Transcripts For CNBC Squawk Box 20240713

Half an hour ago pretty good turn around yesterday. Interesting, cramer, the night before said it would start at 230. But he said it would get sold out the day before i watched as the dow improved. The s p was stopped. I was like, figures. At the end of the day, thats called in the money. In the money in the tacos now, you change the story. I said it from the get go joe, it will cost me a lot less to buy the tacos. But you have to listen to me. You are used to that. Becky, what do i get . I get to not buy you a dog somehow. You won you were complaining about this you are such a welsher you set up the terms of the deal and came up with the whole idea. Suddenly, you got your whole dog expense. Oh, well. Did you talk about yields did you see oil . I didnt. I saw now that it is above 27 a barrel still the june contract. Yield on the 10year around 0. 6 the oil prices watching this, the wti Contract Trading now that is something we have been watching closely because of the overall demand picture. I want you to sell this next lineup of guest like andrew has been the last couple of days you dont need to work hard with a lineup like this. Hes still selling. It didnt need selling. We do have a big lineup of guests it is friday theyll talk about markets and reopening. Starting with black rocks rick reider, marc dalbryant and more. How was that that wasnt overdone. Im not a carnival barker like you ive heard you and today, coming up, a huge lineup of guests i do that at the top of the show, i try to weve genuinely had some great guests i dont think weve been overselling. I specifically like when you do it. It is very sincere. It is agagenuine. It is sincere. In the meantime, well get a key data point at 8 30 i can try to sell you this data point. April retail sales expected to drop we dont want to sell that to anybody. Economists are expecting a 12 drop after the decline that took place in march sources telling cnbc now that jcpenney planning to file for bankruptcy today final negotiations could spill into the weekend weve seen it with neiman and now jcp, the beginning of this retail route and the prospect of more ahead something well have to keep our eyes on. Big piece in the journal. It has hastened the demise of the players. You need to be digital you need to be online. I dont even know if you need bricks and mortars anymore what about davos does that ever happen again . Davos, thats a tough one forget about the social distancing how would that look to have a bunch of rich people flying into the alps and living it up. I have thought a lot about that. Other things too. I would make bets it gets done virtually that would be my bet unless there is mass testing only if testing was scaleable for everybody. If you had to get testing in davos that wasnt available everywhere appeal to that. I love it that would be appealing to some to Washington News sources tell cnbc the white house would likely support another round of stimulus checks relief that could be a positive sign that republicans and democrats are willing to negotiate the house is expected to pass the democrats 3 trillion package today but republicsenatd trump have said it would be dead on arrival 2,400 for married couples and 500 per qualified dependents. Sources tell cnbc the order could come as soon as today. It is only 6 06. I wanted to talk about stayathome orders. It is only 6 07. Normally we go to like 6 15. We havent been you are quick. Getting us out early yesterday, it was like 6 12 ive been watching not planned they have been trying to get us out earlier with a short a block. Questions on a widely used coronavirus test and someone who can help us with this, dr. Scott gottlieb first, take a look at shares of denys First Quarter profits fell as dining rooms closed. Can you imagine trying to one a denies stream lined menus, reduced hours, shareable family meal facts. The stock there. Can you see 500 dennys have reopened limited seating. Might be the future. When you take align, you have the support of a probiotic and the gastroenterologists who developed it. Align helps to soothe your occasional digestive upsets twentyfour seven. So where you go, the pro goes. Go with align. The pros in digestive health. And if stress worsens your digestive issues, try new align digestive destress. It combines aligns probiotic with ashwagandha to help soothe occasional digestive upsets, plus stress that can make them worse. And try align gummies with probiotics to help support digestive health. So were working 24 7 toected maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. The fda issued an alert saying there is early data that suggests the abbott labs may be delivering incorrect results a study at nyu said tests may be missing more than half positive cases. They argue that the tests have been used at the white house on the president , Vice President and other top officials. Abbott said it would change procedures that negative results were presumptive matching the guidance given in the fda alert. Ive heard it is 85 accurate. It is fast joining us now dr. Scott gottlieb, cnbc contributor, serves on the boards of illumina and pfizer the way this works, we still dont know anything. We dont know when you can test positive even though you might have it. It is novel, hence the word novel. Your 85 is probably about right. The study is probably a little off. The test has a high specificity, meaning if it says you have the coronavirus, you do. For a certain percentage of patients, it will say you are in the all clear, you dont have the coronavirus when, in fact, you do we understand these rapid tests have a lower sensitivity than those you send out overnight if you can use a rapid cheap test to say 85 of them have coronavirus there in the doctors office. The other 15 you suspect but the test is negative youll know to send off for a test this machine is also used for flu and strep. If patients come in, they test them, they dont have strep throat, they send off to make sure it is not a false negative. The problem is how it is being used you dont want to use a machine like this to screen a sim toe magnetic people. You want to follow up. They are using this test to screen visitors and staff in the white house. We dont know if they are using it to extrescreen the president d Vice President we dont know. The pcr test, if you were exposed to someone like earlier that day and you did have some copies of the virus, you think the pcr test is able to detect that if you take that, there is no way you are getting a false negative that has some false negatives as well. It depends on when you are tested there was some good studies done there is sort of a peak early on and then it goes down a comes back up. Timing of testing is important here that test can miss people as well to be clear, the id now, the abbott machine does look for the viral rna. It is just different how it does it let me ask you something, the whistleblower yesterday, what you saw, what you heard. The headline in the New York Times dont do that, the headline of the wall street journal would be what i didnt listen to the whole testimony. I thought what he said that was important was talking about the fall and the risk that this comes back in the fall weve talked a lot about that. I think there will be better tools in place, better procedures and screenings in place. I think we understand that this is likely a virus that will be endemocratic and will be with us i think that was the important thing that was said. That was important i dont know how a whistleblower talks about the future it doesnt sound like a whistleblower. Who wants in ill see who raises their hand first. I think beck andrew raised his hand errarlier i hate to do this. I rather pick you. Okay, teacher scott, i wanted to talk to you about something you wrote about recently involving mass testing that i dont think has gotten enough attention. Im hoping you can explain it to our audience you wrote about the idea that you might be able to do mass testing. 50 people, 100 people on a shot on a daily rotating basis, employees going to work. It sounded like spitting into something, collecting all of that and sending it off overnight and finding out if those 50 or 100 peoplehave it. If someone is positive, then they retest the group, if they dont, everybody is in the clear. Explain what you were talking about. Briefly, there is different tools. You have the rapid test, very good in the providers office. Pcr base test. Good for an accurate hananswer you have to wait overnight then you have this platform. This includes next Generation Sequencing so im on the board of illumina. They have a platform lets say boeing they might break the people into pools of 25 to 100 have them test the pool. They test the pool if you get a hit on the pool, you go back and test individually if you want to use it for routine screening, you dont need to test individually. The reason this is a good tool is that pcr looks for two p things next Generation Sequencing looks for 200 parts on the virus if you are trying to screen a pooled sample for something sensitive and specific, next Generation Sequencing, there are other platforms that can do this and give you a sensitive, reliable answer. There is no onesize fits all test the key is to try to adapt the right technology to the right purpose. The i. D. Now isnt a good machine if you are screening an a sim toe magnetic population and you want to be 100 accurate like in the white house. And like the other machine, thats sensitive, you are not going to get false negatives with this. So i understand this. Andrew, you are such a hog. You just ignore. Does the spit get collected together no. You wont be spitting in the same bucket. Everyone would give a sample and then those would be pooled together. They test sewers and stuff. They are talking about that possibility. Becky has a lot of questions. Go for it. Im sorry. Seize shes a great waver. Lets talk about the cdc talking about looking out for the disease in children. There was a 30fold increase, not 30 , 30fold increase in an italian province that was hit hard by the virus. Parents everywhere are listening to this. What does this mean . The accruing evidence is starting to show there is a core relation between this syndrome and the coronavirus. Whether an active virus or late, like you recover from the virus and then develop this. Showing in a town in the last five years in the last few years, they had 20 cases and in the last month, they had 10. The alert from the cdc is the first statement from the federal government that correlates the syndrome with coronavirus. They call it associated with coronavirus. They put out a Case Definition for the first time in that definition, they say current or prior infection with coronavirus. They talk a lot about a cluster in the uk around april 26, late april and now the late cluster in the United States we dont know again. We are talking about the denominator. How many kidshave had coronavirus . Is it thousands or tens of hundreds of thousands of kids and this is a rare condition the other thing is we havent seen these records coming out of asia we are seeing them in europe and certainly out of the United States we havent seen it in asia it could be that they are missing it and kids are getting infected at a lower rate there and could be something we dont understand listening to you, you are part doctor, part Public Policy because of your fda experience would you characterize you in terms of 50 50 you know the economy is an issue to reopen. If you are purely a scientist or doctor, you may be 100 that and want to stay closed forever. Zeke emanuel said we could open in like 2035 or something. You are sort of in the middle . I am 100 medical degree. But you are a policy guy and realize the reopening has to be done thank you, joe. I agree. We get both from you. I think dr. Fauci may be on the other side and we need both views. I wish i was at that house for the weekend. You can go up in the woods id put up a tent out there. Be careful of the bears. Anyway, see you later. Becky. Thanks mr. Cater. When we come back, well talk to Eunice Eunice yoon about the daily changes we are seeing in china that we may soon see in the United States. And first images of the pandemic across the u. S usaa was made for right now. And right now, is a time for action. So, for a second time were giving members a credit on their auto insurance. Because its the right thing to do. Were also giving Payment Relief options to eligible members so they can take care of things like groceries before they worry about their insurance or credit card bills. Right now is the time to take care of what matters most. Like weve done together, so many times before. Discover all the ways were helping members at usaa. Com coronavirus find a stock basedtech. On your interestsbers or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Time for the executive edge. We are learning from china what life after the pandemic may look like eunice yoon was under lockdown bringing us critical reporting from january to may and first traveled outside of the city this week for a report from shanghai shell talk about daily life we may see. I was following you closely you were tweeting about how you got on the train and they are taking temperatures and you got on the plane. I was watching and thinking, this is what it is going to look like for us. What was the shocking thing and what made you feel the most comforted . I think the whole idea of just getting out was anxiety ridden i was nervous about going out because we had been under lockdown for over four months. Traveling has changed. You noticed the temperature checks there is thermal imaging in the airport and train station. In the airport, i ended up getting my temperature checked five times when i walked in at the