Transcripts For CNBC Squawk On The Street 20240713

Coming off a fiveday win. A lot of the stocks in the nasdaq are for companies that do better in covid era. Remember, weve got many, many institutions with 80 to 95 of people working home. They require a gigantic change in the supply chain of work. And the supply chain of work is just generated a remarkable new wave of the cloud, of hardware, of software, and the companies that are really rallying for the most part are companies that do fabulously when you have to create new factories the factory is in the home theres a look at steve mnuchin. Well talk to him in a few moments. A lot over the weekend, whether it was mnuchin, kashkari, prepping us for the idea that the worst of the impact is still to come, even after that jobs number on friday which we didnt have you with us to discuss. Here we are i wanted one thing to be normal in my life Everything Else has changed like so many of us. I questioned the notion that this month will be worse we are hearing too many people who are reopening, and unless theres going to be another outbreak, i just think these people are being too negative. I dont want to be in the camp that says happy days are here again, but every Single Person this morning has talked about a reopening, whether its mark cuban, jackson from autonation, i dont know how people think it could be worse ppp kicks in maybe theres something we dont know that is going to make it so that we stall out again. But i think maybe theyre just underpromising and hopefully overdelivering but jim, to the extent that we dont know what things look like a number of months from now, that continues to be certainly a conversation that i know youre having, were all having with people in the Business World the nature of work your point, so many people working from home. Weve seen the Big Technology companies, facebook for example. Any number of other ones who have said to employees dont worry about coming back until next year if you dont feel comfortable. We talked to dave gitland from carrier on friday about the assembly line, and that spacing people that far apart may require robots in between. You have to think about what will life be like when we return to some sort of some form of normalcy its not going to be the same. No, it wont be i think that the factories are really struggling. Whether its tyson, where theres just a horrible article about what it was like initially there. Initially being not that long ago. Whether it be elon musk, his rant this weekend. Let us go to work. This is the first time i can say this, but unfortunately were not amanufacturing country, bu maybe its fortunate now because theyre the ones that can at least put out product. The product is going to be curtailed. I know that we had no autos to speak of sold last month phils been talking about the incredible resurgence of the truck. We wont look at these and say they dont count because theres a theres a huge they make a fantastic deal basically with low interest but it is an issue i know, david, you talk about what happens if hertz goes under, those used cars used cars right now are not much cheaper than the new cars. So the people buying the new cars with the financing plan we could be deluged with those housing held up. Housing has held up to a point where we dont talk about it enough as a bright spot. Maybe its because i gardened this weekend, saw my wife, and i have some positive things to say, but i feel this relentless that well have a worse number than the Great Depression, which is what secretary mnuchin basically implied, im not buying it. I get that. I get that we talked as well about those who own commercial space, whether its for retail or office space, back to the idea that what percentage of a work force now at a company will not be required to show up in the office at all . Efficiencies that companies have seen out there, theyll seize in the name of, well, keeping people distanced, so forth it is also going to help their bottom line to some extent the question is who is it going to hurt . Theres a lot of Economic Activity that comes from people reporting into work every day. Right and even when we get back to opening, its still unclear certainly in many major metropolitan areas im talking across the country, not just in new york youre right. Where, you know, where its not going to be returning to a normal level of Economic Activity you can use the salesforce. Com numbers, and say we dont need staff. We can have every producer at home we can let everybody go. They dont talk about it that much, but products are so good that you simply do not need anywhere near the number of people who used to be in the office theyre discovering that i dont know what happens to those people i dont know what happens to so many people that are just sextr. Three months ago everybody was so needed. Now we find we have to find n g things for them to do. Your point or employment makes sense. Senate alliance had a comment out this morning, they say were talking about reopening all the time through the lens of retail, malls, entertainment, disney you go back to the doctor or get your kids back to the dentist or the orthodontist, youre talking about a vshape in at least health care visits teledoc notwithstanding. Thats a huge part of gdp. Maybe your point on unemployment is in the right direction. Im so glad you brought this up im calling this a health care recession. There was a tremendous number of people who were taken out. We have the combination of abbvie today and allergan. Botox, the whole idea that dermatologists, who wear masks and have ppe, that theyve been sidelined. Theyre back think about the whole chain of people involved in health care, in doctors, in dentists. You know that was an area that was in depression. I come back to the administration not recognizing the fabric of work in the country and not realizing who is ready to go back looking too much at factories in old america and not looking at new america which is traditionally based on health care, tech the thing i am worried about is banking. How much forgiveness can you give before the reits just not only give up dividends but give up themselves . Thats a key question we dont have a full sense yet of may meant rolls, whether its retail, where in april a lot of them werent paying. Most werent paying. We dont know yet. Then to your point, it works up the chain to the indebtedness that those owners of the real estate have, and their ability to repay the banks, and whether there will be forgiveness there. Guys, another story weve been watching closely is the reopening broadly speaking around the world and disney in particular, those theme parks, of course, still closed in the u. S. , but open in china at least at Shanghai Disney lets get to eunice yoon who has that story for us. Thank you very much, david. There are new rules to be able to get into this theme park. Got to wear a mask, get your temperature checked and keep a safe distance from each other. Reporter another sign life is getting back to normal in shanghai, selfies in front of the disneyland castle. After being shut for 15 weeks, Shanghai Disneyland became the only disney theme park open for business the park is still under postpandemic restrictions to keep people healthy. The man in charge of doing that here is andrew bolstein. Every line has markers instructing people to keep three feet away from the next person at entrances and even while on rides. As our guests are loading in, we put an empty seat between each group and an empty row. At the park visitors get constant reminders to distance from each other. At the restaurants tables are being blocked off. The menus are staying the same, but the Service Style may be different we wont do buffets, but well serve the food for you reporter hand sanitizers are available and mobile payments are encouraged theaters will stay shut, parades limited, and no fire works to discourage crowds. But you can still see your favorite characters, just dont get that close mickie and the gang are social distancing no hugging that has to wait for safer times. You may have noticed that bolstein and i werent Wearing Masks during the interview that reflects the loosening restrictions here in shanghai, but also we taped that interview before the park opened, and we are sure to stay at least three feet away from each other. Back to you. Thank you, Eunice Eunice yoon in shanghai, who i know earlier pointed out the lines are much shorter so, there is certainly one benefit to having the park far from full occupancy. You know, i im so split a lot of people in this country are antimask. It comes easy to people in asia to wear masks. We are six feet. They are three feet. Thats quite a difference when it comes to a restaurant, when it comes to retail i always wondered, where do they come up with their rules whos informing them we obviously are pretty loose on masks. Were very strong on distance. Its quite an anomaly to see what theyre doing verses what were doing. Really quick, jim, jpmorgan analyst on squawk suggested maybe july 1st for orlando and later for disneyland given the disparity between florida and california policies. That would be why disney stock is where it is that stock was supposed to get hammer hammered its gone straight up since they reported people are getting more optimistic the 25 figure doesnt make sense to me. All right well talk to disneys bob chapek later this morning on squawk alley about the shanghai reopening and more. After the break, the treasury secretary, dont go away 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. Joining us now is steven mnuchin. Mr. Secretary, thanks for coming back on squawk on the street. Great to be back with you okay. I want to give you a chance for a doover. We saw a remarkable weekend. Resurgence in shopping, so many places going out can we take off the table that the next number will be worse than this month . Maybe leave it open that perhaps weve gotten some improvement . I wouldnt say its a doover. I said it could be so, i think the economic models are very difficult to predict in this situation, since this has