Transcripts For CNBC Squawk On The Street 20240713

Yes look, theres no doubt about it, as becky said, things are better after than before. Skeptics will say you cant ramp up this rna. Moderna has been saying they can do 800 million to 600 million to 900 million vaccines, and i think therefore the move in the dow and the move in moderna makes sense. Do i want to chase moderna no do i feel like things are better its hard to believe that anybody could do this this fast, except for moderna i want to caution people, they have never really done anything. This is a very, very big deal. But there are people scientists i talked to this morning who say look, so far so good thats much different from the way i felt on saturday when i learned that the oxford test that everyone was so excited about did nothing. So this is not on prime mateates is on humans if youre negative on the market, you have to rethink. People will say we have to buy value. Autos are pumping. This is good news. You dont think its a sell and stay at home kind of stocks day . I think Everyone Wants to do this, but this is something theyll be ramping up another trial in july. We might be seeing something in the first to Second Quarter. I know everyone people will want to sell General Mills watch kraft, that will be the tell i used to have a barbell philosophy, you should have some disney, some General Mills will the people say its crowded . They always say everything is crowded when its working. Tomorrow you have to ask yourself will moderna be on the tape again with good news . The answer is no well be talking about the difficulty of making a vaccine i in particular am focused on retailers this week. This is a walmart home depot week this is not a kohls or Urban Outfitters or l brands week. As far as im concerned, the mall didnt just resurrect itself because of moderna. The numbers will be bad. Id rather be in target than i would be in, lets say, Bed Bath Beyond how about that some of those stayathome stocks may not perform as well as some other names you mentioned today because of this news, i guess. You made the point, moderna is a fairly promotional economy, not to take away from it, but joe on squawk box also making the point, its eight patients so far. Were talking about a i mean, a vaccine, you know, you do at some point have to establish safety at large scale, 50,000 people in a trial, things of that nature. We are moving at speeds we have never seen before and doing things that have never been done before, were all hoping against hope that this does work in a larger context it does need to be taken in context. Right we dont know how long maybe the antibodies last for three months maybe these eight people were kind of like selected by some of the drugs that like some of the drugs we heard about that got everybody out of the hospital quickly and it turned out they didnt. Moderna is happy to come on quickly. Thats great we always want to hear from anybody doing good but 8 for 8 is not 8 billion for 8 billion. So therefore the stayathome stocks, they sell off this week, maybe they sell for two, three days then the American People forget. Ill tell you whats more important than moderna is will the states that had bars that were packed this weekend have breakouts . If they dont, a lot of these places youre letting the youngest people out. If theres no breakouts, then you can get something moderna or something j j, we have so much money sloshing around the system it could be incredible you would do theres no social distancing in the crowds that i saw now, i live in nunew jersey, the worst state in the union, but some people are acting as if its over. Yeah. This week will be very big gm, ford and fiat resuming production in detroit. Apple will open up 25 u. S. Stores this week disney will open their Walt Disney World shopping area on wednesday, jim so you think were still in a mode of watching the reopenings and bracing for an uptick in cases, which is also sort of hard to divorce from the testing thats Getting Better. I am concerned. Look, we live in an area where there was a very big contingent, bellmawr, i have a house near there, really having a great time on the beach. Your hope is these are young people who somehow do not have parents and could be asymptomatic and not maybe not get it i dont know where were all those people three weeks ago . I feel the reopening is being trumped by the people who say you know what . Reopening means all clear. Now, in new york obviously i cant open my restaurant, ill get arrested a lot of places are flaunting. A lot of places are saying listen, it was mostly nursing home people. A lot of people are saying its a hoax these people were out in full force this weekend look, it would be fabulous if there are no outbreaks it would be fabulous if the eight people was a harbinger for 8,000 when we do the july testing. Then well say there were trillions pumped into the economy, now were having no social distancing, everything is great. The market breaks out to new highs. Right and meanwhile chair powell on 60 minutes i think taping something not far after his comments that we carried live, talking, jim and carl, about the fact that the fed is no limits i guess is one of the keys even before we got the moderna news this orning, the market seemed poised for gains of what seemed to be some new language from him or at least said in a new way or to a different audience perhaps from questioners who obviously are not as deep in the weeds as we are in terms of fed parlance and policy i do think what happened he speaks to the regular people. The people at home kind of like when ben bernanke went on in march of 2009 and said this is over. Were not going to let more banks fail when i listened to powell, okay, it looks like by any means necessary. They dont want more layoffs so you combine no more layoffs, moderna, fed cheief who was much more go, go in terms of making sure people wont be laid off anymore on 60 minutes and number of upgrades a big week for stocks that could do well. Europe was strong. There are there are a number of green chutes, what can i say . If moderna is for real, i dont want to say it its just too early to say its for real it is too early i dont want to do it its hard to know where the starting gun is, jim, on promise like this. Your point about upgrades, nvidia taken to outperform doubles the target to 425. Thats a longerterm story on ai and data analytics, but williamssonoma with an upgrade on the idea that people will take their travel spending and use it in the kitchen. I love that thats one of the names youre supposed to sell off of good news from moderna. Thats typical of whats happening. People are still afraid to go somewhere. But they still have excess money. Theyre not going out to dinner. Theyre not doing anything take some of the money, you can go to home depot or williamssonoma website. The Jenson Wong Nvidia upgrade stocks, reports from the 21st, it will be a blowout number. My travel trust belongs to the crowd that loves nvidia. My dog is named nvidia at the same time, again, up 20, its like moderna. Is moderna going to be up 30 today . Probably if you buy it here, maybe flip it if youre a trader or short moderna because you think theyre promotional, i dont know what you do i dont know i used to say theres certain things you would do, theres certain societies that say you have to stop promoting that. That stock you saw jim, you saw the move in serento. Did you see that move on friday on antibodies . They could potentially work. Who are they . I know. That was quite a move. Looking forward to talking to the ceo. That will be good until this serento, it was a fabulous town. You can go back now. I look forward to going back to italy as soon as possible i do, too maybe ill let you have my house. Maybe, maybe not maybe that will be the first place you and i spend some time together jim will we bring our wives or just you and me kind of hiking you know, i mean, either one. When is dr. G. On when do you have them. The 10 00 hour. That stock is paraboliparabolic. David, you would have been eviscerating some of these yes yes. I think thats a fair statement. Carl, i dont know. Hope is springing can we wait maybe maybe there are no outbreaks there are a lot of us in the north who are maybe you want to talk macro, too. Look at oil, carl. Were above 30 now were in the 30s, up almost 10 on crude remember the last contract expiration that did not go well, jim. June expires tomorrow. You have production cuts that seem to have happened faster than some people thought obviously a huge return to driving. All the mobility data bears that out. 32, right . We talked about the three handle last week. They did turn the spigot off. I asked mike worth the ceo of chevron, by far the best oil company i believe and its done well, why didnt he go down there and bid 2 for it. It moved too fast, its not what we do he said. But this time there will be companies that have Storage Space who will if it gets down like that, theyll snap it up i think theyll just go around the tanker theyll rent any tanker. Theyll rent a princess tanker not really a tanker. How about the saudis disclosing stakes in boeing, facebook, city, disney, marriott, berkshire this is all going back to march 31st they were bottom fishing. I thought live nation, thats a real vaccine shot. Isnt that you have to have that work its entertainment they didnt im surprised they didnt