security gate and when i walked in at the gate on my wrist and at the plane door on my forehead there is a lot of screening. Everybody has to wear a mask the only time i was allowed to take my mask off is when they asked to i. D. Me they want to make sure there is nothing hidden under your mask and all the ppe. Your the ground staff, Airline Staff had on at least masks or even more. There wasnt a whole lot of social distancing on the planes or in trains because the tickets now are all being sold in the past, railways and airport authorities were trying to limit the number of seats being sold that is no longer the case if you do have a temperature, there is now an area they want to quarantine you. So you would go in between the cars and stand there the rest of the journey. But they would ask you if you could please leave earlier to make sure there arent any people with fevers on the train. Finally, one other thing that happened just today. Ive been hearing a lot from various factories and people working in companies that the authorities here are talking about easing the travel entry ban for foreign executives as you know, foreign executives and Foreign Residents have been banned from returning to china now it looks as though the wheels are in motion to allow people to come in there has been speculation that could happen after the nationals Peoples Congress you would have to have a letter from your company vouching that you are a critical employee and another letter that vouchs that you are healthy, so that legally you are tied to that company secondly, once you come in, you would have to expect a 14day quarantine if you are a foreign resident, you would go to your home and they will literally put police tape on your door to make sure you dont come out if you are not a resident in china, you would be funneled to centralized or governmentappointed hotel, that could not necessarily be in a city like shanghai but Inner Mongolia or somewhere else before you are allowed into the big cities trying to make changes for people coming from countries with lower infection risk who are seen as critical when i asked people, do you think americans will be allowed anytime soon, most dont think that is the case because of the infection risk level in the United States right now. Wow eunice, a lot of the things you described, i could see happening here such as temperature checks and requiring masks. The idea that anybody who flies into jfk from some other country is going to be told they have to selfquarantine in north dakota or something i dont see that happening in america. I dont even know we would set up hotels saying, okay, you have to stay here at the jfk hotel for 14 days. Those are things china has had a much easier time with saying you you are going to do these things i dont know that that translates here. And also, you have to pay for it yourself. You have to pay about 120 a day for that government appointed hotel in Inner Mongolia. The other thing that is a big difference is the government mandated health code and this travel itinerary that is generated. In china, everybody has to use them it is unclear exactly what data is collected whether it is synced up to your medical records. A lot of that is a big question. I dont see that as something americans will really accept but it is something that is very prevalent here we have regulistration of i. D. , health checks. Creating a bar code. Then in terms of where we are, some things to watch one is our sports venues here are now open they require reservations. If you want to go to a stadium or go some place outdoors to go jogging, you have to register and limit the number of people there. Some Contact Sports are not allowed. It has moved up a bit where they say you could play basketball if you are outside. You could play pink pong gyms right now, no swimming, no underground gyms but you can have some cardio machines before, there was a serious limitation on the kind of exercises you could do at the gym. For restaurants here, something specific for china all t all the restaurants are open but they are encouraging them to use serving utensils and people to eat with their own plates. That is a cultural difference in china. Because in china, they eat everything family style with their own dish and finally, we are watching theaters new regulations came out with a push to open in june one of the requirements is that people will have to have all gn alternate seating in alternate rows that means theyll hopefully be open to some theyve said there arent any good movies right now in china that could be another big issue. Eunice, thank you for a look at what may be to come here. Good to talk to you. When we come back, a lot more on squawk box ahead we already know retailers took a big hit in april later this morning, well find out how bad is really was. Well get you ready with the data and tell you about the mpiebe posed to outlast the lockdown next these days, its anything but business as usual. Thats why working together is more important than ever. At t is committed to keeping you connected. So you can keep your patients cared for. Your customers served. Your students inspired. And your employees closer than ever. Our network is resilient. Our people are strong. Our job is to keep your business connected. Its what weve always done. Its what well always do. But inside every etf. There are untold hours of careful construction. Infinite what ifs . And contingency plans. Creating funds that help target gaps in client portfolios. Tap untapped potential. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Good morning weve been watching u. S. Equity futures. We were looking at green arrows about half an hour ago right now, dow futures down by about 85, s p down by 10, nasdaq down about 20. The market was up some 300 points the wti still indicated up i just saw 28 a barrel. Damage control dave calhoun is reportedly trying to smooth over relations with some Major Airline ceos after telling cnbc some carriers may not survive the crisis a high ranking executive at united and american complained about his comments youve got to be so careful when you say anything when you say a Major Airline, everybody gets mad anyone even considered close to being major. So you throw them all in as a possibility. You can see that might not be taken so great wait. You are not a Major Carrier anymore. I wasnt talking about you but if you are, you might be one of the ones that doesnt survive. Sorry. Hes got his own issue i dont think he was necessarily trying to emphasize the negative there. Hes got his own worries he was answering a question he was asked specifically honestly im sure hes not taking any satisfaction in making that point. Hes got his own worries obviously. Dont we all not us as much as i dont even want to imply that we have problems because we dont. We dont here we are. We are working thats what we forget. What do i do do i start floating checks for food it is unbelievable new retail data ahead. Well get you set for the numbers next you can watch or listen to us live any time on the cnbc app. As we head to break, here is a look at some of the scenes yesterday of states reopening for business or at least starting to across america 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. 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. It started with a few 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 welcome back as economies start to reopen as a gauge of how things are picking up may be an alternative. Steve liesman has been monitoring this. What are you finding mixed results some of the mobility data that uses cell phones has shown the pick up of people moving around. Some of the data we are picking up as far as store closings doesnt show much. Look at the road back bareometer we got excited when this number of the threeday average changed. It dropped to the Single Digits but we ticked back up to 7. 2 and shows around the country and all states, stores are Still Closing week to week we look at new infections. That has ticked down not at the low but seshlly if the april infection rate was 100 , this is 76 . Showing you new data we are following especially after delta and the pilot story. Air travel through tsa through put, 7. 5 of normal. The covid cases at 76 , a steady decline on the threeday average we watch here to try to smooth out the daily fluctuations thats down from the peak of 105 it is off the low, which was 73 . Look at one days worth of data to show really the devastation in the airline industry. A year ago, tsa processed 2. 3 million passengers in a single day the 13th of this month, 176,000 the low on that was a pick up from last year the forces going on. Businesses want to reopen. Government rules are relaxing. Customers and Consumers Want to get out. Still, all sides have existing and continuing concerns. The story here is the highfrequency data. We have to learn how to watch it and understand it but we are not going to hit a button and the economy is going to reopen i will say the data we are looking at showing continued closings is a little more in line with the continued rise in jobless claims andrew, wait. I get to play teacher. Now im going to bring andrew in go ahead, andrew steve, question for you so when you are looking at the demand issue, the question im wondering about. You look at who is going on an airplane or store. Do we believe it is a genuine demand problem or do we believe that it is the social distancing rules and the fact that so many states are still out of business through the requirements effectively preventing that. If you look at the stores that are open, what does the demand picture look like at those places thats a great question ive been interested in two different dimensions what you are talking about. One is, did the country close down because the country closed it down or because businesses didnt feel comfortable keeping their businesses own i think it is a combination. What we saw, andrew, i was able to analyze this yelp data. States that voted republican in 2016 versus states that voted democrat i was able to analyze it on republicanrun states versus democraticrun states. It showed that the country shut as one it didnt matter the state leaning. Maybe by state size but not politics how will it reopen i think people will feel more comfort getting out. Think about businesses that may want to reopen but does he or she feel safe bringing customers in well watch that we had a story today that dennys opened 500 stores. Will people go thats not really a government question but a question of the virus itself and peoples attitudes towards it steve, thank you. Really interesting well see you soon retail sales are expected to show a record drop for april when they are released in about two hours time. The industry undergoes a transformation not just the traditional retailers and Big Box Stores that will survive. But others as well we are joined by our guest dana, thinking about the day that jcpenneys is expected to file for bankruptcy. Neiman marcus and then you have macys talking about closing additional stores. What does this mean for the future of not only those Big Department stores but the rest of the malls and the rest of the Stores Within the mall as a result we are seeing a complete transformation of the retail landscape. Digital transportation is accelerating if you dont have capital, capital is king right now. These Department Stores need to reinvent themselves. There will probably be fewer Shopping Centers only the best will survive inventories were preeaster and you are coming out nearly summer youll have integrated omni channel, curb side pick up consumers need to feel safety. The many easy youre of safety is a measure of what the traffic can be it will be a changed retail landscape like weve never seen before what are the companies we dont talk about a lot we talk about walmart, target, amazon what other lessthought of names. Off prices are going to win tj maxx, burlington. They are off the mall and provide value. Youll have brands win whether estee lauder, nike, theyll have the on line in physical stores where customers will be able to go there others like the dollar stores. Dollar general, dollar trees and costco is a winner at the beginning, traffic we thought was weak before, its getting weaker stores recently reopened are getting up to 60 of volume they had. Thats a win what happens when unemployment subsides well need to have value those Companies Like 18 rides a month thats impressive and for anything to work from home will continue to matter and its worked from home and worked from school also. Dana, its great to see you we appreciate some of the new ideas. Well have you back soon thank you. Nice to see you, too. Andrew okay. Thanks, becky. When we come back, a lot more on squawk were going to talk about the changes that could be coming to tsa checkpoints and how that Technology May be soon making the way to the entrance to your Office Building as well. The ceo of clear joins us next an interview you dont want to miss every Financial Plan needs a cfp® professional confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Welcome back to squawk box. As states are looking to reopen, many states are looking to monitor the health and safety of their employees. This week clear started rolling out the health pass which is a Touchless Technology that tracks health sites to enter places of work we want to welcome clear ceo karen sideman becker good morning to you. Most people know clear by going to the airport it was born after 9 11 this is another crisis with a new component being born explain what the product is in terms of how its going to work relating to covid. Youre right. Clear was borne out of 9 11, and it was about a Public Private partnership leveraging innovation to enhance Homeland Security and delight customers that was really the beginning of screening 1. 