Transcripts For CNBC Squawk Box 20240713

Hold on. This is a tease. Stealing the thunder already this thats right, we are going to talk about this in just a moment anybody still on radio has to wait a second. Take a look at the futures this hour dow futures down about 170, s p off by 2 and nasdaq down by 81. Yesterday, nasdaq down about 1 . Crude oil prices, lets check that quickly we had been watching that contract build up. The july contract build up to just over 34 yesterday. Lets call it even at 32. Then there is the treasury market weve been watching youll see the 10year note has been yielding 0. 64 . A little pressure there too. Take away. With that tease, it feems like months now, weve had really big guests and corporations a big interview at 8 00 a. M. Eastern. Well talk all things economy with former Vice President joe biden about the pandemic, the race for the white house and so much more. Well do that at 8 00 a. M. Live with him a big interview to look forward to on this friday. Tgif i know all the days roll together but here we are and it is friday. I thought yesterday was friday it is friday and a threeday weekend. That makes it a better friday you have to realize it makes next week a fourday week. There is a lot to what it means to have a monday off which i like better than a friday off. You are looking forward to the threeday weekend and the fourday workweek next week. But as we always say, we are just so happy that we are working. We never forget that right . Yes do you dream. Im dreaming every night it is a lot of anxiety and pressure can you imagine being a kid in the world like this. We have to count our blessings i see it with our kids every day. Meantime, joe, you alluded to this news taking place overnight in china we want to get to that story now. Hong kongs hang seng plunged more than 5 after saying they will possess new security laws well get over to our china expert, eunice yoon in beijing officials have been describing hong kong as a defenseless city that those new security laws are meant to protect. The proposal was tabled here in beijing at the National Peoples congress, which is a big political gathering. The proposal aims to tackle. Secession, subversion, terrorism and foreign interference all of which would improve the one country, two system style of governing which has allowed hong kong to operate relatively independently ever since hong kong was handed over to the chinese from uk rule as you can imagine, many hong kong act vaivists are calling fr action and street protests and a breach of their liberties. That this is the end of hong kong as they know it hong kong has been free wheeling system different from mainland china. Thats one of the reasons we saw such concern in the stock markets. A drop by 5 also interesting that this whole hong kong issue and concerns about the National Security law really overshadowed the big headlines that some people were happy with there was an increase in expectation of stimulus. That looks as though it is going to happen. One notable thing was that there was no new growth target, which is highly unusual. Was seen as an acknowledgment that beijing is expecting Slower Growth so the budget deficit target was raised up to 3. 6 . This is the first time it has been over 3 people are saying there is going to be moneythere to stabilize the economy. The defense spending is higher by 6. 6 . The growth is lower compared to other years. The unemployment target is interesting at 6 with the target at 9 million overall, people expect leadership to guide its decisions on the unemployment figure because as you well know, the leadership is very sensitive about people not having jobs because they see it as a social stability issue. It is a big one there are about a million questions to be asked. Well check with you in a little bit. We will President Trump meanwhile said yesterday, we are not closing our country, in his words, if the u. S. Is hit by a second wave of infections. Here is what he said when asked about that second wave during the tour of a ford factory in michigan we are going to put out the fires. We are not going to close the country. We will put out the fires. Whether an ember or a flame, we are not closing our country. The president wore a mask for the first time it was the first time hes been seen wearing a facial covering id wear that thing. Do you like to see people out. Not strangers that people sometimes i dont want to have a conversation with at the super market i know thats hard for you to believe. This is your avoidance tactics. You have plausible deniability. You didnt know whether they recognize you and they dont know whether you recognize them. I can be right next to someone getting something off the shelf and i dont feel like i have to make small tack which i love this is perfect for you yes it is. A couple of times i have mentioned that, lets see, i think we both recognize each other. I feel bad. I see my neighbors im trying to keep my distance i feel bad like im not being neighborly enough you want to make sure everybody is safe. You know blake. You know what a hugger is. She hugs everybody. She says i cant live in this world. I said you are never going back to that. We are not even shaking hands. Like seinfeld. Everybody wanted to kiss jerry they got mad at him. You cant do that anymore. Dont expect that sorkin no more of the three on each cheek. I cant. I cant do it. Anyway when we come back six feet. You cant even do a fist pump or one of those we know how to blow kisses now. When we come back, well take a closer look at Vaccine Development and the potential for expediting trials. Dr. Scott gottlieb will join us next and dont miss our interview with president ial candidate joe biden at 8 00 a. M. Eastern time. Quk xilbeig bk. Sawbo wl rhtac save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Pharmaceutical and Biotech Companies are working at a quicker space to try to create a coronavirus vaccine. There is a debate whether people should be exposed to the virus to try to speed things up. Meg tirrell has more on this there is a healthy debate on this idea of what is called the human challenge trials to try to speed up the vaccine for coronavirus. On the pro side, they say this could speed up development by several months and enables testing even if the outbreak subsides it could happen that by time the vaccine is ready, the virus has passed and it is hard to determine efficacy in the field. They also say this would by done in young, healthy and lowrisk volunteers there is still a risk of disease or even death. There is no rescue therapy there is remdesivir but it is not a silver bullet. And it may not predict efficacy in the more Vulnerable Group experts like a vaccine olgs said if it takes to january to get to a phase three trial, it is worth it because we could be vaccinating people before january. Already more than 24,000 people have volunteered to do this through a group called 1day sooner in 102 countries. This happened before for the flu. They called the place they lived hotel influenza. There is precedent but a lot of questions. Lets hope it is not Like Hotel California you can check out any time you like but you can never leave. Thank you, meg joining us now is dr. Scott gottlieb, cnbc contributor and serves on the board of illumina and pfizer earlier this week when we had the moderna ceo or maybe last week, he was talking about the 600 people that would be signing up in the phase two study. I asked him where those people came from. Who volunteers for this, do they get paid for this . What kind of ethics questions are at play. They do get paid for it you wouldnt want to pay them an amount that would influence them to do it these are 18 to 30yearolds i think well end up not doing it the reason to do it is to get an earlier answer on whether the vaccines are effective in a phase two study. We are not going to be able to enroll trials in july and august there is not going to be enough circulating to find out if these are working. Well have to wait for the fall. Sponsors who try to enroll them in july and august might enroll them in the wrong place. You might enroll them in houston and find out the outbreak is in dallas it is hard to make advancements in the summer until we get to the fall one thing you could do is these human challenge studies. The complexity is not recruiting volunteers but manufacturing good gmp grade virus in a lab, High Security Lab that can manufacture the virus. There arent many of them. Probably just one lab the dod maintains that could be attached for a trial like that. What about the phase two weve already heard from places like moderna and others. Thats not going to happen im confused by what we are saying we wont be doing this or they are in a place there wont be a lot of outbreak . The phase two studies, they are looking at whether the vaccines produce antibodies and whether those look like the kind that have a clinical benefit but not studying the vaccine with people coming into contact with the virus. You can try to do that but you wont be able to do that in the summer time as levels are coming down you need to wait until the fall when you can vaccinate 30,000 people and enough of them will come into contact with the virus and you can figure out whether it is working compared to a control group. This is a way to expose people at a time in Julyand August where there is not a lot of circulating covid to come in contact with it is a way to accelerate development and get an earlier answer some thinking, that you can go into the phase three studies and your just looking at immune owe genisity data. We have boeen looking at the numbers. They have been coming down in new york, Washington State has been improving a lot are you going to feel comfortable to a point soon that you break out of the lockdown youve been in too it is nice weather out, people are out all over is that okay is that a safe thing to do now i think well all be able to take a breather this summer and get to some sense of normalcy being careful. Going out a little less, practicing good hygiene. Shrinking down our social circles. If everyone takes simple precautions in their lives in their social circles and the amount of time that they shop. A study showing if people just shopped one day a week less, that could have an impact. If we are all careful, we could take a breather. We cant be complacent heading into the fall when the risk is very different i do agree with you. Im hopeful that this summer we could take a break is shopping the most dangerous thing we do now . Any time you go out and come into Contact People in an indoor setting, over a period of time going into an Office Setting people who work in at risk jobs, thats why we see the risk in places like a Meat Processing and you are on the same floor in contact with the same people those are highrisk setting. Indoor and in contact with the same set of people for a period of time, those are the conditions under which this spreads. Again, they sort of down graded the risk of picking it off an inert surface why . If someone sneezes on a stable top that has covid, why wouldnt you be able to obvious lue you could but why is it less likely do you need it in the air and to inhale it or something i guess it is just a harder transmission the cdc statement about the transition of droplets is based on the studies looking at outbreaks of infection and it is mostly right most of the transition is from the drops and contact with people i wouldnt discount the probability there is some spread through contaminated surfaces. People should be careful about shared surfaces. I dont think that study has definitively concluded the shared surfaces. I would still wipe everything down im wiping individual avocados down im not kidding. I take them out of the bag and wipe them. Bananas. If you buy a bunch you can wash them we all have to decide where we draw the line there is limits on what we can do for reasonableness. Shared Services Like mass transit, they should be doing deep cleaning, shared Office Spaces businesses need to think about those. It might be a lot less but it is still a risk okay. Dr. Gottlieb, thank you great to see you coming up, wipe it all down. Wipe everything. You know what, hard to get those clorox wipes you can make your own save the old container works on hemorrhoid wipes too. Tmi see what three Big Tech Companies are saying what are you laughing at 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. Time for the executive edge. We have a look at the impact of the pandemic on three tech companies. Nvidias cfo said the lockdown hurt business early as caves in china closed but then the surge of demand of people working, learning and gaming at home. Nvidia makes processors for gaming up 25 year over year. Shares are up more than 45 percent e yeyear to date hp enter prizes. Hurt hard by pandemicrelated supply chain disruptions including a dropoff. Eroding