take Warren Buffett out of goldman he hammered goldman like you wouldnt believe that stock has been a oneway street now we have a sense. If you handle that order, its not like wow, i have to get people to goldman. I know what buffett is selling but what is he buying . Moderna anything . Moderna i dont think so. No the unlikely a nice start out of the gate going for us here with the opening bell in just 15 minutes. If these gains hold, s p and dow could wipe out their lseoss for the month of may were back in a minute thanks for sharing your savage moves, and especially your awkward ones. Thanks for sharing your cute kids. And your adorable pets. Now its our turn to share. With the geico giveback. A 15 credit on car and motorcycle policies for both current and new customers. And because were committed for the long haul, the credit lasts your full policy term. So thanks again. One good share deserves another. Across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. In the long run, even in the medium run, you wouldnt want to bet against the american economy. This economy will recover. It may take a time it could stretch through the end of next year we really dont know can there be a recovery without a reasonably effected vaccine . Assuming theres not a second wave of coronavirus, i think youll see the economy recover steadily through the second half of this year. Thats the fed chair on 60 minutes last night as jim said before the break, talking to a much broader audience there than he would on our air or in front of congress tomorrow, jim. Where is the balance between remaining upbeat and trying to instill in congress at least some urgency about spending. I think you could say that he the big way people are putting this is we have to wait and see. I think he can do that he can be as optimistic as he was but still wait and see look, theres something theres big lines to get into bars in wisconsin. And theres big bread lines where i live in brooklyn its like were two countries. The food lines were incredibly long these are people who had jobs. So i feel like were in two countries. And look, i want to be part of one healthy country. I want to be clear about that. It does feel like there is joy in some places and theres incredible poverty where there didnt exist three months ago. I dont know i think the poverty gives powell the chance to say we have to be very vigilant about making sure that no more poverty, no more job loss he has to be circumspect because if there is a spike, were right back in the soup remember what dr. Poufauci is talking about, he was invisiting there would be a spike in the fall remember his testimony not that lock long ago where he basically said stay in your home. Yeah. Yeah even his comments about the flag and schools, got attention recently and got the attention of the president when this crisis began, certainly many of us would not have expected it would have gone down political lines almost. Partisan lines in terms of the view of it, but that appears to have happened to your point of being one nation as opposed to two. I dont know its bringing us closer unfortunately no. The opposite i think that there are a lot of people who either feel that the democratic governors and politicians handled this wrong or actually just feel that there is a tremendous amount of quarantine, self quarantine and people were afraid of getting sick then there are a lot of other people who feel healthy and dont mind going out at all. Thats kind of what people are saying, the south is and some of the midwest is about people being judicious, not going out if they have preexisting, the people without preexisting, its their time to shine i dont know sweden made a plan going in thats kind of what youre describing there yes thats the swedish plan. Exactly. You were very much encouraged not to participate they did not close down the economy. But they had the plan going in they articulated the plan, they followed the plan. Whether or not its going to end up being the right plan to follow, at least they had one. This is increasingly the president tweets that it tweets as if he werent the president. We ought to open up the country. Hes president open it up hes putting tremendous pressure on governors to say, listen, its over. Or lets let people out. We open our country. We open our country is the opposite of what a lot of governors feel, including the governors in states who are expected to vote against him right but carl, we are reopening a lot of the country already we have a lot of states that are open, a lot more that are going to follow, carl, in the not too distant future, as long as things remain on a path and we dont see a spike. Yeah. Absolutely thats why we have to keep on top of the case load and the new death count in states like texas who have been dealing with this for weeks. Quick break. Well come back and look at the opening bell on a day where tus getting the week off to a very good start you should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. 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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 on the street. Lets get to a mad dash. Blue pill or red pill for you . Take the red pill elon musk is back. Hes hilarious as ever a little cryptic i suggest people follow when you take dayquil and nightquil adam jonas of Morgan Stanley, to be bullish or not to be bullish. Today he says play to win but at what cost. He has a life, he goes out, maybe he doesnt maybe he zooms people. He said lately weve been getting asked, adam adam, why stay with the equal weight why cant you be more positive on the stock can you imagine being an analyst on tesla and getting pushed . Hey, adam, how are you doing he talks about capital intensity, china risk, shortterm demand risk, competition from amazon. Fremont to potential, union risk, better way to invest in tech and ev batteries. Adam, why stay with equal weight why cant you be more positive on the stock he is unclear because those are some of the more bogus reasons to stay neutral that ive ever heard. Jim, look at what this has been a double since the lows give me the mask. Since the third week of march, right a double you had to be in this this is one that the growth guys, you had to be in this, beyond meat, and you had to be in nvidia. The rest left behind people will want to sell these because today they want to buy ford motor, tomorrow moderna will say nothing 8 for 8 . What is that about lets go back and buy tesla. They may buy tesla any way because theyre taking that red pill its extraordinary its an extraordinary stock. No one knew, it just kind of happened i dont know kind of happened the opposite of Softbanks Vision Fund, david Softbanks Vision Fund has been having a more difficult time of it than tesla, yes thats a fair point. Significant losses there, of course though they are saying that there are that investors that valuing the vision fund at zero is far too pessimistic. Only oil goes to negative, right . This meanwhile, i wanted to ask you, what does it mean for tmobile, that Deutsche Bank gets more . Dont you tell im sorry. No, listen. Tmobile is by far the most important part now of deutsche telecon. The merger with sprint has been completed. There were reports in the wall street journal that softbank is looking to sell additional shares of the combination. They rolled sprint into it obviously owned a good amount of it you could imagine they would want to monetize their stake to sure things up and help fund a potential buyback at softbank that elliott has been pushing them on. Well have to wait and see jim, ive been checking around i heard a lot of the stories correct, but theres a couple things that may not be lets wait a little on that one. Yeah. I dont know by the way, tmobile has been a complete horse thats another stock i developed an index of the stocks that work people say it will sell down because of moderna give me a break. Will people suddenly start working at the office . I dont think that will happen with the 8 for 8 success, i think you could argue its good for everybody. Its good for the market why not leave it at that heres the opening bell as you can see, pretty good breadth here as we get a look at the podium and the nyse will reopen the floor to some small groups of traders a week from tomorrow jim, whats our thinking on we have not set a policy yet in terms of our own exposure down there. But to what degree do you want to get back on that set . Pfrnlg im not in a hurry. When you listen to what theyre trying to do, what theyre saying, look, theres not going to be a gigantic when an ipo occurs brokers hanging out with each other save three or four around a post but i think that until i agree with the question that was asked, until you get a vaccine, do you want do anything . Why put yourself at risk i think ive got the best mask i got a few left the n95s i feel good when i have it on. I feel bad when i take it off. Thats simple. Yeah. You were mentioning going back to work sorry, carl i was going to say, we got lots of pictures from the production floor at aston martin in wales this morning. People on the line in masks putting cars together. Well get some of those out of the automakers the president is going to detroit on thursday. Citi is bringing people back to the Hong Kong Office these are issues that people are wrestling with, and people may have more discretion than others yeah. Businesses