0. Just like screening was forever changed post 9 11, in a post covid environment it will shift. Its sports stadiums, retail, Office Buildings, restaurants. While we started at travel, were a biometrics secure identity platform. Its about attaching your identity to an airport, your passport, your credit card to buy a beer, getting into a sports stadium now with the launch of clear health pass, its about attaching your identity to your covidrelated Health Insights for employers, employees, customers. Everybody wants to know that each others safe to start to reopen businesses and get america moving. Caryn, just to clarify one point about this though, this program is not a testing program, though i imagine testing can be added to it, but this is about people answering questionnaires about their own health and so the question is, how do you think about that in terms of creating a trusted environment . Absolutely. Youre right this is not a testing platform just like airport screenings and multilayered approach, screening 2. 0 is a multilayered approach to buy down risk and increase confidence. It starts from a mobile app perspective with connecting your face to your identity and the questionnaire. You then bring that into the physical environment where its about your questionnaire and then temperature its also then about linking, just like we built those links to tickets, its about linking to Lab Companies and test data this will continue to evolve with social distancing, with masks, its about putting that whole picture together, those many layers. Ultimately the vaccine. Right in terms of the cost of this to employers and also its relati relationship to the clear pass that people are used to using, both now at airports but also at stadiums, are they connected is your identity connected is that information shared these are of course then we get into the privacy issues. So privacy and Data Security is job one at clear. It has been for ten years and it will continue to be, right weve built a brand that stands for trust which is why we think were uniquely positioned here well be retrofitting our pods at airports for that experience with temperature and be able to integrate it, but this is very separate free for consumers and then well be partnering with Enterprises Just like we do at delta and united talking to great people whether its jim murr trying to open las vegas or danny myers or people in real estate like scott reckler. You have such a united front to bring forth the solution. Real quick before we go, do you see a day where we actually test every Single Person who gets on an airplane . I think thats a great question i dont know that im the right person to answer that. I see a day where we need significant amounts of data to Health Insights around covid and potentially others, right . This is the beginning. To create a safe travel environment. Okay. Caryn, we wish you lots of luck. Everybody is trying and this is a really unique and interesting product and we look forward to getting an update on it as you progress thanks so much thank you stay safe. You bet becky . Still to come this morning, thanks, andrew, still to come this morning, the founder of boston dynamics will join us to talk about the companys robot that encourages people to social distance attack robots. Well be right back. Tempurpedics mission is to give you truly transformative sleep. So, no more tossing and turning. Because only tempurpedic adapts and responds to your body. So you get deep, uninterrupted sleep. During the tempurpedic summer of sleep, all tempurpedic mattresses are on sale good morning key retail data due out at 8 30 a. M. Eastern time. Could set the tone for todays trading session. In washington, new support for a fourth round of stimulus as the house prepares to vote on a 3 trillion package. And john hope ryan sending a proposal to treasury seeking a living wage plan he joins us to talk about that and the reopening of americas economy as the second hour of squawk box begins right now. Good morning and welcome back to squawk box here on cnbc im joe kernen along with becky quick and Andrew Ross Sorkin new tensions between the u. S. And china may be responsible for what youre seeing in the averages now propping up this morning, it appears thats what is weighing on the stock Index Futures the Trump Administration is moving to block shipments of semiconductors to huawei Commerce Department is amending a rule that targets huaweis ability to buy u. S. Originated semiconductors we were up initially 30, 40 points after the big rebound yesterday. Becky, someone wrote in we were down i think 450, more than 450 points yesterday and closed up 377 points now here we are down about 180 this morning yeah. Coming from up 20 points or so an hour ago when we started the show an historic week for the fed bumped Corporate Bond etfs which caught a lot of attention. It was another brutal week for the job market which saw millions more people a played for benefits rick reader is here. Rick, i want to start with this news that were just hearing about, kind of just get your thoughts on some of these potential risks that are out there, the idea of more tension with china, what that could mean for the economy and for the markets. Becky, i think you hit the nail on the head by the way, the markets have a whole series of uncertainties that are going to play out over the next few months but the china trade one is going to be maybe not as big as it was a year or so something, but it is going to be real by the way, when you look at the equity market, when you look at how commerce works, think of semiconductors, think of the percentage semiconductors is the top two or three in terms of the market cap and equity market. When you do something that has an impact on that sector, then it really impacts the market so this is something, by the way, when you think about the china trade discussion, you think about the china relationship discussion broadly, this is one of the issues that has broad bipartisan support my sense is this is going to be more and more of what the markets are going to focus on particularly up until the election as we get closer to the election. Broad bipartisan support in terms of wanting to play tougher with china yeah. I should have clarified that there is different senses of how pernicious that has to be, but no doubt there is bipartisan there is real bipartisan support that we need to be or should be as a country tougher and things like this with regard to huawei become a galvanizing point of support in terms of both parties. So, yeah, it is something that were going to focus on and will create volatility into the election for sure if not longer. Andrew has asked the question of a lot of people over the last couple of weeks, just the idea if we do have more tension with china, what does that mean when so much of our supply chain is based there, not just for electronics but also things like personal protective equipment, some of the pharmaceuticals. Pharmaceuticals, yeah no, its going to it is a big world. The intertwined nature we see this a lot when we talk about the asset markets. A lot of discussions about the chinese assets and theyre tree men to usually large holders of u. Sfrmt assets as well. The interlinkages in supplies, in technology broadly are significant and how that plays out. By the way, none of these are an easy answer. I think the more aggressive that the u. S. Is, its hard to see that you wont get some sort of retribution on the other side. It is going to be an important dynamic. But like i say, i hope at the end of the day theres a pragmatic approach because some of these things, like you say, pharmaceuticals, et cetera, are pretty engrained and very hard where were going to move down the road to being more localized in supply chains across the board, its very hard to aggregate things Like Pharmaceuticals that take years before you can get the drugs into a mature state. Rick, before we get the news about huawei i was kind of thinking about what i wanted to talk with you about today. Just thinking about Risk Assessment and how much tougher your job has gotten on that front these days like how many possible outcomes or potential outcomes are you trying to think through these days how disparate are those outcomes what can the fed do to alleviate those things how can you put that altogether at this point . It starts at 4 a. M. At my desk and goes until about 7 p. M. And then the nation gets going listen, there are i think one of the things thats happening by the way, why this is an interesting and exciting market is the opportunity. Were going to go through, this is not just where we sit in may, this is going to be a dynamic going forward. The dispersion around asset classes, the dispersion around custome companies, regional where growth is in the markets, we do a tremendous amount of analytics, data assimilation to see we study credit card data around the world trying to understand where a growth pattern is, where is the consumption taking place. Its a fascinating time to be in markets. We live people under estimate, for ten years we live in a reasonably stable market with some brexit, et cetera, thrown in along the way. Its right on that trend line. Back on the trend line its not going to be this virus is going to be with us for a very long time, including the last segment you guys were talking about when you think about transportation, et cetera what youre going to have is more dispersion, Technology Evolution i think its a fascinating time to be in markets. Fascinating time to generate return around indices, et cetera it is time intensive even if you have tremendous data and analytics, its still incredibly time intensive. Speaking of some of that data, whats the answer . When youre lacking at the credit card data from around the globe, where are you finding growth so some of the things are no surprise when you look at technology, look at the evolution of digital businesses, and its not just the traditional businesses that you would think, my gosh, looks like amazon is doing well, google is doing well, et cetera, then you get into some of the companies that have employed digitization and employed technology into their businesses even the Companies Like the walmarts, the targets, Companies Like that have done phenomenal jobs with regard to logistics, upss, et cetera. Those are some things that were watching pretty closely. Regionally, listen, we think the u. S. Is going to grow. We think china is going to grow and that chinas impressive. The data we study across the board when were looking at china. Its not a v shape, its not far from it either gosh, then we look at europe we dont see a catalyzing. We dont see any of the data that we look at. Some green shoots back to where we were in a couple of places but not really emerging markets we think is a longer slug. Particularly places like brazil, argentina. China went into this first you will expect them merge first. Youre not seeing green chutes china has taken it youre going to be sent into quarantine for 14 days if you dont have a house there, theyll send you to mongolia, no joke, mongolia to a hotel. None of those things are going to happen in the United States i doubt theyre going to happen in europe. In a free and Democratic Society those are huge impingements on freedom. If thats the case, again, do you think it is eventually going to come here and to europe or do you think that because they are able to put the more stringent factors that theyre going to see a sharper bounce back . So, becky, i hear a bunch of issues, a bunch of things that you brought up there, all very fair one of them is like you say the measures that china took were very aggressive. By the way, its easier in china when you have one region and youre managed, asit were, fro one single point of attack talk about europe, talking about a despair rat set of policies. That makes it harder secondly, you know, by the way, i do think youre going to see more of those testing, more aggressive testing, et cetera, as you talk about in the last segment youll see in the u. S. Those issues are there but, listen, i am there you have to think about the starting point and context china grows and is maturing and grows at 6 and change. U. S. Is growing at a point we were growing at real gdp that was 3 to 4 for high, but the run rate is real gdp we think is closer to 2ish percent. Europe is starting at a point where theres no catalyst for growth ive seen on this show the ecb is keeping rates negative, never going to get there you dont have the catalyzing growth influences. You think about as we just talked about, the digitization of the u. S. Economy. You dont have those engines of growth so youre trying to stimulate without significant fiscal stimulus. Youre trying to stimulate an economy thats going to be difficult, let alone the tourism, let alone how travel impacts the european continent which is known for significant amounts of travel throughout it and into and out of. Eric, thank you i really like these chats. Gives us a lot to think about. Thanks, becky. Hopefully we can see you again soon thanks, becky thanks for having me. See you soon. Andrew meantime, weve got some news that might actually provide some insight on why markets are moving and moving lower this morning on some huawei news. The chief of chinas global times tweeted the following, based on what i know, if the u. S. Further blocks Key Technology to huawei china will activate whats called the unreliable entity list which would restrict or investigate u. S. Companies, such as qualcomm, cisco and apple and suspend the purchase of boeing airplanes and it may very well be that news thats leading us a little bit lower or more than just a little bit lower this morning. Weve got dow looking like it would