industry well speak with the former ford ceo after the break and what it e sts to the Auto Industry and thre of the economy. Stay tuned welcome back to squawk box. Check out the futures. Were up about 190 points this morning on the dow s p called up 21 pretty interesting we go down about 600 plus points on the first day of may. As you recall, looking down another 350 yesterday which would put us down 1,000 after the s p has clawed its way all the way back to 2950 closed up 25 points. Up about 200 today were going to have mike wilson on later from Morgan Stanley analyst who says a lot of the things that deserve to happen, the pandemic brought them on very quickly and now were back on track so well see. We will discuss that with him a little bit later becky . All right in the meantime, Fiat Chrysler out with the Quarterly Results this morning phil lebeau joins us and he has more on the numbers. Phil, good to see you again. Hi, becky not surprising, it is a loss and wider than expected loss in the top and bottom line. They missed on both of these remember the Fiat Chrysler reports its results in euros 30 euros per share versus expectation of 11 euros per share. The revenue coming in weaker than expected. One other Important Note in the earnings from Fiat Chrysler, its north american plants, its confirming that they do plan to start those the week of may 18th weve talked about the big three squeeze in terms of production in sales they have no production until mid may. Lower inventories on key models, specifically full size pickup trucks the trucks are in demand the proof of it, check out frank kent chevrolet just outside of fort worth we talked to the owners within the last week. They are seeing so much demand that they are going to other chevy dealers around the country saying what can we buy off of you if you are closed down because of coronavirus because weve got record demand. In fact, theyre seeing double digit increases in sales why . Youve got 0 financing for 84 months and perhaps not making your first payment for three months or six months you put that together, thats a better deal or virtually a better deal than you would get if you went on the used market right now. As weve talked all about it, guys, for some time, pickup trucks, full sized pickup trucks are red hot demand if you take a look at general motors, remember, it will be reporting its q1 results tomorrow morning were interested to hear what they have to say, not only about where the company is in terms of production, but specifically when it comes to that fullsize pickup market, guys, they were trying to get back from the strike, the impact there in terms of beefing up production and the inventory levels, now theyre facing really tighter inventories and those are hot trucks that are in demand. Its all pickup trucks right now that are really hot. Guys, back to you. Phil, stick around. Want to bring in an industry veteran into this conversation to discuss the car glut that we are seeing thanks to the pandemic joining us is mark fields, Senior Advisor at tbg capital and former ceo at ford mark, great to see you you heard the report that phil just brought us. You think about the glut thats there. You think a little bit farther out. Youre now in the Investment Business would you be investing in one of the automakers well, i think when you look at the market, its always good to buy low then buy high the bottom line is when you look at the longterm market, you have to look at it and you say, listen, people might think of a vehicle, personal vehicle Going Forward as almost like personal protection equipment, almost like a mask because theyre able to control the hygiene in that vehicle. You know, people will be less reticent to or less wanting to go and take a plane or commute to work in a train or a bus and so when you stand back and look at that you go, well, its going to be tough the market is going to be down, but the bottom line, the demand for transportation over the long term is going to continue to be robust as the world comes out of this, particularly around developed markets. What are you seeing around the world . Is there any model we should take away from whats happening in china in terms of what was a deep demand problem clearly that seems to have come back a bit . The u. S. I think seems to be fairing better than that thus far. Yeah. Everybody says lets look at china and see what that means for the rest of the world. Youre already seeing some differences. Obviously in china the first month of this pandemic sales are down about 80 snap back to a certain degree in the last month here in the u. S. We didnt see in that first month as deep a fall in demand it was only about only, it was about 50 . So we may see it less but maybe a little bit longer. In addition, when you look at china, when you look at production and getting vehicles to customers, its a little bit different because here in the u. S. For the u. S. Auto industry in particular, have you a patch work of orders as these plants try and come up and you just heard fca is announcing they want to come up may 18th when you have 40 of your parts coming from mexico, which right now has a lockdown until may 31st, u. S. Industry is not going to come back up if you have government orders that are different across the patch they have to be in sync. Thats what the automakers are working through right now. Hey, mark, its phil lebeau hear good to see you again. Two questions for you. First of all, you and i have talked about this many times the time to buy into the Auto Industry is in a recession you buy those stocks knowing that youre going to come back on the other side. Would you get into these auto stocks right now if you were an individual investor . Two, we typically see a shake t shakeout do you expect to see more of that this time around . When you look at inbe vesting, i think from an investing standpoint, the best place to invest in times like these is in the supply base. I think youre going to see a number of consolidation in the supply base, particularly as some of the weaker ones that are going to need liquidity Going Forward. So i think the supply base is the area to look at. And in terms of consolidation, as i mentioned, in the supply base well see some consolidations because keep in mind, suppliers Going Forward are actually going to have to keep more inventories and tie up more cash because youre going to see a little bit of fits and starts in terms of how the plants come back up but also, you know, with this virus being around with us for a while, at any given time if you have an employee in your plant that has the virus and that line has to shut down for a few days, you still have commitments to your automakers to deliver just in time delivery. So with those kind of things and lower productivity because youll have the social distancing youll have higher absenteeism because of older people who dont want to work or people with schoolaged kids that arent going to school youll see some consolidation there. I believe youll see consolidation in the retail network. Those dealers that are very strong, particularly in terms of an Online Presence that will become an expectation Going Forward and then, you know, finally from an oem standpoint im always a little reticent to predict consolidation. I dont see it, but i think if we do its more likely to happen with oems in the same country, and the reason for that is because these are national champions. We get political aspects, union aspects in there and its quite difficult. Hey, mark, two other