Transcripts For CNBC Squawk Alley 20240713

Green. Were currently holding onto some gains despite the miserable number out of adp, 20. 2 million jobs lost in april looking at commentary from disney and gm on various stages of reopening in shanghai, here in north america and the nasdaq continues to confound some of the bears as it is less than 1 from going positive for the year. Its actually pretty incredible and speaks to how defensive those megacap tech names have been viewed to be by investors in the market and for good reasoning looking at what weve seen so far where earnings are concerned. The other thing to keep an eye on is crude prices after five Straight Days of gains you have futures up 28 for the month of may so far. Those coming up because of the u. S. Private payroll numbers, that 20 million plus drop in april, which was not unexpected but still obviously so painful, especially when you put it in context of being the worse jobless in the history of the adp report that as you balance the daily data that shows decrease in driving in restaurant activity and what that means for potential little bit restoration of demand for gasoline states are counting for 40 of gdp, will have partially reopened by the end of the week. So that continues to be something in focus of course, the question is going to be, are businesses in those areas going to reopen, as quickly as anticipated, and most importantly are consumers going to come back right, jon carl, you mentioned the nasdaq i want to look at that if you look at whats up the most in the nasdaq this morning, a lot of semiconductor names, ala, applied materials, western digitals all those semiconductor names, equipment names connected to doing well also ecommerce getting a bid this morning the platform focussed on brazil and latin america doing well and shopify reported earnings this morning, that stock is soaring, up 5 doing well in the pandemic as businesses shift online. Its up 13 for the week theres arguably an ecommerce connection as well to blizzard, which we think of as a gaming name but theres commerce happening within the game and that commerce is Digital Commerce that is probably part of that story post earnings as well. Interesting combination of semiconductors and e commerce really driving the nasdaq. Its close to session high, doing better than the other indexes, carl. S p, Information Technology is not only green for the year where where its up 1 for 2020. Our next guest said the recent decrease in regulatory pressure is going to have a longlasting impact on the economy. Roger joins us this morning. Its good to have you back, kborng good morning. Its great to see you, carl well lets talk pressure in a moment. In terms of price action, i wonder if the things we were talking about make sense to you it does. Given the sense that Information Technology, Life Sciences are things that get employed in a global pandemic. Carl, its really obvious how dependent we are culturally and economically on Information Technology today if you combine that with the federal reserves pumping a ton of liquidity into the markets, it makes total sense to me to see stocks where they are today. Theres a lot of liquidity, look at whether its apple, google, or amazon, these are companies that are exceptionally well positioned relative to the rest of the economy the challenge for investors now and i think frankly for policy makers is that the unknowns relative to the pandemic are huge and just saying youre going to reopen the economy does not mean people are going to show up. Does not people are going to spend money, are going to be fully employed to me that level of uncertainty requires that all of us look, whether were looking at tech or any other sector, and ask the question, what is the risk reward from here. I do not think a v shaped recovery is the most likely thing in the economy i think what the economist, with their current cover story about a 90 level of for the recovery, i dont know if thats right or wrong, but it seems to me that kind of thing has to go into your thinking right now so you think the price level might be justified but its not investable yet its been investable, right, carl, i look at this and i say to me, ask yourself whether theres ever been a time in your professional life when there was more uncertainty about the economy than there is today. I certainly cant name one and, you know, ive been doing this for since 1982 and i look at the current level of uncertainty and say, look, what do we know. We know that were going to try to reopen states what else do we know we know that two months of everybody staying in quarantine did not actually stop the disease from spreading it merely slowed the rate of growth to 30,000 a day and a few thousand dead per day. And i look at that and i go wow, by the end of the year youre going to be at numbers that are somewhere between totally fatality of world war i and total fatality of world war ii and youre going to do that in one year it seems to me, if thats where we are at the end of the year, the market is going to have some issues its just not going to i just dont think people are going to absorb that like its normal. Roger, something that strikes me, looking at whats happening in the market youre talking i think about risk just now yeah. Look at corporate bonds. Normally you think of those as