open down 205 points nasdaq off 75 points and the s p 500 looking off about 23 points. It would have a huge impact, as we said, on some of those Big Tech Companies and the likes of boeing yeah. Pretty interesting, guys. Gae owe political implications of all of this. It does imply that some day trade with china where both countries actually have app economy could be important at some point in the future at least were off the at least were off the death and morbidity and being tested to go to a restaurant and i think were going to be carrying a card that says we have antibodies, andrew i dont know if we get tested every single time but, of course, you couldnt just carry a card that says you tested negative because it would be good for like three minutes until you walk outside right. It has to be positive antibodies and then thats taking the leap of faith that positive antibodies mean youre immune. Just to go back to the trade issue. It would be nice to trade again some day it would, but the question is given the relationship, how do we do that this goes to Eric Schmidts point yesterday, which is you have to have relationships with countries, even countries you dont trust. Theres no question how chinas behaving and how were behaving. For a long time i think eric schmidt has wanted to live in the United States of the globe you want to look at a global you know, hes got a reason to be that way, obviously, with the businesses that he was in, but he didnt say one negative thing about about the concentration camps in china, about whats going on in the south china sea, about what they tried to do here not one negative word was heard from eric schmidt about china. What are you talking about what are you talking about . Google would be i didnt want to bring it up. Google, if you recall, was the first major Silicon Valley company to say were not doing business in china. So i didnt hear that yesterday. Was he ceo then . Maybe thats you know yes, he was ceo then. All right all right. Yes, he was ceo then. I dont know what happened. If you want be to complain about it, call tim cook. Call your friends at cisco call i understand. Theres a lot of other companies theres a eric schmidt is not the person you should be going after this morning the point is how do you create a relationship with a country that you dont trust . I think we need to figure out perhaps a different way to do that and its on us and its on them but ultimately even if you think the other side is completely terrible and obstinate, you have to figure out a way to work with them. Well see otherwise were going to be in this soup that were in. Theres times to appease and theres times to put your foot down i dont know which one were in right now but like i said, im just glad that this implies that there is an after there is a beyond this where we can actually be worried about trade tensions rather than just being worried about stepping outside coming to hear we go, coming to a park near you four legged robots that encourage social distancing. The ceo of boston dynamics joins us first though check out the shares of applied materials. Shares moving higher this morning on the news. Were coming right back. For your own safety and those around you, please stand one meter apart. Thank you. Youre watching video right now of boston dynamicss spot robot. Thats what its called. Little spot. In a single park that video from over the weekend the four legged robot encouraging park goers to social distance. Joining us to talk more about all of this, the robots creator, boston dynamics chairman and founder. Privilege to spend time with you before good morning. This is the first time, maybe im wrong, where these robots are, in yf you will, out in the wild and being used in very, very unique ways are you getting orders now for the robots in the covid world . We are. We started out using spot in a variety of hazardous environments and now that the pandemic is on, people realize there are lots of situations where youd rather not have human contact so the robots come in there and its been a useful tool so how many of these robots are out there right now . How many are you going to be manufacturing . What countries are ordering them how much does it cost . Were manufacturing about 1,000 of them. We have 120 out in the world. We have others its being used in a wide variety of purchase. Were in an early adoptive period very soon well have published pricing and you can just, you know, go to our website and order it by clicking very soon, a couple of weeks hey, marc, how do they work if theyre going to focus on social distancing, how do they know that theyre not separating me from my kids or from my spouse or something . Or how about if we walk up to a park and were meeting my mother and father or something . Its really interesting its really interesting. For the singapore use, which is i believe the clip you just showed, theres a person at the other end of the controller sort of driving the robot around. The robot can operate itself, but a human can be the station and steer it this way or that way and they can also see the some of the imagery from the robot. On its back we have a camera that they use. So theres really a human making the decisions as to, you know, who to interact with in the case of the distancing. In cases where were using it in a refinery where the robot and a half have i gates on its own to make measurements and do whatever they were doing were thinking of using it for disinfecting places. Everybody wants their train stations and other facilities to be disinfected so that when you go in you know youre safe in those kind of situations the robot can autonomously do all of the operations because there arent people there to interact with. If it comes up and nudges me because it thinks im too close and i dont listen to it, does it zap me . No. Nothing like that. The robot isnt enforcing in singapore, its just giving people information and encouraging them i believe theres a human nearby whos you know, who can do whatever enforcement they decide is appropriate, but the robot doesnt do anything like that. Marc, this is off topic far be it for me to ever do that did you see the most recent war of the worlds, the series on tv. That thing looks exactly like did you see it did they design it after you . Honestly, it looks exactly like that, but they werent very nice to people. Yeah. Well, you know hollywood, they seem to have only one story that they keep telling over and over again. You know, our robots are doing very boring, repetitive tasks. Thats really where the opportunity is the kind of things that people dont really want to be doing. The same single thing over and over again dumb, dirty, dangerous we call it i havent seen war of the worlds ill send you a shot. Its identical. Marc, before you go, in terms of other use cases in this in a post covid world or in a current covid world you talked about the idea of disinfecting things do you imagine using these robots to deliver things. Absolutely. To go to doors, do other things that people in a touchless world might be looking for . I mean, absolutely. There have been a couple of stories. One is the singapore one another is weve been working at the Brigham Womens hospital which is one of the big hospitals in boston helping screen covid patients. Originally we were just talking to them without there having to be a Health Worker there now were making vital measurements like respiration rate, body temperature, working on oxygenation and heart rate. All that can be done without contact even with the robot and weve had kind of a flood of input of people who have ideas for how they could keep their workers from having to have contact either with other people or with situations and i think its going to be very interesting time where some of these new applications play out. Okay. Marc, its great to see you. Itsfascinating. Come on back we want to get an update as soon as the next iterations of some of these reboots get out into, as we say, the wild. Thanks for having me. You bet. When we come back, the pandemic is pressuring the Mortgage Market and forcing some homeowners into forbearance. Weve got new details right after this break time now for todays aflac trivia question. What does the acronym utma stand for . Aner when cnbc squawk box continues 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 we hope you find our Digital Solutions helpful to bank safely from home. Deposit a check with your phone or tablet. Check balances, pay bills, transfer money and more. Send money to people you know and trust with zelle. Stay safe. Stay home. Together, well get through this. Pnc bank confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Now the answer to todays aflac trivia question. What does the acronym utma stand for . The answer, uniform transfers to minors act a tax effective way to transfer assets to minors without establishing a special trust were getting some new information on the number of Mortgage Loans in forbearance. Diana olick joins us with more hey, diana hey, joe. Yeah, the numbers ever still rising but the pace of gains is slowing considerably as of may 12th, approximately 4. 7 million homeowners were in government or private market forbearance plans. Thats up from a 4. 5 million from the week before they can delay their payments for up to 90 days or up to a year that translates to 26,000 borrowers a day. Thats slower than what we saw at the start together the 4. 7 million loans are 8. 8 of all active mortgages and 1 trillion in unpaid principal. 7 of all fannie and freddie what does that mean for servicers who have to advance those principle payments to governmentbacked bond, to date, 3. 3. 68 billion a month. Another 2. 1 billion will be faced by servicers of portfolio held and more than 9 of these loans are in forbearance as well andrew, a lot of numbers there but at least the pace is slowing slightly thank you, diana, for that. Meantime, futures moving lower right after the break from euni eunice you have to hear what she has to say. Welcome back, everybody. The futures moving lower this morning. The dow off by more than 200 points on some headlines from huawei eunice yoon joins us from beijing. You want to tell us about the move from the United States and the move the chinese are telegraphing, their response. Yeah, thats right. Becky, a top editor at a hawkish communist Party Newspaper called the global times appears to be hinting that china could retaliate from that u. S. Move i the u. S. Decides to block shipments of semiconductors from huawei technology. What they said in this tweet, based on what i know, if the u. S. Further blocks Key Technology supply to huawei, china will activate the unreliable entity list, restrict or investigate u. S. Companies such as qualcomm, cisco and apple, and suspend the purchase of boeing airplanes. Likely people are getting concerned about the potential impact this could have on the trade deal since people are worried about trade tensions ending up in a scrapping of the relationship or ripping up of this deal and for the relationship to continue to get worse. One of the things though that we should know is that he is obviously very well connected with the government. You know, a lot of people respect what he has to say over here, but at the same time hes often used as a way or he often kind of talks about policy thats not official so he could get a message out but then that could just be posturing because when you look at the rest of whats happening in the state media, for the most part its talking about how china is making good on its pledges, its bag up soy beans, its easing tariffs on blueberries from the United States and shipments of barley so you could see that from the chinese perspective there is a hope that the trade deal is going to continue and that the trade relationship could improve. In fact, the Foreign Ministry said that its hoping that the u. S. And china can meet halfway in response to a question about President Trump overnight saying that the relationship between the u. S. And china could be cut off completely okay. Eunice, thank you. A lot to think about well talk to you soon andrew . Okay. Still to come on squawk box this morning, with Airlines Cutting flights, those that remain seem to be filling up faster with, yeah, less social distancing thats caught the attention of at least one lawmaker. Weve got details righafr e eak. T te yes. The first word to any adventure. But when allergies and congestion strike, take allegrad. A nondrowsy antihistamine plus a powerful decongestant. So you can always say yes to putting your true colors on display. Say yes to allegrad. Yeah, everything is runningis smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. As airlines slash their schedule phil lebeau is here. Hes got the story on that reporter becky, lawmakers. Transportation committee the images like this its really caught the a techks of representative defazio. Were going to try to promote social distancing. All middle seats should be open. He wants to limit capacity to 67 . In his letter he sent yesterday he writes who among the ceos of the a 4 a carriers, airlines for america, would want a member of their own family to be assigned to a middle seat between two potentially contagious passengers in the middle of a global pandemic. He is encouraging people to keep the middle seat open he has not said whether he would push for legislation to require that as you take a look at the Airline Stocks, what youre seeing, if theyre not at 52 week lows, theyre at multiyear lows the Airline Stocks continue to see a number of pressure number of people flying remains low. Down 93 compared to the same day. The average plane load about 17 passengers yesterday delta came out and said, look, we have more pilots than we need 7,000 more than the fall of this year thats half