questions. Tesla stock, weve been talking about elon musk earlier this morning because he just crossed this threshold mark for his compensation with the stock staying where it is. Does it make sense to you . Well, listen, their board decided that thats the way they wanted to compensate him on the stock price and, you know, the stock price has reacted so he gets his pay day but, again, when you look at the tesla Business Model and the tesla business, listen, a lot of that stock is retail owners and they buy into the future that elon has painted for his business and where his business is going and hes been rewarded for that. And thats what his board has decided how theyre going to compensate him and the last question i want to ask you is about dealerships. In part the segue is i was thinking tesla owns its own dealerships, Small Business dealerships. What do you think the future of the dealership model is going to be how many do you think can fit into this . You might recall two weeks ago autonation took the ppp loans for all sorts of its shops and ended up giving it back. Theres lots of other smaller dealerships that clearly need the money. Yeah. You will see some level of consolidation in the dealerships. Every automaker, what we saw in the great financial crisis, for example, at ford, we reducedou dealership count by about 25 . But keep in mind when you look at the dealerships across america, yes, you have a number of dealers obviously in urban areas, and i think youll see more consolidation there, but you have a number of dealers in rural areas, and those communities actually rely on those dealerships, particularly selling trucks and commercial vehicles and things of that nature so i think if you do see consolidation is in ush bap areas. They can still have access to dealerships and they can bring the costs down and synergies in rural areas, youll see less of that because of the fact that the manufacturers, automakers want to make sure they have that market representation in those important markets. Mark, thank you phil lebeau, thank you appreciate you joining us this morning. Becky, over to you okay. Andrew, thanks. When we come back, the ceo of International Paper, mark sutton the supply chain a t cndheompany trying to help out during the pandemic stay tuned squawk box will be right back. Derek, seems like your team is operating just fine remotely. Yeah, everything is running smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. Confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Some stocks to watch this morning. Start with shake shack shares rising. Same store sales fell about 13 . The Company Says Demand is starting to pick up but it warns of challenges as it looks to reopen some dining rooms in some areas. It says beef prices have jumped over the past few weeks as processors closed plants in response to the irus the company ceo joins squawk on the street later this morning shares of hertz plunging they secured an additional advisor to help with bankruptcy proceedings. Shares of chegg beats. Subscriber growth rose by 35 as more students were required to learn from home amid the pandemic chegg giving strong Second Quarter guidance the companys ceo is going to join jim cramer tonight on mad money. I think, andrew, were going to have i. P. On, ceo. We are going to have him today we are. That is happening and its happening very soon. Earlier we head from trucking giant xpo about shipping boxes around the country we talked b. As we return, as you said, the Company Making those boxes is going to join us. The head of International Paper, mark sutton, is going to give us the Cardboard Box economic indicator. That and a whole lot more right here on squawk box. 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. Communities of color have always been underrepresented in the u. S. Census. That means less federal funding for schools, hospitals, libraries, and other Public Services for Diverse Communities and less representation in congress. This year, its critical that you participate in the 2020 census. Its safe and confidential. Lets make sure everyone is counted in our community. For more information, say census 2020 into your x1 voice remote, and to participate, go to census. Gov. Welcome back, everybody. Packaging producer International Paper is playing a key role producing and delivering critical role. Joining us on the phone is mark sutton hes the chairman and ceo of International Paper. Hes on the board of directors of grocery giant kroger. Thank you for being on the phone with us. Good morning, becky happy to be here. You have a really great set of insights into how things are moving through this crisis you see the number of packages that are going through in a lot of different industries. Maybe you can just walk us through some of those items. What do you see when it comes to durables or when it comes to ecommerce . Those are two really important segments i think for the first four months of the year we have seen Significant Growth in a number of segments. The ones you can imagine that are intuitive like food processed foods, protein, all paper goods. So the famous tissue, paper towel, all of the things that are in coordinated packaging that make their way through the retail channel ecommerce, we talked about it on our Earnings Call last week, strong orders of magnitude double digit growth above what was already a strong growth. And then in the chemicals and pharmaceuticals segment, also strong growth. I think on the less exciting segment, again, you can think of some of these as obvious, but beverage, for example, the retail improvement in beverage doesnt offset the food service decline, which is mostly in the form of syrups and things that go into restaurants. Thats a huge user of corrugated packaging and thats down. Durable goods are down mainly because of the uncertain consumer theyve been down through this period once we went into lockdown and people depend on the Financial Confidence of consumers. The one thats a little counter intuitive is produce think about the Grocery Stores its not all produce but some produce. The offset in restaurants and also school cafeterias, universities and secondary education, that drop in produce and maybe some of the concerns consumers have initially with produce in the Grocery Store, thats down. So we see all of these segments moving in slightly Different Directions its been a net positive for a company for International Paper for the first four months. We talked last week on our Earnings Call as we look out i think it will depend a lot on the confidence of the consumer and the disposable income for anything thats not essential, food related and global life supplies and the jury is still out on how successful we are reopening parts of the economy yeah, mark, i was going to say with the durables, how much of it do you think is because the consumer is not feeling great about things and how much is just because so many of the stores are closed down yeah, i think its both thats the you know, some smaller durable items i think got substituted through an online channel, but i think the supply side of durables is also a very good point. Its been impacted by the Retail Stores closed. And i think a lot of purchases like that that are in that category, when theres this much uncertainty, i think people dont necessarily stop they just change their timing. When they see how things are going to settle out. That i believe will unfold over the next few months and were very hopeful that each region, each jurisdiction that tries to do its