are thinking long and hard about how theywant to go about bringing workers back, whether its to the factory floor and how that will work or to the office buildings. Jim was mentioning it earlier. For us, when im ready to get on the subway every day again is when well be feeling comfortable going back downtown. Not sure when that will be but, jim specific to the commercial real estate and those who rent office space, theres two competing arguments. One is youll have socially distant spacing in offices so you will need more space but its being overwhelmed i think by the number of executives ive spoken to who are basically talking about a new world of work in which some segment of their work force works from home. They look to shrink their footprint overall and then it goes to economic demand. I dont know what the vacancy rate in new york city will look like come the fall its not going to be good. The prospects for it Getting Better over time are not particularly strong either one reason why shares of some are down sharply, but up sharply today on vaccine news. Also maybe some hope for retail jcpenney, trying to get right back in a smaller footprint. I think the competing views are interesting. What i think is missing out of these views, if they would somehow lower the rent than it would matter no one ever thinks no one ever lowers the rent in the country who is driving the lower rent . Starbucks saying listen, if you want us i dont understand how the Real Estate Investment trusts constantly talk about how they dont have to cut rates look at what their stocks have done they should have cut rates because empty doesnt pay the bills. And these guys have been really not great actors as far as im concerned when they say that, you know, theyre not going to theyre still going to guarantee this and put good dividends in the pocket of their holders. Give their customers, their actual the guys who have retail, give them a break. No one ever lowers rates but the question becomes how much of a break . As you well know, a lot of them have debt, debt thats been secure t securitized, backed up by reins coming in, whether its retail, office space so, yeah, they have some room, but they may not have as much as you think in terms of the ability to lower those rents or where the marketplace will take them regardless. We may end up i dont know if its bankruptcies but restructurings of some kinds and buildings will undergo that. Youre right. Youre right tanke tanger, this was a good company. Tanger is now at six you look at a real company for years and years, but what these guys did, they levered up. The guy who didnt, simon. He has a pretty good balance sheet. I wait to hear, david what youll say about the taubman acquisition. To me, its game on. But maybe do you know anything new on it i done. You know, you have any number of people who will participate in event investing now or the old risk arbitrage who have gone over that contract with a fine tooth comb who are looking at anything that might be used to mr. Simons advantage to try to either get a reduction in price or walk away but they are not finding that at this point, jim. Doesnt mean mr. Simon wont be aggressive in trying to figure it out or he will at least slow walk this deal, take as long as he possibly can in terms of closing. He obviously has to wish he would have waited just a couple of weeks because it would have made the difference, after waiting so many years to buy this company we know they had interest in it for a decade or more the stock is up nicely today. The cruise ships, because of moderna. Moderna has eight people, so lets book a cruise. Apache, were not going under, right . S. O. Green, were better than you think. And look at delta. Wow. I guess well be flying. I dont know i think that when you fly to certain countries, theres a twoweek quarantine, its not great thing for when you have a week off how will we get to italy . We have to fly we cant we we cant cruise there. Actually, you could cruise there. You could go around you could no. Were not going to do that im trying to bring my daughter home from spain in july. I said listen, i think you might need goggles she said why dont you just buy me a hazmat suit international travel, even when you get off the plane, going into customs, depending on the country youre going into will be no picnic. No. Given some the quarantine policies of certain countries. I do want to ask about levels here getting back to this level, 2,932, this is the third test, the high of the move, drw was saying was 2,955, that was late april. How badly do we need to bust through this we have to. Its key i think you cant keep having these. You do have this is a really big week for earnings. Huge and walmart is a dominant stock. Psychologically home depot is a dominant stock lowes, htarget matters all the team who felt certain stocks that are doing well will start selling off, i go back to nvidia it does report this week, but theres no sign that nvidia is done in part because theres a big gaming cycle and in part because they have those inference chips that can understand slang ultimately those inference chips will replace people at a party theres always people you dont want at a party, you can hand pick your holograms and program them to say youre a great guy i love you thats how you would finally get friends. Remember you said on air you dont care for friends this would be it for you david, this would be great david, you need a hair cut i do. You know, believe it or not i need a hair cut and i do and i do have friends, i swear i do. Man, you have taken that one statement and played it so many different ways, jim. I have. Youll never forget it, will you . Ill never mention it again just like you told me never to mention bob bakish from viacom, how is that stock doing . How did you know that two for one split . How did you know that . I did not know that that stock is up nicely this morning after they reported that not terrible quarter recently. And, listen, the surprise name look at disney up 7 . So heavily shorted. People bet against them. Next thing you know theyll have a saliva test to get in. Why do people bet against when iger came back, wasnt that a strong signal that you shouldnt bet against disney i thought it was came back he never really left your point is that he was reported to have taken more responsibility again as you might imagine, given hes there, hes actively involved as is mr. Chapek as the ceo talk about timing. What a time to take over as ceo. The stock is hot. Stock bottomed there were a lot of shorts ahead of the quarter because people feel if youre getting rid of a dividend, shouldnt the stock be down didnt do that if youre a short seller imagine if you bet im going to bet that disney eliminates its dividend but the stock went up huge theres a level of buoyancy, then we hear about the fed no one mentioned how the fed is pumping in money i had an outfit on this week, draftkings this is one you have to love this there are no sports, right can we all stipulate theres no sports except for maybe no sports this stock is now up 186 Jason Robbins was on talking about korean baseball, okay . Really, theyll bet on anything. Im waiting for them to bet on ra raindrops. Look at this stock this is what people are afraid of theyre saying give me a break a stock about gambling with nothing to bet on . But then again, theres some nascar this weekend. You know, theres golf they bet on golf, you know they bet on golf yeah. Pretty amazing. Jim, i watched the interview you did. Its worth mentioning this was a special Purpose Acquisition Corporation again. By the way, man, were seeing a lot of those everybody wants to do a spac if youre a hedge fund, you want do a spac. Its all the rage now to do these special Purpose Acquisition Corporations that is one of the more successful ones. It is i guess we should move on. All right fidelity did say last night, guys, nearly 5 trillion in money market funds thats 16 of market cap a lot of dry powder out there. Its increasingly evident this morning. Every dow stock in the green lets get to bob pisani. Bob . And the important thing, guys, we have a triple whammy going here we have generally positive comments from the fed chairman, that Moderna Vaccine news, and we hahave metals rallying what is the s p worth when you have hopes for a vaccine sitting near the highs for the day. Important where were at now lets show you the s p the last three months 2,939 was the old recent high. The april 29th high. Weve been struggling to get over that. Havent been able to were sitting right there. We can get over that, well go back to the highs we had in march. We were descending in the early part of march, nice to get over 2,939 on the close if we can this is all about reopening hopes. Hopes for a vaccine, travel and entertainment stocks, you want to watch them on days when theres optimism, theyre all up you can see that look at the airlines up nicely, too. Those airlines, awful lot of cash burn going on with them any kind of hopes that things might be getting back to normal in even a modest way will help here sectors, banks had been enormous laggards, boy, is there catching up for the banks theyre rallying thats nice to see today tech is lagging. If you look at the mega caps, a lot behind this recent rally has been the mega cap names. Were not doing much with the mega caps. Thats interesting that means some of these may be used as sources of funds to buy other things the mega caps in the Second Quarter, we are talking about 26 increases in facebook. Were only halfway through the Second Quarter look at these numbers for the mega caps. If these start flattening out and the markets keep moving up, that would be healthy rotation today. So again, were halfway through the Second Quarter what are we up, 10 . 