of the total number of pilots. They have about 14,000 theyre retiring all of their 777 planes airline and airline industry, theyre quickly moving to cut their costs as quickly as possible shares of boeing the Company Appointed a 31 year veteran of the company to spearhead Health Initiatives so that they can work with the airlines and policy makers to promote the fact that it is safe to fly and, guys, this is going to be an issue that is going to continue to percolate because the airlines are in a catch 22 here in terms of flying, promoting social distancing, yet at the same time theyre in the business of making every flight profitable if possible the question, how many would fly if someone was in the middle seat how many would fly if someone wasnt in the middle seat . I mean, it but, joe, from the perspective of the airline, im not saying this is right or wrong, but from the perspective of the airline you basically have said, 33 are dead. Im saying you get the same answer just having the middle seat open doesnt all of a sudden make you feel any better with a member of your family going to fly on a flight, phil thats not a panacea just because the middle seat is open. Youre right, joe we talked about it. Look how they tried to control capacity so all the planes were full the only way they were making money was with full planes reporter joe, if you were to do true social distancing, my producer and i were working on this take a 737 you might get, might get 22 to 25 people on a plane if you did true social distancing one seat in between people is not six feet. No. No what is it, 20 inches, 22 inches. Lets speak to somebody whos on the front lines tennis tate throws allied pie lots cumulatiommunumulativommuc. Have you been flag so you know whats happening tell us your perspective right now, dennis . Right now were at this pivot point where we thought we had mandates from our airlines for masks. Social distancing is just not you cant get that 100 on an airplane just like you pointed out with phil. The bottom line is the masks protect each other theyre masks of respect youre not going to propel any unknown condition that you have on to somebody else. We are just floored that the d. O. T. Who the faa works for has stated that safety and wellbeing of passengers is our number one priority yet they bifurcate it out and say theyre not in charge of Public Health as captain of my plane, i have one goal in mind, to protect them i dont bifurcate it we need mandates for masks, its for cleaning and screening. The d. O. T. Secretary said she hopes airlines will clean the airplanes like they should this is not a time for hope, this is a time for actual must do and mandate so were not going to be able to do the phil called it a catch 22 i guess it is a catch 22 unless you were to triple prices, you cant i dont even know if that would be far enough away. One person in a row. Social distancing is not going to be possible its cleanliness and masks this is about instilling confidence that its okay to fly. You saw this week where airlines had to back away from their individual mandates of masks on the airplanes saying to get on it you have to have a mask once youre on it, if someone doesnt want to wear it, theres nothing we can do about it thats where the department of transportation and faa is giving us theyre giving us a platform of jello to stand on. Thats not how my cockpit or plane works. It doesnt go to parties the president wants this back up and running. So do we, but weve got to do it responsibly. Slogans dont work actual actions work and it has to be concrete we cannot rely on recommendations for recommendations. Its a circle of frustration for us and frankly its reckless got to get this right. Well squander the billions of dollars of c. A. R. E. S. Act money that has been invested if we dont do this with some concrete measures its that simple. How are we going to deal with all the pay lots that arent needed right now to fly planes what are the discussions in your group about that stand out in american airlines, we worked early on with our Management Team we have 5500 pilots that have taken voluntary partial pay leaves, conserving cash flow and keeping pilots on reserve ready to roll when we get into the recovery that extends through the summer. Were taking action working with our Management Team. There are other airlines, delta shocked the system by talking about the over age of pilots were handling it in a way that works and it complies with the c. A. R. E. S. Now and in the intent in the future. You had mentioned david calhoun, the ceo of boeing and what he said, another shock wave out there. Based on boeings assumptions on a particular aircraft, the max, our counsel would be just like other ceos, ill just say it bluntly. Tell you what, you fly your jet and well fly ours by the way, one of your jets is grounded so well do our job, you focus on yours and well get through this i think were ending this, andrew i saw you waiving. Were you waiving at someone in your house or did you want to ask dennis a question or do we not have time . Im leaving it up to you what do you think . Were going to say thank you to dennis who had some fighting words there, who i think just made some good news, interesting news with some provocative views. Were going to say thank you to dennis we appreciate it. Were going over to eamon. The house is meeting to consider a new 3 trillion relief proposal eamon javers joins us with the details on that. Reporter good morning, andrew the 3 trillion proposal will be voted on nancy pelosi is one of the best vote counters in the business, but there is going to be some discussion whats in the bill 1 trillion piece, aid for states that have been so badly hit. A lot of governors saying were not going to be able to make payroll if we dont get federal help thats in this bill. Theres a second round of direct help 200 billion for hazard pay for essential workers. 75 billion for testing and contact tracing. 175 billion in Housing Assistance but as i say, there are some questions about exactly how this is going to play out, partly because pelosi is trying to bring members of congress back to washington from across the country. Members of congress are dealing with that right now. Will enough of them show up on the democratic side to actually pass this . Theres a little bit of unknown around that. Also, what are the liberals going to do today . Some of the progressive caucus members have said that they dont think this bill goes far enough they would like to add some amendments they would like some proposals their particular idea theyre locking on to is the idea of a paycheck guarantee for Small Businesses thats a 600 billion proposal theyre frustrated thats not in this bill. Will they sit on the sidelines or vote for it what will the white house say . Will they embrace those direct payments to americans as weve talked about will they embrace the aid to states as some of the governors have asked for the president has been reluctant to do that and has pointed out some of the most hard hit states are democratic states. The states he says are returning the best are republican states will the president come out in favor of the state, so lets watch this we expect this will pass by the end of the day back over to you thanks, eamon appreciate it. States around the country reopening in an effort to support the economies. Governmental aid may not be accessible to all Business Owners joining us on that and how our country can recover from this pandemic is John Hope Bryant john, great to see you this morning. This is an issue i know youve been talking a lot about i know youve written a letter to the treasury secretary, steve mnuchin, about what youre calling a new Marshall Plan and whats needed in terms of government aid to help small Business Owners that are part of your constituency. Tell us about it yeah, good morning. Good morning, all of you, thanks for leading in, being a light for america. Were into the going to be able to deficit fund ourselves out of this well have to deficit fund ourselves. We need Financial Literacy for all. We need k through College Education as a requirement for all. High School Education is not enough to grow this economy in the 21st century we need mentorship for all apprenticeships for all and incentives to do that. I think the way we solve the living wage problem versus the minimum wage problem is not to put the burtd on Small Businesses who cant afford the pay increase you take that and you use the earned income tax credit not a handout, its a hand up. That will boost them 20, 30, 40 in their pay, allow them more disposable spending. We all pay for that because we benefit for that thats going to put most of the money back into the economy. We need an obsession around entrepreneurship, obsession around entrepreneurship. Do you know that 96 , andrew, of all black businesses in this country are sole proprietorshipp no employees with no back room were experlgts at business, bu theres no back office no Business Management we never got a lesson in Financial Literacy, ever, or Business Management. Come a time like this, we need ppp. We dont trust the government, we dont trust banks and our records arent right you have these huge gaps in our economy. This is the time to reimagine everything the double down and reinvest in our own supply chain as you smartly said, how do you trust how do you do business with a partner you dont trust internationally . This is the chance to reinvent and reimagine everything a lot of the crazy things ive been saying on your program are now being adopted by bipartisan leaders in washington. So lets just talk about the living wage issue. Obviously weve had a huge debate about this on the program and around the country for a long time. The idea of a universal basic income is one version of it. It sounds like youre doing a different version of it. But the question is for people who dont have a job or not going to get a job or are going to be hurt by the pandemic, what would your policy be to help those folks . Its short term and long term youll have a dual economy recovery youll have a soft u at the top and an l at the bottom 40 of folks who i have served sorry, 40 of the economy who are hourly workers who have been hit by the jobless claims, it will be an l. Theyll get through it well get through it weve been doing so much with so little for so long the top piece will be the u, the stimulus, Higher Education the folks at the top not being laid off like the folks at the bottom even the recovery is going to be detached i think we have to have some temporary stimulus for those at the bottom, temporary because the government told america to shut down. This wasnt, you know, the failure of Free Enterprise this was a natural disaster, right . Unlike the last crisis where idiots sold people bad mortgages, right this was a natural disaster. The government told us to shut down so the government will within reason have to soften the blow as we ramp back up. Now we have to have a plan beyond temporary stimulus. They have to find a way to help people have a bridge over troubled waters. Do you know at operation hope, in two months, andrew, joe, becky, ive done in two months more counseling than in six months of last year. Its different counseling by the way also its more survival surviving than thriving, but two months and we havent even gotten into this thing helping people reimagine their financials my website crashed two weeks ago. These arent poor people, these are average americans. The issue is we are now realizing we have a fragile American Economy that need to be armed with Financial Literacy. We had a conversation two days ago with senator portman. Hes nonsupportive of the 3 trillion plan which would extend Unemployment Insurance or insurance Unemployment Benefits because one of the things that hes nervous about, i think, is that it creates a disincentive for certain people to go to work. In fact, he talked about trying to provide more money, maybe similar to what youre talking about in a different context, so that people do go back to work where do you stand on that particular issue in terms of people who may not feel comfortable going back to work and how we should deal with the economics of that . I mean, look. You saw a pilot you saw pilots who dont want to go back to work. You have people making six figures that dont want to go back to work unfortunately black people are half the deaths and were only 13 of the population. Thats one group in this subgroup i understand people for Health Reasons who dont want to go back to work i dont want to blame the victim, i want to blame somebody who had no part in this pandemic we didnt bring this on. But on the second part of that, i do agree that stimulus alone is not going to work you incentive advise them to get back to the economy, they will i think the things like the eitc idea, im hoping they will consider this as my other crazy ideas, it makes sense. Probably my ideal politician has a republican head and a democratic heart this is the time for the get it done party get on with the drama has to stop were going to disagree but we cant be disagreeable. We have to get both a bridge over troubled waters and an incentive to get back to work and we have to create a new era of jobs. And a supply chain at home okay. John hope bryant, always good to see you. I know i know you are not used to me shutting up, but i did. Thanks. Becky . All right, andrew thank you. When we come back, wall street legend jimmy dunn has a unique perspective on the market and the economy. He will share thatwith us next in the meantime, futures continuing to drop dow futures indicated down by 250 points nasdaq off by 116. The s p down by 27 based on some of the tension between china and the United States and how that is coming home with the huawei news this morning, well talk remo about that when squawk box comes right back this is a tempurpedic mattress. And its mission is to give you truly transformative sleep. So, no more tossing and turning. Or trouble falling asleep. Because only tempurpedic uses proprietary tempur® material. That continuously adapts and responds to your body, to relieve pressure. So you get deep, uninterrupted sleep. All night. Every night. The tempurpedic summer of sleep starts now, with all tempurpedic mattresses on sale, and savings up to 500 on adjustable sets. Breaking news. Futures dropping sharply this morning on fears of reemerging tensions between the United States and china we were flat in the premarket two hours ago. Now we are down 250 points were expecting more bad news at 8 30 a. M. Eastern time were anticipating another record drop. Were going to talk about what happens when u. S. Businesses start to come back. Connecticut Governor Ned Lamont will join us ahead of the states reopening process. The final hour of squawk box begins right now im joe kernen good morning with becky and Andrew Ross Sorkin watching the futures worry about the china deal china trade currently down 266 points i havent seen much worse giving back a lot of the gains that were hard won yesterday after we were down over 450 points. We closed up almost 400 giving back almost 300. 