reopening does it in a successful way and i think the more confidence of course its related to other things like therapeutics for the virus and ultimately a vaccine also, just good, safe practice in opening retail should help that category. Mark, you mentioned about how theres been a real shift in the way people are ordering. Obviously the consumer side is up if you are looking at things from the Food Services side, going to restaurants, school cafeterias, obviously none of that is really anywhere near the levels it used to be we spoke with the ceo of cargill on friday. He said they were in the process of trying to change how they run their lines so they are producing more for the Grocery Stores, less for the restaurants. Are you making changes like that do you think these changes are temporary . Well, we supply all of those suppliers that we would talk to you about, Companies Like cargill and others, packaging for the retail channel and packaging for the food service channel. Its less of a change for us we can make more one of type of a package and less of the other. Some of our machines are capable of doing both. As you get further down the supply chain, the Food Companies have a challenge less by need in a totally different way than a retail channel does where individual consumers are going to take packages so i think we are a lot quicker to switch between them sounds like we it takes a little bit of capex, its not instant. Thats why weve seen some of the dislocation. Mark, youre also obviously an international company, thus the name International Paper what are you seeing in places like china and europe where the coronavirus hit first and maybe its clearing up a little more quickly than here . Yeah. Europe is a decent sized business for us, mostly packaging. We are seeing country by country recovery we have some businesses in Southern Europe primarily, mostly food packaging. Id say italy is starting to recover a little bit better than spain and than france. For our business it was good again in the first three to four months of the year now everybodys got food stocked up the same question that we had in the u. S. , which is a much bigger part of our company, is how successful are the individual companies in reopening and how confident are the consumers. We are monitoring that very closely. In china, we dont operate production facilities but we export from the u. S. From a joint venture in russia and from brazil products into russia, packaging and pulp pulp used for tissue, towel and other packaging. That business that market is recovering actually quite nicely the export packaging materials and then pulp to china is recovering pretty well mark, we always appreciate talking to you we hope youll be back soon to give us another update about how things are progressing i would be happy to have a great day. Thank you, you, too joe . Coming up, senator tom cotton on the growing tension between the United States and china. This guy was early, was he not, on the possibility that it was a lab where the virus first originated no one knows for sure at this riint, but certainly not being deded as much as he initially was. Well be right back. Breaking news, the turn around continues futures pointing higher this morning a day after stocks staged an impressive interday comeback rising u. S. China tensions this time its not about a new trade deal, its about the coronavirus. What china knew, when they knew it and how they handled the initial outbreak a live report on the latest developments is coming up. And using technology to track the spread of the virus. You know the privacy debate is coming were going to kick it off with the cofounder of reddit the final hour of squawk box begins right now. Morning im joe kernen along with becky quick and Andrew Ross Sorkin we were talking about the turn around and the futures indicated up 190 points now on the dow and i woke up, they were about 350, 360 premarket it moderated got all the way down to less than 100 points of gains now back up. A lot of lets look at the treasury yields first. 65. Then well look at oil prices. That had a lot to do with what happened yesterday lateday move in oil prices. Really we have seen a move from about remember, it was 13 or 14 a barrel, so thats like a 50 move it seems like in about a week it was up sharply towards the end of the session yesterday which gave a lot of strength to the equity markets in turning things around now its up again in a day i dont know whether its really able to sniff anything out demand wise, but nothing has changed supply wise. The only reason you would think that oil was improving was the idea that europes reopening and maybe the were seeing the lows in demand, i guess, becky thats what people are thinking. Not that because prices have surged to 22 22. But really when i was looking at the oil boards this morning, i was like, is it really 22 i almost fell off my chair. You thought we switched months ago. Maybe what happened . Right yeah amazing. Right all right, guys. Were going to start this hour in washington, d. C tensions between the Trump Administration and china are mounting over the genesis and the initial reaction of the coronavirus. Eamon javers joins us. We spoke with nunez who was telling us about how over there theyre saying, look, ha, ha, ha, we handled this so much better we gave them two months warning. Whats the take from washington . Reporter well, look, theres some chest thumping on both sides of the border between china and the United States. Both countries are pointing the finger at the other. We saw this new report from the department of Homeland Security that was released yesterday or that was reported yesterday which made a conclusion about how the chinese allegedly covered up this coronavirus, the dhs saying they intentionally hid the covid19 while stockpiling medical supplies for themselves, even at a time when the Chinese Government allegedly knew this was going to be severe around the world we also saw mike pompeo, the secretary of state over the weekend saying theres a significant amount of evidence this virus came from the laboratory in wuhan placing blame for releasing the virus. He said were going to hold those responsible accountable. Then we saw the president asked about whether he might impose tariffs as part of the punishment that he envisions on china. He didnt deny that on fox news over the weekend he said tariffs at a minimum are the greatest tool we have ever devised. All of this comes after a year of trade tensions between the United States and china. Just on friday, guys, we saw an executive order on both power supply aimed at a number of countries, including china the idea here according to peter navarro, who i talked to on friday, is that they want to get the United States off of its dependency on a chinese supply chain. A lot going on here, but its about the supply chain its about the virus its also about politics theres an important effort here by the president to say, look, im not the one responsible for this the Chinese Government is responsible for this and were reacting to it that gives him an argument that he can carry into november, becky. All right eamon, thank you very much joe . Thank you, becky. Thank you, eamon lets welcome senator tom cotton of arkansas. Senator, thanks for joining us this morning i dont know two, three, four months ago one of the first times you actually broached the possibility that it wasnt a slam dunk that the virus was originated in a wet lab, did you have any of the recent evidence that has brought a lot