11 for the s p 500. Put up the major indices in the Second Quarter this is largely a mega cap tech rally. Dont kid yourself look at growth there, up 15 value, which is mostly banks and a few energy stocks, look at that, way light. A dig dispersion between growth and value. Today is the Halfway Point for the second half. Everyone says this is the worst quarter. Well see whats going on. If you look at the sectors, energy is rallying tech is the big rally. You see banks down, transports down, reits down you get the point. This is an unusually wide dispersion in sectors after just six weeks of performance so a lot of catching up to do here whats interesting is the trader sentiment. Its mostly bearish. People are not terribly enthusiastic because theyre concerned about the rollout and the reopening. Retail sentiment is high those numbers, 53 bearish, yikes, thats high equity etfs and mutual funds, its been choppy but mostly outflows the last couple of weeks. A lot of talk about high levels of cash on the sidelines is this bad news as you know, these are contrarian indicators. This is good news. What we call the pain trade is higher the trade that would cause the most distress to the most traders right now is higher. Thats being exhibited today i got my first hair cut in three months i had my barber come over, sat in my backyard, out in the fresh air, with him wearing a mask, and me sitting there i got it done. Three months finally worked al fresco, thats the way to go you look good, bob thanks bobs point about the relation trade has everybody watching backend rates lets get to Rick Santelli hi, rick hello, carl whether its reinflation or reinflating the equity markets, we do see rates starting to perk up just a bit. Its mostly long maturitmaturits twoyear, up 16 basis points, higher than fridays close because it did close towards the higher end of the range. Tenyear notes, up four basis points lets look at a chart starting around april 1st the reason this is important stocks are flirting with some midpoints here that are significant. If you look at where stocks were before the big coronavirus break in march, where the lows were, you know, theres 24,000 plus in the dow, hovering near midpoint. The same could be true for the highs in the fixed income space as stocks do make these bounces. So for april, it was 77 basis points was the high yield close on tens. At 68, you can see thats the immediate area traders will be looking at for resistance. If you go back to march where we had the full effects of the coronavirus on the economy and rates, youll see that after the initial drop of 54 basis point close on the far left there, the highest yield close we had was right around 120 right around midmarch that is your second bogey for watching as these markets may normalize on longer maturities with the nearterm deflationary pressures, the reflation trade and the stock reflation trade are further down the road for the fixed income space finally, if we look at how the yeartodate pans out, lets not forget that treasuries and the tenyear closed at 192 at the end of last year the high yield was established the first day of the year. Theres a lot of bogeys, a lot of moguls we have to get over. The nearterm looking around three quarters of 1 , right around 75 to 77 basis points is the large term resistance. Carl, jim, david, back to you. Thanks for setting us up on that jim, Morgan Stanley today says this is one of the key questions not just for whether banks take leadership again, but for markets at large, these back end rates they have a ratio of cyclical to defensive equities, which normally tracks the tenyear but is now spiking higher. Their question is will the tenyear yield follow that look, the achilles heel of this market that nobody talks about is not the cruise ships, its not some retail, its wells fargo. Its the banks and theyre screaming today. I think that really matters. When you talk about the banks, they have their stocks have to act better. Their stocks are saying default, default, default if they can make money off of the rates, that would be terrific if we get some good spring housing market, that would be great. David, youre worried about this, too. We watched wells fargo get cut in half. Thats a gigantic bank yeah. We watched it last week, jim, as its market cap approached briefly may have fallen below 0 90 billion. Its had a significantrally of the lows i guess were talking over 10 since were talking a market cap above 1 100 billion hard to imagine for a bank that once sported a market cap of a quarter trillion, did wells. Also levered to the consumer you made the point, oil and gas not an unimportant part of their portfolio to some extent just overall concerns about the viability of those groups and sectors and how much and how big the writeoffs will need to be. You did have the saudi fund come in and buy citi, which has been a terrible stock. Terrible what ruined these stocks in terms of maybe not ruined the company, when they were not allowed to buy back stock, that was it they turned out to be houses oft i cant believe how badly they acted. Were they really the bottom bid at all times i dont know it seemed like they were goldman is the leading the group of the performing the worst. Buffett decided to tell. A decision he took ten, 11, 12 years ago. During the crisis that he got that deal that only buffett can get. Look, i guess it doesnt matter what price he got out it was a pretty bad price for some of it guys, well watch this open the point a few moments ago was to expect resistance around 2950, 2975 were a shade below a. Back in a moment i am totally blind. And non24 can throw my days and nights out of sync, keeping me from the things i love to do. Talk to your doctor, and call 8442142424. Iits not acceptable oor nothing. And its definitely not close enough or nothing. Mercedesbenz suvs were engineered with only one mission in mind. To be the best. In the category, in the industry, in the world. Now, get 0 apr financing up to 36 months on most models and 90day firstpayment deferral on any model. Mercedesbenz. The best or nothing. Take a look at some of the dow gainers quarter to date. Home depot 35 home depot reporting tomorrow along with walmart andths iseek. Er were back in a moment soft music [female vo] restaurants are facing a crisis. And theyre counting on your takeout and delivery orders to make it through. Grubhub. Together we can help save the restaurants we love. 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. Lets get to jim in stop trading. I love alaska its just so much fun to go to theres a 699 cruise that you can book for next year, may 21, for norwegian cruise if you believe in mo der in a and like cruises, this is a 2900 value thats going, and its on the norwegian bliss. Its a beautiful ship. If you think that cruises are done, think again with the deals. And you can cancel this is, to me, a great bet on a vaccine, and i think that when you see that you can cancel and the trips are mazing, and the boat is beautiful, ive been on it, i say to myself, what is that stock doing this low and with the fewest covid numbers of attack when you look at the cdc page and also the miami herald i dont know maybe hope springs i term a eternal and this is the one you want to buy. Hope is the right word because we dont know yet. Given that, what are you covering tonight im covering avaya, they do the zoomny right . They do it its fantastic and a much higher resolution and then ive got john miller. Look, are we going to be able to open the country if you can, get the grand slam at dennys, and scott sperling, were talking about how much hospitals have spent and also the ways to treat covid people. Which are not being treated correctly in other places. David, im never going to mention again you said you didnt have any friends and you didnt like friends. Thats not the quote. Finished. All right ill see you take care of yourself. Take norwegian cruise lines on the way jim, well see you tonight you too, carl squawk on the street continues in just a moment vo our communities need help like never before and wells fargo employees are assisting millions of customers across america through fee waivers and payment deferrals, helping people stay in their homes through mortgage Payment Relief efforts and donating 175 Million Dollars to help hundreds of local organizations provide food and other critical needs. When you need us, wells fargo is here to help. Good monday morning. Welcome to squawk on the street. We are live from separate locations on a morning where the markets are ripping higher on several positive headlines reopening auto production in detroit. Moderna with positive data in the phase one vaccine trial involving humans all of it adding for fuel for the bulls. And now numbers from diana after the sharpest one month drop in the history of the index in april, home buying sentiment jumped up to 37 according to National Association of Home Builders still below 50 its negative territory and well below last may easter tory construction has continued and buyers are coming back either virtually or in person as states lift stay at home orders of the indexs three components, current Sales Conditions rose six points to 42 sales expectations in the next six months jumpeden the points to 46. All negative but record low Mortgage Rates are helping 30year fixed another new low and the supply is at a record low. Builder sentiment is strongest in the west, weakest in the northeast. Diana, thank you. As carl mentioned we are off to a strong start here in the first half hour of trading with the s p up over 2. 