265 points this morning. Nasdaq taking it on the chin down 136 points now. 599 want to tell you about the freshness. Commerce is targeting huaweis ability the editor in chief from chinas global times based on what i know, he wrote, if the u. S. Further blocks Key Technology supply to huawei, china will activate the, quote, unreliable entity list that would restrict or investigate u. S. Companies such as quale com, squalcomm, cisco and apple and suspend the purchase of boeing airplanes they will allow businesses who do business with huawei through august they suspect this will be the final such extension that is weighing on markets and raising all sorts of new geopolitical and trade questions. Becky . Andrew, thank you its been a big week for the markets and for the fed. Central bank chief jay powell said that more fiscal stimulus from Congress Might be needed to pull the country out of the economic downturn. Thats despite the trillions of dollars washington has already spent. Joining us right now to talk about lots of things is wall street legend jimmy dunne. Dunne is hosting a Charity Golf Tournament benefitting front line workers that airs on cnbc and other digital channels. Nice to see you, becky. Im doing great. How about yourself pretty good pretty good. Why dont we start with what jay powell had to say this week because obviously that impacts the banks and the financials pretty largely he said no negative Interest Rates. Maybe thats the one positive things banks could take out of a lot of negative things he had to say. Well, you know, obviously i agree with that. Negative Interest Rates are counter to everything we are as a Capitalistic Society just the thought of it borrow money and ill pay you. It makes no sense at all it hasnt worked in japan. It hasnt worked in germany. I thought the chairman was totally correct and its a really bad idea. You know, we have to get back to work we have to do it safely. We have to do it as carefully as possible but any future legislation should come with a real high bar for the lawyers, if businesses are brave enough to open and do it smart and do it carefully and are sensitive, as much as humanly possible to this pandemic, theyve got to be able to be assured theyre not going to spend a lot of money in court and have a lot of distractions i think the fed chairman is going to try to do everything he can and, you know, lets face it the fed can push the market but it cant push the economy forever. So we have to get back to, would. I dont know exactly how we can do that, but it seems to me that closing the schools and shutting down is going to do far more damage than the pandemic is doing. Jimmy, in is very different than the financial crisis when the banks had so many issues how are the banks situated this time around . Well, youre rate its night and day different in 08, not really just the banks, but all of the lending vehicles there was just too much credit there were people get being buying 4, 5, 6 homes that couldnt afford one and just, you know, Interest Rates are going to come down real estate prices are going to go up. Thats how i make money. And the banks or the lenders, it wasnt just the banks, are really the cause of a lot of excess credit and maybe they werent the cause but they were an enabler to the crisis this is entirely different this time around. The banks can very much be a solution i talk obviously, becky, as you know, to bank ceos every day it seems to me for the most part they kind of remind me of a group thats sort of battend up for a hurricane, ready for a real storm so far it hasnt been as bad as it could have been so i think that theyre cautious. I think to date its been better than we thought. We have a long slog. Theyre in much better shape and much more part of the solution now than in the 08 situation. Thats the u. S. Banks european banks never really got their houses in order the way our banks did. What do you hear about banks there . Europe is a mess. Its been a mess for a long period of time and it doesnt seem like its going to get better real soon so i think, you know, the United States has got real challenges ahead, significant longterm challenges that this is going to cause. By comparison, it seems to me that europe is way behind and in much worse shape and asia seems to be getting through it faster. They were earlier. Becky, a client send me a clip it was the beginning of this, whatever we think about this, multiply it by ten he said, you were right, i said, no, i wasnt right we should have multiplied this by 1,000 europe was slower going in, theyll be worse coming out. Im a little worried about the United States right now. Maybe thats the wrong attitude, but we need to do this i mean, your last guest, i think he said something pretty good. A democratic heart and a republican hand. I kind of like that. We need to get together and figure this out. Hey, jimmy, couple bank questions. Do you have any worry that this really trickles back up to the banks in any meaningful way. So far the banks have obviously been in good shape theyre in much better shape than they were in 2008 as we started to see some of these big retail bankruptcies, as youre going to start to see, i imagine, rent and other things start and mortgages either not get paid or get renegotiated, what that wheel really means, and who to the degree that there are banks out there that are susceptible to that, how do you think about that landscape who should we be focused on or not . Andrew, i dont think its a thought. Its nice to talk to you but i dont think its a thought its a reality there is no way in the world that this is not going to affect negatively banks, okay it is 100 going to, all right the reality is, and ive said it on your shows a lot, you buy banks at sort of below book and you sell them at 2 1 2 times book and the reality is right now the banks are ahead. Theyre telling you theyre down 30, 40, 50 . You look at the Third Quarter of 19, whereas the tech stuff is up 10 or 15 . That sort of tells you thats a real good view of where the world is now im not saying the banks cant do better from this level. I happen to think that they will i happen to think theres more risk for some of the stronger, better banks at down 40 or 50 in trading at 60, 70, 80 of book than there is its just that book, its not a matter of theyre down at 70, theyre going back to book there is going to be a new book and at that point, and i think theres a cushion to invest now from how much theyve come down to book, but banks are absolutely going to be affected by it. I think it makes sense to you know, to buy strong banks. You know, i dont want to say which one, andrew, you know i cant do that, but obviously areas that are less susceptible. Banks that have a lot of exposure to energy, thats going to be in trouble for a while banks that are very, very involved, big restaurant lenders, theyre going to have problems, but and everyone is going to have problems everyone in the country because, you know, this is not this is going to be a long slog. You dont have 40 Million People go out of work and then 40 Million People come back to, would. So were going to deal with an environment very different than we had for several years its just that i think that the price, how much, how far theyve come down, i think if we can get back to work, we can make up some of that some of those losses more quickly. The longer we stay out, the worse its going to be im not trying to be insensitive to the health risks. I understand that. People that are like me that are old and overweight and used to smoke cigars should be careful, all right . But theres a you know, the younger people, people that seem to be less vulnerable to this, not 100 but far less vulnerable, they have a right to go out and get back to work and do something hey, jimmy, its joe. Im going to try to turn myself away from the russian table tennis tournament this weekend on sunday, but its possible theres actually a sporting event, thanks to you, and its going to be for charity. It will be on the best tv station, too, on nbc yeah. It will be like the greatest course has there ever been a camera on that course for a tournament, jimmy . Not allowed we have people shot if they took a picture, you know, in years past at seminole no, this is this is historic in the sense to seminole weve been low profile and camera shy my past president s are rolling in their grave or unhappy with me, and i would understand that. The reality of it is we want to do something and the people you really ought to thank are ricky fowler, rory mcilroy, Dustin Johnson and matt wolf they want to do something. Theyre obviously not getting paid to do this. Nbcs not making any money seminole is not making any money. Were really going to try to raise a lot of money, millions and millions of dollars for people who need it this economy is desperate right now. Were going to try to ease as much pain as we can. Its something seminole wouldnt normally do. I thought nbc felt it would add to the panash of the event if they could host it at seminole nbc sports coverage, they cover notre dame football, thats obviously the most important thing other than this tournament this weekend, joe. I think it will be a lot of fun. Jimmy, you couldnt get anyone better than mcilroy, johnson and Rickie Fowler and matt what happened . Everybody thats a pretty good group we wanted to get all florida residents. Rory is one of the pro members he played in it seven times. Matt played in it. We appreciate pros that have been supportive of the pro member event i dont know that theres a bigger story in golf than rory mcilroy. You must know someone at seminole to be able to do that thats exciting. Fantastic. 2 to 6 i dont know who you know. You have some pull down there. Maybe the guy that runs the whole place, you might have a relationship with, yourself. 2 to 6 2 to 6. 2 to 6 on sunday. Something to watch . Live golf live golf. I dont know what to do. We wont have any fans and were going to be completely consistent with the covid world. Conjure up some wind. Id love some wind. Id love some wind i wish there was. Eats me alive that makes me know i suck when i play that place. Go ahead, beck jimmy, you mentioned notre dame and youre on the board of trustees at notre dame a few questions for you. Are kids going to be going back to school . Will notre dame have classes will you be playing notre dame football in the fall well, i get what i deserve for bringing that up i was going to ask you anyway yeah, okay, good. That made me feel better you know, unlike seminole, im not in charge of notre dame. I am merely a voice and hopefully a cheerleader. We at notre dame believe that on campus education is really, really important the relationships that you build, the time you spend in the dorms, the time you spend in person so probably more than most schools, we dont think that you can just do it online and get the full value so i would say that our administration, our chairman, our executive committee, our trustees, we would really want to try to do it with as little risk as possible, be as careful as possible, but i think were going to want to get to school sooner i love what Mitch Daniels has done at purdue i applaud him. In the end he has a good governor he seems to want to get back to work if we can do it safely, we will do it. And that wont be a decision that ill make we have different rules there than we do at seminole if we can do it safely, well do it i hope that we can we wont play football unless we can do it safely and have all the students back. Imy, so good to see you and i think everybody is going to be watching you this weekend at seminole we will see you again soon give. Pick up the phone and give money to this cause. They need it. Just cant believe you thanks, jimmy. I cant believe you swung that on seminole the whole world gets to see what everybody else is just seeing every part of when youre there. Thats awesome nbc. Lets hope its awesome on monday nbc theres no crowds not going to tear anything up. I might if i were playing that pro amateur that you have. That was formerly the most famous thing that goes on at seminole that ive never been invited to. Coming up, retail sales number, all of wall street will be watching. The plunge in march was the worst on record. April is expected to be worst. First off, were going to check in with the governor of connecticut as weve done several times during the pandemic and ask him what hes most concerned about stay tuned, watching squawk