more people to your side in at least admitting the possibility that it wasnt in a wet lab that it was generated in a p4 lab that wasnt run that well yeah, joe, i didnt have any kind of classified intelligence or secret information, it was really just reading the news from china and medical journals and following the inherent logic of events. We knew as far back in january thanks to some Scientific Research published by chinese scientists in the lancet that the early persons infected with the virus, 1 3 had no contact with the wet market whatsoever we also based on best evidence available knew that that market was mostly a Seafood Market, didnt sell the kind of bats this virus is believed to have jumped from bats into humans what we did know is there were two labs in wuhan that dealt with coronavirus that has a bad record of bad Safety Practices as our state Department Officials in china were worried about two years ago. Thats all circumstantial evidence theres no direct evidence there rarely is. But i think the American People are entitled to use their common sense to look at the labs as the most plausible explanation of the origin of this virus, especially when you consider all of the lies by the Chinese Communist party and what they have done to intimidate witnesses and destroy evidence. There will never be anything more than circumstantial evidence in all likelihood, senator. What does that what does that mean the United States should do in relation to chinas actions its an important trading partner. We signed a trade deal is this a time for punitive action which could hurt economies around the world, including our own . Chinas a pariah state. Its not just the United States that recognizes that more and more countries are beginning to recognize that they need to bring manufacturing out of china and back to their home countries, like japan has done with billions of dollars in subsidies. They shouldnt be taking the multibillion dollar loan shark operations that are called the belt and Road Initiative its not just the United States thats doing this, but its well pastime the United States begin to bring manufacturing back to our shores, especially in critical areas Like Pharmaceuticals and medical device and supplies and telecom and other advance technologies the unfortunate fact is because of decades of failed trade policy, china does have a substantial market share of some of those critical goods. We dont want to take any precipitous steps that would hurt the health of our people, but we also dont ever want to be in this situation again nor do we want to let china corner other critical markets all around the world, whether it is masks for Health Care Workers, rare earth elements for the technology industry, 5g, pharmaceuticals or anything else senator, wanted you to react to an interview that dr. Fauci gave to National Geographic magazine just within the last 24 hours, and he says quite emphatically that theres no Scientific Evidence that the coronavirus was made in a chinese lab. He goes on to say that i dont understand what people are talking about, and he says, i dont spend a lot of time on this going through what he calls a circular argument. What do you make of that dr. Fauci there is referring to distinct question what we were discussing earlier, whether the virus was genetically engineered or modified in any way. That gets into some very technical scientific details the Scientific Consensus at this point is that the virus was naturally occurring, but a virus can be naturally occurring and still result from a lab outbreak because we know that they were using bats in those labs in wuhan. They were researching the coronaviruses that come from those bats there were legitimate purposes to do that, whether youre looking for testing or therapeutic drugs or vaccines. That does not eliminate the possibility though of an accidental breach of air Filtration Systems not working or someone being infected in the lab and walking out and starting to infect others in wuhan. So thats a different question, a logically distinct question from whether the virus was genetically engineered and modified in any way. Thats beyond my scientific ability. The Scientific Consensus at the point until we study the virus more carefully is that it was a naturally occurring virus but a naturally occurring virus can be down in the laboratory as well. That was two weeks ago that it was a naturally occurring virus. There are certain conspiracy theories that it was genetically engineered and genes were added or subtracted from the bat genome from the Chinese Military no one is saying that. Its been determinedits a naturally occurring virus, but there are laboratories over there doing a lot of research on bat viruses and, you know, some of the circumstantial evidence that you point to is that the person that one of the original patient zeroes had no contact with the wet labs. Theres a couple other things that i guess pompeo is probably using that, but do you think its all going to come out, senator, that anything that gets someone like secretary pompeo to be so definitive about it or that the evidence is weighing, do you think that that eventually all sees the light of day . Well, i hope so i published an op ed piece in the wall street journal last month that laid out the case the circumstantial evidence all points to the laboratories nothing points to the Seafood Market in wuhan. On intelligence questions its rare to have direct evidence, conclusive proof you have to use your common sense and weigh all of the evidence when you do that here, at least for the time being until the Chinese Communist party can produce evidence to the contrary, the most plausible explanation is that this virus originated in a lab. And so you think we need to theres going to be some Global Response to china to hold them accountable, not just the United States . You think that that is go ahead. Yeah. Whatever the origins of it as well look at how china reacted to it. They 4r50 they lied to their own people and the w. H. O. Even after they knew the virus was highly contagious. They allowed International Air travel to continue i think that was a deliberate decision because they did not want to have their economy crippled they chose to let travel continue internationally outside of china while lying to the world about the transmissibility of this virus. I think that was an intentional decision to ensure that the virus affected the economies of all their trading partners, especially their chief rival, the United States. All right senator, a different go ahead. I had one quick geopolitical question meg tirrell on our air yesterday was reporting that Gileads Remdesivir was going to be taken over by the federal government in terms of how it was going to be handed out and taken control of im curious, as we get vaccines and as we get other drugs, how do you think those should be distributed . Do you think they should be shared with other countries and what do you think the implications of keeping them all in the United States if, in fact, thats what we decide to do will be well, i think the most immediate question is the question of manufacturing production the science obviously takes some time to get right, but one of the biggest bottlenecks we could face is scaling up a working therapeutic drug or vaccine so we have 330 million doses for the American People but also so we can produce the hundreds of millions or billions of doses the world might mean if we can get those therapeutic drugs or vaccines, certainly we should share them with