5 or right at a 2. 5 gain chairman powells comments on 60 minutes over the weekend one reason, but another key one, hopes for a vaccine. That involves the company moderna. We have that news after an interview with the companys ceo earlier on squawk box. Meg . Good morning. These are the first human trial results were seeing of a vaccine, and they are encouraging but theyre early. This is a small trial. It was done in relatively young and Healthy Volunteers so there are going to be more questions to be answered in later stages of the trials what we saw in this phase one study was a dose dependent response, meaning the higher the dose, the more of an immune response the participants generated. After two doses they say all patients developed antibodies to the virus. Some stopped the virus being able to infect cells they observed antibody levels similar or higher than those generated by people who recovered from covid19. Overall, they said the vaccine appeared to be generally safe and well tolerated there are some immune infection site reactions, fatigue, fever at the highest dose. Things you see sometimes with vaccines and they say now they plan to start a phase 3 trial in july this timeline is incredibly compressed they just got into human studies in march the way theyre doing this is overlapping the trials so theyre starting the phase 2 based on the safetiy from phase one. And the efficacity data generated from phase one to try to guide the doses theyll select for the trial if all goes well, the next question is manufacturing. They signed a deal to try to manufacture up to a billion doses per year of this vaccine and we talked with the ceo of moderna about that this morning. We are already working on scaleup. And we say we could go up to a billion doses per year with this new data we just got at the end of last week, were going to increase our investment in capital equipment, in Raw Materials to make as many doses as we can. We know every dose is going to matter so guys, even as the companies are trying to figure out whether they can make vaccines that work against covid19, a huge question is the sly of the vaccines if they are successful and the companys chief medical officer saying demand is going to outstrip supply at the beginning. Its going to be a major question meg, thank you. That certainly is having an effect on the markets. Dow up 7 00 at the moment. Strong rally to kick off the week with stocks across the board in the green today jonathan joins us from and Samantha Azzarello jonathan, how much is the Market Banking on a vaccine here . I think were overplaying the nearterm news if there was absolutely no news of a vaccine, the stock market would probably be up today the same way its been up the last month or more. This is really a story of stimulus coming from the government and if you look at the overall news flow, im not sure that it would by itself warrant the kind of move weve had right here samantha, are you as skeptical as jonathan . I mean, i think the volatility right now is tied to a bunch of Different Things whether were going up or down its vaccine news. Its treatment news. Its jay powell speaking we know that i still think theres a little bit of a disconnect between the real tide of the economy, whats happening with the macro data, in particular the labor market, and then whats happening on the financial side given the spreads tightening the market is up, and conditions are loose. I think were just monitoring that gap between one and the other to see where things go over the next couple months. Yeah. Jonathan, samantha mentions the gap. We have an s p down 9 now for the year when i look at 2021 and what your expected earnings are for corporate america, i mean, what kind of a multiple am i backing into when am i going to be potentially disappointed or will i not be fewell, first, this year the expectations are for 125 of s p profits. Thats down 25 from last year and the number is falling further. That basically puts the market multiple at 21 whats so important about that is before we went into this crisis, the market was trading at a multiple of 19 times. And people were complaining or concerned that the market was overvalued at 19 when we have today, a market thats much more expensive and the risks are obviously substantially larger and if you continue to have the estimates fall which they are, the market may, in fact, be really at a 22 or 23 weve never had a recession that weve left with the market leaving at peak multiples. And so you you know, im going to disagree with the other person on the line, but theres always things that are positive and negative in the market on every day. But the reality is that 21 times multiple given that right now weve had tens of millions of people put out of their jobs in a collapsing corporate profits and even if the trials go super well, were not going to inoculate the entire American Public probably by the end of this year at the very earliest, and that means that this expectation we have for this bounce in the economy and the ease of reopening is just probably unrealistic now, there are a bunch of things to be positive about but the news flow right now is probably not in the top of that list but jonathan, i mean, this is what so many people have argued and youve missed this entire runup in stocks. On the flip side, i could argue that yeah yarks weve never had a recession where multiples like this weve never had a recession that was sort of engineered by society and the government for Public Health and then was let to reopen. You know, with a number of scientific advances on treatments and vaccines which could all affect the rate of growth which im wondering if the market is more focussed on the rate of growth and not just a sudden snapback and, therefore, Higher Expectations for future activity. Well, if you take a look at the kind of stocks that are winning, its the kind of things that you would expect to be winning when things when conditions are not good. Youre not seeing the banks leading the market thats what would normally happen if you think you have a potential robust snapback. Youre not seeing industrial and Consumer Companies winning youre seeing businesses in the tech space that dont depend on the economy are the ones doing super well, and nonCyclical Companies in areas like Consumer Staples and in health care that dont need the economy as well and were not only talking about those that are a play on the coronavirus and cures, but Health Care Suite in general so this if you look at the level of the market, it says it looks like its game on, but if you look at the kind of companies that are winning, its companies that are able to withstand this and are healthy and not the Cyclical Companies that should be doing well. If this was healthy, small caps would be beating large caps. If this run was healthy, value would be beating growth and thats not whats happening. Samantha, jonathans skepticism points to a larger debate what do valuations mean in an era where so many Key Companies have pulled guidance and when theres 5 trillion in money markets earning practically nothing. Are we have an era where valuations matter less than flows . I mean, the standard logic would say that valuations always matter right . And we would say that looking forward, we will get to a place where valuations matter again, but i would agree with that sentiment. Right here, right now, i think theres a lot of red herring data we look at the valuations but dont know earnings estimates. That p is moving and shaking a lot. Even just kind of to take it back to the economy, i disagree with a little bit of the logic around this idea that the equity market can go forth and run on its own merit and steam. The heart and soul of the economy is the consumer. It takes us back to labor market data i agree its not as fun or exciting to dig through. Its still important i would say this around the consumer believe it or not, the income replacement theyve received from the government has actually more than offset losses. Now, thats a bit of a generalization, but we look at data like sub prime auto loans and yes, the default rate ticked up thats the bottom of the barrel but not as much as you thought and we also look at rental payments who is making their rental payments on time this time last year that was about 82 of people making those payments on time you might be surprised to know that this time, this year, its only about 80 its only gone down 2 the point im trying to make is the consumer is still pulling their weight even though theyre not spending their wallet for the most part given the income replacement is Holding Things up. My concern is what if that goes away, or the longer this goes on, its not as feasible, and thats a big risk. Samantha and jonathan, thank you for joining us dow is up 660 points yeah. Almost got up to 800 799 points at session highs. When we come back, dont miss the ceo of Sorrento Therapeutics the dow is up 670 now. Dont go away. At leaf blowers. 