nothing to do with normal economic factors, this has to do with the closing of the economy and an opening of the economy. To me, first of all, let me say, were sympathetic to all the workers who this is impacting. If the numbers are worse next month, we understand that. I think the numbers will be Getting Better as we go into the summer and reopen the economy. Thats the important issue here. Were discovering phase one, pretty much being completed. We have phase two now, which is another whole level. What can we do what can the government do, how much money should the government spend to make it so phase two incorporates all the new rules, the new safety rules which turn out to be quite a burden for most of the businesses jim, the really important issue is Congress Worked very, very quickly with the administration and the president on an unprecedented 3 trillion package. And were just getting that money now into the economy were having the second round of the ppp being dispersed. We have over 140 americans who got direct payments, either direct deposit or checks we have lots of money going into the economy because of the facilities that the fed has announced with the treasury. Weve unlocked the bond market, so you have Companies Like boeing being able to borrow unprecedented amounts of money i think what thepresident has said is lets step back for a few weeks, lets be very considerate in what we do in the next round before we go consider spending another trillion dollars or more of taxpayer money. But the president is determined well do whatever we need to do. First, ppp has been a phenomenal success there were some people who took advantage of it. You weeded them out. At the same time, ppp has unveiled some situations that i think the president really would be great to step fwhinto, whichs the disparity of states. You have elon musk trying to open a factory he cant open a factory where hundreds of people would be employed many people in new york are taking whats known as the tennessee pledge because we dont know how to open restaurants. You have to whip out half the chairs, take somebodys temperature when they come in. Boy, would it be great if the president gave us directives on what he thinks the white house should be doing. Weve put out a set of guidelines, we are working with the states most states are cooperating. I agree with elon musk, hes one of the biggest employers and manufacturers in california, and california should prioritize doing whatever they need to do to solve those Health Issues so that he can open quickly and safely, or theyre going to find hes moving his production to a different state. Mr. Secretary, theres been so much debate around whether or not states that have been poorly run deserve as much aid as those who have not are there parameters that the white house is developing to determine how well a states been run and whether that is a factor in ongoing aid . Theres ongoing discussions on this. But, you know, ive heard very clearly from the president and the republicans that we are not bailing out state pensions and other things i have not heard from the democrats that theyre willing to do it they want to throw a lot of money at this problem, but i think its very clear there is not going to be bipartisan support that bails out states from previous problems and one of the things we did last week at the president s direction, i think it was very important, we gave a lot of money to the states. We created more flexibility. So we said they could use that money for firemen, First Responders, policemen, so that in no Uncertain Terms the states didnt have to lay off those people because they were having budget issues. Were also very quickly opening up the Lending Facility that the fed has working with the trernrtrer treasury as you know, with Interest Rates very, very low, states can borrow this money, some of them, it would have to make changes because they do have balanced budgets, because this is a onetime situation that is quite different. Well be working with congress to discuss these issues and many important issues like the liability issue. We want to make sure its busine businesses opening up and theres not frivolous lawsuits in listening to you answer that question, it sounds like you dont view states fiscal problems as something that needs to be dealt with immediately i mean, they are so many states are facing significant shortfalls as a result of lost sales tax, not just no, but the likes of nevada, florida, louisiana, states that rely a lot on sales tax, theyre facing big budget shortfalls that could require them, therefore, to lay off workers. Why isnt that something that you would view with the immediacy that needs to be addressed . Let me be clear the c. A. R. E. S. Act gave a lot of money to the states. That money was intended not for lost revenues, it was intended for covid19 related issues, since thats really what the priority is. Having said that, we just gave them a lot more flexibility. So not only can they use it for direct covid related issues, weve given them flexibility for First Responders so that in no Uncertain Terms the men and women out there helping us fight this terrible disease, the policemen, the firemen, the hospital workers, the First Responders, we wand to make sure in no Uncertain Terms they get laid off. The issue of lost revenues is a complicated issue. These are taxing authorities on their own. Different states tax different ways some states have more issues some states have less issues this is something i continue to discuss with the president and we discuss with congress theres an opportunity here that you once said you would take on our show, never thought it would happen, you said if we ever got Interest Rates so low that the shortterm and the longterm is the same, you would not hesitate to refinance. What an unbelievable time to do that you could save trillions of dollars without having to raise taxes at all why not take it . You understand the bond market better than anyone who has been in the government for a long time were absolutely doing that one of the things ive said is one of the reasons i do feel comfortable with us spending all this money is because Interest Rates are very low were taking advantage of longterm rates. I know at times we talked about 50 years, 100 years. When we looked at the market, there wasnt as much demand as we thought but right now weve launched the 20year. Between 10 years, 20 years, 30 years, were borrowing a lot of money longterm so we can lock in this 3 trillion for a very, very long period of time so, were being careful and balancing. We dont want to disturb the markets too much but well take advantage of refinancing all of our debt to make sure that we have very low rates. I think thats something that is a great opportunity for us refinancing existing debt, where you would buy back debt capital gain free and use these low rates to do that you would save trillions more. I dont think we need to buy back debt because of the amount of debt we have that is short that does roll off and the amount of debt were using for these deficits i think we have tremendous opportunities without needing to buy back debt. I assure you, we are very much focused on low rates and taking advantage of locking this in for a long period of time. Mr. Secretary, could you please tell the mortgage companies, look, we think you ought to do mortgage forbearance, lengthen the what the mortgages are theres some nonfannie mae paper out there that could lead to evictions lots of retailers and restaurants could be in trouble because they cant afford the rent what a great opportunity to say come on, this is a time for forbearance. This is the time where you must lose some money in order to save our country. I completely agree with you during the mortgage crisis, the financial crisis, lenders worked with borrowers i think mark calabri has done a great job working with fannie mae and freddie mac on forbearance guidance secretary carson has done a great job on ginnie mae and fha. Weve encouraged private banks to follow. We wont tell them what to do because these are private contracts, but i think the majority of banks are following these. On a lot of these loans, i think what theyre doing is tacking on the payment to the end we understand it will be hard for many borrowers to make up two or three payments, so it will get tacked on to the end. Were monitoring the Mortgage Markets carefully. Im pleased with how this is working. Mr. Secretary, jim brought up negative rates the journal over the weekend said the fed is likely to use it people predicting that powells appearance tomorrow will say as much does treasury agree . I want to be careful. Im not going to comment on the feds action on Interest Rates thats up to them. Thats consistent with my view we v. Plenty of issuance at zer that we will take advantage of from my standpoint being a borrower, well take advantage of zero rates. Speaking of the fed, its david again, mr. Secretary, where are we on the various programs that you were helping to backstop with what was over 450 billion where you would take the first loss some of it was allocated a lot remains unallocated. Its not clear exactly how active the fed has yet been on main Street Lending or aid to the states that you talked about in the form of credit. Give us an update here on what the fed is doing and what your expectations are for those unallocated funds. I think the fed and the team at treasury has done an outstanding job working aroundtheclock getting these facilities up and running. Several of them are up and running. As you said, theres several more we expect to be up and running over the next couple of weeks. We have literally daily calls with the fed on the working teams working through this and as you pointed out, i allocated half the funds, i kept half the funds in reserve, since i dont know which one of these markets is going to need more money. As opposed to allocating it out all in advance, i thought the strategic and important thing was allocate a lot of money and well see where we need money. If we need to put more money in main street, we have the