sales due to the pandemic ibm. Some reports say it could be in the thousands. First cut under ibms new ceo. Coming up when we return, reopening america. Speaking to ceo from a casino. And dont go anywhere, we have a big interview with joe biden at 8 00 a. M. Eastern. Before we go to break, a look at yesterdays winners and losers 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. Dow down about 130 points on news happening in hong kong. Stocks wither weaker crude prices continue to trade at much higher levels than we saw when things got dicey. We are back to 62 almost on wti crude. Casinos are big business they recently started to reopen in louisiana and mississippi after being closed to the public for months offering a glumgs of what the industry looks like in the future joined any by jay snowden. Recently reopening 10 of its 41 facilities weve talked to some restaurants and everybody facing similar things what is specific in terms of what youve seen many were hit hard and we were forced to furlough 95 of our team members toughest decision and times weve had to go through. We are seeing a little light at the end of the tunnel. We just opened five properties in louisiana, five more. Kansas next week, West Virginia on the 5th, and more on june 1 we are working with state leaders, regulators, mississippi, louisiana, some of the best regulators in the country about how we can do this in the safest way. Temperature checks before you enter whether it is a team member or a guest. Mask wearing for team members strongly encouraged. We have extra masks for those who forgot theirs. When you come into the casino, every slot machine turned off to force that social distancing table games turned out traditional spots. Food and beverage offerings are more grab and go than full service restaurants. So far, so good. Team members have preached safe, comfortable environment. Thats our goals no one knows how long well be in this position. What about the number of employees youll be able to bring back if there are fewer people what do you expect gaming revenue to look like even six months from now if there are not as many slots or people . Joe, look, it is tough to predict th predict in this world we find ourselves in i would tell you im excited to say we have been able to bring back 3,000 team members over the course of the last several weeks. That feels great when you had to furlough 95 of the company. To make those phone calls back to team members. Weve had tremendous success so excited i got the results over 95 of our team members we spoke to accepted to come back, which is fantastic stat compared to what i have heard elsewhere it is so hard to say now there has been a lot of pent up demand folks have could be infever, looking to get out of the house. Well see how this plays out demand has been strong so far. I guess for a while, the brick and mortartype operators may have looked at online as a threat i guess we are all doing things now. Youve entered into an agreement with bar stool sports and you are an omni provider now now it is a good thing i dont know if you want everyone just staying home on line but you are probably happy youve got that channel now. To your point, we pivoted about 15 months ago as a company and decided based on Sports Betting legalization prolive rating across the country so quickly, we have an opportunity. We operate more properties in more states than any other Gaming Company thats very powerful because this is a states rights issue in terms of Sports Betting and on line casino. Sports betting is legal in several states i casino is legal in about five states a lot of conversation now. States are asking god forbid if this happens again, the states that have legalized i casino are still generating momentum. You have this opportunity in the state. We are set up very well. Whatever form of gaming that customers are looking for. Brick and mortar, retail on line sports book or casino. We are positioned really well with great products and brand in bar stool we partner with. After earnings and people ask about liquidity. You said you were pretty comfortable with it. Still a couple of days later, you did equity and convert offering is there a shift did something deteriorate or did it seem like a rainy day was a good time to tap the markets we have said liquidity was earnings we had got the runway through the end of the year in a zero operating environment. If we could get that liquidity profile even in the worst Case Scenario and it is off investors minds, we can focus on reopening properties and Getting Team Members back to work and investing more as we think legalization will move more as we move forward. We are looking to raise capital as a secondary and we ended up raising 670 million that takes us well into 2021. There is a lot of momentum in our stock as investors start to focus on the future as opposed to what the profile looked like two months ago not a big casino guy but draft kings. They are doing so well before all of this. You figure similar type of profitability at bar stool good thing to who in i do miss. I miss things. I dont know whether to bet on the phil tiger rematch i know you probably want sports to come back as well even if you dont bet on it. Something to do, right joe, i think we are all starving for sports. I played my whole life love sports. I have two kids and they are both spring sports athletes. It is killing me to have to see them stay home watching about how tough this is on kids and parents. We are all forced to homeschool now. My wife is doing an amazing job but we didnt sign up to be homeschool parents we do view the opportunity in Sports Betting back to your question, our strategic relationship with bar stool we believe will allow us to be a top three player theyve done a great job converting daily sports to real money Sports Betting what has proven out in states that have legalized Sports Betting is you have to have a strong sports brand and audience our investment in bar stool delivers that for International Gaming tirrico is on the way check him out. Good luck and thanks for coming on today thanks, joe another one of those minor losses in the grand scheme of things but things that matter so much at home kids running track, playing lacrosse, basketball clinics it looms large in their lives. When we come back, positive numbers out of china for apple we compile new data to get a better view of the companys recovery reminder you can watch or listen to us live at any time on the cnbc app a look at scenes from yesterday as sftates reopen for business across america welcome back to squawk box this morning dow looks like it would open down about 132 points. S s p 500 off. China signaled it will impose new National Security laws on the hong kong territory. Apple is a big subject data compiled by cnbc painting a positive picture for apple in china since the height of the coronavirus there in february. Research says apple sold 3. 9 million iphones in china in april. Up 160 from march apple shipments to Retail Partners in china totalled 3 million. That would be up 30 from the prior month. Seen as a positive indicator e Commerce Firm telling cnbc that revenue from apple products on the online t mall store jumped when we come back, well talk to the ceo of the retail group that owns forever 21 about the return to malls and what that looks like and at 8 00, dont miss our interview with joe biden. Squawk box returns with all of it in just a minute. You should be mad they gave this guy a promotion. 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. Welcome back to squawk box. Malls werent crowded before and probably will be less crowded when we see the restart. That may affect retailers looking to survive we talk to our guest ceo of the group that owns brands like forever 21, nautika and others. We are trying to determine whether retailers like yours are going to make it to the other side and what the landscape will look like. The landscape is different for sure early stages, weve opened up approximately 400 of our stores out of 1,100 in the United States so far. Early results, aero postal is almost at par store sales compared to last year where forever 21 and nautica are down 20 . We are hoping traffic picks up daily but shoppers are definitely buying more than they have in the past so the average sale is higher than it has been in the past let me ask you about that is your expectation as you try to model this out that folks that are coming back to the store and making bigger purchases, are those purchases not being pulled forward but maybe even backward. Are these things they would have bought in the last two months but couldnt because of the lockdown and ors or Something Else a little bit product on the shelf is really important and obviously, you know, ecommerce tells us what the consumer is looking for. So making sure that we have that those products in the store is very helpful. But consumers that are shopping today are actually they know what they want they go into the mall, they go directly to the stores that they want to shop in, they go in and they buy theyre not looking as much as they are shopping. They are generally most people that are coming in the stores are buyers. Are they trying clothes on . Whats the procedure hows it different no, theyre not trying clothes on we actually have a very good return policy so they come in the stores, they buy their purchases, they take them home, they try them on and if they dont fit, then they come back and they return them we have just a very good return policy at all of our locations hey, jamie, on that return policy, what do you do with it after its brought back . Because i feel a little uncomfortable thinking something im picking up in the store has just been in somebody elses house. So returns have been slightly under 1 and those products go back and they get cleaned properly before they go back on the shelves and if were uncomfortable, then we just throw them away. How do you clean clothes . You clean clothes, everything is steamed and properly cleaned with proper wands that check for anything that are on the clothes and we have been doing that since weve reopened the stores. Theres ultraviolet lights and stuff like that. Jamie, weve seen a number of bankruptcies, as you know. Theres an expected sense that theres going to be lots of different restructurings Big Questions about whether this is going to hit the mall operators themselves and what the whole experience looks like. You know, extrapolate out 12 months from now. The market obviously thinks that were going to be in a vshaped recovery at the moment, that the world is going to look a lot better a, do you think that what does that mean for the retail space is there a lot more consolidation . Are we going to see less stores . Whats this all going to look like look, i think youre definitely going to see consolidation. The bigger are going to get bigger and the weaker are probably going to go away. The weaker dont always go away. They tend to rebound in a different way. I think this time youll see the weaker actually go away. As far as malls go, i would tell you if you feel more comfortable walking into a mall right now or do you feel more comfortable walking down broadway . I would tell you that i would feel more comfortable walking into a mall than down broadway in new york city, bumping into people up and down the streets is not as safe as going into a mall that is cleaned 24 hours a day 7 days a week and making sure that, you know, people are not bumping into each other. Traditionally, if you sort of look at the malls around america today, there is plenty of space inside the malls to walk around. And i would also tell you, you know, were in a lot of the simon malls around the United States and, you know, especially the outlets, theres plenty of space, you know, to walk around the outlets where its open air and the consumers are feeling, you know, pretty comfortable Walking Around i think its probably safer than, you know, going into some of these big giant box retailers where theres lots of people Walking Around those stores. Right throughout this pandemic have you been paying your rent 100 across the board look, we we have very good rent deals from our landlords. Were not a Leverage Company we are partners, you know, with the landlords, with brookfield and Simon Properties so, you know, our rent deals have been fairly good through this crisis. You know, a lot of our rents are percentage rents so were working through it, you know, quite well okay. Jamie, wish you a lot of luck. Hope you come on back and let us know how its going. It will be very fascinating to see what sales look like and what the consumer is up to so we appreciate your time this morning. Thank you. Thank you coming up, were going to talk about the potential for a crackdown, a beijing crackdown on hong kong the hang seng plunging overnight. A live report from china is