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. Dont get mad get e trade and start trading [female vo] restaurants are facing a crisis. And theyre counting on your takeout and delivery orders to make it through. Grubhub. Together we can help save the restaurants we love. Across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. Welcome back across cnbc were taking a closer look at how states are fairing as they find a balance between reopening their local economies and protecting their Citizens Health wisconsin has seen a 23 increase in cases since opening and a 12 increase in hospitalizations a daily average increase of 31 patients testing has also increased 32 with 8 of tests coming back positive in wisconsin. When we compare the threeday average of cases its seen a 66 spike in cases last wednesday the Wisconsin Supreme Court blocked the governors stay at home order, accelerating the reopening of bars and restaurants there since reopening on may 9th, nevada has seen a 17 increase in cases, a daily average of 4 114. Testing has increased 51 , and 9 of tests are returning positive results and when compared with the 7day average of cases its seen a 5 decline in cases in nevada david, i think to sum it up, though, according to a lot of the wall street notes over the weekend, one of the reasons the markets in a better mood this morning is there hasnt been a huge significant spike in hospitalizations and deaths in a lot of the key states that reopened, at least not yet and people are looking at that as so far as a positive development. Right it certainly is seen as a positive some of the Health Experts will tell you it could be as much as three or four weeks after reopening that you see that potential spike. So we will continue to monitor it closely of course, the hardest hit or one of the hardest hit states is new york Governor Cuomo beginning a phased reopening for the past weekend on saturday. One city began resuming manufacturing, wholesale trade, curb side retail and agricultural work. If all goes to plan, most offices and person retail and professional services will resume business in about two weeks. Joining us now, following the first phase of reopening is the mayor of ithaca. Nice to have you with us this morning. Thank you so much i really appreciate it what are your expectations for phase one and what are you seeing on the ground in terms of reopening . Sure. We are cautiously optimistic i am very proud. We are very proud in ithaca to be really an economic engine for our region were the Fastest Growing economy in the state were one of the Fastest Growing in our country we have the lowest unemployment. Better jobs figures than new york city, and thats been the case for about six, seven years now. We shut down our economy very quickly and did a tremendous job of social distancing our people here listened to the scientists, took it seriously, and we ramped up our Testing Capacity so, in fact, weve had zero covid deaths even though were in new york state, and weve been testing our Testing Capacity is through the roof all those things tell us that now is a safe time to begin reopening, and particularly around construction, we think thats positive. We cannot be this economic power house again unless the rest of the nation and frankly the rest of the world gets the virus under control, because a big part of our strength is our inner connectedness, and if were if our students can come back to the United States or if parents in california will feel comfortable sending their kids to cornell in the fall, then our economy wont get back to where it was. Yeah. Well, there it is. You mentioned cornell. Ithaca college, also important to your overall economy, adding hundreds of millions of dollars. What is your latest read on cornell and the likelihood of it reopening at this point . Yeah students on the campus. Right cornell university, and Ithaca College have made the decisions not only to shut down this semester and the summer but theyre all waiting to see if they can reopen in the fall. Again, much depends on not only what we can do here. Its frustrating we feel like our police officers, our firefighters our Municipal Workers have done their jobs our county officials have done an incredible job. Our hospital doubled the kpazty almost overnight we had so much excess capacity that we spent two bus loads of doctors and medical people and nurses to help were ready to reopen, but the federal government just has not done their job theres not a testing scheme thats national that will put people at ease and make them feel comfortedable traveling around were waiting, cornell college, Ithaca College, theyre waiting to see if its going to be possible for the nation to send all its students back in the fall theres so much thats outside of our control, but we do hope they come back because without the students spending, its not just pizza shops and bars and restaurants, its barbershops, nail salons. Its accountants its law firms i mean, the ripple effects of all of our students staying home and not coming back to campus would be crippling mr. Mayor, have you done any work on what type of financial hole that puts you in if the universities dont open and what you need yes yes. Thats been the cause of many sleepless nights over two months i took office at the height of the great recession. I was first elected 13 years ago. And i closed a budget deficit that was 3. 5 million large. It was the largest deficit in the citys history we worked really hard to close it were now facing a budget deficit of 15 million five times the size of the largest weve ever had and that assumes, honestly, that budget deficit assumes the students are coming back in the fall if students dont come back in the fall, were in real cataclysmic trouble. Thats why the bill the House Democrats passed last friday, a tremendous bill that would have helped us were in a finger trap right now we cant reopen the economy in this economy not if we have to furlough a quarter of employees weve had to close down our Youth Services how are people going to go back to work if they have nowhere to drop their kids off. We need the federal government to get the Engine Running first with more stimulus frankly, if they feel like as the Senate Republicans seem to feel like theyve done enough stimulus, theyre not paying attention to main street come to ithaca and stand on the Street Corner an ask yourselves does this seem like a stimulated economy to you finally, if cornells decision is the most important one for the town, when is the drop dead date by which they need to decide one way or the other to have a school year begin or not likely early june theyve joined together with a coalition of other colleges in new york state to figure out what they need, what they need from the state and the federal government and what they need to be able to do locally. Its a complicated patchwork that includes indemnity for the college, if they reopen and something goes wrong and the virus spreads and includes a testing regime that is really more robust, far more robust than we have now and really, we need to know if those things are going to be in place by early june. I would say the first, maybe second week of june is the drop dead date to decide. Yeah. Well, mr. Mayor, these colleges are under enormous pressure to open as well the lack of foreign students who are typically full payers, the lack of a summer school, a high margin business. Room and board which even though its not margin is am mortized over the course of the year in terms of revenue they very much want to, if, in fact, have to open as well, dont they absolutely. And every school is in a different place. Cornell, 7 billion. Every school is in a different place. Ithaca college has a positive, enormous impact on the world its in a precarious position. If they dont reopen, Wells College is 40 minutes up the road has announced they dont reopen in the fall, theyll never reopen again thats the level of seriousness, and as i said, talk about the effects. If all the students dont come back, sure, that effects the universitys bottom line, but the dining halls is full of food sourced from local farmers what happens to farmers if they dont have access to that same market its a troubling state of affairs. Yeah. And one that were going to be watching closely certainly appreciate you kwoining us this morning as well thank you. Thank you so much i really appreciate it today the oil rally. Wti up almost 35 from a week ago. Surge in oil prices pushing the energy group up. Etfs all in the green with the Energy Companies benefitting from the rise in crude oil at the highest price in weeks pumping out the overall market to sthp s p up sharply so is the dow. Nasdaq is up about 2 stay with us on squawk on the street. At mercedesbenz, nothing less than worldclass service will do. Thats why were expanding your range of choices. Many dealers now offer optional pickup delivery and athome maintenance, as well as Online Shopping with Home Delivery and special finance arrangements. So, whether you visit your local dealer or prefer the comfort of home you can count on the very highest level of service. Get 0 apr financing up to 36 months on most models, and 90day firstpayment deferral on any model. Were committed to making college more