box on cnbc there are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Welcome back to squawk box this morning new yorks Governor Andrew Cuomo saying five regions around the state will be allowed to start a phased reopening of their economies today. That doesnt include new york city in connecticut the reopening is set to begin next wednesday. Joining us right now is connecticuts Governor Ned Lamont governor, thank you for joining us thank you for hosting me in your great state. We appreciate what youre doing. What are you looking for i just heard your last bit. Its worth noting that connecticut will be hosting the travelers Golf Championship at the end of june. That in kronwall, connecticut. The seminole of new england. That will not be in front of a real audience, in front of a tv audience these are all the baby steps we have to get back our metrics are going in the right direction as youve heard from others. Thats hospitalization is really key because that speaks to the capacity of our system and were getting our testing and track and trace up to speed very quickly. Well be doing over 42,000 tests in place just outdoor 90 less likely to get infected outdoors than indoors. Doing a little bit with some of the hair salons and some of the main Street Retail whats the next step after that well take two or three weeks. Do people follow the protocols, restaurants, people Wearing Masks and gloves, sanitizing between meals, six feet apart. If it looks like its working pretty well, june 20th will be our next phase wed think about what wed do from there can we talk about the budget in the state of connecticut . Its going to become an issue if it isnt already, not just in connecticut but in new york, new jersey, specifically around the tri state area it will be a problem for states and municipalities around the country. What needs to happen here . Whats the fair way to deal with this so what the feds have done is theyve reimbursed us for covidrelated expenses, which was very helpful, ive got to say. If i have we were in good shape. We had a balanced budget this thing hit and all in the last three months were looking at a 1 billion deficit in this fiscal year which ends on june 30 90 of that is related to the fact that not just income tax has disappeared but sales tax took a whack usually sales tax is a little more stable. Because we shut down the service piece of our economy on the strong recommendation. Feds, that has taken a hit were in much better shape than our peers. Unless they get a help to make up for the revenue shortfall. What are you projecting out longer term . Clearly theres been the stayathome orders have obviously been demonstrable impact on revenue to the state theres larger questions about the next 12, 18, 24 months as to what the economies look like in some of these states given maybe not stay at home orders but social distancing requirements, people who were laid off, may not be getting back to work, anxiety just about the peoples own station and economic station in life and, therefore, what they do when it comes to spending yeah. Our budget calls for a gradual coming back and we will see. I have pratt and whitney the military piece of their business is strong the commercial piece of the jet engine business none lets face it. I think that could take a little bit of time to come back how fast will people come back to restaurants you look at georgia, theyve been sort of the canary in the coal mine. The good news is you havent seen a lot of spikes the bad news is people are heading back very slowly so it hasnt made much impact. I think that example is what we should plan for in connecticut people come back cautiously. Weve talked a lot about the future of work one of the things people do talk about is people getting out of the cities, people going to the suburbs and whether theres going to be effectively a reverse trend and how that wo s works. Does that benefit connecticut . If new york city is not as strong as it used to be, what does that really mean given that theres still a huge commuter portion of the tax base of people in connecticut . Look, i love new york city. I think its the Global Capital of the world and connecticut southern connecticut has benefitted by being part of that same ecosystem theres no question about it phones are ringing off the hook at real estate offices all throughout southern connecticut. People are realizing telecommuting doesnt mean you have to be in new york city five days a week. It means if you have to stay home for a period of time having a nice little backyard is not a bad way to do it so i think people will be taking a second look at connecticut because it has some real advantages here. Okay. Governor, its nice to see you and we wish you lots of luck with the reopening thanks nice to see you guys. Thanks absolutely. When we come back, breaking retail sales data for april. When businesses felt the full weight of Coronavirus Closures well get to that in a moment. Take a look at shares of office depot. That retailer planning to cut more than 13,000 jobs by 2023 as well as close a number of its stores the company says that the restructuring could save it as much as 860 million stock is up about 2. 5 thats aicll nke stay tuned, youre watching squawk box on cnbc coming up, the number of the morning, april retail sales due out this morning leyre expected to be ugly. Wel have the data when squawk box returns right after this. 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Of course this is an alltime low monthovermonth change with regard to the history going back to early 1992. If we look at x autos, its down 17. 2 x autos and gas sales down 16. 2. And i want to point this out because i think this is something we really need to Pay Attention to in the future, these are all seasonally adjusted numbers that process is imperative because the seasonal process doesnt assume the economy was intentionally shut down, which really does change everything. So sometimes nonseasonally adjusted may mean never so well continue to monitor those throughout the day Empire Manufacturing for may is out as well. Wow, minus 48. 2. Minus 48. 2 this follows an unrevised minus 78. 2 for last month. Obviously the minus 78. 2 is an alltim record we have industrial Capacity Utilization coming up. Some of these numbers have been around basically close to 50 plus years or more, at least my records go back that far im sure were going to challenge history on both of those numbers especially on the Industrial Production side and utilization rates. Consider energy. Andrew, back to you. Thank you, rick were going to continue this conversation rate now. Stay exactly where you are Steve Liesman is also running through the numbers rate now want to get his take on whats happened just here steve . Reporter yeah, andrew, you know, the countrys shut down and people arent buying stuff i mean, i hate to state the obvious, but this is an obvious statement in bold relief here. Theyre not buying cars, down 12 . Theyre not buying furnishing and Home Furnishing items down 58 . Clothing and Clothing Accessories down 78 i mean, theres one positive here i think there is just one positive, and that positive is nonstore retailers up 8. 4 besides some sort of strange up and down we had december 18th, that is the largest onemonth increase and that is electronics. Thats where people are, indeed, buying things. Nonstore retailers down 29 i want to just say a word here you have gasoline station sales down 28 in this case because people arent driving, they arent really getting that rebate necessarily. Theyre not paying as much for gasoline and getting into work theyre not getting the stimulus you might get. Similar ideas for the decline in Federal Reserve Interest Rates the nation is shut down. That shut down showing up dramatically in these retail sales prices retail sales report here and were just not seeing yet any kind of evidence in the early may data. Much of a rebound, andrew. Steve, one thing though and i dont know if this is promising or not, you look at the auto numbers. You look at those auto numbers versus what the auto numbers were in china, for example, and it was a much worse situation over there so the question is why do you think that you know, how do you whats the distinction . Im going to pass on that i dont have any actual information on how the auto dealers at all are selling cars these days it was down 33 in april sorry. Yeah, 33 in april, down 25 from february its down pretty substantially it was better in china ill leave it to phil how hes going to explain that to us. No, no, in china we were talking 70, 80 down its a fundamentally different picture and trying to understand the distinction from our own market and to the extent were looking at other markets to try to understand what was going to happen here. Meantime, ill throw it back to joe. Thanks, steve. Talking to steve. Yeah, steve, gas is cheap but youve got nowhere to go i was going to say reporter right. Theres a great cruise leaving on monday on carnival. Tickets are you can get a suite, beautiful what do you say . Ive got a coupon to a massage place, regular, for your back. That may not be great to have, you know, 20 off on that either, do you think, steve . None of these things work when were not doing anything, do they reporter no. No i think the best side of normalcy, joe, is that you feel comfortable enough to joke around im with you on that, i never know what the right tone is. Youre right, there are a lot of bargains out there, but people are not necessarily going to take advantage of them look, in the real time big data that i reported in the 6 00 hour, im nervous about how to use this data and whether or not its really telling the story. We have these pictures of people going out to restaurants, but i just look at the data. Jpmorgan institute is putting out real time credit card data people are just really not spending because theyre in their houses and i dont know, beckys the best barometer of all. Becky, are you ready to go to a restaurant i keep telling people im not even doing takeout. Reporter right i tell people, look, lets make a bet. The bet is i will buy you a steak dinner at a crowded restaurant if im wrong because thats what i really want to happen thats not what im seeing yet steve, the one thing i want to add to that though is we are all in a very different place than much of the country i mean, in new jersey, in connecticut, in westchester and in times square, i mean, were in the hot zone, every single one of us, and thats a different story than you might see in a lot of other places steve reporter i recognize that. Joe go ahead, joe i want to say one thing real quick which is i am looking at this data across the country and im not seeing it certain pockets, but im not seeing this wholesale get out the pictures show these people in the restaurants, whats going on there . Im not seeing the data. Sorry, joe. I have been telling my kids and my wife were going before the end of the month to a steakhouse and that we went to we actually went once in march and thats my story and im sticking to it, although new jersey may not cooperate im ready. The table where we normally sit is not right next to all the other tables so the waiter wears a face covering, right and weve been getting takeout so im different that way. I would youre not ready by the end of may to go to a restaurant, steve, no way . I dont know, joe no takeout for you either . Reporter ive been im an excellent chinese food cook, joe. Born of my days in russia when there were no chinese restaurants here weve been doing some takeout. Support your local businesses do some takeout. Ive been buying gift cards. Reporter i promised my whole family to meet in cape cod on memorial day weekend daddys going to have to eat some crow. Thats what im saying, by the end of may were going back to celebrate something anyway, rick, do you have zment. What does penelope say . Were going one question. Everybody is talking about these numbers like you are, autos, joes asking about autos seasonality and seasonal adjustments is like an artificial adjustment learning process. Over time it catches up and realigns we havent had time to do that this year it isnt going to learn much whether its inventory, the way maintenance goes up and down running shoes, the seasonality is there theres a lot of issues. Continuing claims yesterday. The difference between continuing claims, seasonally adjusted and continuing claims nonseasonally adjusted was the spread of over 1 million jobs over 21 plus million it isnt insignificant with the retail sales, these are the same we need to be careful about drawing conclusions on data the way we used to because seasonal adjustments are not going to be accurate even though theres a variety of different numbers and how theyre calculated they have a state bias on how they adjust. Its all quite complex and over time it will catch up. These numbers could be exaggerated one way or the other. Rick, you made an excellent point in your opening reporting of the data about the seasonal adjustments. I meant to Say Something about that, forgive me for not, that you were 100 right. Because of the uniqueness of the huge declines that were seeing, the seasonals are being wiped out and not very useful and the continuing claims might have been better, not necessarily true for the current claims out there. The bls current claims, too current claims yesterday were current claims were down about 190,000 yesterday from the previous week. They were down over 220,000 on a nonseasonally adjusted basis that much much closer. It would have been down 621,000. So these numbers are real. They will get smaller though most likely, the differences im saying the difference in that was much smaller, plus add in the idea that connecticut messed up and added 270,000 to the claim. We always