being safety but with the amount of debt that so Many Companies that were used to thinking of pillars of the economy are taking on and questions about their survival, talking about travel, retail, maybe not, then dividend paying stocks, thats supposed to be where investors rush to when the market is uncertain. Disney suspending dividend for half the year. I mean, so where do you go do you go to the high valuation tech stocks like apple and microsoft, people are saying those valuations theyre probably going to pay their dividends because theyre still making money, right . To me it depends on your time horizon. At my age, my situation, i want to have a combination of things like tbills and things like tech stocks, because i understand tech, im comfortable with the risk there. Its a sector thats a relative beneficiary of whats going on but most of my money i just want to stay on the sidelines because i think there will be a better entry point than today and, you know, i look at this, i say each person has to make their own judgment what i would simply observe is that when we come through the end of the year, i dont think were still done with the pandemic at that point you know, that all the evidence is that it takes multiple years to develop a vaccine and that while were going to throw more money at it than any vaccine in history i dont know you can change biology. I dont know that you can change physics well enough to have it come in less than a couple years. Historically its taken a lot longer than that so we shouldnt be surprised if the coronavirus is part of our economic and social landscape for many years to come and in that scenario it just seems to me that the economy is going to have to restructure that the people who work in meat packing companies, do delivery, work in grocery stores, theyre going to have enormous amounts of leverage in negotiating how much they get paid and the working conditions they operate under. And, you know, if they all get sick and a whole bunch of them die, youre going to have a really hard time replacing those people unless you pay better and have better working conditions but it feels to me like theres going to be big changes coming out of this. In the tech sector, that represents a huge opportunity but probably not for the type of products that were successful before. I think everyone is hoping and praying we see an effective vaccine much sooner than later, even an effective treatment of course. Ahead of that could inject more confidence into society in the meantime but you touched on something that i think is so key, roger. And that is the discussion has been centering around this idea that big tech is now in a position to get bigger i get that discussion, but what if this is also minting a new class, maybe a freeshman class f companies, whether its zoom, instacart, or peloton which is reporting after the bell, too. To me those companies are enormous beneficiaries of whats going on in the short run. The question is, is whats going on now is that normal and therefore these things are going to continue to rise . I suspect that would last a long time so that would be a yes, morgan when i look at the broader market, i go the next set of things that come out, the next set of Technology Opportunities i think are not going to be about taking jobs away from human beings and giving them to robots but using robots to create Economic Opportunity in ways that also create jobs think of things like contact tracing. Theres a role for technology there, but humans are a bigger part of that than people have been willing to admit so far so if you can get Contract Tracing technology that does some of the work, youre going to employee hundreds of thousands of people in the United States to do the rest of the work, and thats a good thing. Roger, why do you think regulatory pressure easing is a temporary phenomenon how hard are we going to lean on these guys if were relying on them so much in the structured economy were talking about . Carl, i dont know that its temporary. What i know is that the pressure is off right now and the question is, when does it come back and does it come back it seems to me that amazon, in particular, has behaved in a way over the last few months that is likely to ncrease the regulatory pressure downstream its not so obvious to me that that pressure comes back to facebook and google the same way that it was building before. Well have to see. Its just an unknown but obviously regulators today, they have bigger fish to try and theyre going to focus there. Thats going to give these guys tremendous freedom, and their stock prices are currently reflecting them. I wonder what you think about the goings on in amazon, its been a week in terms of news flow you had the state ag here in new york saying theyre going to probe some of these work and Labor Relations in the company just today were hearing that a worker died of covid that was working the Staten Island Warehouse Facility and then you had the aws engineer that quit last week and publically discussed the grievances he had with the company and meanwhile, amazon saying that theyre basically going to forego the profit they earn in the Current Quarter to put towards worker safety and better Covid Response and precautions i think if amazon takes the 4 billion they would have otherwise earned and put it