ability to do that as i said, on the corporate facility, we wanted to provide a lot of money there my expectation is in how the markets have opened up, were going to need to spend a lot less money there i can tell you im authorizing a wire this morning going into the secondary corporate facility its on its way out. We expect these facilities all to be up and running very quickly. I just want to commend the amazing team of professionals at the fed and at the treasury who have been working aroundtheclock to create these and market stability mr. Secretary is there one secretary or one program that you think already that the fed has been most active in, you know, to your point they have not had to intervene in the Corporate Bond market much because it opened up on the prospect of them actually being involved let me be clear, these facilities were supposed to be backstops. So this is this was intended to be backstopped. You saw the initial facilities around commercial paper and money markets took in some volume once we did that, its quieted down it created stability in those markets. The Corporate Bond markets, when we announced these, the Corporate Bond markets were completely stuck they became unlocked you look at the ppp facility, thats up and running. So small lenders are able to access the fed facility. The main street facility, the muni facility we expect to be up and running soon in a perfect world, we dont need to use these, but they will be ready and will serve as backstocks so were sure that American Business and workers have access to liquidity i keep hearing one word, its a word people tell me you will not use, it has to do with ppp 75 goes to workers, but people want flexibility they want to give it to the workers, but kind of you go from law firm to law firm to law firm, business person to business person, they dont know what to do they need guidance they all want the program to succeed, but they dont know how to execute on it i disagree with you completely they know how to execute on it its working great 99 of the loans were 2 million and less to very Small Businesses as you know, theres a small number of loepans around public companies, but this program is working great. Its getting money to the workers. On the 75 , let me just comment, the way congress designed this, eight weeks of payroll, plus 25 of overhead. If Congress Wants to change that rule, im happy to work with congress if theres bipartisan support to do that the 75 test was just a clarity on a test that was clear in the way that congress designed this program. Again, like anything else f we need to make technical fixes as we see different issues, i think one of the things were particularly sympathetic to are the restaurants. Yes many restaurants are just beginning to open up and have said that they would like to hold the money they cant do that, thats not something we can do. Well look at a technical fix. So, were working very clearly but this program, this will help about 60 million americans get back to work mr. Secretary, i could not agree with you more. I think its an unbelievable program. Certain industries are more difficult. If they give us flexibility from congress, it will really be a home run secretary mnuchin, thanks for joining us thanks, jim great to talk to you. Jim, thanks for bringing that to us. The opening bell this morning. Great discussion, jim, with the secretary, especially as it relates to corporate debt. You saw the ual issue over the weekend didnt happen. Reportedly because of concerns over collateral. Then carnival gets upgraded this morning because they think nobody wants their collateral, as a result theyll get a lot of waivers on covenant. They say they have enough money. When you look at the timeline here, the key moment is when boeing did not need a bailout. Boeing raised the money. I think that was the fed doing a great job. Secretary mnuchin was involved that would have been the real disaster thats the best industry we have some of these less essential Industries Like cruise ships, its amazing they get the money. I had norwegian on friday. They have almost no covid, everything is fine youll love this david in particular because i know youre a bigcruise fan bookings ar ahead of last year david, you and i, come on, with the wives . What do you say . Yeah, okay. Ill see you yeah, no i dont think so maybe one of the really small boats, like the one that would just be us and the crew . That one were not talking uss minnow. I was thinking maybe more geffens boat. Does he lend that out at all it was great to see the y upgrade, because when you look at whats going on with the stock market, there is hope springing eternal that is springing. I was trying to find out how do you have your treasury secretary say a number that will be worse than the Great Depression. I think thats where you want to hold the line. Thats the braveheart moment you dont want to go worse than the Great Depression its vital that we dont psychologically i think its very hard to come back yeah. Tutor jones on squawk did say that in terms of new york city, if were looking at lockdowns like we had a year from now, he said in that case you would be talking about something resembling a depression. There is the heat map. So many individual issues to get to intel is leading the dow, i guess on these reports about the Government Holding talks with them and taiwan semi trying to repatriate production. What matters to me is that we have lam research, when you go into these plants, thats what you see. I try to provoke becky into provoking navarro about the idea of trying to make it so taiwan is protected more. Thats where most of the stuff is from. I think its crazy that intel is a leader on this its not necessarily good for intel. Unless theres a sovereign wealth fund, intel is once again not a leader, its a laggard lets not forget that. Other companies have passed them other Companies Like nvidia and amg, which ha amd, which have been able to make smaller footprint chips i dont know i dont want to buy the stocks on that. That paul tutor jones interview was incredible there really is restaurants where nobody can do it you have to take out too many tables no table bigger than six no bar to start . You have to ask people, have you been in touch with covid then you have to take their temperature. I mean, by the time you do that, give me grubhub. I know. His remarks were powerful. They did seem to reflect, i think, obviously as a lifelong new yorker myself, the problems that new york conceivably will face that we talk about in terms of what a return to normalcy will look like before theres a vaccine when you think about places that have large cultural institutions that rely on museums, on people going to the theater, on people going to lincoln center, so many other things not to mention just aggregate bringing people together its hard to imagine the city returning to any sense of normal until, as you said so many times, there is a vaccine. Were a city based on crowds were pro crowd. We want a crowd in the theater we want a crowd when we go to the museum when we go out to dinner and i dont know whats going to happen, but Paul Tudor Jones talking about a million jobs t could be two million jobs. What can open in this environment . Everything is small. But the crowds are large what do we do . Every other row at the theater what play can survive with every other row . They need to pack them in to have a successful play it is a Netflix Grubhub economy in new york. Its a shame i dont know any other way around it. Yeah. On that point, david, regarding Movie Theaters, i dont know, are we putting any faith in this daily mail headline about amazon being interested in amc, which is up 45 right now . I dont know, carl. I would point out daily mail, be very careful not quite sure what the benefit to amazon would be i almost could see them buying amc networks before i see them buying amc the Movie Theater chain. I will reserve judgment on that story. They have got some issues, we know that. Given their indebtedness thats a key point of everything going on now, if you come into this crisis with a lot of leverage on your balance sheet, you really need to figure out what to do about it, which gets me to one of the larger deals that weve seen in some time, certainly in private equity. It brings together two of these trends a levered company and private equity looking for an opportunity. Talking about cody, the beauty company, which reached an important deal with kkr. Kkr will buy 775 million of a convertible with a 9 coupon right away to help them. But then also entering into an agreement, memorandum of understanding right now, but im told they will get to a definitive agreement shortly to sell 60 of their professional beauty and retail hair businesses, that includes wella, clairol, opi salons being closed, that business is suffering. Kkr is going to basically put in another 250 million to the convertible preferred at the same rate when they close that deal and then buy 60 of a 4. 3 billion of an enterprise value business theyre valuing it 12 times this years ebita they will own 60 of it. Get two board seats. So the check from kkr is approaching 3 billion 60 of a 4 4. 3 billion enterpris value, that includes debt. Another billion for the convertible preferred. Thats a big number coming from two main funds at kkr. I was shocked these have been football products, the wella products you go to amazon, you are not going to get price for these things there isnt really necessarily anything that is proprietary i dont know what kkr is thinking theyre smart people i hate to sell anything that goes into a walgreens or that can be sold on amazon, unless its clorox. These are the professional businesses they bought a lot of these from p g about four, five years ago they added a lot of debt they are controlled by j. A. B stock is up 8 getting closer to the conversion price. It was about a 20 conversion premium, 6. 24 for kkrs convert, the stock is now 5. 