the world as well. One reason why weve invested money on the front end to Start Building up manufacturing capacity is because no private company would do that until they know they have a working drug or working vaccine. But we dont want to take the ordinary course of business where you have a long and slow buildup so were going to invest very robustly in a lot of manufacturing capability some of it may end up not working. We may be scaling up for drugs and vaccines that end up not succeeding in final trials id rather make that investment on the front end so we dont have any bottlenecks on the drugs our scientists and researchers will hopefully discover very soon anyway, thank you, senator. Thank you. Its good to have you on who knows, it says its never going to be more than circumstantial so, i mean, i cant believe the type of hoopla i see even when we discuss it. To a certain contingency, they claim that its a try to, i guess, cast blame aside from the Trump Administration i dont know they go crazy even if you even broach a possibility that china might be at fault in some way. They go nuts it ruins their whole narrative anyway, thank you, senator see ya okay coming up on squawk box this morning, a lot more. The looming fight over privacy as mobile Technology Allows for tracking who has the coronavirus and who doesnt. Reddits cofounder Alexis Ohanian is going to join us after the break. Take a look at the shares of United Airlines. Internal memos indicating the company is planning to cut more than 3,000 manages and administrative positions it says its going to happen in october and pilot ranks can be thinned by as much as 30 as well because united took government aid, its banned from cutting jobs before september 30th stay tuned youre watching squawk box on cnbc 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. Technology relies on blue tooth signals. Joining us to talk about the virus tracing as well as the embedded privacy debate that goes along with that is Alexis Ohanian. Hes the cofounder and managing partner and cofounder of reddit alexis, good to see you. Likewise. Wish it could be under different circumstances. Yeah, me too. Been following you kind of watching how youretracking everything thats going. I know that you have a lot of different projects that youre working with when it comes to coronavirus and how to try to battle that on different fronts. Why dont we Start Talking about the whole idea of tracking you know the Digital Community prettywell you helped build it with read zi reddit do you think this is an idea that they will embrace but fear . Being able to find out if you have been around anybody that has coronavirus . Yeah. I think this has always been an interesting relationship because, you know, social media empowers people to share every possible thing to where they are and how theyre feeling. When it comes to health there is a higher standard that i think all consumers expect and rightly so they should the challenge right now is these Large Tech Companies are at an alltime low when it comes to sort of user trust overall because its been eroded over a decade plus. So i think on the one hand, yes, technologically there is a lot of value that can be created here theres a lot of good that can be done. There are actually lots of ways to safe guard privacy, even with tools like this. The bigger issue is the lack of trust and the fact that youre going to need to get users over the mental hurdle of being willing to have this information stored on, you know, google or someone elses servers i think that would have been the case, say, five or ten years ago, but the perception has very much shifted since would you give up your information . You know, im in enough of the sort of public light that i dont really i still want my privacy obviously but ive come into a different expectation of it because i know so much of my life is already going to be public would i recommend that my dad do it i dont know i think we would need to see a really transparent and hopefully accountable providing company to give us the confidence to say like, all right, yeah, wed be willing to do this like i said, its quite unfortunate because technology could really be helping us here in very meaningful ways, but the thing that has been eroded is that trust hey, alexis, like i said, youve got a lot of Different Things that youre working on. One of your Portfolio Companies is called better fin theyve been working with the ppp loans trying to get that out. How is that going so far and what do you think of the overall ppp program . Well, look, we need to get this money on to main street, and i think Small Businesses, mediumsized businesses, these smbs need to be the first ones to recover we were thrilled weve been investors in better fin for the last year or so. Theyve been able to shine because of the software, which they had already built to help Small Business owners fast track and basically get a chance to apply for loans or Disaster Relief theyve helped thousands of people apply for ppp those programs are going through funding quickly. A lot of the folks who are getting the funding dont necessarily need it as badly as these Small Businesses do. So i think the more and more opportunities we can get to back Companies Like better fin, another one called wifco launched a program this past week in charlotte, north carolina, for basically just 0 loans because they want to on board these Small Businesses into their software. They know what they need from all the time theyve spent in charlotte. Its actually just capital in order to keep their business going during these shelter in place and the promises all the software that theyve built in addition is able to help rebuild main street as we come out of this. So were actively looking for more companies to invest in that can then invest in these Small Businesses during the recovery because i think not just as a business person but as an american, we desperately need those businesses to exist and to thrive as we come back because they are such big employers, because they actually do get money back to communities where they serve and, you know, were going to the recovery is absolutely going to need them. Hey, alexis i think the big banks are getting a little bit of a bad wrap in all of this. They are responsible for a lot of Small Businesses, too jpmorgan represents 70 of Small Businesses in america. You have a similar percentage representing wells fargo andback of america i think some of the problems with the ppp is with the sba fin tech is doing for Small Businesses, Community Banks are but i dont think the big banks can really be involved with it if you are trying to get the money out to main street. Yeah. Look, at the end of the day, this was an exceptional situation that required people to move really quickly to get a lot of money distributed, and so theres with any kind of herculean effort, thats going to happen. I think across the board folks were unprepared for this, and i get it i do think moving forward hopefully a lot of the infrastructure, again, this all just comes back to software. A lot of the infrastructure that i hope we can build coming out of this will be the plumbing t make this much more practical, right . What we dont want to think as americans is that, you know, an executive at a bank can have an easy phone call with a friend of theirs or a high value client who is a Small Business owner thats going to mean money will go to them faster than, say, the other 50 who dont necessarily know the administrations phone number