into a combination of better Work Environment, worker safety and more compensation to the people working in there, that will be the most brilliant strategic move that company has made in a very long time, which is saying something, because amazon has done a magnificent job and it is really obvious now that the way they have focussed on extracting the last penny from every opportunity has created a Work Environment thats just socially unacceptable and really unhealthy they can easily fix that without losing their position in the markets. And they should do that. If thats what jeff does right now, hes going to take away most of the pressure because amazon should be a great place to work. And, you know, the reality is, the convenience of what they do is really great. We dont need next day delivery. We dont need same day dlaieliv. What were discovering right now is we need things we need on a reasonable schedule and optimizing for other things is going to be more valuable to them in the long run at the same time our viewers know you, roger, as a critic of the way some of these Big Tech Companies have structured their business and even an advocate, i would say, at times of backing away from those platforms entirely if anything, this crisis has made me skeptical of the move to boycott social platforms i think theyve shown themselves to be essential and so, if you cant boycott them, then there have to be rules that govern both individual user safety and probably societal safety and one where we take them as an essential component of the way society functions like utilities, like roads, like bridges, right jon, im completely with you. When i called attention in 2017 to the issues in particularly facebook at that time and then youtube and google and later on microsoft and amazon, it was really about this issue that democracy and public health, privacy and competition in the economy, were all being endangered by the Business Practices of those companies it was never that they didnt offer good value, right. I still use facebook as a product because it does some things that are really important. Its just the way it does them can be really harmful. With facebook right now, and youtube, theyve had an opportunity to really step up, to limit disinformation around the covid pandemic and to say that theyve failed, i think, is a generous statement. You know, facebook and instagram are the platform for organizing all of these armed and angry liberation protests that are going on around the country. And both facebook, instagram and youtube, have been used to take a pandemic, which affects us all, and somehow convert it into part of the culture wars and make it political. Thats insane. And that is simply a function of Business Models driven by algo rhythmic amplification, grabbing our attention and manipulating it thats harmful it seems to me this is the moment i wish the executives of those companies would recognize that this is amazingly unhealthy. And that they are playing way too big a role in undermineding social cohesion in a pandemic. Its one thing, i can see them saying listen, politics we have a different point of view, we want trump to get reelected people in the United States are entitled to have different political points of view but it seems to me if you undermined public held, that is the sort of thing we should get angry about. It brings to light the polling data we had moments ago yeah. The partisan gap of what people are think are safe in the company. Think about that, its crazy. It is crazy do you expect your band to play again a live gig in the next year or two . I have no idea. We talk about that all the time. I do a daily live stream at 7 20 p. M. Eastern, 4 20 p. M. Pacific time on facebook, on twitter, on youtube, on moon. Com, we do it every day at 4 20 p. M. Pacific. Okay. Whenever its safe for the band to come back well have the whole band to do live streams. Right now one of the band mates have been sheltering with us so we do a duo. I dont know, carl, i have no idea we have to be careful and set a good example but were looking at every option, but we have to go slowly. Were looking for that day, roger. Me too. Stay safe. Be well, everybody. Morgan . Later this hour, the ceo of Virgin Galactic, well talk about the partnership with nasa and space in the age of covid fp dow is flat. Dont go anywhere, back in two to give you the support you need. To stay motivated keep active and sleep well. 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With nearly three out of four hotel rooms empty across the nation, hotels are doubling down on hygiene measures to ease travelers concerns and it starts as you enter the hotel. Plexi glass at the front desk, encouraging key less entry signage confirming hot spots like the thermostat, remote control, shower has been cleaned. If youre used to towels organized, thats going away more and more of our guests have asked that we dont come in their room, because again humantohuman contact so we are reducing the level of frequency as it relates to housekeeping, based on Guest Feedback technology will also play a key role weston Houston Medical Center is using a germ zapping robot to disinfect rooms. Fitness centers will have fewer machines to allow for social distancing and the breakfast buffet will no longer be offered as well. An executive at marriott and