61 these are the kinds of deals you are seeing private equity step into coty already had issues with its balance sheet. It was looking to sell the entire professional beauty line prior to covid hitting the process was ongoing. It obviously changed here towards the end as they moved quickly to secure financing. Its amazing to see any deals at all i was cheered by that. It says people think theres certain stocks that have gone down so much they want to take advantage. I dont know whether adam aaron wants to sell amc, but wow, wella . Just one of those things that is five feet in the drugstore nobody is really going tothe drugstore. If thats a deal, we have some other deals that will be working. You may have a busy summer after all. Could be. Im starting to sense a pulse in m a, slight, just very slight, but something is there we have a lot of tests, abbott has a new test. Yeah. New tests out of abbott. Emergency use authorization from the fda, thats a 15 the 15minute result thing, gottlieb had some kind words for that diagnostics and therapeutics, we will not take our eye off of that ball. Thats how you open america you open america by knowing that youre feeling you are as good as you feel obviously this disease is so insidious that it has these days where youre good, youre the super spreader, then we have these days when your oxygen falls apart and youre dead. Anything that tells you that this could be happening is selfquarantine, we get things open i dont know if we give badges to people who have gone through it or tested i read these things and i think there is progress. Who knows who is working on what i have bristolmyers tonight i want to ask them, do you have a secret project going on . Everybody seems to have something secret going on. Its great were off the shallows. Dow is down 180. Lets check in with bob pisani good morning good morning. Happy monday, everybody. Bit of a defensive tone to the market today pfizer, united health, Johnson Johnson all up in the dow. Cyclical stocks like boeing, jpmorgan, a bit on the downside. The focus is still on the recovery rather than on the losses weve had the market is still acting Glass Half Full. So you see today banks a little bit weaker, materials, industrials, they are weaker health care and consumer staples, theres your defensive group a little bit stronger. You get this push and pull, this is a typical pattern generally markets have been Glass Half Full rather than glass half empty we like to remind everybody how difficult it is to figure out the right levels for stocks. So Many Companies are pulling guidance smaller groups because earnings season is passing, but chesapeake, roku didnt give guidance continental resources. Blue rock. Some reits havent were nearing 40 of the s p 500 that has declined to provide fullyear guidance nearly 40 thats unprecedented still the focus remains on the recovery rather than the losses. Still Glass Half Full. If you look at the market internals, the s p 500 has regained 60 of the losses from the february 19th high thats amazing rally here. The breadth has been expanding more advancing stocks than declining stocks on a daily weekly basis the volatility, the vix closed at 28 on friday. The lowest level since february 26th we were over 80 in that week of march 23rd still everybody keeps insisting we need to be cautious the internals of what were seeing here would recommend that other than no guidance from the s p. The dividend cuts, suspensions, weve seen far fewer buybacks. A notable expansion in the s p, we dont know what that means, but depending on what quarter youre using, were trading 20, 23 times forward earnings. Thats a high number given the caution out there. People keep saying why is the market up with such horrible numbers . Look at the sectors. The sectors are telling you its not so clear the cyclical names the anks the energies, the industrials, the reits, theyre still getting clobbered. Banks are still 34 below the old highs. Thats hardly a recovery yes, weve seen some sector outperformers most of them tend to be in the defensive groups for example, consumer staples. Health care. Health care is 5 off of its highs. And, yes, this Communication Service has done well. Thats because alphabet and facebook and netflix and maybe verizon have done well a small handful of stocks. Its the tech group thats done really well if you look at all of those names and see what theyve been doing let me show you the five biggest names are from their 52week highs. Microsoft is almost at a new high 3 amazon off 3 the new highs. Facebook and apple are only 5 off their new highs. Alphabet is 9 , but remember the s p 500 is only 9 off of its highs. So, those mega cap stocks have been moving. Those are in technology and Communication Services the rest of the market is still struggling so lets make sure, david, that there is a bifurcation in the market people have not lost their minds. Theres rationality in the way stocks are being priced. Back to you. All right bob, thank you bob pisani, who is down in pennsylvania right now but is somebody who i rely on to a certain extent to help navigate new yorks amazing restaurants. We were talking earlier about the idea of new york, when it will get back to business. And on squawk box this morning, Paul Tudor Jones, the man who founded the robinhood organization, which has been so vital in terms of helping underprivileged new yorkers for decades now spoke powerfully about his hopes for being able to aid all those people through the years in various jobs in new york who helped him. Im thinking, okay, this is my chance to serve them. This is my chance to be of service to them. Ive tried to equalize the ledger and i want to be able to say in 20 years to my grandchildren that when they ask me what did i do in the second depression, i will look them in the eye and i want to tell them i did more than i ever thought i could do i think thats it. I think sometimes theres a desire in certain parts to vilify some of our business leaders. Mr. Tudor jones has been so instrumental in helping the lives of so many new yorkers for so long. You guys have been supporters of robinhood as have i for so many years. Tonight well air what would typically be their annual gala, usually takes place at the javits center. He is the guy who has always been on the front lines in triitr trying to make the world a better place hes an angel i remember he came up to me and my wife and he said the greatest blah, blah, blah my wife said who is that i said thats an angel he makes everybody feel terrific i wants everybody to help. I dont know i remember when he had a big hit in the market, and so many others did theres some great people out there. He is the most selfeffacing terrific guy when you meet him in person you might think what does he do . Seems like a good guy. The only word i can come up for him is angel the numbers hes put together over the years, astounding were rooting for them to do just as well tonight as it airs on cnbc and all kinds of other networks interesting, too, his discussion about the United States and socially how we may differ from other economies that have tried to tackle this problem differently. Of course his comments on bitcoin, which we had seen headlines about last week, but which he called more a great speculation than anything else with 1 , 2 . Yeah. He has seen it all people want to go for it he is so nonjudgmental he is. What a lesson in life to listen to him he does not have he doesnt have a firm line if you like to do something and it doesnt hurt him or hurt the country, game on so many people are judgmental when they come on tv and its a shame. This guy is a peacemaker i never knew whether he was republican or democrat, hardline or softline. Hard money, soft money hes health, wisdom for society. Maybe thats how we have to be i always feel great when hes on sensational. Yeah. Guys, 2912 on the s p. Lets check in with rick sab telly on this monday good morning, carl. When i look at fixed income markets its hard not to think of a, big supply coming today. 96 billion in threes, tens and 30s. This package is at record funding size today 42 billion in threeyear notes at 1 00 eastern. Im covering this option many will be scrutinizing to see how supply moves through the system we all know you nigunited airli pulled a junk deal friday. It seemed to be more of an issue about collateral airplanes and the can be and the amount of them that would secure this loan at least in the eyes of the investors well watch and see. If you look at one week of twos, down to ten basis points of intraday its never been at that level. It settled at 14 thats where its hovering right now for the most part. If you look at a one week of tens down the curve, weve come off the worst levels but the worst levels at 60 basis points is above 54 alltime forever low yield closed a low of 36 to 52. Steepening is good getting close to negative Interest Rates on the short end is not good. We certainly look to see if any fed speak will address this crazy insane condition that is infected and affected europe and japan and finally, lets look at whats going on with regard to the other part of the most important aspect of this, and this is whats going on with regard to the midpoints of tens minus twos and not only that, but some of the other yield curve trades if with leook at the bund, its right in the middle of the range as many are holding and idling to see how the greatest economy maybe delivering some of the fed programs like the junk bond market this week carl, jim, david, back to you. Lots coming our way in the next few sessions, rick. Thanks, rick santelli. A quick break as the dow is coming off the first weekly gain in three led my intel i love these fries. You know, the chef here trained in france. Mmm, it shows so good. Oh hey, did you say you needed help with investing . Because i know someone whos really great. And you trust him . Totally. Yeah. We went to school together. Ill check him out on investor. Gov. So, whatll it be . Ill just have the burger. Before you invest, get the full report. Check out an investment professionals background for free on investor. Gov. Before you invest, investor. Gov. Find a stock basedtech. On your interests for free on investor. Gov. Or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Retail