and so that is sort of the reality of when youre putting all of this responsibility so quickly on massive banking in a infrastructure that doesnt have the ability to scale but this is where i think coming out of this we will see a much clearer, much more evident need for software being part of these businesses and able to do the work better, cheaper, faster and getting to where it needs to go. You spoke with dr. Scott gottleib earlier, the former head of the fda. Hes been a great voice on this getting this up to date, how things are changing, where he sees the greatest need now you have to focus on areas where its less privileged people who are there, who are crowded into certain areas and i know that you have taken a step to make sure that this company, adams, which is a company that used to make shoes is now kind of transitioned so they are making masks you are making sure you donate a huge number of those masks to the new york city housing authority. Yeah. How did you get involved with that how does that work well, one of the joys of doing this job is we get to work with founders who can adapt quickly. Although their sneaker sales were still doing well, they realized they had an opportunity with their manufacturer in korea to produce special everyday masks for their customers. Sold over 50,000 within the first week and we donated one for everyone that was sold so over 50,000 masks are going to the new york city housing authority. To your point, communities of color, poor americans are going to be those two groups are going to be disproportionately affected by this just because of all the sort of structural problems we have i think at the end of the day we are allamericans. We are all dealing with this challenge together and its just its a sad reality that most of the Rural Communities are taking a bigger toll but ive been heartened by the fact that nonprofits as well as for profits like adams have been actively working to try to serve the communities in which they work. I think the stories that i really hope come out of this in the years that we look back on this period will, i hope, be the ones of Small Businesses and nonprofits, even just individuals looking to help their neighbors at a time where even just the nature of this awful thing makes us want to be skeptical and nervous and fearful of one another i really hope this can bring out the best in us and will have many more stories of us just making peace with one another. Alexis, ive been watching your twitter feed too. Your hair, you go. Youre with us with the rest of us getting long and shabby you and me both. I need to get the courage to trust my wife to cut it. Yeah, not happening here. My husbands not cutting it alexis, great to see you thank you so much for joining us. Thank you. Well talk to you soon. Thanks, becky. Joe, over to you. Coming up, whats really going into the rising prices that were seeing at the Grocery Stores across the country. The nations food supply under scrutiny weve got a live report on the biggest threats in the weeks and months ahead plus, how pennsylvania is teaming up with one of the best known Food Companies to get broader help to workers. As we head to break, check out the shares of starbucks. The Company Planning to reopen more than 85 of its stores by the end of the week. Though theyll be limited to pick up, delivery and drive through which we do frequently stay tuned youre watching squawk box on cnbc its a challenging market. Edward jones is well aware of that. 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. The best Entertainment Experience. S xfinity x1. It comes off of 39. 9 which is the best going back to, what, february excuse me, september of 16 september of 16 at 39. 9 being the smallest deficit its starting to get bigger. Now its got a long ways to go before we get some history behind it, but suffice it to say that most of us believe that in the grand scheme of things as coronavirus catches up more with global trade numbers like this, what well find is exports in the u. S. Are going to fall fast er than imports. Thats the logic Interest Rates continue to hunker down, although were at the upper end of the range, especially in the long maturity. 65, 66 basis points has been a bit of a stopper tens of 30s. We want to pay particularly close attention to these rates the German High Court has given the ecb three months to justify the new qe measures. Up to that point they could kind of sort of be doing what theyre doing. Becky, back to you. Rick, i havent gotten to chit chitchat back and forth with you. Where are you, lobby of hq corporate lobbies many people considering its the i. T. Aspect of the exchange. Everything done electronic we are working off premise so the building is largely empty. City of chicago, you know, seems to be coming to life a little bit more every day just monitoring traffic, pedestrian traffic, car traffic i will tell you this, becky, unlike the east coast, which has gotten hit so hard, chicagos numbers do seem to be going up, i acknowledge that, but many of us live outside of the city and in suburbia. In suburbia theres a lot more normalcy obviously bars, restaurants, things like that arent open but there is a sense of more normalcy especially when theres more wide open spaces when you get out of the city. I will tell you it certainly seems as though morale, especially in the city, is down a bit. As we continue to grapple with many people i work with, floor people that would like to come back to the floor, june 1st theyre going to try to reopen havent heard anything from the cme or the New York Stock Exchange what theyre nervous about is they thought the goal was to bring the curve down they believe that a lot of thats been accomplished eradicating coronavirus seems much more difficult and thats what many of the people i bumped into or talked to that would like to, for example, come back to the floor, where is this end game how much longer is it going to last to that extent its similar 20 what youre experiencing. Its good to see you. Check in with you tomorrow, okay thanks. When we come back, the ce off of doordash on how food delivery has changed since the coronavirus reached the United States stay tuned you are watching ua b ghhe ocnbcwkox welcome back, everybody. If you are going to the store or ordering delivery, you are spending more on food. Jane wells is here reporter neilson reports milk prices are up 10 produce up 10 happy cinco de mayo. Four out of five food categories are higher normally food inflation is 1 to 2 over the last six weeks thats doubled. In the average week we see 1 3 of units sold in the average Grocery Store being on promotion. In the latest week were only seeing 20 being sold on promotions theyre trying to get the product on the shelves. Albertsons is showing 30 jump it is limiting how much meat a customer can buy same with costco the greatest threat to the food supply is the health of the people bringing it to us. We are not eating more food we are notnecessarily growing less you try to go to door dash, they are out of meat they use fresh beef. If this continues with high unemployment, becky, see the opposite happen with food inflation. More private label products which are cheaper. Whats weird, jane. Ive been trying to figure out how much more im spending its impossible. Ive been doing all of my meal prep at home not buying out anything. Im trying to figure out if im spending more money on food now or if i was spending more when i was paying for more takeout. There is no metric. I actually asked about that yesterday. One