hilton both telling me they hope the new cleaning measures will spur demand and instill confidence amongst travelers who are, understandably, nervous about checking into a hotel. Thats going to be a completely different experience and investors wondering how much all of that is going to cost thank you very much. Obviously markets trading between red and green arrows this morning a lot more squawk alley continues in a moment. Dont go away. Right now, there are over a million Walmart Associates doing their best to keep our nation going. Because despite everything thats changed, one thing hasnt and thats our devotion to you and our communities. Our priority will always be to keep you and our associates safe, while making sure you can still get the essentials you need. The future is much less clear to me how the business will turn out through no fault of themselves. I would not want to bet my life on whether we beat the s p 500 over the next ten years. When the conditions are right it should be obvious to repurchase shares and there shouldnt be the slightest taint to it. In the end, the answer is never bet against america. Welcome back markets about to close in the uk and Continental Europe right now a mixed picture. Stocks pulling back after yesterdays rally, the eu predicting a recession of epic p purr portions due to the coronavirus. Automakers saying it expects the impact from covid19 to hit the Auto Industry for quite some time the u. S. Food and Drug Administration has approved farziga, and you can see their shares are up 3. 5 lets get an update regarding the coronavirus with sue herera good morning, everyone. President trump says the Coronavirus Task force will keep working indefinitely just yesterday officials, including the president himself, had suggested the task force would soon be fazed out. But trump says it is here to stay but will likely shift towards reopenings and vaccines. Germany is loosening its lockdown restrictions. Angela merkel said people from two different households can gather, and professional soccer can resume in the second half of may. Students have returned to school in wuhan china for the First Time Since the school was locked down. Senior students preparing for college have been allowed back after testing negative for coronavirus. And shanghai disneyland will open on may 11th for those with reservations, masks will be required and temperature checks will be implemented on entrance. You can head to cnbc. Com for more disneys former head of operations for parks is going to xtin us ne dont go anywhere. Were back in two. Welcome back disney announcing that its parks experience and Product Segment took a billion dollar hit due to the pandemic last quarter. Still the company is planning to reopen shanghai disneyland next week with limited capacity and required use of masks and temperature checks joining us to discuss, former executive v p of operations, lee cochrell i believe you stepped away from the role in 2006, is that correct . Thats right. But you were running that from 1990, i believe, through 2006, so you saw quite a bit and having visited a couple of disney parks myself, theyre the happiest place on earth, disney says but theyre also like a mini authoritarian state, theres cameras, tracking, required screenings. Does that mean disney will be able to use some of the same kinds of technology to ramp operations back up that some of the more restrictive regimes have been able to to good effect i think theyll use those plus many others theres a lot of creative people at disney in the group, and they have a lot of people studying these things i opened the paris parks and then i came to disney world for 13 years, and i can tell you, through 9 11, we executed that perfectly because i one thing about disney is the whole world loves disney, one lady asked me, can you imagine the World Without disney i think this will be i dont know how long its going to last, im not sure disney knows yet when they will reopen. But theyre very creative, they go beyond expectations, if youve been there you know that, and it will be safe. Disney says its safe, people will come back. What do you think disney will do what would you do in this situation to really underscore that can they require a test to either enter the park or perhaps to get a fast pass do you think parks become more of a Premium Experience cost wise because theyre going to have to operate at reduced capacity yeah, i dont think i think we dont know what theyre going to be able to do because were still trying to learn what technology would be available, how it could be implemented, what the general public will stand for, i think, and expect theyre going to tell us what they expect anddisney will be finding that out from their guests around the world. What are your expectations when you come back to disney, and i guarantee you, disney will not open until they say its safe to come. The difference between having it be a safe experience and a safe experience that is still magic, right i just wonder, how much can disney incorporate technology and so forth to make it not only safe but make it feel like it used to feel. I dont think we know that yet because americans and the whole world has a short memory after 9 11 we were worried about when it would get back to work and it was just several months and already people were