next at 8 a. M. Dont miss our big interview with president ial candidate joe biden. Vice president will be here for an extended be on the show for an extended period starting at 8 well be right back. Dont forget to subscribe to our podcast. Youll get interviews, original content and behindthescenes access look for us on apple podcasts or on your favorite podcast app and subscribe to squawk pod today. One of the nations most successful private equity firms wants to make sure ppe gets in the right hands. We will hear from robert smith. And tracking covid19 testing. The ceo of splunk will be here to talk about tracking the pandemic the second hour of squawk box begins rate now. Good morning on this friday. Welcome back to squawk box right here on Cnbc Andrew Ross Sorkin along with becky quick and joe kernen in the red dow opening down 140 points. Nasdaq off 66 points the s p 500 looking to open down about 18 points all due from some pressure from news overnight in china, joe. This me for sure . All right. Mack points when theres three boxes. I think hes pointing when im supposed to start. I see you going like this news out of china well all be back together some day maybe. Will we . I dont know anyway, andif we wont have delays, remotes and everything its amazing that it kind of works, right anyway news out of china yeah. In the eye of the beholder. News out of china overnight, the countrys leadership breaking with more than 25 years of tradition by not issuing an Economic Growth target for 2020. Chinas finance minister said the country will face some factors that are difficult to predict pointing to the coronavirus and trade uncertainties. He said the lack of a target will enable the government to concentrate on ensuring stability and security over to you, beck. All right another big story breaking overnight. China signaling that it will impose new National Security laws on hong kong. Eunice yoon has more on that front. Eunice reporter thanks so much, becky. Hong kong activists are calling tonight for protests across the territory, and this comes after the chinese leadership here in beijing had tabled a proposal, a set of National Security laws for the city which the chinese officials here have been describing as a defenseless city of hong kong now the new proposal would include or at least are meant to tackle secession, subversion, terrorism, foreign interference and would set up beijingbacked intelligence agencies in hong kong in order to, quote, improve the one country, two systems style of governance. So this system has been in place since hong kong was handed back over from the u. K. To china and has allowed hong kong to operate relatively freely from mainland china. Now as you can imagine, not only are the activists very concerned but the Business Community and lawmakers are very concerned about what all of this means lawmakers have been saying that this is an end of hong kong as we know it because they are concerned about the potential breach for the role of an independent judiciary, for encroachment on Civil Liberties and also on the position of hong kong as a Global Financial center whats ironic is this all comes at a time when hong kong has been trying to shore up its credentials and make itself look like a place for Chinese Companies to list because of the tensions between the u. S. And china. As you guys know, the senate has passed a bill that would potentially mean that Chinese Companies would dpee list some of their stocks. From my conversations with some bankers in hong kong, the authorities in hong kong have been very eager to try to showcase some of the benefits of being on the Hong Kong Stock Exchange they have, for example, recently eased some of their rules about weighted Voting Rights so making it a lot easier for not only Companies Like alibaba or others to take a larger role in the hang seng and that could happen this summer. They also have been talking up how they have still access to International Investors. Chinese startups that ive been talking to here have said that one of the reasons why they havent been so interested in shanghai and wanting to go to the nasdaq is the fact that they can actually tap into International Investors, u. S. Investors and those funds and in hong kong theyd still be able to do that then finally in hong kong, the authorities have really been hoping that they could talk up the fact that they could provide political cover from the u. S so having a lot of these listings and Companies Come back home could be a whole lot safer, dont have to worry so much about the headache of being criticized in the United States. Hey, eunice, it seems like we are kind of watching these tensions between hong kong and beijing play out on a maybe an upgraded cycle. You see these protests that come out. You see the push back. You see things kind of quiet down a bit, but then with the next wave it sounds even more strict and more imposing than the last wave that had been there. Reporter yeah. I think thats worrying a lot of people, not only inhong kong but also here who, you know, have been watching this relationship for quite some time and see the benefits from a business perspective of the chinese of main land chinas relationship with hong kong, with hong kong being a window allowing Chinese Companies to jump out into the International Realm for International Investors to come into hong kong and see it as a safe place to invest in Chinese Companies, but certainly theres a lot more concern that these protests could get pretty ugly. And also the whole city the city of hong kong has been on edge for several weeks now and one of the points that people have been watching is june 4th theres supposed to be every year there is a peaceful rally on june 4th in hong kong and because of the pandemic restrictions, they were recently extended for public gatherings until june 4th so that already was angering a lot. People there who are used to going out on june 4th and either commemorating people who are lost on Tiananmen Square so the whole combination right now is looking very, very bad. And so and at this point it doesnt look as though there will be any change of heart from beijing about dialing back some of these National Security laws. Right eunice, thank you. Good to see you. For more right now on u. S. And china tensions lets welcome ra uchir sharma. What do you think, ruchir. This is where things are ramping up with china and the United States and china and hong kong, too . Exactly so when i was on your show last time a couple of weeks ago i was talking about the fact that what this crisis has done is accelerated many trends that were already underway before the crisis rather than sort of turning the world upside down adding that this is exhibit a of that this is on the other side of the indication of that a series of things that have happened over the last 24 to 48 hours to suggest that. Im not sure when this law gets implemented or if it gets implemented. I think that in general the biggest story here is that these tensions are sort of just getting ramped up. As we head into the election, we have to have much more of this, even if theres not immediate action, even on the whole realistic story. These are all long processes these arent events. But i think that the direction is clear and obviously new sort of element for all of us investors to consider as the year plays out we are looking at the futures down by 103 points the dow all major averages are down a lot of people are pointing to the amped up tensions with china as a big part of that reason this is a long, slow moving issue. You do have bipartisan support, democrats and republicans saying they want to be a little tougher with china what does that mean longer term . Well, i think that we are back to the era of a nuclear war, in the fact that this is a new war centered on this you have a much higher geopolitical threat and this needs to be accessed now its possible that after the election some of this cools down a bit, but i think the trend is pretty clear in terms of what happens. The only thing that can prevent it from escalating further is the consequences last year thats what happened, the u. S. And china sort of calmed things down because it was clear that the mess the economy is in, i think that, you know, sort of politics trumps economics in an environment like this which means what . If were already talking about economies basically in free fall, both here and in china, if this gets ramped up, what are the net ramifications and what would you be telling investors to do right now as a result . Right the biggest fear i have, so much crowding of position in a few of these stocks, which is particularly in these leading chinese adrs in the u. S. Tech stocks. I think that their performance in particular is at risk with whats going on. If you look at the last couple of years, every time you have a major u. S. china escalation, thats the only time the second growth is giving it a hit. I think that that is what is sort of at risk more than anything else in the coming few months you know, just think in the u. S. You have the phenomena where five or six stocks, the big faang stocks have totally dominated the earnings and the relative return for the u. S. Similarly, in the emerging markets its these five or six stocks led by tencent, alibaba which have completely dominated the environment. The excessive crowding in these stocks on both the u. S. And china and these stocks which are very exposed to the deep globalization trade, i think those become a balance i think thats what were seeing on a day like today as well. You know, last week the Chinese Government was fairly explicit in its messaging that it sent through one of the newspapers or one of the media organizations there thats very close to the Chinese Government, kind of a mouth piece for them they were very clear in messaging that it was going to be apple and boeing and other stocks that directly took a hit, that china would stop buying boeing planes, they would stop being maybe working so closely with apple and allowing them to go back and forth. Are those of particular concern for you . Do you think they carry through . Yeah. Its sort of a bigger team that ive been thinking about the end of the era of multinationals. These companies that do a geographical split, there is a risk in terms of what happens to them these things arent going to change overnight no one is going to withdraw from china or global footprint, but i think that it is the sort of big risk of multinationals. Yeah, those stocks that you mention are also the kind of stocks that im talking about. Where does the exception of crowding and which it happened this year spotted concern. This event is a direct threat to those excessive crowding in which has happened if you look at all the hedge fund baskets, you look at the detailed investors theres been such an explosion in new retail trading, theyve all been buying the same handful of stocks in terms of the super popular faang stocks and the very big chinese adrs i think thats where i see the big risks at an event like this will only accelerate that. Ruchir, thank you for your time today its good talking to you. Great thanks for that. Coming up, nbcs mike tirico on the future of sports in america after, during, right now with the coronavirus pandemic. He joins us next be sure to stick around for our interview theres a bigger interview than mike tirico just barely. Former Vice President and president ial candidate joe biden. Before we head to break lets get a check on the markets squawk xomg ghbabo cinrit ckh. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. 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. I geh. Common bird. E. Ooh look over here something much better. There it is. Peacock, included with xfinity x1. Remarkable. Fascinating. Very. It streams tons of your favorite shows and movies, plus the latest in sports news and. Huh run the newest streaming app has landed on xfinity x1. Now thats. Simple. Easy. Awesome. Xfinity x1 just got even better with peacock premium included at no additional cost. No strings attached. Just say peacock into your voice remote to start watching today. Welcome back to squawk box. Alibaba just out with its Quarterly Earnings it Beat Estimates on both the top and bottom lines alibaba reached 1 trillion, with a t over just concluded fiscal year. Thats for the very First Time Ever also saw increases in active users with Online Shopping boosted significantly by the covid19 pandemic. Joe . Thanks, andrew. 