at the center of the market weakness this morning under armor down 10 as sales sell 23. Pvh and others the nasdaq is struggling to go green. Were back in just a moment. Lets get to jim and stop trading. Some companies should move forward. Mar yacht, reports the quarter and arnie chooses words that he doesnt mince. He says a lot of stuff is plain bad. Greater china is stabilizing but at a level that is low and lodging demand and most the rest of the world has stabilized as low levels. The stock is getting hit i have faith, but this is one that is still a very troubled area, Hotels Occupancy stabilizing in the low 20s. One thing we didnt get too much on was auto nation, tesla, toyota with numbers about production rates as they start to reopen. Actually, a lot of manufacturers are going to be reopening in the coming days. Jackson, good numbers tesla, i like the idea that musk says they have to work it out but hes arguing for i think a reasonable stand we saw that number, toyota in checking in phils excellent tweet column what would happen if musk moved to mexico . What a fire storm that would be. Huh . Yeah. China model on day three is down 64 in april is coming from the china Passenger Car association. Well watch that thats whos stopping us. You know i think a lot of people feel t out ofcontrol out there. Yeah. Bristolmyers tonight its part of my Health Care Initiative we do here. I have to tell you that hes doing incredibly well now that the deal with cellgene closed. A live person no longer in everybody uses it, its by mortgage so you dont get on hold for hours thats what everybody is finding. People working at home, and yeah, and then horrible numbers in industrial. Industrial declines is amazing the stock got hit. Usually dont ever expect utility to get hit, but this is a those are depression numbers that he reported yeah. Hopefully on the upswing great to have you back we missed you friday thats all right. You guys have to take some time off too. Its a burnout time. This thing weighs on you every minute yeah. Definitely a test of endurance well see you at can have on mad money with jim cramer. Good monday morning. Welcome to squawk on the street. Im Carl Quintanilla with sara eisen and david faber. Dow is down 230 as retail really takes some of the wind out of the sails after under armours results. I thought about you this morning. Two of the companies you cover under armour with weak sales down 23. At the same time general foods raising their organic guide to 2 to 4 from prior 1 to 2 if youre in the cereal business, you can raise your guidance all the packaged Food Companies are doing better, because the initial pantry loading that some analysts were worried would decline after that initial burst that we saw at the beginning of the crisis has led to increased sales steadily we continue to hear from the ceos, so much so that now the companies are able to revise their guidance for this quarter and often case raise it as were seeing with General Mills today. Consumer staples different than consumer discretionaries i spoke to the ceo of under armour its going to be a slow reopening of retail. In the meantime, most of the stores are closed. Under armour doesnt have a ton of International Exposure and not as much ecommerce exposure. As far as the overall markets, david, not surprising, perhaps, to see the markets start lower this morning after some of the news flow from the weekend i was following the clusters that are breaking out in south korea. Theyre small right now. Were all on guard and tense about this idea of a second wave as we look forward to reopening in this country. Clusters in south korea, clusters in china. These are countries that are Contact Tracing and testing, and theyre able to pinpoint it. And we just hope we can get to a place like that in the u. S. Where we can limit any potential second waves theres also these reports watching the briefings in new york, our mayor and governor talking about new symptoms in children and the three children that have died in a potentially linked covid19. The headlines were unnerving this weekend the market tended to follow the Health Headlines a lot more sometimes than the economics and earnings headlines which have been worse which is why everybody is talking about the discorrecnnect. Yeah. The continued disconnect down 9. 8 for the year versus an economy which well, we saw the jobs numbers from friday the question is whether the next number is going to be even worse. We did speak to secretary mnuchin this morning of course, as you might imagine, hes more positive in terms of the coming turn in the economy and we did hear from him as well on his view of jobs and the jobs report take a listen. The economic models are very difficult to predict this situation since this has nothing to do with normal economic factors. This has to do with a closing and opening of the economy so, to me, its first, let me say were sympathetic to all the workers who this is impacting. And if the numbers are worse next month, we understand that but i think the numbers are going to be Getting Better as we go into the summer and we reopen the economy. Thats the important issue here. Sara, we also spoke to him about the various programs that the fed has undertaken and the unallocated money that koim kaim from treasury thats yet put toward particular programs theyre just Getting Started he talked about not needing as much on the Corporate Bond front, but other areas perhaps needing more, sara, but it was interesting to get a take from him on the programs that we talked about but that havent really or are just Getting Started really now its amazing how much of a signaling effect the Federal Reserve can have just saying just saying that its going to come in and buy Corporate Bonds, just clearing up the market and helping even the junkiest of junk bonds get attention and that was the purpose of the Federal Reserve saying theyre going to step into this market without having to actually go in and buy it now, jay powell, the chairman has said multiple times since then, they intend to follow through. They cant let the markets think theyre just signaling and theyre not going to go through with it. We are expecting that to happen, the mainstream Lending Facility which hasnt gotten started yet has taken a lot of comments at the Federal Reserve on how to administer that. The fed is going in a place its never been before. It doesnt want to end in a place where theyre accused of helping out wall street and not helping main street and giving all these free loans with no Strings Attached i think theyre being thoughtful jay powell is speaking at an event on wednesday thats a lot of focus for the market as well so far the fed as helped a lot of the market activity in action way beyond what were seeing in stocks so far. Yeah. On a week where were going to get at least nine fed speakers as you say powell, later in the week 96 billion of treasuries to price. In the meantime, lets bring in a columnist for the new york times, jim stewart to talk more about the economy and the markets. Youre seeing me remotely what youre not seeing is i had all my haircut off anyway, good morning jim, its good to talk to you. Weve been having the discussion about the degree to which reopening happens. It sounds like youre expecting it to be more encouraging. We cant ignore the fact the market has gone up significantly from the lows. Its hit my sort of rebalancing target of about 25 . I think its a great time to look at your portfolio and if youre not on your target, this is not a bad time to sell a little bit to take advantage of the hospit optimism and rebalance im not saying its going down, but thats a proven thing to do. In terms of the reopening, i agree with sara. People are not looking at the immediate data coming in theyre trying to look ahead, theyre looking at how the virus is behaving. What we may see in the u. S. Is there are large chunks of this country where the impact has been relatively modest and they may be able to reopen considerably without big investments, but there are other areas starting in new york city that are much more seriously hit countries. And i think cuomo has been prudent in setting forth pretty strict guidelines about when to reopen, clearly. Were going to have an experiment going on over the next few weeks where were seeing the range were seeing everything from the sweden approach to something closer to the chinese approach and were going to get data from that which i think will help to clarify the picture. Jim, in a world where we look at agate nationwide employment, how valuable is that, and can we take comfort in parts of the countries where the job losses are truly temporary . Yeah. Well, i think thats one of the Big Questions is the unemployment data doesnt tell us exactly how many people were furloughed as to posed to being laid off the furloughing idea meaning theyre going to get a job again as soon as the conditions warrant that and i think the hope is that a High Percentage of the furloughed people will get hired. I think thats why these unemployment numbers are different than anything weve had in history before. I cant recall a time when such a High Percentage would have been characterized as furloughs, and it will be interesting to see regionally and some of the states opening, how this bounces back this will give us a clue more broadly. How much of the job losses and how many are longer term or temporary. I dont buy its going to come back immediately in this extreme vshape. I think there will be some kind of a v, but the top of the v is going to take a while to get back to. Yjim, its hard for anyone to know what the reopening is going to look like were in the new york area t felt this crisis so differently than so many other parts of the country im wondering what kind of data youre looking at and what kind of pieces youre reading to see how the rest of the country is handling that with more than 20 states already reopening in some fashion as we try to see whether the jobs come back and the activity restarts and consumers spend again. Well, first, as an investor, i