coming back a lot of things changed at 9 11, new security rules, checking people, all kinds of security at disney world and actually the guests told us they liked that. They were first concerned would they like all this security and cameras and all, and, in fact, they told us they did like it and did want it. I think thats unknown yet how far this will go and how long some of the extreme measures will last. And especially if you get the inoculation. Yeah. As you do have some of these local economies beginning to open up here in the u. S. And other parts of the world right now, it really does seem like one of the questions businesses are grappling with is the value of their brand and putting that brand on the line right now. Disney is obviously massive, powerful, trusted brand. Do you see this as a quantity fi indication of the value of that brand and that being perhaps worth more, at least in the near term to disney, than the current financials of the company . Absolutely. I think trust is everything, and i would tell you, all the years i worked there and when i hear from the guests around the world, they trust disney literally theres no place in the world thats the most visited vacation place in the world and people come back, i think, on average every three years. And its a highly trusted brand. And the Safety Measures at Walt Disney World are amazing you would have to be inside the company to see the commitment to that its part of the chuulture safety is the number one at disney along with the parks disney has Disney Cruises and had been expanding those. The cruise industry has been hit especially hard during this pandemic and im not an expert on this specifically, but something tells me its potentially going to take cruises quite a while to come back do you think disney has to rethink where cruises fit in the experience portfolio that they have and how do you think they work through that i think the cruises are just like the parks, going to a hotel, or traveling to europe. People, when they feel comfortable with it, i think they will feel comfortable with disneys measures on ships quicker than anybody else. They have a good track record, theres already a lot of interest being shown, people wanting to go on a cruise and wanting to go on a Disney Cruise so, you know, right now were in the middle of this thing, so i think some of this may, as soon as theres a vaccine available, i think youll see a lot of this disappear. And people will step up and if disney waits to make any decisions until theyre sure, i dont think disney is going to make decisions based on what everybody else is doing in the economy, the gyms opening and restaurants opening, itll be different. Theyll be focussed on how to do it at disney world and because, again, the guests are from all over the world every country in the world and so are the people who work at disney world. Lee, starting monday were going to have our eyes on shanghai disney. Theyre going to run about a third of capacity. Theyre going to have masks and temperature checks and theyre using this government issued qr code i wonder, can we look at that and sort of take it as a proxy for how north america might reopen or not . I dont think so. I think each place has to be different. Theres a different feeling about it the public is different. The culture is different in china than it is in paris, than it is in japan it will be different each culture is different. I think thats one thing disney learns is pay attention, respect the culture and make your moves based on that, of what the expectation of that culture is lee, disneys workforce has been hit hard by this as well. Youre looking at furloughs and potentially cuts what do you think is important for disney to do from here as they look to ramp operations back up and employees might be wondering what the commitment is to them yeah, i you know, thats always the hard you know, they say theres dilemmas in life and we at disney have to think about taking care of the guests, the cast members and the bottom line, theyre all connected. You cant disconnect them. If you lose one, you hurt the others theyll work through this, disney cast members love working there, theres low turnover at disney theyre anxious to get back to work but it could be a while because they have to ramp this thing up slowly. By the time its fully opened, whether thats now, six months or a year from now, a lot of those cast members will have moved on to Something Else but disney announced quickly to close the parks back on march 11th, paid the cast members for the next several weeks trying to do the right thing, thats all you can do do your best and then forgive yourself thats i think what disney is doing and many other companies are stepping up to try to do the right thing. And its difficult with those three measures companies, workers as well. I know we feel that way, too lee cockrelle, thank you for be us new york state is out with the latest numbers on covid19 heres Governor Cuomo a few moments ago. Our total hospitalization rate is down again you see this curve we talked about it on the way up, which was a painful journey. We talked about it at the quote unquote apex which turned into more of a plateau, flattening, and now were seeing a small decline. We would like to have seen a faster decline, but this is where we are its a painfully slow