12 billion in lost revenue, hundreds of thousands of jobs. Thats what the sudden loss of sports means according to a study by a friend of the show, patrick reesch the numbers could double if College Football does not return joining us on the impact of sports and what it looks like when it returns. Its already returned. Mike tirico. Host of nbc sports olympics, football night in america, indy 500. Why dont you give us some important spots, mike. Little did i know how are you . Thanks for coming on the show. I am great. Good to be with everybody. Joe, good morning. Yeah, ive done more tv in my home office in the last two months than i have the last year were all finding a way but it is different i should be at the indy 500 this week end who knows when were going to get to that normal, whatever that new normal is all of us as sports fans are happy to have a few, a few live sports back. When i texted you on sunday during golf and i said your voice is like a chorus of angels and you said, no one ever said that to you in your house before what does that mean . Youre not appreciated there no. No everybody no. 20yearold, 18yearold kid, been married over 25 years the dog shares that. You can tell, mike the president called in. I saw that interview i thought you did a great job. Everybody was watching it was good but those guys were rusty, were they not they were. That was a taste of whats to come how is it going to work, mike . How do we reopen its like reopening the country . It is in a lot of ways, joe in a couple of different fronts. First, just competition. Players are going to be rusty. Secondly, there are all of the new protocols for covid19 testing. A significant amount of testing is going to be needed by the leagues and teams to get sports back going thats going to make the question is there enough testing that the athletes should be getting this volume of testing compared to the rest of the population of cities and counties and states in i think were moving towards that line with testing ramping up and seeming to be more available then the third part is the economic part. It is going to be very different. When he takes fans out of the stands, it will be great to sit at home and watch. When you take fans out of the stands you are talking about being in the billions across the entirety of the industry. That is going to be a right sizing, a changing, a seismic move potentially in sports if this goes on for six months, a year, 18 months. You make some great points and that is we know nascar is going to go on college reminds me of kids going back to school earlier we need that to happen so parents can go to work we need students to go back to campuses to have College Football and your beloved orange do you know whats going to happen there what are the prospects of this happening . Yeah. Its hard to tell, joe you hear every school say you mentioned im a syracuse alumn the chancellor has talked about it publicly now. Notre dames president father jenkins said yesterday or two days ago that notre dame, students are going to come back a little bit earlier and theyre going to leave on thanksgiving break. Thats when their finals are going to be so kids dont go home, come back after thanksgiving for a couple of weeks and go back home again try to limit the travel and the number of exposures you might have that is a different model. Everyone is looking to get kids on campus not just for sports but the economics of the College Campuses which is massively impacted if there are students on campus, then you can have fall sports which includes College Football. Thats the cash cow. 60, 70 of the revenue from these athletic departments comes from football season football is almost essential to not see a massive, more immediate change in not just College Football but the entire structure of intercollegiate athletics. A lot is tied to what happens in august and getting kids back on campus. Not surprised you have your finger on the pulse. Great for all of us. For my draft kings and nfl. Yes. You point out, nfl, you know what, make my day. Cancel the preseason we dont need that, right . They can always delay that oh, no, they canceled the pre as long as we get to the real season, thats fine. Theyve got some runway, right its two gates of revenue and all of that and the season tickets for the owners theyre the ones that say dont cancel the preseason. Right there is no preseason in College Football could you play the nfl without a preseason game or two . Perhaps. I think the nfl has the most runway because theyre going to see what Major League Baseball tries to do to start a season. What the nhl and the nba do to try to finish their seasons. Theres conversations with players associations and the leagues on all of those fronts then the College Football and the nfl and i think they have the runway because they have bye weeks. They can tighten up that week between the conference championship and the super bowl. If they had to, they could push the super bowl back. They have a lot of options so i think the nfl is going to have the best ability to have a season, something were familiar with, play out once we get to the fall thats if there isnt a big spike and things dont change from where they are right now. We dont have that much time. The olympics, too, youre a main guy there. That should be interesting thats enough time well be able to have like back to back, wont we . Thats not going to be a bad deal to go through if that works. Yeah. We had ioc president on my nbc sn show two days ago he was optimistic. Theyre trying to put the pieces together theyre getting 850 million for tokyo and the federations that run all of these sports and the National Governing bodies 2678913 days, joe, from the Opening Ceremony in tokyo to the closing ceremony in beijing. Lunch talk live is on the Sports Network you talk about all of that well end, mike, with these pictures this has been done before. 1918 i got a picture of a baseball game. Thats a georgia tech Football Game right. In 1918 thats the stands. Then baseball being played with the ump and the catcher and the batt batter, that for some reason looks familiar that could be taken two months from now we dont know. It will look different but hopefully it will look like something weve seen before. For our psyche, it will be great having sports on. The reason youre where you are, so smoothe. Any sport and i just love hearing you. Very kind nice things about squawk box, too, during this pandemic. I appreciate that. You, andrew, becky rock it. Keep it going. Great talking to you, buddy. Have a great weekend. See you on the links hopefully soon. Youve got it. Becky joe, that was a great step towards normal that felt normal maybe thats where were headed. When we come back, one of the most successful private Equity Investors wants to make sure the Payroll Protection Program funds are getting in the hands of those who deserve it. Robert smith is the founder, chairman, ceo of Vista Equity Partners hell join us. Time now for todays aflac trivia question. How many people flew on United Airlines in 2019 the answer 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 but inside. Theres advanced research, modeling and refinement. Constructing funds that dont simply follow an index. But explore new terrain. Helping you fill portfolio gaps. Connect to client goals. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise. 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And try align gummies with probiotics to help support digestive health. Now the answer to todays aflac trivia question. How many people flew on United Airlines in 2019 the answer, 162 million. United had 4,989 daily departures worldwide still to come on squawk box this morning, Vista Equity Partners chairman and ceo robert smith is going to join us. The ceo of splunk joins us to talk about the platform that tests covid19 all leading up to our interview with president ial candidate joe biden at a 8. M squawk box returns right after this welcome back to squawk box this morning the paycheck Protection Program was designed to save main street more than 4 million loans have been approved totaling more than 500 billion is the money getting to where it needs to go . One of the most successful private Equity Investors wants to make sure it does especially when it comes to minority owned businesses robert smith, Vista Partners great to see you. Good to see you. Thanks for joining us. My pleasure good morning you have worked with the white house on this ppp program and so i just ask you to start by giving it a grade do you believe the money is getting where it needs to go nkts you know, the First Tranche of the ppp i think was challenged to get to the Small Businesses, small and medium businesses the second tranche are being a lot more effective one of the things that we discovered, andrew, that you and i have discussed is there is a frankly banking desert in a lot of the communities about 70 of the africanamerican communities dont have a branch bank weve been working with secretary mnuchin and senator schumer and pelosi to actually work on building out capacity in what i call a capillary Banking Systems which are the Community Development Financial Institutions and minority depository Solutions Building out capacity to get these dollars into the hands of these Small Businesses which are essential to our communities so what do those capillary banks look like . If you are a Small Business owner listening to you, where do you go to get that money so theres a little over 1,000 of these cdfis and these banks typically are in the communities. Theyre mainly in what we call targeted communities and fortunately a lot of the larger banks dont bank those organizations or those businesses any longer and theres about 94 or so of the africanAmerican Businesses are Sole Proprietor ships and dont have banking relationships what weve been doing is technically enabling us. We have wonderful teams enabling the businesses to go through the etrans theres national bankers. Org weve been working with black churches, our fair share a number of organizations weve been working with to enable these banks to be able to process the loans. Theres probably about 90 billion or so left in the second tranche of ppp and i think its essential that these Small Businesses get their share of the stimulus capital to frankly repair some of the economic damage that this covid virus and this sheltering at home has done to communitys economic base do you think the ppp Program Needs to be extended and more money needs to get into it the senate tried to pass a bill that would have extended from june 30th, as you know, to the end of this year. I think two things. One, i think we need to think about this holistically and how do we repair it and the Economic Opportunity we were on the path of capturing part of that is, a, more Capital Needs to be driven frankly into the Small Businesss hands and probably give them a little more flexibility in terms of how they spend it it shouldnt necessarily be 75 for payroll and 25 for rent and utilities. It should be more flexibility. The vast majority of these Small Businesses, loans typically need to be in the 50,000, 75,000 range not 2 million. I think it needs to be extended. There needs to be carve outsfo businesses and assets under management thats where the capillary banks fit. It takes more time to process the loans to Small Businesses. Robert, maybe a sensitive question, but how do we incentive advise workers to go back to work and to do it safely the reason i ask is weve had a number of guests on the show over the past week or two from washington often on the republican side who say especially among low wage workers that some of the Unemployment Insurance programs are effectively paying them more to stay at home. I understand. They rely on that due to covid but it becomes complicated. I understand. I think its important, andrew, two things we need to make sure its safe for workers to return to work and i know theres a lot of scientists, we work on a number of commissions on the state and federal level to think about pathways to get back to work safely most americans do want to work, get back engaged in commerce, business, trade that theyre engaged with i think the important part of that is make sure we have a very robust set of businesses for them to go in and provide their duties and their efforts so i think its important that we really frankly restimulate the economy and actually, frankly, invest in the technology that will make our businesses more efficient. I dont want to necessarily waste this crisis by investing in technology and ensuring every american and every American Business has access to a robust Banking System every business has the ability to leverage Newer Technology so they can grow more effectively and continue to increase the wages and opportunity for the employees. Thats the best way for us, frankly, to get entice folks back to work robert, let me ask you a question as a business question, as an investor in this world right now. Clearly the market is anticipating a vshaped recovery are you anticipating the same kind of recovery you know, the world i live in, as you know, andrew, is software i think what has happened is the Digital World has been pulled forward in everyones life at this point in certain