dont think any of us should be guessing. At least, i talk to a lot of people who are just clutching at something they heard somewhere and theyre making guesses about what the future holds. I think we have to recognize that even a lot of experienced investors are not doctors or epidemiologists. We just dont know so i think youre right. Youve got to look at the data and i hope were going to start to see more focussed data from the places like dgeorgia. What are the numbers showing . We ought to be able to learn something about that even the data is, i find, is very baffling. One of the big mysteries to me is cuomo came out i guess last week and said i looked at everybody admitted to hospitals recently, and they were people who had stayed at home they had been following the rules, most of them. It begs the question, well, then how did they get the virus i hope they continue to do more work on that i was troubled by that disclosure, but it makes me think this thing is way more infectious than we realize, but, again, i think you do have to look at it geographically. Montana is the polar opposite of new york in terms of the infections but were going to have laboratories now, interesting things are happening in california, texas. There are so many different varieties that we ought to be able to learn quite a bit from the data in the next few weeks and months and that aside, we have to keep an eye on the medical advances i mean, is there a cure or treatment . Is there going to be a vaccine theres a lot happening on that front. The average person cant follow it all doesnt have access to the data, but i think we have to be alert to that, and i think there could be some good news coming out of those medical efforts. Yeah. I saw poll numbers about the percentage of americans overwhelmed with covid19 news theres too much to process on a daily basis. Thanks for coming on nice to chat with you bye. Coming up in the next hour, Shanghai Disneyland reopening today. We will talk with disneys ceo about the companys path forward. Well be right back on squawk on the street. Currently health care is the only financial thats positive financials the hardest hit race for cures for covid19 continues at a startlingly fast pace lets bring in the former ceo of a Pharmaceutical Company fred, you can forgive people for being confused, where are you focussed in terms of what you see as the most effective treatment right now that has a chance of getting to market fairly soon . Not hearing fred yeah all right. Well well try and take a break and see if we can reestablish full audio contact with fred. Stay with us heres the thing about managing for your business. S when youve got public clouds, and private clouds, and hybrid clouds things can get a bit cloudy for you. But now, theres the Dell Technologies cloud, powered by vmware. A single hub for a consistent operating experience across all your clouds. That should clear things up. Welcome back were going to try again with fred hassan, fred, my question was given your experience as having run a major Pharmaceutical Company, where are you focussed in terms of the various efforts underway right now whether its antivirals or vaccines as having theby chance of getting to market quickly thank you very much its really an unprecedented effort its a war and there are so Many Companies around the world working hard at it t lots of over 100 projects are are really country projects. Where i see it happening, i think were going to break records with vaccines. Vaccines take 5 to 20 years to show up. I think were going to get a vaccine between 12 and 18 months were trying different ways to get there. Were seeing acceleration of acceleration of innovation just drawing new approaches. The vaccines are going to come next year, but in the meantime, i think were going to do fine with a fast cycle response to this situation so weve gone through a painful national lockdown. Were now opening up the country. And as we go forward without a vaccine, there are going to be outbreaks, local packets of outbreak, but well see a public thats alert and Fast Response very good rapid accurate diagnostics, and then fortunately, were going to have some fastacting therapeutics thats going to bring this under control. Already remdesivir, a product i talked about on the second of march has been approved by the fda for covid19 the one that im most excited about is the antibody cocktail which regeneron is working on. It stops the virus from attaching to the cell. It intercepts the virus before it gets to the cell, and remdesivir slows down the viral replication. We have two separate lines of defense, and im optimistic that we will be able to make this a manageable situation just like hiv became a manageable situation with drugs and drug cocktails. I think well see the same here, and hopefully continue to take care of this as we manage toward a vaccine as soon as 12 to 18 months but testing is an important part of that are we where we need to be in terms of quickly determining whether somebody has the virus or the antibodies for the virus . I think were making great progress this morning we heard about this test which doctors can administer in their own clinics. The doctors can learn about this in five minutes. Theres also the rapid test where you can get the results in five minutes to 15 minutes if you really want 100 accuracy, you can get the pcr test in many ways, if you have a test, and theres an 85 chance its accurate, you can start feeling better in the meantime you can take some drugs until you get the 100 assurance, which might be a day or two or three later which is a pcr gold standard, but we are really seeing massive innovation in diagnostic testing just like were seeing in drugs and in vaccines. Its the Three Corners of the triangle were working hard on fred, i wonder, when you talk about some of the commentary were getting from the big pharma on therapeutics or vaccines, are you surprised the language hasnt been more neutral or more circumspect, more over promise, underdeliver or do you believe the progress is ahead of the kind of rhetoric were hearing . I think that the progress is enormous it really the bubbling science, the amount of stuff thats shown up in knowledge in the last five years is enormous. And the number of cools that are at play is enormous, and were now working with an interconnected world so when they found out about this virus in late december last year, the g gnome was more known to labs by february. Thats how fast information is traveling. So with this acceleration of acceleration, i really believe that we have very powerful tools to contain this. Hiv took about ten years to get contained. Now i think were going to see this one get contained very quickly with all the modern tools we have, and we got educated with the problems we saw with sars in 03 and mers in 09. We learned a lot about these kinds of viruses and i think we had a running start. This is a bad one. Its very contagious, but its really part of the same family in many ways fred, i wonder how were going to look back at this period in terms of health care and unintended consequences. Children not getting vaccines, people not going in to get diagnosed or treated for life threatening conditions often cases. Cancers, heart attacks, strokes just because covid19 has completely taken over. How are you thinking about the longer term impact well, the longerterm impact in my opinion, is very clear this is the century of bio science. This is when a lot of innovation occurs Going Forward last century it was the century of physics a lot of good things happening last century its really a pity that only 50 of the populous gets the flu vaccine, but thats partly because many feel that if they do get the flu, theyll be able to deal with it. But we really hope as we go forward into a an era where people get vaccinated in larger numbers than in the past, and i think in some ways this is a wakeup call. Take care of your health in life, health is precious. Protect it with the best practices and the best medicines you can find it is the most valuable thing youre going to have in your journey in life. I think thats a basic philosophy thats going to be drilled into us as a result of this horrible thing thats happened to mankind in the last few months fred, thank you for joining us this morning. Appreciate it. Fred hassan. My pleasure elon musk escalating his fight with california threatening to move teslas Head Quarters out of the state over pandemic restrictions. Phil joins us. Never a dull moment. No. On saturday musk went to twitter saying this is ridiculous, not allowing tesla to reopen its plant in fremont, california theyve gone to federal court. They want them to say they have the safety protocols in place, they should be able to resume production Alameda County says its working with tesla nonetheless, when you reason or read elon musks tweets on saturday, its clear how upset he is about all of this. He writes frankly, this is the final straw. Tesla will now move the hq and future programs to texas nevada immediately. If we even retain this manufacturing at all, it will depending on how tesla is treated in the future. Tesla is the last car maker left in california. Take a look at the annual deliveries and were pointing this out because a lot of people said are they sticking with their guidance of delivering at least 500,000. They havent changed it yet officially when you look at the april 3rd model deliveries in china, down 63 . Production has been stopped since march 26th its going to be tough to keep that guidance much longer. Look at shares of tesla year to date analysts saying watch the cash burn in q2 because of the limited production it could be 2 billion to 4 billion. Well see if we hear anything in terms of the court fight today and with the Alameda County health department. All right phil, huge story well talk to you in a bit later on this morning, Shanghai Disney reopening, of course, with some precautions. Well talk to bob chapek at 11 00 a. M. Eastern time about the path forward for shanghai and potentially well see, ckn montd ahm. Ba ia me it started with a few