would think net net were spending less because it costs less to buy food in the Grocery Store. You have to make it yourself nobodys actually come out with that yet i do know my dishwasher is being put through its paces like never before i thought ours broke a couple of weeks ago and i went into a panic attack. Wow were running it twice a day now, everything. Everything and im learning to cook me, too things i never did before. Love it. My entire recipe i broadened my repertoire of what i can cook with ingredients that i never cooked before because you get what you get, right . Let me tell you real quick things that arent selling because high cuts of beef usually go to restaurants. Those arent selling we could see fillet mignon turned into beef that would be quite a burger. Wow jayne, thank you great to see you. You bet. Very good. Thanks, becky. As jane mentioned, doordash and response to the coronavirus outbreak, the Delivery Network is beefing up, beefing up support for some of its employees as part of a partnership with the Pennsylvania Attorney Generals Office doordash will expand financial, child care and Health Support for its gig workers. Joining us is josh shapiro, Pennsylvania Attorney general. Good morning, gentlemen. Help us understand what this partnership is going to do for the people in your community well, its good to be with you. Look, we know here in the commonwealth of pennsylvania weve got 1. 7 million pennsylvanians out of work gig workers are stepping up and acting like essential workers for so many of the products that we need and many of them cant get ppe, many of them cant get the Financial Security and the benefits they need if they get sick or a loved one gets sick. Enter doordash ive been trying to work with gig economies to make sure they protected their workers. I reached out to tony and said lets do something really significant for these gig workers in pennsylvania. Lets make sure we set a new standard of protection for these workers and its great to work with doordash. Not only are we able to do that to pennsylvania but tonys taking that all the way across the country, not just making sure they have ppe, benefits, funding if they get sick, but stepping up in two communities that have been really racked by both the economic crisis and the Public Health crisis thats philadelphia and pittsburgh we have homebound low income seniors who cant get access for food thats being paid for them. Now well have dashers taking those meals to those seniors all in all, this is a big step for pennsylvania im proud to partner with door dash. Tony, explain it a little bit, not just in the pennsylvania context but to the degree youre going to try to take this nationally how much money is it going to cost you or the states for doordash, its a big investment its a multimillion dollar investment that started months ago. As many of you know, this Health Crisis is also an economic crisis there are so many furloughed workers or workers that have to receive pay cuts and we want to make sure theres a Holistic Program so it started distributing millions ofunits, sanitizers, gloves, masks to make sure that they would be protected defaulting to no contact deliveries and then with the expansion of the announcement we made a few weeks ago and in partnership with attorney general shapiro today, we are expanding our Financial Assistance program as mentioned, the top drivers who are most active that have primary child care expenses are covered. New dashers will be aible to get access to sick leave making sure all dashers will be given access to telemedicine so they dont have to choose and find ways to get diagnosed relating to health concerns. As attorney general shapiro highlighted, we are working in the community. Thats taking the project dash initiative that we rolled out nationwide and taking it to pittsburgh and philadelphia in which were donating and delivering free meals to the mobility impaired households, elderly, and giving free deliveries to Health Care Workers in the Pennsylvania Health care network as well as nationwide tony, how does this change the Business Model one of the big debates about the gig economy has been all of the benefits or frankly the lack of benefits that gig workers traditionally were provided. That was so crucial the publics understanding was so crucial to the Business Model of a company like door dash. I appreciate the question, andrew i think one of the things that most people dont recognize is that most of the workers on the door dash flat form or on platforms like doordash work very few hours a week. 90 of drivers were working about three hours on average per week thats because they had other jobs this was really an opportunity to supplement that income. Now certainly with covid19 and the turmoil that i think weve seen in the economy, there have been lots of folks joining platforms like ours to make sure that they can add to their, you know, previous income. What they really value is making sure they have the flexibility to work whenever they want, wherever they want especially during now we want to make sure that these folks also get the protections that they deserve. Attorney general shapiro, how do you think about the gig worker again, this larger contextual question of whether gig workers should get benefits, should be considered employees versus contractors and the benefits that they may get as contractors insofar as they can work when they want to work, they dont have to work when they dont want to work right. Its a conundrum. Well, its not too much a conundrum but it is a serious Public Policy issue that needs to be addressed. Im choosing to look at this in two buckets. Number one, we have an immediate crisis and tony and doordash have stepped up to address it with their workers im going to be working with other ceos to get them to emulate what doordash did. You raise a point about the broader economic issues. Ive been a champion for workers, and i have seen so many gig workers fall through the cracks when they dont have the kind of security that other workers have clearly this needs to be addressed on a Public Policy issue as we rebuild our economy. There are so many people out of work in pennsylvania 4. 1 million pennsylvanians thats one in five workers in the commonwealth we know there is going to be a realignment of the work force. We know more people are going to seek the flexibility that tonys talking about in ways in which they can provide for their family and have flexibility to do the other things that they need, but in the process of getting that flexibility, in the process of being able to work for one of these gig companies, weve got to make sure that they step up with worker protections. We think that this is a really important start. We think this sets a good tone and a good example, but weve got a serious challenge within this country, within a decade we know morethan 50 of our work force is going to be in a position where they are they are working for one of these gig companies, where theyre independent contractors. We have to ensure that they have protections so that they cant be taken advantage of by employers or by the circumstances that might create challenges for them. Okay. Attorney general shapiro, tony, thank you guys very much appreciate it very, very much. Thank you andrew,thanks. A warning out for norwegian cruise lines this morning. It says theres doubt about the companys ability to continue as a going concern. This comes before the suspension of all of its cruises because of the coronavirus outbreak