segments of the economy i think we will see a more rapid recovery in areas im in in particular in other areas i think it will take time. I think we have to relearn how we engage in certain environments and requires for some period of time social dynamics of space that we hadnt contemplated before. I think our Retail Markets are going to change quite dramatically in terms of how we buy goods and services and i think were all going to embrace more effective ways of engaging, utilizing in my Case Software and technology to move business along and theres probably going to be a reshaping of the supply chain across multiple industries and thats going to take some retooling and some effort. It will be a question of how long it takes for that to actually manifest. When you look at valuations today and of course youre buying private companies, theyre pegged off of a Public Market do you say these prices make sense to me . These prices are too high, theyre too low . What we see, you and i chatted about this a few months ago, prior to covid we had massive amounts of liquidity in our markets generally. And i think as people started to realize that Certain Industries are getting hit harder than others in this context, that theres going to be a rotation through areas i think are less effective. So weve seen segments and sectors in our space, for instance, where evaluations, they took a shortterm drop and now are kind of reaccelerating to the normal or to the rates they were before as digital consumption increases, some of that is an argument that its been overbought too quickly all right we are about a year its been about a year a Year Anniversary were you surprised the 2019 Moorehouse College class you were going to pay off their entire student debt. It was a remarkable moment that everybody in the country saw and we applaud you for doing it. Thank you. Im curious what you think now about Higher Education, the cost of Higher Education a lot of parents, by the way, and students thinking about whether they should be paying for a virtual education, some of which may be happening in the fall what do you think of all of that yeah. I think it is, again, brought to the forefront that were going to have to rethink education weve been talking about this for years. What is the value of a fouryear degree versus maybe going into different forms of work study, apprenticeships, et cetera weve expanded our programs for intern x programs focusing on s. T. E. M. Education the dynamic is since most of our students are learning from home or learning at a distance, leveraging technology to do that most effectively is going to be one of the critical parts. I think theres going to be a reshaping and frankly readjustment of our educational dynamic. In all frankness, i think some of that is warranted and i think we should think about whether one of the most effective ways for us to educate our population to drive forward into the future of opportunity and a lot of it is digital, s. T. E. M. Oriented. Real question how much do you get in the universituniversity a lot. There are other vocations where you can frankly learn them in coding camps, et cetera, move forward from that direction. Okay. Robert smith, it is always good to see you we appreciate you. Appreciate all the work youre doing. Thank you for inviting me and continuing to get the word out and get the ppp into the hands of Small Businesses. All the best. You bet thanks, robert. Coming up, new data showing a big pickup in iphone sales in china. Details right after the break. Then the ceo of splunk on business in the cloud during the pandemic doug meritt will join us ever since weve gone mobile on the now platform, somethings gotten into the office. I hear you. Feels like theres no barriers between departments now. Do you think everyone appreciates it . I do. Huh. Forgot my glasses. Serivcenow. The smarter way to workflow. Shares of moderna rising this morning on some comments from dr. Anthony fauci meg tirrell joins us with the details. Reporter good morning, joe dr. Fauci was just on npr discussing the data we saw from moderna. One of the knocks on the way that data came out was that we didnt hear from dr. Fauci and naiad which are the partners on the trial. With remdesivir it was dr. Fauci who delivered the news of the results of their trial so people were scratching their heads about why he hadnt been heard from on the moderna data this morning on npr and cnn last night he said hes cautiously optimistic seeing the data he talked about the levels of neutralizing antibodies observed at the early stages of the study. They only had eight patients worth of data. All eight did show the neutralizing antibodies. He said the titres were high. That was a detail we have not seen the plan is for niaid to submit that soon. We should see the data, guys theres an optimistic outlook from dr. Fauci we have to remind everyone, this is early days. Eight participants worth of information. Still a long way to go to get through this back over to you and we dont know for sure that even that level or titer of antibodies, whether that generates immunity or not to the covid virus. No one has ever said otherwise, that its a long way off just the ability to take a small segment dr. Gottleib said, you enclose it in a lipid, a small segment of messenger rna, viral messenger rna, a small segment. To put it into a human cell and have it translated into the spike protein thats just like one on a virus and not the virus itself and to generate neutralizing antibodies is a positive it would help if people just understood a little bit about science to understand that thats a pretty significant step, whether it eventually results in a vaccine or not is a long way off obviously but you know that, meg i mean, we were talking yesterday together about using a complete adenovirus which has a recombinant copy of a viral gene in it. Thats double stranded dna that youre putting into someone hoping that that gets expressed so that theres immunity to that, but, you know, ive got my problems with putting another virus in that has a recombinant genotype and Everything Else that gets a little i dont know, this is a much more elegant and presumably a safer way of doing it. Reporter well, potentially, joe. That second approach you just mentioned is the Oxford Astrazeneca approach there are pluses and minuses to each one the draw back of mrna of course is that it hasnt been taken across the finish line before. I know. So there are questions about it well have to see questions about that in trials. I dont think adenovirus as a vector that theres an existing vaccine either, is that right . I think youre right. They use a chimpanzee adenovirus johnson and johnson uses an adeno virus as well. They have tested that substantially across 70,000 people we have talked to j js chief scientific officer and they do have a lot of data on that there are a lot of questions this is a new virus. Well have to see how all of these approaches work. Beck . Scott gottleib made the point also that in america we are trying a lot of companies here in the western world are trying all of these new approaches that would be really exciting if they worked. The chinese have taken a different tact using old technology, weakened viruses, something theyve been doing for over 50, 60, 70 years to dry to come up with some of these things as well that raises questions of what happens. Is there anybody in the western world that uses that Old School Technology reporter thats a good question, becky. The inactivated or attenuated approach is one thats tried and true many of the vaccines that our kids get now are based on that technology and were developed in the 60s i think the most advanced vaccine approaches using that technology are indeed ones used by Chinese Companies most of them being worked on by American Companies and European Companies are newer technologies. Meg, thank you for the constant update on this. It looks like moderna shares are up by just over 5 that has certainly been a stock that has been on a roller coaster ride this week when we come back, the ceo of splunk will be our guest. At the top of the hour, former Vice President joe biden will join us. Deere and company, earning 2. 11 for the latest quarter stock is up by 3. 6 . Squawk box will be right back. 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. Confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Ee i got an oriole here. Eh. Common bird. Ooh look over here something much better. There it is. Peacock, included with xfinity x1. Remarkable. Fascinating. Very. It streams tons of your favorite shows and movies, plus the latest in sports news and. Huh run the newest streaming app has landed on xfinity x1. Now thats. Simple. Easy. Awesome. Xfinity x1 just got even better with peacock premium included at no additional cost. No strings attached. Just say peacock into your voice remote to start watching today. The cloud is a bright spot in the markets throughout the covid pandemic one Software Platform keeping companies up and running despite nationwide shutdowns 38 . 28 since the w. H. O. Declared a pandemic joining us now in his first interview after reporting First Quarter results is douglas meritt, president and ceo of splunk those numbers are pretty incredible since the w. H. O. Up 28 . You have said a company like yours that can offer cloud products that help secure and monitor a disperse work force, theyre in demand right now. We shouldnt be surprised. Well, thank you im really, really proud we closed our quarter april 30th we had nearly 2 3 of the quarter influenced by the Global Crisis and the pandemic it was comforting to see that beliefs that weve had and that you guys have talked about, that this crisis is certainly accelerating some cree trends around the world plays out with a Data Platform as well. We believed and have been espousing for our entire history that data is critical to reimagine businesses, to save lives, to make effective decision making. I think what were seeing and you guys are doing an excellent job on helping people with the overload of data we have around the pandemic as that data is moved from a luxury to a necessity. I think that splunk has a key big data semistructured, unstructured Data Platform is there to help organizations through this crisis. Near term there might be some disappointment in revenue and things flowing to the bottom line because youre trying to shift more cloud based and its essential you do that. For example, your cloud revenue is up 81 but its still not the lions share of how you do things thats going to continue it wont be quite as maybe the numbers wont go quite as quickly but it will be more stable yeah. Its actually a little bit ironic with where we are right now that a big revenue quarter is an indicator that our transition isnt accelerating to that quarter we have the guide post for ourselves internally and for investors as well. Annual recurring revenue cuts through the noise of multiyear contracts. Weve seen this continue to grow we were 52 growth on arr. 1. 2 billion in arr. Cloud arr grew 42 million and 82 growth that resulted in that 112 million 81 growth in cloud revenue but we still have a majority of our contract base and Customer Base managing the software themselves through term contracts, which has very, very different revenue characteristics. So the covid testing, you actually are in this coalition with public, private, other nonprofits to actually crunch that data in real time to help figure out who needs to be tested, maybe even respond to what the results are its pretty exciting. Yeah. Were really excited about that. We worked with a number of other companies. We obviously are the data and analytics portion of the solution to develop a free and publicly available solution for state and local entities that are all struggling and wrestling with this testing issue. Its a really wonderful platform that, as you said, does everything from help citizens to selfdiagnose and get feedback on whether they should test. Helps them locate where available testing and most expedient testing may be helps them through that testing process. Then a whole host of analytics for the end user, both customer on whats happening with different testing trends but also the local entities and people that are trying to get visibility on to trends around covid to see whats happening within their media department. You would characterize the federal governments response, at least in using data as not all it could be. I think we were very slow at first. Go back to there are a lot of beacons and warning signs late december, early january. By mid january there could be something that we should be a little bit more prepared for i think theres been more aggressive push in recent months obviously, but going back to being so important forget the virus and whats happened with the virus, thats hard to figure out less hard to figure out whats happening with medical supply chain. What does ppe look like . What can Health Care Workers are available . Hospital beds, ventilators, all of those issues we talked about. Thats available information what is our capacity for testing is a great example distributed amongst many, many different locations but if you are willing to wade through complex, nonstructured, messy data, there is information to pull out i think its going to be critical for us to really leverage the situation to take a different stance on data and make sure that the next thing that occurs, there always will be a next thing, we are much more wellprepared and have a better chance to see those. Were not going to reopen immediately, doug. We have to run i want to have you back. Data could figure out how to reopen were working on that as well. Start working on that, doug we appreciate it. Thank you very much thanks. Andrew thanks. Coming up when we return, president ial candidate joe biden is going to join us right after the break. Were going to discuss the handling of the pandemic, the Payroll Protection Program and so much more lots to discuss with joe biden meantime, here are the futures dow opening down 28 points right now. Were back joe biden right after the break. Turn on my tv and boom, its got all my favorite shows right there. I wish my Trading Platform worked like that. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. Good morning it is 8 a. M. On the east coast and former Vice President joe biden is about to join squawk box live. Just ahead, bidens take on the trump administrations response to the coronavirus and whether he thinks its time to reopen the country. Plus, well get him to weigh in on crisis driven Corporate Bailouts as well as spiking unemployment rates and just what a recovery would look like in a Joe Biden Administration the final hour of squawk box begins right now good morning im joe kernen along with becky quick and Andrew Ross Sorkin u. S. Equity futures at this hour, up and they had been down. Probably over 100 points or so i am hesitant to really tie it to anything, but they did bring us some comments from dr. Fauci about a possible vaccine earlier losses are now in positive territory, beck i saw gear was doing really well this morning. Thats right. Did come out with earnings and, look, maybe it took some of the attention away with the tensions with china thats what has been weighing on stocks earlier this morning and yesterday, too we have a few big stocks on the move this morning including china based ecommerce giant alibaba which Beat Estimates on the top and bottom line. For the fiscal year alibaba topped 1 trillion in volume benefitting from the virus driven Online Shopping but, again, there have been questions about what the senate is going to do. They unanimously moved to pass legislation that could make it tougher for alibaba to list in the United States down the road. Construction equipment maker deere reporting quarterly profit with revenue beating forecasts too. However, deere said it expects Global Equipment sales to fall by 30 to 40 as the covid19 pandemic weighs on demand. The stock is up by 2 3 4 . Foot locker is out with Quarterly Results this morning the retailer lost 67 cents a share. More than the street is expecting. Revenue missed estimates with Comp Store Sales plunging a wider than expected 43 . Tough to do same store sales when a lot of the stores are closed foot locker has suspended the Quarterly Dividend its down 5. 7 ready, andrew we are ready in just a moment i think were waiting. Well can chat a little bit beforehand let the Vice President ready to go i think were very close which should be great. Andrew i think what were going to do is this, though we want to get a little bit more time with the Vice President so we are going to take a quick break so that we can sit down and spend more time with him were going to be speaking in just a moment with president ial candidate joe biden. That is next right here on ghafomt box in just a men rit ter this short break ein. High protein. Low sugar. Tastes great high protein. Low sugar. So good. High protein. Low sugar. Mmm, birthday cake. And try pure protein shakes, with 24 vitamins and minerals. And try pure protein shakes, you say that customers maklets talk data. S. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. Welcome back to squawk box this morning want to get to our biggest this hour the democratic nominee, former Vice President joe biden joins us on the broadcast. Mr. Vice president , thank you for joining us this morning. Nice to see you. Happy to be here. Want to start with the economy and your expectations good morning your expectations for where things are headed. We are, of course, now at nearly 50 unemployment over 36 Million People unemployed and yet the stock market is really where it was last october as investors are expecting a sharp snap back, a vshaped recovery. You have advisers and other economists in your midst does this make sense do you expect a vshaped recovery. From your lips to gods ears. The vast majority of American People are suffering right now, they dont measure their Public Health, their physical security based on the market. Let me ask you this you have pledged that if you are elected you plan to raise taxes on corporations and also high net individuals. Given the pandemic, how quickly do you think you would move on that as you try to balance growing the economy, getting people back into jobs with paying for all of the services that we are paying for now as a result of the pandemic look, my tax policy is based on a simple proposition. We should stop rewarding wealth and start rewarding work a little bit lets raise the Capital Gains tax for people making over a million bucks a year in ordinary income lets reverse the trump tax cut. Imagine if we had that 2 trillion now as we go into god willing a recovery which is a long way away as i see it in which they use to buy back hundreds of billions of stock, boost wages for workers. Did they do that no lets use the money to invest in the middle class you know, almost 40 million americans have filed for unemployment and you know what the white house is proposing more tax cuts for corporate america. Ive got a novel idea. How about some relief for main street the entire recovery program, the entire stimulus has been passed several trillion dollars what was it done for to keep people employed. To keep people employed. Whats the president done . Fired the inspector generals, the vast majority of the money has gone to the very wealthy and major corporations not a single penny has gone to the main street fund that has been set up in the last three months and the ppp what happened . People are getting locked out. Look, we didnt advertise thats not what it was ties advertised to do the American People are getting a little frustrated getting extremely frustrated the president s response to all of this has cost lives and its cost jobs. The way to fix the economy is get Public Health response correct and in a structured economy. What were doing now is upside down the bigger you are, the faster you get the money. Boost the economy, create middle class, paycheck Protection Program. Health care. Confidence, look, i just think hes got this all backwards but he doesnt seem to care much about it let me just ask you though about a couple of things you mentioned and unpack some of this on the tax front first. Sure. I understand you want to raise taxes. The question is how quickly you do that in the midst of this pandemic and in the midst of trying to get the economy to recover. Nobody making under 400,000 bucks would have their taxes raised, period bingo. Lets get people back to work. Lets get them to work now look, heres the deal what about corporations tell me how many people are investing that tax break they had in new jobs. Give me your numbers, man. Come on. Lets get real people are hurting i absolutely understand that. Im trying to understand as youre trying to balance these issues, especially when it comes to Corporate Taxes, how quickly you move on that given that you want to get jobs and get people back to work okay. Let me ask you the rhetorical question what has what jobs have they created if we give them more of a tax cut . The president s talking about a greater tax cut for corporations you tell me what you think, how many jobs that will create in the next six months. Youre the expert, you guys. Im not being a wise guy im not trying to be like trump, not criticizing, you really, think about it the main people need to get back to work and the idea theyre already talking about, you know, the president s phrase, what is it, we have time to wait . Theyre not even going out and helping making sure that the states have the money to keep their firefighters on the job, to keep cops on the job, teachers on the job, all of those things that do create income and do generate growth. What are we doing . I mean, what hes taking im sorry. I get frustrated not with you, with the situation. Thats okay let me ask you that. Im having trouble hearing. Can they turn up the volume . I do apologize i apologize, mr. Vice president. We will try to get the volume turned up. Let me ask you this about the bailouts you know, the bailouts were intended, as you know, to keep people employed and my question to you is do you believe that companies that get bailouts that dont keep people employed, were already starting to hear that airlines after september 30th are going to potentially layoff people, whether they should still get those bailouts. Not only that, whether shareholders should be wiped out and whether effectively some of these companies should be nationalized you participated when we did this with the Automobile Companies, you know, after 2008 and taxpayers got a piece of those Automobile Companies well, look, the taxpayers are coughing up all this money, and the idea is to keep people employed how can you tell that the largest employers are Small Businesses collectively they employ more people as you know as well as i do what is happening to them . What help have they gotten in the paycheck Protection Program, whats happened i see we have american airlines, delta airlines, et cetera, all up there i got it what about those stores along main street in those small cities and towns theres no reason why they cant do a little of both. The biggest Corporate Bailout in American History is asking next to nothing of corporate america. Besides that, the president has gone out and fired all of the inspectors general i am focused on keeping people employed, keeping them on a payroll so that when we get to actually recovery, were now just talking about stimulus to keep things from getting worse and the idea of putting people back to work is going to occur when we begin to really invest in america, when we invest significantly in infrastructure, we invest significantly in all of the research and development that has to be done to compete with not just china but around the world. We can build back better but the more people that are out of all those little Small Businesses, they go out of work they go out of business, theyre out of business. Theyre gone so why did they pass the 2 trillion program focused on helping keep people employed whats happened . Mr. Vice president , wanted to ask you about the pharmaceutical industry in large part because the Democratic Party, as you know, has long criticized that industry now humanity is so dependent on their innovations in this pandemic the question i would ask you, we were talking about some of these efforts at vaccines. Would you look to put price controls on a vaccine or a therapeutic if one is found . No. I tell you what, if one is found, i would make sure that every Single Person in america is able to get a vaccine, period, without any cost and i would do the same thing with testing right now and id look, we need a health care policy. We need to be able to provide people the ability to stay healthy and get healthy. Theyre the things we need to do all of the talk about opening up, people arent going to open up until they have the confidence to know that if they gather together theyre not going to get sick. You know, you saw that columbia study, other studies that if the president acted two weeks earlier there would be 54,000 more people alive than there are today. We have to move and what do we have to move on . Ordinary people breaking their neck, people who are carrying the rest of us on their back in terms of this virus, that they are able to get the kind of medical help they need as it relates to this pandemic mr. Vice president , its joe kernen thank you for joining us we appreciate it. Hi, joe how are you. Some dem pundits say that sanders and warren voters are essential for you to win i know youve probably seen that some arent quite there yet. Others point out that your candidacy surged when it became apparent to