decline. But its better than the numbers going the other way. You see it on total hospitalizations you see it on intubations and you see it also in the number of new cases per day. This is important because while were seeing the hospitalization rate go down, and you see the number of new cases going down, those number of new cases are still problematic, right so 600 new cases yesterday with everything weve done we still have 600 new cases yesterday, either walking in the door to hospitals or people who are in hospitals who are then diagnosed with covid but that number is also going down one of the most stubborn situations, and the most distressing are the number of deaths and that is down from where we were but its still 232 yesterday, which is an unimaginable and painful reality that we have to deal with. And when people talk about how good things are going and the decline and the progress, thats all true thats also true that 232 people were lost yesterday and thats 232 families that are suffering today. Thats Governor Cuomo with todays hospitalization and new caseload out of new york state markets riding a tight rope lday, close to the flat line. Wel take a short break be back in a minute. Dont go away. Feels like theres no barriers between departments now. Do you think everyone appreciates it . I do. Huh. Forgot my glasses. Serivcenow. The smarter way to workflow. Find a stock basedtech. On your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. As the economy reopens, restaurants are turning out to be a huge focal point with wendys, papa johns, wing stop and grub hub tonight were kicking off with wendys that reported u. S. Sales are rebounding after losses due to covid19. At the low down nearly 26 but theyve stabilized to 2. 1 fall last week and were overall flat for the quarter the pandemic does make it tough to compare the numbers wendys breakfast was a focus before the pandemic hit launching in march accounting for 8 of the sales in april as the company is hit with beef shortages, the ceo said the company is shifting focus to chicken products to papa johns, stories up 5 pbt 3 for the quarter, 27 in april in north america alone the aggregator business has doubled to 4 . The company said it had 1 million new customers in april alone. The ceo will join us on power lunch for an exclusive interview for tune in for more on that later. Both companies withdrew full year guidance due to covid uncertainties. But all restaurants said the consumer was strong precovid and are not sure about the future, but operations will look different. Back to you. Uber announcing major layoffs this morning and the foregoing of pay by the ceo. Just almost a week after lyft made a similar move. Uber is laying off 3,700 employees, that accounts for about 14 of its total workforce. In a filing the company said that will likely result in 20 million in severance and benefit costs. But this wasnt unexpected ride sharing bookings we know they have fallen off a cliff both uber and lyft have withdrawn their guidance this Business Model burns through billions of dollars annually this comes after a number of other layoffs in the sharing economy. Mentioned lyft, remember the sharing economy, this is a market getting hit particularly hard in the covid crisis lyft laid off about 17 of its workforce. Theres also scooter, startup, lime has laid off 13 of its staff. Yesterday airbnb announcing cuts of about 25 of its workforce. And we work, of course whose trouble started long before coronavirus is expected to make more job cuts in the coming months the filing today says that ubers ceo is foregoing his 2020 base salary in an email to staff today, he says that days like this are brutal, but it reflects the reality of ride trip volumes being down significantly lyft reports today after the bell, uber reports tomorrow. And ubers results could look worse because the footprint is far more international and would have been feeling the covid fallout for longer what is interesting is the last few weeks in particular, uber hinted it was seeing a recovery in some of the markets and itll be interesting to see what the Companies Say about the profitability targets that came before the crisis and whether the pandemic throws those totally off track. Back to you. Some key numbers and incite were going to be watching for at a time everyone is focussed on the unemployment data, jobless claims, jobs report for april on friday, it seems like the share economy is only just starting to roll out these waves of mass layoffs right now. Is the sense this is the tip of the iceberg the longer this pandemic stretches out for within the share economy yeah, i think it does remember were talking about corporate employees. Were not talking about uber drivers and instacart workers that are seeing a surge true. Some that are seeing a surge in demand and drivers who are seeing the opposite, demand dry up but these are corporate employees. I think a lot of these companies, particularly when you look at uber and airbnb, they have become ambitious over the years, you think the two sided marketplace would have to do less of this, with being asset light. I think people were surprised they had this many employees to begin with, but they were supporting these platforms, they want to be transportation, travel platforms so they bring more and more employees, high wages, these are Tech Companies at the end of the day. So now theyre having to scale back i think youre right, morgan, this could be the tip of the iceberg, with uber in particular you could see more cuts on the way. Probably the drivers who are feeling this pain sooner than the corporate employees were, because people havent been riding in ubers and lyfts for a while. Thank you for that well take a quick commercial break. The ceo of vgiirn galactic joins us in a few minutes. Stay with us quadrupled their money by 2012 . And even now, many experts predict the next gold rush is just beginning. So call u. S. Money reserve, the only Precious Metals organization, led by a former director of the United States mint. As one of the largest u. S. Gold coin distributors in the country, u. 