smaller bills. Fifty dollars here. Eighty dollars. A hundred dollars. I had good health insurance. Why isnt this covered . Well, then they started getting bigger. Eighthundred dollars. Eighteen hundred dollars. I saved for this. But not that much. Im glad i had aflac. They gave me money when i needed it most. Thats why aflac is here, to help with the Expenses Health insurance doesnt cover. I love that aflac duck. Aflac get to know us at aflac. Com 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. Good morning welcome back im sue herera new cases and deaths in the u. S. Fell to their lowest levels since late march on sunday this as a number of states begin easing the virus restrictions. Nonetheless, more than 21,000 new cases were confirmed and about 8 00 deaths reported in france commuters are filling roads and train stations as a number of lockdown measures are lifted masks are still required on public transport people no longer need to fill out permission slips before leaving their homes. Traffic is up in london. Many confused brits head back to work Boris Johnson says the lockdown isnt ending yet, but he is encouraging some people to return to work the leaders of scotland, wales and Northern Ireland are sticking with existing stay at home measures. Another update in an hour for more coronavirus, head to cnbc. Com carl, back to you. Sue, thank you. We want to talk a lot about disneys reopening strategy in shanghai as disney shanghai opens over the weekend bill cohen joins us this morning. Now the president and ceo at itech entertain a theme park consulting service. Thank you for helping us understand what were seeing this morning pleasure. Nice to speak with you whats your take on how theyve done shanghai and to what degree can we extrapolate potential openings in around in orlando were happy to see them open in shanghai. It gives us hope that the rest of the system will soon come online were watching carefully to see how they do in shanghai, and were hopeful. Were also confident they likely have their act together. They should be doing fine and maybe some of the Lessons Learned will kind of progress through the rest of the system over time as they let them open up in the United States. Whats been your impression so far of what you can see in shanghai well, so far, we dont know a lot about it i was on the phone last night with some people in china just to kind of gauge where they thought it was going to be in the form of attendance so again, were hopeful it looks like the chinese are going to go to the park. Its a more managed process there than maybe we will be here, but in the end, i think the newness of that attraction, its only a couple years old, is going to play in their favor because the demand for those people to get into that park is going to be high initially what about the cultural difference can we have that here in this country where disney lapd and disney world reopen without parades, without fireworks, with extreme social distancing, with temperature checks can you envision that in this country working . Well, i could envision it, sara, but its going to be a challenge and new. And i think the people that are the disney fans for the last several generations that are going to be disappointed initially, but i also think disney is smart guys theyre entertainment people at their heart. Theyve going to come up with solutions to maybe enhance the Guest Experience over time so the guest will see some changes and some new shows, but i think disney, again, they will attack it aggressively, and experience wont be lost for long i wonder how much some of these businesses actually have to turn into sort of police at their own theme parks or retailers . Its one thing for them to put in place the procedures but what if people dont follow them . What if people get too close or arent following the safety precautions that make it safe to reopen a place like disney world in the era of coronavirus . What do they do . Thats a good question. I think thats going to be the until they operate, until they get up and running, theyre going to have to work around this and learn each day. I suspect as you said earlier, the cultural differences between property and china were tokyo, japan, orlando, california will be noticeable. Because the people just use the parks differently depending on where they are so the actual lets say management, the Operational Management will be at a Different Levels and different parks. That can be that way in a place like Walt Disney World where each park, theres several parks there, each park almost has a slightly different guest profile and a different operation method so to your point, the big players, the disney universal studio guys are good at their operations protocol. It wont be quite as visible as you might think it would be. So the way they set the park up, the way they operate the park, the way they capacity manage the park will be the way theyre going to kind of accommodate the groups and the crowds and the social distancing that your concerned about. David faber last week on the earnings call, the companys ceo talked about beginning in the u. S. With 20, 30 sort of of capacity and working up from there. Whats your sense based on what weve seen in shanghai and what you know and what youre seeing out there now, in terms of what they could operate at safely until such time as everybody feels safe to fully go back . Thats the difficult question i think the answer to that is going to be operating over time. But we have to remember sometimes these projects are not theme park stand alone theme parks alone. Theyre Business Model includes a detailed and orchestrated Destination Resort visit while the theme park admissions is important, firms of people are going into the park is important, theyre also building the Guest Experience around hospitality and retail and other commercial experiences its a very articulated orchestrated visit so it doesnt just solve the problem to have people come and come into the parks. They would also want to find ways to increase their length of stay over time more days so they can sell hotel room and sell more food and retail these are not just singular admissions only strategies theyre very complicated and sensitive strategies theyre going to have to work on to that point, bill, i wonder, what do you think the biggest challenge is is it cleanliness on the ride itself is it the hotel . Is it moving people around, Transportation Logistics is it about the preserving the disney experience . What do you think is challenge number one oh yes, yes, and yes. Lets say a disney model, these guys are not just in the entertainment business you have to remember that they are also in the Transportation Business they have a variety of Mobility Options from buses to trains, monorails, water craft and they have people in hotel rooms, people in stores. So if you think of a disney attraction, the idea that its at one part food facility entertainment, retail, its all the challenges you would have in the rest of the world, that they have to manage in one place. So the cleanliness, lets say the Health Safety issues, theyre addressing in the Retail Stores like a good retailer would do theyre addressing it in food facilities like a strong restaurant would manage it and then, of course, on their entertainment pieces, rides and shows, cleanliness at least the perception of cleanliness is critical to them, because their reputation preseeds them every guest anticipates a high level of safety already. So theyre going to add to it in the sense of the selfstaafety issue. We have to run, but we had an analyst this morning who suggested orlando opens july 1st would you take the over or under on that . I would like the over on that, and the reason i say that, and you know this already. Disney doesnt control itself. They kind of wait on the authorities and the government and the governor here to make those decisions but once they allow that to happen, disney will be in business very quickly. Bill, hope to have you back as we move closer to that date, whenever it is thm thank you very much. Coming up in the next hour, dont miss an exclusive interview with disneys ceo, Bob Chapek Disney shares are lower. Well be right back. Every Financial Plan needs a cfp® professional confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. One thing separates this recession from a depression says a top economist. Find out more on tradingnation. Cnbc. Com 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. Shares of under armour getting crushed today after reporting weak First Quarter results. Including overall sales falling about 23 amid virusrelated store closures the largest business in north america. Internationally sales dropped 12 . Apparel down more than 20 footwear down almost 30 these are ugly, ugly Sales Numbers including the wholesale as well. In china and south korea, all of their stores have reopened traffic in those locations have picked up, though, the company did say they continue to see o progress coming in recent weeks. The ceo stressed the ecommerce business has been on fire which is helping them. The problem is they dont break down how much business is coming from online, but last they said it was low double digits in terms of percentage. Not where it needs to be to offset stores. Theyve already been in cost cutting mode theyre going through restructuring as part of a transformation and a turn around so thats already hitting Marketing Budgets and jobs and Capital Expenditures they were already in that zone have had to pick that up as a result of this crisis. Liquidity is not a concern they tapped their Credit Facility and have a billion in cash so calming some of the nerves on that but clearly, this is a company that was struggling to turn around going into the crisis, and now with most of its Stores Closed across europe and in the United States, their most important market, this is going to be a long, difficult turn around if the new ceo can do this this is a stock thats down 60 over the last 12 months. Just to give you comparison, the big rival nike is up 7 in that period well talk to the ceo