count on people messing up thats part of the system. Its the white noise. Not like that nobody ever messes up in the amount of a weekly a normal weekly amount of 270,000. Were going to bring somebody else in here whos a couple more people, both experts. More reaction and retail data. Lets bring in jan kniffen and our own Courtney Ragan jan, youve been listening to all of this. You probably are ready to for me to just let you go. Go well, ill tell you, the numbers werent good its true, whether the numbers are meaningful or not, we dont really know from the point of view of the actual number, 16 , really 10 , was it 14 , who knows . Doesnt matter the point is it was really bad we knew it would be bad and we know what wasnt selling what wasnt selling was all of those stores that were closed because the government said you have to be closed and people didnt want to really go to them anyway, as you just said, and they didnt really want to go to restaurants even if the restaurants had been open. What weve just seen is the worst month. It will be better in may because everything is starting to reopen in some parts of the country the numbers will get better. Most of those stores are opening at about 55 of what they would have done the same time last year thats a real number that tells you just how tough it is that you cant get them back in the store yet that number will gradually rise and will be at 70 , 65 before we get to holiday and then if were lucky well be in the 90 range by the time we get into the holiday selling season thats what that number has to look like for things to be good. This number we just saw was terrible but nobody thought it could be anything but terrible however, we do know that pajama sales were up 150 what does that tell you . Oh, yeah. That makes sense courtney, your beat used to be it was never boring. Bricks and mortar going one way. You didnt know this was coming, did you . Reporter yeah, these are some pretty wild numbers, joe. I know when we talk about the government retail Sales Numbers were looking at this monthovermonth comparison which is important when we were looking at april that was much worse than march because only about half of that month was shut down, but i also want to look at the yearoveryear numbers which are pretty interesting, particularly when you look at the food and beverage and the grocery sub segment. Grocery store sales were down 13 in april, which might be surprising to some, but if you think about that hoarding and that stockup behavior that we saw in march, that kind of makes sense. Maybe you didnt have to bias much when you went to the store in april as you did in march, but you still bought more than you did last april because Grocery Store sales were actually up 13 from last april. So i think that might be indicative of behavior weve seen similar commentary from the likes of costco when they were talking about food, stockups, the patterns of behavior the other interesting point though is we have been hearing a lot about strong sales in the home areas people are sitting at home looking around for things to sort of improve. Im talking more about Home Furnishings, not so much home improvement. That wasnt a good number. Down 59 in april from march down 66 year over year. So i wonder if theres a little noise in there and if that might shake out. I agree with rick and steve that i just dont know how much we can put into some of these numbers. Were going to have to see over time how this plays out. Jan, jcpenney, i mean, its going to keep happening, i guess, right well, j. Crew already filed niemans already filed we know that stage already filed and penneys will file and john mervados filed, weve had a lot of retailers already file. Were going to have thousands and thousands of stores that only reopen long enough to go out of business. That was already happening we knew there was going to be shakeout in this industry. 2014 i was back on your show saying were going to see 50 of nonbar, nonretail online by 2030 now it will be 2025. 10,000 stores a year will close now well see 50,000 stores close this year. Its all just being accelerated by covid but theres no surprising things going on here. The retailers that are struggling are continuing to struggle and theyre struggling harder because cash flow went to zero for a lot of them thats never happened before in the history of retailing if you were down 10 in a recession, its not a big deal now its zero six weeks, eight weeks, whatever. Even when you come back your cash flow will be 50, 60 of what it mormly was you cant make a living there. You continue to see people fail even when we start to put the stores back together this is just an acceleration of the trend. We are going to go online. We are going to go digital, we already knew that. It will just come a lot faster since covid is patching that and now the consumer doesnt feel safe they dont just want convenience now, they want convenience and safety and thats harder to deliver. Its expensive to deliver. So the cost structure is also going to get worse for all these retailers as they have to do all of these things to make the consumers feel more comfortable. Final words, courtney then were going to go. Reporter i think were going to have to watch this sector, joe. I totally agree with what jan is saying it is not that covid19 and amazon killed retail these were trends that were starting to happen and this is an accelerant. Its like putting lighter fluid on a fire that was burning and smoldering. Thanks. Liesman, have you been to the supermarket . Have you not done you havent left your house . Is that what i am to understand . Reporter joe, i called the harbor master, whos a friend of mine, to get the boat in the water before they shut it down i get to go out and social distance with a fly rod. You have left the house okay good that sounds good yeah youre safe out there probably unless youre reporter thanks, sal. Thank you, jan. Reporter shout out to sal. Rick and steve, thank you becky . Hey, joe, just heard from a guy on twitter who said he went out to a steakhouse in omaha this week. I read that. The food was excellent. Felt very safe masks, glove,great care taking the vibe was horrible not because of the restaurant but its weird to have people serving you dinner in masks and nobody else around. We go out as a fam. We dont need anyone else when we go out as a fam, the four of us we make our own vibe i dont need happening people and stuff like that. Here you go, sir. Thats fine they better have masks on if im going to eat it. Anyway all right. We have much more on the markets as we make our way towards the opening bell right now we also want to draw your attention to the price of crude oil because yesterday dwi closed above the 50day moving average for the First Time Since january 9th. Big deal up another dollar today. Gain of 3. 6 28. 57 28. 57 28. As we head to a break, a programming note for you dont miss the interview with anne wojicieki this afternoon. Welcome back to squawk box. Futures now are down theyve been worse than they were, but down about 250 points. Down about 2 and change when the numbers came out and they did sell off most of the numbers were worse than people thought. Then you heard all the all the going back and forth about what it really means worse than expected, but we knew it would be bad. Andrew, well see what happens long way until 4 00. Right thanks, joe. When we come back, well talk to jim cramer, get his thoughts on the trading day ahead and how things will play out ahead of this weekend and talk markets with jeff saud vo since our beginning, our business has been people. And their financial wellbeing. Its evident in good times, with decisions focused on the longterm. And crucial when circumstances become difficult. That continued emphasis on people our advisors, associates, clients and communities gives us purpose, strength and a way forward. Today. And always. Welcome back to squawk box. Want to get over to cnbc headquarters where jim cramer joins us now about 250 points lower on the dow now. We have the overhang of this huawei china news which i think we should dig into but also the retail numbers what do you make of both you guys covered it unbelievably well. Those of us who get up early know it looked like a good day, a followthrough day anything that is china tension attacks the stock of apple when apple goes down, thats been a bellwether of nasdaq and it turned around applied materials. They were up big last night, now amats going down amat is the stock to watch retail numbers, what can i say theres a horrible distinction between essential and nonessential when they we were talking with Planet Fitness last night, when they made liquor essential and gyms not essential, it wiped out a lot of gyms. So theres only one strong gym all these numbers pointed to the same stocks doing well, costco, home depot and lowes, amazon and yes, walmart its target is doing well everybody else doing poorly. Amazing article on how fedex is cutting back hours on the ones most hurt. Theres only a couple places for us to go is there anybody out there who is a dark horse stock in the retail world or inperson world where you say to yourself, you know what . They were beat up so badly, but when this is all over theyll make it. I was going to say ollies, because they lost their founder, mark butler, theyll come on strong of the low ones that are restaurant or retail, no the stocks are telling the truth. Thats what is so diskourcourag. Theyre telling the truth. The real issue here, andrew, these places hire. These are the places where the jobs are everyone knows it. These were the places where you couldnt for 15 an hour, i couldnt get a dishwasher. Now theres no dishes to wash. I like the old days when i used to complain about the high price of work. That was found how have you been . All right . Were all trying to hold up i think were doing okay youre out. Youre in a beautiful area clearly in a beautiful area. Im stuck here but your area seems to change every day. Oh, my area my physical area yes i see looks great reminds me of the old days is that a precovid picture . Yes, precovid picture. Well get different images for you. I have to send it over to becky. Well see you in a little bit on squawk on the street. Talk to you soon. Becky joining us for more on the markets is the chief investment strategist at Capital Wealth Planning are you still feeling the lows are placed in this i think the lows are in i dont think theyll get retested two weeks ago i said the market is in for a rough spot here for a while. You know the economic numbers, the retail sales will be ugly. I think the market will look by that as things reopen, i think theres i dont know how it is in new york, but everywhere else i talk to in the country theres huge pentup demand for people like cheryl and i who want to go out to restaurants again. I think the markets will look by this upcoming soft spot in the economic reports, and the softer earnings that will be reported and well look for a pretty strong pick up in the back half of this year you know, the knockon effects from Something Like retail where you hear from all these retailers filing for bankruptcy and others closing lots of stores, that feels like its not going to be as simple as just reopening things, right . Yeah. Thats a fair point. One of your earlier guests talked about that might have a knockon effect with some banks. Which is probably true but again, i dont think its going to be that big of a deal i do think theres huge pentup demand out there we have not been able to go out to restaurants for five, six week weeks. Right what do you do in terms of the market, jeff, if you think the market will look past some of these bad numbers, what is a fair valuation for any of the stocks youre looking at i said on cnbc and i wrote in my letter the past two weeks that the market is in for a rough spot here. My models dont tell me how low it will go, but i dont think the lows we made a couple months ago will be retested because i think youre going to get a pretty strong pick up in earnings in the back half of this year. I think youll get strong pick up in Economic Activity in the back half of this year and theres a ton of cash on the sidelines. If you talk to the Retail Investors, theyre still scared to death thats not the way, you know, market you know, blowoff highs are made so i think were still in a secular bull market, secular bull markets last 15, 20 years i think we have 5 to 10 years left in this one very few people believe that right jeff, we have about 40 seconds left what do you think it would take to convince Retail Investors who have been on the sidelines to put some of that cash to work . I think it will take, you know, a rise in the equity markets to new alltime highs, which i think will happen probably in the First Quarter of next year. Wow okay jeff, its good to see you i hope you get to enjoy your dinners out. Yep well talk to you soon. You bet were looking at the markets now, the dow is down by 220 points we have seen it down about 266 was the most i had seen it down. S p down by 26 the nasdaq off by 130. Have a great weekend, everybody. Well see you back here on monday morning squawk on the street begins right now. Bye, guys. Good friday morning welcome to squawk on the street. Im Carl Quintanilla with jim cramer, david faber live from separate locations futures are red. The bears can pick their poison today. Retail sales down 16. 4 china tensions, as the u. S. Moves to cut huawei off from u. S. Tech. Some states that have opened like texas, showing record high daily case load. It was the huawei news that took the wind out of the sails of futures earlier this morning yeah. Im not saying its unexpected a lot of the Chip Companies i know have built in the fact they wont get huawei business. I think the thing that