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[announcer] if youve bought gold in the past, or would like to learn more about why physical gold should be an important part of your portfolio, pick up the phone, and call to receive the complete guide to buying gold, which will provide you important, never seen before facts, and information you should know about making gold, silver, and platinum purchases. Pick up the phone and call americas gold authority, u. S. Money reserve. With nearly two decades in business, over a billion dollars in transactions, and more than a half a million clients worldwide, u. S. Money reserve is one of the most dependable gold distributors in america. Welcome back Virgin Galactic rising this morning, up about 3. 5, almost 4 , after announcing First Quarter results and a new deal with nasa. George whitesides joins us now in a cnbc exclusive. George, thanks for being with us good morning, morgan. So cash on hand, 419 million. So down slightly from the end of 2019, but i think much better than investors were anticipating then, of course, the headline that over 400 deposits from individuals in 44 countries have been taken, representing potentially 100 million plus in future revenue and that was as of the end of april. Walk us through those deposits and what youve seen in terms of interest in Space Tourism and the future sale of tickets, despite the pandemic and the subsequent recession that were now in yeah, morgan, were really excited by the response that weve seen to our new smallstep program. So sort of one small step, one giant leap and as you say, weve now had over 400 people put down their money for this program that puts them at the front of the line for when we do release tickets, some time later on. And you know, what i think it shows is that the demand for these incredible experiences, you only live once kind of experiences is still quite strong and, you know, weve been heartened by that, as well as, you know, the size of the increase in our in the top of the sales funnel, which is people who havent put down money, but who have expressed or registered their desire to fly that went up another 15 or over 1,000 people, as well. So you know, what were seeing here is i think, you know, strong growth in our sales funnel and i think thats a good sign for what we have to come how much of that demand do you expect to translate to actual ticket sales, especially if this economic downturn were in right now continues to stretch out . Its a great question you know, one of the things that ive been pointing to is the fact that weve had, you know, really essentially a constant base in our existing ticket holders. In other words, we havent seen any sort of substantial requests for refunds or anything like that i think thats a great sign. You know, this company has been around for a while ive been ceo for a while, and weve actually been through a few of these serious recessions or other things. And our Customer Base during those periods has always been remarkably resilient and i think thats just a credit of our customers sort of economic position. And i think hopefully, thats a good sign for, you know, for what is to come. Yeah. You just completed your first test flight out of Virgin Galactics new home on friday. Whats the timeline now for service to become operational . When are we going to see Sir Richard Branson and those first paying tourists actually get to go up to the edge of space well, you know, were taking it step by step, as you know i think the main thing is that i was incredibly heartened that we were able to successfully fly a great test flight for the first time over new mexico and space port last friday that was a big accomplishment. We really had to over the course of april go through every single one of our procedures to make sure that they were covid19 compliant, in terms of the ground crew, in terms of the pilots and all of this we also, as you may have seen, we tested everybody in our facilities all of our pilots, everyone else and i think that gave people a little bit of, you know, comfort coming back to work. So whats going forward, you know, we have to look at the data from fridays flight. Well do a data review over the next couple of weeks and then we will see what we need to learn. And then well get back into preflight flow for our next live flight, which will be a highspeed flight, should be interesting and exciting and well review the data for that and then well move into the final phase of what we call the powered flight test program, where were flying, you