exclusively patrick frisk tomorrow morning after he spends the day, no doubt, carl, talking to investors today about these results and how theyre thinking about the second half which theyre giving no guidance on. Yeah. Its amazing guys, its almost a test now from Companies Starbucks another good example where you have the announcement of a lot of locations in china being open and yet, traffic not returning to levels. Thats going to be the test from now on not about whether youre open. Its about whether or not people are coming to your reopening yeah. That is going to be the key here as we reopen the economy nationwide are people going to feel comfortable in terms of venturing out again in the same fashion they did previously . It was a starbucks open at the end of my block in new york city yesterday, i noticed back to ua for a minute. They like a number of companies, its not as though they werent having troubles before covid. They were. They were trying to deal with a lot of things youve reported on for quite some time. Its only added to their considerable problems coming in. And whats added also to their problems is under armour made the bet it was going to be the Sportswear Company it was going to outfit the athlete. Not that nike and adidas dont, but theyve gone more on the fashion route in the last few years. Guess what, theres no sports right now. Thats not happening theyve had to deal with a lot of promotions. Theyve discounteda lot. Theyre trying to get rid of that the ceo today told me hes selling at higher prices right now than this time last year, but they were trying to turn it around its why frisk is there as ceo and not coo. They made the transmission wo because under armour has been under tremendous pressure. Yes and the market is down lets call it half a percent, the s p. Nasdaq fairing well. The likes of apple, facebook, alphabet and amazon not to mention microsoft all up on the session. We have a lot more squawk on the street for you. [narrator] at Southern New Hampshire university, were committed to making college more accessible by making it more affordable, thats why were keeping our tuition the same through the year 2021. I knew snhu was the place for me when i saw how affordable it was. I ran to my husband with my computer and i said, look, we can do this. [narrator] take advantage of some of the lowest online tuition rates in the nation. Find your degree at snhu. Edu. 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. Welcome back to squawk on the street. Stocks generally lower today amid reopening jitters almost every sector is down. Financials near the bottom that sector dragged lower by weakness specifically across the regional banks the kre regional etf is down nearly 5 . Its now down 40 this year. Its still up 24 since the march lows back to carl. All right. Erik, thank you very much. Interesting discussion going on this morning about the degree to which reopening and closures have a balance in terms of hospitalizations, we continue to watch International Markets where south korea and china seeing spikes in new cases. When we come back, bob chapek of disney on the opening of Shanghai Disney in a moment. Across cnbc, we have been taking a closer look at how states are fairing when they lift the coronavirus restrictions the data are very new, but weve already seen in emerging trends as government officials try to rebalance the health of state economies and americans. Since partially loosening restrictions one week ago, florida has seen only a 13 increase in cases, average of 644 new cases per day. These numbers exclude large counties like miami dade and broward and palm beach which remain closed. Testing has increased only 26 and 8 of total tests are coming back positive. Meanwhile, South Carolina, which has now been open for three weeks, has seen a 75 increase in cases, an average of 156 cases per day. Testing has increased 109 with 9 now of total tests coming back positive. David, i guess we need to wait to see whether we get hospitalization numbers because that really was part of the point in locking down these economies, to try to not overwhelm the Health Care System and not have as many people getting critically and seriously ill and potentially dying. Well await those numbers. Its still early yeah. This has been the balance, of course, that has been ongoing since we initially did not respond to appropriately to the virus coming to these shores, sara, in the weeks and months that we had a real chance to prepare perhaps in a better fashion, and now the question is the damage, of course, from a closed economy on so many peoples lives and the mounting pressure to open and open as quickly as possible given that pressure and figuring out a way to test and Contact Trace and make sure that we can keep the virus tamped down while we reopen. And theres no real template. People are looking to china, but, you know, wondering if we can trust the data coming out of china and how different culturally and Everything Else is going on there. We want to continue the reopening question speaking of South Carolina the state moving to phase two reopening today and that means resuming Indoor Dining but with some restrictions. Joining us is sam, ceo of Charleston Hospitality Group he manages over half a dozen restaurants in downtown charleston welcome. Thank you for joining us sam, what does today look like for you . Glad to be here today well last week they had the 20 outdoor seating is and we definitely were very optimistic about the outcome and friday they announced about 50 of the Indoor Seating with some restrictions and same thing, were very optimistic. You know, the challenges are bigger than just how much seating youre allowed to open the challenge is more about how we have staff to actually, you know, be able to work or is there any traffic that comes into the city, especially like charleston, you know, that lives on tourists, the hotels are empty, most of them are closed, the airlines are not flying in, so we have a big wither issue than just, you know, whats allowed to open and how much to open so are you actually opening the restaurants for Indoor Seating today . If so, how much capacity and can you really space that out . This last week gave us a way of how to look at things and how were going to be able to stay in the guidelines with the social distancing, six to eight feet per table, so luckily we had a great mothers day, it was very inspiring, and made sure to stop by the stores and see the people the locals are coming out. In the downtown charleston market when theres no traffic, no tourists, it definitely did not have that experience that we had in the suburb restaurants. Now for today and tomorrow, of course, were contacting more employees to come on board the challenge remains, you know, why would they come back on board if they could make more not working than if they are working. To answer your question, were optimistic about the fact that we are open. Sam, when you think about day part, im thinking about dinner time where really the variable you want to leverage is time spent at the table you want the party to hang out, get a cocktail before dinner, get that extra bottle of wine after dinner how much of dinner is a challenge versus say breakfast or lunch luckily its been im speaking because the majority of our breakfast, lunch and dinner, weve seen definitely more of a breakfast than actually dinner outing it seems like our Dinner Service was still sending more to goes than an Indoor Dining. Sam, i can only imagine how difficult it might be to figure out what your sales and profits conceivably will be in the coming months . Whats the number in terms of occupancy you need to be able to actually be profitable. Well you go from 100 occupancy to 20 to 50 , in this industry of restaurants, hose pa tallties or hotels you cannot survive. Were doing our best to make sure that our guests are safe, our employees are safe i dont foresee profitability right now. Were really looking forward to bring all the staff back, you know, into the restaurants yet, this is a bigger challenge than actually, you know, the occupancy. The challenge we have is like, will the employee come back to work why would they come back to work if they can make more out of work yet, as far as the business, we did really good yesterday. I was really surprised to see we did have a lot of wait in some of the restaurants with a very minimal staff. Maybe after this week well be able to tell exactly whats the longterm effect of this epidemic and how are we going to proceed forward with it. Do you think, sam, South Carolina is prepared are they issuing enough testing . Do people feel safe and want to come back out and eat at restaurants . I dont think theyre really prepared i know they have opened some sites. Luckily i can speak on behalf of our staff and company, no one has been affected by the virus, so no one i know from other Restaurant Companies were affected as well im hoping that, you know, with the time going, be able to maybe, you know, people will examine down here and just hopefully be able to get back to normal. Sam, we wish you the best appreciate it, sara keep us posted on the progress opening in charlton. Thank you. Sara, well see you this afternoon on closing bell. David, well see you later as well everybody, good monday morning. Welcome to squawk alley. Im Carl Quintanilla with jon fortt and Morgan Brennan coming to you live from various locations. Very busy hour head on this monday including an entire with bob chapek as Shanghai Disney opens overnight. Lot of pictures and discussion of how disney will manage to a safer operating environment for theme parks that has big implications for this country as we view disney as the proxy for how you can do this at scale. Yeah. Carl, im watching disney this morning, it is down. Watching the stock action, also down pinterest, yelp, lyft and uber and those would be stocks that would benefit from things being safe to open up sooner maybe this mornings trade thus far has been on the idea that maybe things wont go as smoothly as we were hoping at the end of last year and following that idea,