norwegian says the negative impact of covid19 for the company may continue beyond the time that the virus is actually considered contained and, joe, probably not a huge surprise in that youre continuing to wonder if people will go back if it reopens if they feel safe on a cruise cruises and then all the way down the line, just pick your pick the next business, but i think cruised is the one we i dont know. Thats what i think about. How about a basketball game in an arena . Right how about every sorkin, you may never be back hear are you ever going to get on an elevator in new york city . Would you . Why would you . That scares me, elevators. Dont you you all live on top of each other in new york city, right . Yeah. Look, ill tell you, in the building that we live in right now, and i have not been in the city now in about a month, and i actually need to go in to get some stuff soon, but the in the elevator the rule is that only your family can be in the elevator at one time so if you were to get on youd have to wait thats how theyre going to do it i dont know how you do that in the office. Then you wait in the lobby with a bunch of people. Your bubble friend. Wearing a mask in the lobby. How about this, talking to someone we know who probably doesnt want me to say who big real estate guy. Hes worried about new york city, andrew, because if the subway system doesnt operate or people dont feel comfortable with that, the whole thing everything breaks down in new york city. True. True. What are we going to do about that yeah. Without a subway, it just the whole model doesnt seem to work i dont know weve got i think for the next several months were all wearing the masks and well pray for the vaccine. Right. The whole thing is you know, dont you guys dream about it i dream about it i never go a night without having some type of a dream. Its never i dont remember any of my dreams you dont because youre exhausted, all those kids i dont sleep long enough exactly and the dishwasher breaking down any way ah think about the disposal, if that doesnt work. Then its bad. We dont have one yeah who are you those are good, becky get yourself a do you have a microwave egg poacher . No, i used to, but i dont anymore. Those are good i watched wheel of fortune last night i take that back before we go to break, a tweet from President Trump saying Oil Prices Moving up nicely as demand begins again. Hes right wti this morning, look at that chart, up from about 12 its gained about 60 or so, right . Maybe more coming u mp,ike wilson will join us squawk box coming right back achievable steps along the way. So we can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Oooh, well. Im good at my condo. Oh. I love her condo. Nana throws the best parties. Well planned, well invested, well protected. Voya. Be confident to and through retirement. Joining us is mike wilson, chief Investment Officer at Morgan Stanley on may 1st, i immediately thought of sell in may, and it looked like it was happening on friday, down 600 youve written extensively about it, after the bounce off the lows, the markets are due for a correction, it might have started on friday, but maybe its only 10 or so. You still have a best case yearend s p target of 3,000 on the s p. Why . Yeah. And i would argue that that 3,000 probably has upside to it given the fact that we are reopening and well get to that in a minute. The nearterm is hard to call. Nobody can trade the market that well all we were saying is that it is overbought we have a month end. It looks like we got the beginning of a correction. The main message is we think corrections will be limited to 10 . Doesnt mean it has to be 10 . We think the lows are in we think theres a lot of cash out there. We think well make progress on a recovery that folks will have a hard time embracing because of the Health Care Crisis were in. Its hard to do that it is hard. Its cinco de mayo, its may 5th, we have no idea what path leads us back to anything even close to all these businesses being 50 of what they were before all this. We cant see how thats going to happen how do you think its going to happen its already beginning, right . You all have been talking about it we dont know the path theres going to be changes in how we function and of course big urban areas like new york city are probably going to struggle more than other areas because of Mass Transportation and areas where, you know, germ transfer can occur more easily look, life will go on. The market quite frankly a month ago was more concerned about the economy being shut down than it was about the virus. Clearly if you shut down the economy, we know what the outcome is going to be its not going to be good. Its going to be terrible for businesses and the stock market. Now that were moving forward and reopening at different paces, every state will do it differently, as long as we remain on that path towards reopening and we make progress and we learn how to live with the virus and try to figure it out and defeat it, the market will try to look forward it will be volatile. It wont be a Straight Path up i think the 3,000 target is very achievable given where rates are, and where multiples could go, and given that 2021 will see a recovery from 2020. The low quarter is probably right now. Right all right. We are out of time we have to get over to cramer, but lets have a back on bold case, 32. 50 i think we have one analyst at 34 well be here reporting on it. Hopefully have you on to talk more about it. Thanks thanks, joe all right lets get over to cnbc headquarters, jim cramer is standing by. Wanted to ask you about whatever you want to talk about i was thinking oil or norwegian cruise lines which grabs your fancy i was on frank del rios new ship not long ago, hes a fantastic operator this is problematic. I looked at the deals you can get on carnival. A fourday trip for about 143 to me, these companies i know theres a lot of criticism of these companies. But if you just go back in time, theyre incredibly well run. We know theres obviously becky, you heard it with the airlines Warren Buffett was very, very selfeffacing, but in the end who knew about a pandemic. Frank del rio runs a fantastic ship my wife and i wanted to go on a small scale cruise with them it doesnt have to be 3,000 people i dont think people realize there are great cruises they can run. I hope they can raise money. Carnival did the Equity Offering at 8 and got the bonds done. Frank is a terrific operator we can criticize these guys, but unless you launched a ship after the cdc, which its not clear whether thats what carnival did, you know, people want to cruise thats i dont know. I dont want to cruise anymore people dont want to cruise having Read Everything that happened and once youre out at sea, if you cant get back to a country, killed my desire. It is just call it problematic. I dont know if its criminal the way australia sees it. Great to see iyou. Well see you in a couple minutes. Thats all from us join us tomorrow squawk on the street begins right now. Good Tuesday Morning welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber premarket adding to gains following mondays upside reversal on optimism about the countrys efforts to reopen. Busy tuesday with ism services in an hour disney tonight watch the move in oil, hits 23, up four days in a row, more than doubling in a week the president now tweeting about demand slowly returning as we do get more headlines about various states making plans to start really at the end of the week. I think that when you go