know, rocketpowered flights at some point within that flow, well be moving into a full people in the back, you know, test passengers, essentially using company employees. And then once weve sort of gotten comfortable with all of that, thats the point at which wed be ready to, you know, fly richard to space okay. You also announced a space act agreement with nasa to facilitate the development of highspeed technologies. So this is basically the hypersonic, supersonic, pointtopoint travel via rocket that you have been talking about, which is a longterm plan and potential business for Virgin Galactic. What does this partnership do in terms of enabling those capabilities and does it actually accelerate the timeline well, you know, were really excited about this new announcement this is a space act agreement between us and nasa. Specifically, you know, weve got an agreement with nasa langley, which is one of their really excellent centers for highspeed aerodynamics. The initial focus of this agreement will be on thermalrelated issues, so, you know, how the skin heats up of the vehicle, as you approach very high speeds, as well as different propulsion options and technologies what were going to do is bring together our best people to look at these technological choices and to do research and development that will help us move forward now, i think its another step in our pathway, our longterm pathway, and what weve said is, what we really want to do is attack the longlead technological challenges first thats critical for any longterm development program. So i think this is a great step forward and, you know, were looking forward to seeing what the team does together hey, good morning, george its jon fortt you said on the call that during march, twothirds of employees and contractors were able to complete their duties from home. You also said that youre developing plans to safely return them to your facilities my question is, why . If they could work from home, why not have them continue to do that will you have some of them continue to do that, or is it important in your culture to have all of those people on site awesome question. And like many businesses, thats exactly the question that were asking today you know, i think that frankly, i dont think we do need to have all of them here we would like to have some of them, because theres a positive interaction between the folks who are on the shop floor as well as the folks who are, you know, the engineers, you know, doing that analysis. But i think, you know, the really interesting thing that you raise is that we could be heading for a new normal, where we do have a bunch of folks who are rotating through the facility and i think thats okay, as long as all the work is getting done, you know, i dont care where people sit yeah. And two questions for you on covid19 and the impact on the business the first is, is it going to change the way people are suited up and actually do fly to space . And the second is, the fact that youre specifically developing oxygen hoods, negative pressure enclosures with nasa as well right now. How much of your resources have been dedicated to that and how soon until you get fda approval yeah, great question. So you know, ive been super proud of the team for taking time to work with our partners at nasa to build these new technologies that will help folks who really are going through the toughest part of their covid infections you know, what weve done is weve created these oxygen hoods, which go over your head and actually prevent up to a quarter or a third of people who would otherwise be needing a ventilator from going on a ventilator and obviously, thats really important, since the Health Prognosis for folks who go on a ventilator, especially if theyre old, can be somewhat challenging. Weve already produced about 400 of these helmets and as you say, were in the eua process right now with the fda hopefully in the next few weeks, thats approved and were able to get these out here. Our longterm future will not be producing medical devices. Were trying to do our part with some great engineering to help folks out in the community and what we would love to do is share that technology with other folks who are in the business so we can get that out, not just domestically, but also internationally. Yeah, george whiteside, ceo of Virgin Galactic, thank you for joining us today thanks so much, morgan. All right, guys dow is down 72 points. Obviously, a lot of data came our way this morning well get more tomorrow with jobless claims, but tonight well have etsy to work with and fox and lyft and paypal and square, as weapon continue to handle all kinds of data points, whether its labor data, corporate earnings, today its oil inventories. But a fair amount of chop. Lets get to the judge and the half carl, thanks so much. Our breaking News Coverage of the markets continues. Welcome to the Halftime Report im scott wapner our top story today, 20 million versus 24,000. One number reflecting the horrific number of job losses last month, the other showing just how far the dow has bounced back from the march lows our question this hour, how long can that divergence continue well debate that today with our Investment Committee with me, as always Joe Terranova is with me today, Pete Najarian as well. Carrie firestone is the ceo of res asset management