accessibley, by making it more affordable, thats why were keeping our tuition the same through the year 2021. I knew snhu was the place for me when i saw how affordable it was. I ran to my husband with my computer and i said, look, we can do this. [narrator] take advantage of some of the lowest online tuition rates in the nation. Find your degree at snhu. Edu. Good morning welcome back im sue herera nearly 254,000 air travelers went through tsa on sunday thats the most since march 24th, but it is still down about 90 from the same day last year at the low point of the pandemic, air travel was down more than 95 . In new mexico, it is still illegal to go out in public without facial covering. Violators can be slapped with fines of up to 1,000. Its part of the states restart plans that allows all houses of worship to open at 25 and the vatican is reopening. Guards in suits are taking temperatures of visitors with everyone required to wear masks across italy and stores, restaurants and churches are also beginning to reopen today you are up to date as always for bcom coronavirus coverage, go to cn. C squawk on the street continues after a quick break. Home and here to help. Heres a tip get halfoff the amazing iphone 11 on at t, americas Fastest Network for iphones. Second tip you can put googly eyes on your stuff to keep yourself company. Uh for example, thats heraldo. Hes my best friend. Oh, sorry nancy, i forgot you were there. Get the amazing iphone 11 for halfoff on at t, americas Fastest Network for iphones. [music] [music] especially in times like these, strong Public Schools make a better california for all of us. Our next guest sites gone with the wind in his latest piece called on coronavirus debt, heed the wisdom of scarlet ohara. Allen, good to see you good morning. Ill let you explain the reference, but your larger point is youre not spending your days worrying about the level of at least public debt right now. Right and thats the reference, the famous statement, i wont worry about the debt today ill worry about it tomorrow both parts are important it is not something to worry about today. We have a lot of relief spending its sometimes called stimulus, but its relief. People are in terrible distress. Its analogous to a giant hurricane hitting the whole economy. That never happens, of course, but a pandemic does. Its relief spending and we need it badly people are suffering all over the place in a variety of ways the tomorrow part is this is adding enormously to the National Debt. I guess the right way to put this is it merits watching there are no warning signs yet that were pushing the limit of the United States government tomorrow on world market none at all. But we should keep watching. And make sure there arent, because thats going to be if it happens, that will be the constraint right you do say no such yellow lights are flashing the markets will warn us with higher Interest Rates and a sagging dollar, but where is the line at which we can declare a warning declared well, theres no magic number but i would say as soon as we start seeing treasury borrowing rates inch up, and its not going to theyre not going to go up by 100 basis points in a day, but if they start moving up and if the dollar starting moving down, i dont mean for a day or two the dollar is always going up and down, but over a protracted period of time, those will be warning signs. Theres not a magic number, but you know the old saying is youll know it when you see it i think we will. Allen, its sara. What does that mean as far as what tomorrow looks like austerity in this country, higher taxes and how soon do you think were going to be facing those realities . Not that soon but maybe starting in 2021 i think its less austerity. Well see, but i think its less austerity than it is whats called adult behavior. I draw the analogy in a op ed which you referred to between now what will happen and what happened after world war ii. We finished up world war ii with a debt to gdp ratio depending on exactly how you measure it from one year, something about 103 , 105 of gdp. That was in 1946 by 1975 that number was down to 22 of gdp. How did we do that not so much by austerity not by running budget surpluses year after year. But keeping the deficit modest so the National Debt while growigro growing year after year was growing slower than the economy. Oh so the debt to gdp ratio went down from 103 to about 22. Thats a lot and thats how we did it, basically. Right but a lot of what youre discussing, allen, would involve rates staying low and to your point, i mean, psychology can change quickly when it comes to the view of a countrys indebtedness, even as it may be hard to imagine the u. S. If our political dysfunction and our inability to have sort of a functioning discourse among our parties continues, you could imagine a day in which people say wait a second, i dont know anymore about this countrys ability to repay and the way that i thought of, and higher rates with our refinancing needs, that would be disastrous, wouldnt it . It would. It would you can and you use the word i think imagine. Yes. You can imagine it unfortunately with the way our politics are today you may recall i think it was in 2011 that for a purely political reason, battle between the Congressional Republicans and president obama, we got a downgrade from s p there was never any question could the United States pay the interest on its debt that was never remotely close to question but there was a question at that time whether politically the republicans were going to deliberately cause a default on the debt i never thought it was likely. Most people didnt think it was likely, but Something Like that could happen again unfortunately, sadly, we could imagine it happening so politics, not the mathematics of the debt that drove that. Yeah. And also we actually saw a major rush into the safety of the u. S. Government debt after the downgrade of u. S. Government debt that tells us how special the u. S. Is there. I want to ask about the central bank jay powell this weekend on 60 minutes made quite an impression i think when he said he are not out of ammunition, not by a long shot, certainly was the right statement to make, and you can see the power of his rhetoric, but are they out of ammunition not by a long shot what does that mean to you what other ammunition do they have well, technically speaking, theres no limit on how large the fed can blow up the balance sheet. And we say blow up the balance sheet, that means either buying assets or making loans that amounts to the same thing. So whether its buying assets, we call it qe, or we call it lending facilities the fed has been standing up left and right. If you ask, well, how much of that could they do the answer is in principle, there is no limit because the central bank, unlike anybody else can create money. T doing that by creating electronic images on banks books. Thats what printing money means these days and theres no technical limit the limit is prudence. All right . So the thing you want to watch and what powell and the fomc will watch is whether it gets to be Early Warning signs, hopefully theyll come early, that banks are now using this fodder, Bank Reserves we call them, to extend the money and credit in ways that could be inflationary that historically is why the fed has limited the supplies of Bank Reserves and tried to limit the size of its balance sheet. Right now the sky is the limit that was the sense of what jay powell said, and we have a debt economy. So the notion that any of this for the foreseeable future is going to be dangerously inflationa inflationary, i think is fanciful now, there may come can a day sometime down the road, maybe as soon as next year, i wouldnt expect that, but maybe, where the fed needs to throttle back it starts to see signs that banks are taking these reserves, building them into money and credit, and the economy is starting to boom, and the danger, therefore, is were going to inflationary, a rise in the inflation rate if that happens, the fed isnt going to need to throttle back finally, allen, you know, the argument you make sort of fits with some equity bulls who argue money supply explodes, but Inflation Expectations remain well anchored and stocks set new highs. Is that an extension of your logic here yes i just like to demure on the stocks one thing i try never to do even in private, much less on the air, is predict the stock market so im not going to do that. But yeah, the rest of what you said is true, and it could, indeed, lead to that kind of a stock market, sure allen, its an interesting piece. Thank you for coming onto talk about it we always love hearing from you. Talk to you soon allen blinder. Thanks, bye a programming note as we head to break later today on closing bell dont miss our interview with jo s joe s jose cil look agent ting at the market. Every sector higher. Led by energy. Industrials, materials and real estate also going strong nasdaq is up 2. 25 s p is up almost 3 . Well be right back. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. We did it c crowd cheering [narrator] wherever you start, snhu is where you can finish. crowd clapping crowd cheering here we go. [narrator] and its it. [group] yay [narrator] you did it, high five Southern New Hampshire university. [man] that gets a hug. laughing look at that masters degree, i did it i did this for my children. I am very proud of myself. [narrator] finish your degree at snhu. Edu. A rush of retail earnings. Our traders break down what to watch on tdirang nation. More squawk on the street coming up. Welcome back activities like haircuts and dining will look very different as businesses begin to reopen. Kate rogers spoke to franchise owners in georgia on some of the steps theyre taking to safely do so. Thats right. And there are so many things to consider like liability, protecting customers and their workers as well and if customers will feel ready and safe to come back in. At great clips c theyve added in awe position, hair Traffic Controller we will have turned our shampoo bowls into hand washing stations so we can cawash hands easily between customers weve had the plexi glass. Well have spots on the floors all the chairs will be taken out of the lobby we had to create a new position, the hair Traffic Controller, pun, its kind of like a receptionist on steroids meanwhile, restaurant owners, at tgi fridays says theyre grappling with mask requirements hes planning to provide masks for workers and guests loot of us have to earn the trust of our guests again, and were going to start by having everybody wear a mask, making sure everything is wiped down as it comes out to the guest in terms of the salt and pepper shakers, bottles, things of that sort they were able to access ppp loans but theyve been conservative with using them as theyre awaiting more guidance there was a release on friday about forgiveness guidance and said more guidance will be coming for both lenders and borrowers in the future. Hair Traffic Controller, kate thanks for that. Kate rogers joining us this morning. When we come back, the ceo of Sorrento Therapeutics on the companys positive test results involving the covid antibody. Dow is up 760 or so. Were back in a moment 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. 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. 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Shares of Sorrento Therapeutics skyrocketing since announcing a breakthrough with its covid19 antibody last week. Stock is up another 30 on top of a 200 rise friday. Cofounder and ceo dr. Henry ji joins us now tell us about the significance of your discovery . So we found a very potent antibodies that complete preventing the virus infection with a live virus which is significant because the quantity is very low. It gives you the instant immunity potentially if this gets approved. Especially this one is very good for the population that is immuno compromised or elderly or the section of the population that dont want to get immunized. Dr. Ji, what is the difference between this potential antibody treatment and what were seeing in trials from regeneron, amgen, lily, which appear to be a lot further along in the process both as far as trials and also manufacturing . Actually, we are almost at the same stage right now nobody has the neutralizing antibody in clinical trials. All are going to be starting in the next few months, including regeneron, eli lilly and amgen we are at the same stage almost and we will see the more the merrier. The reason you want more neutralizing antibodies from different pockets so you have redundancy and see which one pans out and certainly potentially could be sinner in guestic. Using neutralizing antibody has the effect to say if the virus mutates some of the antibody may not work after the mutation, so if you have a different angles from different antibodies attack the same virus, you may have the redundancy you need and also you have the antibody potentially generate body resistance to it after prolonged use, so you want to have multiple parties all coming here with different of neutralizing antibody that will help us tremendously doctor, its david faber. There are those who say and focused on this and say it isnt that hard to generate an antibody, its what comes next in terms of a timeline where you can get to a place that you can manufacture it significant scale. Regeneron saying they have that down to what could be six months, but a lot of people say that wont be the case and my question is, how did sorrento do it in enough time to be relevant yes you know, we have a facility inhouse and well start manufacturing in 100,000 doses up to a million doses in the next few months and meanwhile, we have a collaborator with discussing right now they have much larger scale which in the potentially providing in the millions to tens of millions of doses each production round, so were prepared to meet the vast demand in the next few months what data do you have to suggest that mutations in the virus wouldnt render this antibody ineffective at this moment right now, we know the virus completely preventing the virus infection, this antibody, prevents the virus infection completely and what we see in that is that we have other antibodies as well that works as well and if youre putting the two together or three together as a cocktail, forms a shield preventing the virus mutation so that one of the antibody does not work, the other one or two still works that gives you redundancy in the same product are you making any assumptions for dosage and how can you be confident in those assumptions at this stage of development . Because we can tell from the initial experiment what is the concentration that potentially works to complete neutralizing the virus and we up the dose right now and we believe if we can get around a milligram a kilo, 100 milligrams per person, which is easy to handle and that will be potentially efficient quantity that makes the manufacturing much easier. We are not talking into 100 milligrams which you need 10 grams. But for how long . As i understand it when treating a covid patient with antibodies its a temporary treatment, right . Its not a cure. Typical antibody half life is two weeks, however theres technology right now, you can engineer the antibody to up to two to three months time there is also technology right now we are employing as well, testing, using the dna format so that the potentially inject the same thing as the moderna, injecting the mrna into the muscle, let the body muscle produce it, let the dna in the muscle, let the body produce it and that can potentially last over a year or longer. And i just want to understand the timeline, dr. Ji these results are preclinical do you have to test it in animals before you can start human trials and what is the timeline look like there so we are intent to get it into a human in the next two to three months, especially for getting into the patient just getting into icu, and start treating the patient this antibody not only can do a potentially prevennion as well as a treatment so you go as the treatment in the icu setting, you can get into human very quickly in the next two to three months after that you move up and potentially gets into healthy people. Wait. So are you saying it would be useful as a pro fa laxist and those infected or one or the other . I think its potentially a work both ways were starting with the treatment in the Patient Population that gets into the icu and we are moving to a prevention as well and so what is vaccination is to generate neutralizing antibody. Now we have a neutralizing antibody in hand sorry to cut you off. What is the soonest we could see your antibody cocktail ready for use . Potentially in the next two to three months, that means some time in around july august window got it. Dr. Ji, thank you very much for joining us today from Sorrento Therapeutics thank you for having me. Carl, another 29 , these bioteches have been amazing to watch once you have an announcement like this yeah. Indeed on the heels of that moderna news and again, david, covering it with jim in the 9 00 a. M. , were going to have days like this where we see progress and maybe down the road another day we where see caseloads spike in a state reopened and the market will have to juggle the bipolar diet of news, which is going to be, i think, the norm for the medium term. Yeah. We dont exactly. Im still with you there with the s p, guys, up almost 3 moves in some stocks well above that, this is really quite a rally we have under way here, as you say, carl, in part perhaps responding to the prospects of a near term vaccine. Moderna talking about. But to your point as well, were going to keep watching the data and see how the reopening goes, whether there is a spike in cases that will need a response, that certainly would not be seen positively if it were to occur all right guys, well see you later on sara, see you this afternoon welcome to squawk alley. Im Carl Quintanilla with jon fortt and Morgan Brennan coming to you live from various locations. The dow and the s p have gone positive for the month of may, given this rally here. Getting close to 2950 levels that have been tested before, actually twice in the last few weeks and well see if we can bust through this time bullish headlines, you have powell on 60, we mentioned moderna, detroit reopens not just big cap techs today, apple up 2 , but wells fargo up 5 and oil has a good picture as well, industrials, energy, cyclicals, a lot of things working together in concert in ways that are somewhat unique in recent weeks. Yeah. You know whats really working, i noticed, expedia and booking holdings, travel names that for obvious reasons have been beaten down, both up more than 10 as is trip adviser. So that hope along wit