mainstream democrats that sanders might be the nominee and then they blocked flocked to you are you prepared to say you would govern as a progressive and enact programs in the mode of sanders and warren . If so, what does that say to moderate democrats or independents or some republicans to satisfy with President Trump . Im prepared to say that i have a record of over 40 years and that i am going to be joe biden. Look at my record. The fact is that some areas that i think for example, i think health care is a right, not a privilege. I do not support medicare for all. I will not support medicare for all, but i do support making sure that obama care is around with a public option for those who cant afford, those who qualify for medicaid and they dont get it in their state, they would be able to be automatically enrolled in the public option of medicare. I do not support for giving debt loan for every single solitary person no matter where you went to school. I support the idea if you have a student debt as a consequence of going to a Public University, your income is 125,000, you should be forgiven anyone going to school that goes to a Public University and or community college, they should be able to go for free if income is under 125,000. My wife has na country that out educates us is going to out compete with us. Can we talk real quickly just about what one part of our economy is so important. Sure. The Energy Industry the far progressive wing of the party and the Green New Deal in recent days you said you would shut down the keystone project permanently. We know that the industry is already in dire straits given whats happening with Global Demand what would we do to preserve what would you do to try to preserve these high paying jobs, tens of thousands of high paying jobs in the Energy Sector . Would you close down keystone . Look, i was against im sorry, joe. Im sorry, sir. Go ahead ive been against keystone from the beginning it is tar sands that we dont need that, in fact, is in a very, very high pollutant, number one im not going to go shut down, for example, the they talk about all these other programs the other programs that exist, were going to transition gradually to get to a clean economy. But the idea of shutting down keystone as if that is the thing that keeps the oil industry moving is just not rational. And by the way, it is not economically nor in my view economically make any sense. For example, the whole idea were going to stop fracking, id move away from fracking. I would not do more fracking on federal lands. I would gradually move us out of the position of relying on oil and gas and coal look, joe, one of the things youve seen is that no ones going to build another coalfired plant, period, no matter what the law is because now you can build a Renewable Energy or you can build a natural gas plant that works better and is cheaper and can have less fewer problems. A lot of the folks who listen to your Program Every morning, i listen to it frequently, are already pricing in the price of carbon so, look, the way we can create millions of jobs, joe, is move to a rational policy on global warming, which i have laid out in detail. And, for example, the idea that you want to create good paying jobs, lets make sure over the next ten years we put in 550,000 charging stations along the highways were Building Back up to deal with the present environmental circumstance we have as well as new highways we should be investing significantly in high speed rail and rail we can take billions of vehicles off the road doing that. We should have a president down talking to the president of brazil saying, look, stop burning the amazon its the greatest carbon sinc in the world. More of what you in fact absorb every day equals every bit of carbon that were putting out in the air every day here in the United States. Were going to get the world to come up with 20 billion to help you all like we did in organizing the rest of the world but stop burning the amazon. You know, theres so many things, joe, that we can do without and create millions of new jobs, good paying jobs. I mean, we should be we should become the net exporter of the new technology by investing the 40 billion the 400 billion im proposing in rester much and development for new ways to absorb carbon, new ways to make sure that we can have a system nationwide that can transmit coal and wind across the country but were not investing in those things, joe were not investing in any of it they all create jobs the biggest employer, Fastest Growing employer is in the area of solar and wind. By the way, windows not cause cancer, windmills. Mr. Vice president , thank you for being with us today. Id like to talk about an area that our audience definitely cares about. That would be mergers and acquisitions Elizabeth Warren, whos been mentioned as a frequent potential running mate for you has said shes completely opposed to any deals going through whether thats with big companies, hedge funds, private countries. Amy klobuchar, she said shes had we dont know that by the way. Well, thats what weve read or heard in the news i know. Call it potential running mates. I just wonder, what are your thoughts as of this time do you think they should be banned and are there mergers or acquisitions that bother you i think what we should do is take hard looks at it. Real hard looks and decide whether or not its likely to increase competition or reduce competition. You know, what i im not making that judgment now what im saying is id have the antitrust department of my administration take a hard look at whether or not these mergers increase the pros speblgt of growth, increase the prospect of competition, increase the prospect of unemployment or not. Im not going to make a blanket judgment on that right now its the idea of increased labor increased employment that would be your measure that youd be looking at all of these through. Increase in competition competition. Does it limit competition . Does it in fact go against the notion of the antitrust laws we have thats what id be looking at. Mr. Vice president , just following up on that issue Elizabeth Warren has talked about trying to break up amazon, a company that so Many Americans have become so reliant on and provided essential services during this pandemic would you seek to break that company up i think your amazon should start paying their taxes, okay i dont think any company, i dont give a damn how big they are, if you are lord almighty, should absolutely be in a position and pay no tax and make billions and billions and billions of dollars number one number two, i think companies should be in a position where they start paying their employees a decent wage and protect their employees. So thats the whole notion of this is are you playing the game fairly like it was set up long before and whats the capitalist system about the capitalist system about everybody dealing fairly and dealing straight up with the American People and with their employees. Were not investing nearly as much as we should be doing in a whole range of areas you know that study that was done by the university of massachusetts in 2004 to 14, corporate america, i come from the Corporate Capital of the world, delaware. Im not anticorporate, but heres the deal. The idea that they made several trillion dollars and all the studies show that 54 went to buy back their stock, 37 to make sure their stockholders got rewarded leaving 9 for research, development, races, employment, et cetera. Come on, man thats not the capitalist system freedman is not alive and well but he seems to be running the show here. Mr. Vice president , wanted to ask you also about you referenced municipalities and states, some of which may need to be bailed out the House Democrats have sought to repeal the cap on state and local property tax deductibility. S. A. L. T. As you know it would also be a huge tax break on the 1 . What would you do . Well, what i would do is i would do what we did before. I would make sure theres sufficient money in the rae could have ri program to allow states and local governments to be able to maintain essential workers. And that is firefighters, cops, First Responders generally keeping their county hospitals open making sure that the teachers are able to be employed because as you know, and you guys know it better than most, that all those states and localities have requirement to have a balanced budget they have been clobbered with almost 40 Million People unemployed theyve lost enormous amounts of tax revenue and the idea that mitch mcconnell, who ive worked with a long time says let them declare bankruptcy come on. Give me a break. What are we talking about . Mr. Vice president , i just wanted to clear up one more thing for sure youre on record you would repeal the trump tax cuts immediately and then raise taxes even further right away even if the economy is still in the midst of this pandemic would you do that if elected i would repeal the 2 trillion tax cut for the folks who make over 1 million bucks a year because its demonstrated very little or no growth. Corporations . The Corporate Tax rate that i had proposed at 29 but we had proposed at 28 because i want to make sure that we see that these korpgs, thats not going to take them under what i would not do in the meantime, heres the biggest deal i would stop rewarding through this program that we have, the 2 trillion program put in place to try to stimulate the economy, i would get the money to main street the paycheck Protection Program, the Small Business program with the main Street Lending program. Its out there with billions of dollars. It hasnt lent a single solitary dollar in over three months. Farmers who are needing the help, were told they havent gotten any of the money out, its not going out until june the 1st. Why is he so slow off the mark his slowness is costing lives and costing jobs and costing our ability to rebound mr. Vice president , final question its on the news this morning. Just wanted to get your thoughts and really your thoughts on how you think the United States should react and what you would do if you were the president at this time. Chinas legislature, as you may have seen, unveiled a sweeping proposal of new security laws that effectively take a firm control of hong kong and really crack down on the antigovernment protestors what would you do . Id be at the u. N. With the u. N. Ambassador. I would insist and call out what the United States has always done, overwhelming violation not only of an agreement but of human rights silence on our part has been devastating for people around the world. All it does is encourage thugs and dictators which the president has some kind of affinity for look who he embraces and who he pokes in the eye look, we have governed not merely by the example of our power but by the power of our example. Thats why the rest of the world has repaired to us its the power of our example. We should not remain silent. We should be calling the rest of the world to condemn their actions. Mr. Vice president , want to thank you for this conversation this morning thank you. I hope so, really do. Thank you thank you, mr. Vice president. Appreciate it. Coming up. The road ahead for Driverless Cars as the coronavirus pandemic totally changed the game weve got an exclusive interview with the ceo of waymo. Youre watching squawk box on cnbc. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Up next, how reopening actually gives you time for the hardest industries the restaurants and squawk box will be right back welcome back, everybody. Small Business Owners have spent years building their businesses only to have the coronavirus shut them down pretty much overnight. Thats what happened to restaura restauranteur Cameron Mitchell two weeks ago on march 3rd i was in washington, d. C. , to meet with my bankers. I expressed what a great start to the year we had up 7 same store sales record profitability for the first two months of the year this was march 3rd tomorrow, i believe march 19th, we will be completely shut down. I laid off 4200 people on monday now as the country starts to reopen, Cameron Mitchell is back with us. Thanks for joining us. How are you doing . How are things going good morning, becky its my pleasure thank you. Really, how have things been going for you, cameron where do things stand with your restaurants at this point . I was using the analogy that we were in a major Traffic Accident and the company was in trauma and in a coma for the past few months and were just now beginning to come out of that coma. We opened up 2 3 of our restaurants across america i think were going to survive it will be a while before we get out of the hospital. Lets talk about how you did that you have to go back in and reclean things how did you get the money and how many people are working . The ppp money which we received, in our case, worked exactly as it was supposed to. Helped give us the safety net and the ability to help get us reopened so weve hired back currently about 50 of our work force. Those will get up to full employment levels as we continue to open up restaurants were still awaiting guidance in the major metropolitan areas, l. A. , chicago, d. C. , boston, et cetera were getting there. We expect the restaurants to be open and hopefully back to full employment by the end of june or end of july, somewhere in that neighborhood were working. Its been its quite a challenge. It was much easier to close the restaurants down even though we had hundreds of action items to do so. Its much, much more difficult to reopen the restaurants, get everybody in there, start from scratch, clean the restaurants, clean the patios, relandscape. Get everything brushed up. All the food prepared, delivered, the staff brought back schedules written. You name it, just a plethora of work to do im very proud of our team they have worked their butts off to get our company reopen and here we are today. It was exciting last night i spent the entire evening out in our restaurants to see couples out celebrating and having a great time. People out on dates and parents out with their kids and families and hear that chime of the restaurants and the dining rooms for us was fantastic yesterday what kind of demand is there . How full are your restaurants in the places that theyre open what do you have to do in terms of safety . Are there places where you needed to have much less occupancy in order to distance places yes we have to again, every local is a little bit different, but we have generally speaking the social distancing of six feet from guests throughout the restaurant a number of other safety protocols. We worked for weeks and weeks with our safety team in putting our protocols in place for our guests and our associates to feel safe within our restaurants. So its a little odd walking in the restaurant and seeing plexiglass over your host stand. The host looks like theyre in a penalty box of a hockey game but there are nuances like that in a restaurant that you normally wouldnt see i think people generally speaking are feel comfortable and theyre glad to see the safety protocols in place and so were about we think were about 70, 75 of our sales back is our goal. And i like to, you know any ceo, he or she would be in trauma if they lost 30 or 25 of their sales, but in our case going from 0 to 70 or 75 is a victory, a win i think it will help us and ensure that we get to the other side of this covid19 virus. Hey, cameron. Just really quickly. Have you had to raise prices are you profit annual at 70 to 75 occupancy . Thats a good question, becky. Our models, weve done intensive modeling to show at 70 to 75 we can make about half of the profit that we did prior to the shutdown, which is enough to satisfy our bank and our principal and interest needs and Capital Improvement needs. Its about halfway there, if you will okay. Great. Cameron, thank you im so glad to hear that things are going better and we wish you the best well talk to you soon. Thank you, becky. Appreciate t. Its a pleasure to be here. Take care joe. Thanks, beck. Coming up, the ceo of inphabet selfdriving car unit jos squawk box on a report on the road ahead. 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. I would repeal the 2 trillion tax cut for the folks making over a million bucks a year because as demonstrated very little or no growth. Corporations . For corporation the Corporate Tax rate id move back to what i had proposed at 28 . Okay. What we propose at 28 because i want to make sure that we see that these corporations, thats not going to take them under. What i would not do in the meantime heres the biggest deal. I would stop rewarding through this program that we have the 2 trillion program put in place to try to stimulate the economy i would get the money to main street the paycheck Protection Program, the Small Business program, the main Street Lending program. Its out there with billions of dollars. It hasnt lent a single solitary dollar in over three months. Farmers who needed the help. Were told they havent gotten any of the money out, its not going out until june the 1st why is he so slow off the mark his slowness is costing lives and costing jobs and costing our ability to rebound and that was former Vice President joe Biden Joining us this morning right here on squawk box talking about taxes and so many other issues, guys, about the economy and clearly theres going to be a huge debate about taxes on the other side of this pandemic. Whether you raise them and really when do you raise them. Right. In the midst of a crisis it may be a complicated one especially as we talked about, how do you balance the idea of growth with also paying for all of these services and rescue efforts that weve undergone right i mean, anybody thats in that in the white house at that point is going to look at the deficit and look at the revenue that we have from a slow economy and its not going to be anywhere near whats necessary and then youre going to get back to the age old argument about whether you try to keep taxes low to stimulate growth or whether you just tax to bring in revenue. You know what i feel, andrew, ive always felt that the companies are the ones that hire people thats the private sector. That create the jobs and they compete globally. Right so i want to make it as easy as possible for companies to flourish and compete globally so theyre able to keep people employed, which is why ive never thought that i dont think going back to 28 is a good i dont know, rich people thats different that sit on money thats in a bank. You want to do that, thats fine corporations yeah. Its going to be interesting i think a couple things, if the market continues a pace, i was just going to say, on the wealthiest, and one of his things by the way is Capital Gains. Hes going to make ordinary income taxes thats going to be an interesting dynamic. It will be a harder argument on the wealthy, on individuals. The corporate story will be an interesting one because when do you do that . Do you do that and at some level you could also argue that in an environment where the government is now offering effectively an insurance policy for all corporations, maybe they should pay for that the question is i think more than anything else would be if you were going to raise taxes would be when. Energy, too its so cheap. How do you we still use a lot of energy. If its cheap and its going to be hard to transition to more expensive renewables at this time and as we pointed out, its led a renaissance over the past ten years. Fossil fuels thats going to be tough to transition to that, too. I still want to know just think, dealing with the progressive politicians on the left wing of the party, how do you bring them in . Because so many of the people who have been considered a potential running mate or mentioned as a running made have gone out there and tried to stake their claims saying that big deals shouldnt be done. Yeah. Theres all kinds of other issues that theyre watching they want big banks investigated for how they handed out ppp. How he handles that that will tell us a lot about whats to comfort future of business. The conundrum that the Democratic Party finds itself in, thats what i tried to encapsulate. He cant win in the primary a candidate has to go to the most extreme side of things to get elected and now to win the election hes got to curry favor with sanders and warren people but at the same time you saw what happened when the Democratic Party thought about running sanders. They were like they could see that was a no win situation. How do you get independents . The one thing he did stake out is he is not for medicare for all. Not for that. I dont think that he im sort of of the view that he doesnt have to necessarily try to the voters that liked Elizabeth Warren or do they show up that liked are not theyre coming with him whether he like him or not. In droves theyve got to show up in droves just like i think they show up in droves because of their feelings about the current president more than it may not be that theyre in love with you know what im saying . Yeah. I think theres a back and forth there. Well see. Well see when i interview trump one question lasts about six minutes, too, doesnt it that happens with these guys they have certain things that they want to say, and i wish we had more time, but the reason we dont have more time is because the answers take so long the coronavirus has hit big ride hailing businesses like uber and lyft. Its called into question the viability of ride sharing for the time being could the pandemic end up accelerating the development of Autonomous Cars . Our own phil lebeau joins us with a special guest sorry, finally getting to you, phil good morning reporter good morning, joe lets bring in john craftcheck he is the ceo of waymo john, you heard what joe was saying there about the impact of covid19 you had to suspend operations for a while. You resumed testing. What do you resume rides to your waymo one customers in the phoenix area thanks for having us on, phil its always great to share a story. Yeah, we resumed testing in phoenix just recently. May 11th we have our cars back on the road there were doing additional testing in california at our proving ground well be back in service when its safe to do so for everyone. Probably over the course of the next couple of weeks in phoenix. Youve seen the hit that both uber and lyft have taken in terms of the general public saying, look, we are not going to be taking as many ride shares certainly didnt from the big hit from coronavirus may not return to ride sharing how do you believe the future or what do you see for the future in terms of ride sharing and how much does that potentially change what way mow will do in the future for sure. The requirements have put a damper on transportation of all sorts. Weve seen it everywhere traffic is way down on our nations roads and, you know, if you have the privilege of a home with a garage and a car or two in those garages, you have the opportunity to move from place to place right now that feels pretty good a lot of folks out there feel they dont have a car, and there has to be a way for those people to move around its a wonderful opportunity for waymo to move people safely and easily from point a to point b. So well be an alternative as the economy and the world returns to normal. How do you convince me the car is clean how do you convince me that car is clean and i wont contract coronavirus or anything else that might be out there . Yeah, thats right. One of the great advantages we have is a fleet of hybrid minivans we own and control that fleet. Theyre all waymo vehicles, we have a wonderful partner who keeps those vehicles very, very clean. And i think that can give folks a lot of reassurance that the ride theyll have will be a clean, safe and hygienic one john, when do you expand beyond phoenix right now youre in a small area with waymo one when do we see that expand and become more than just a small area in the southwest part of the United States . Yeah. Weve had a lot of experience driving. Weve been in 25 different cities across the u. S. Were driving now in phoenix weve driven for more than ten years in the bay area. Weve also had operations in detroit, Washington State, miami and other locations. So well be moving and expanding from the phoenix area. Right now were driving in an area larger than San Francisco, which is cool, the southeast corner of phoenix. Well be expanding that service into places like San Francisco and l. A. Moving forward. Cant give you a specific timeline on that today which then brings up the question, people sit here and say you just did a 3 billion round of raising capital, and when does waymo become a profitable entity that will grow on its own or is this something that people will look at in five years and say some day well see waymo out there, but its only in small pockets. I think one thing to keep in mind is this problem that were solving, this problem of selfdriving its probably one of the hardest problems weve tried to solve in the world. In many ways this makes landing a rocket on the moon seem a fairly straightforward task. So its a long journey we consider this an ultra marathon were just Getting Started on it its pretty extraordinary. Weve been oversubscribed. Weve added a wonderful gang of partners to our cap table, folks like silver lake, canada pension plan, fidelity, autonation and magna, its a good crew and were ekrquipping ourselves for the long haul. The world needs this technology. 1. 35 Million People die every year in car crashes. Its a pretty crazy situation that weve been willing to accept the equivalent of an airbus 320 crashing every hour of every day thats the cumulative death toll on the worlds roadways right now. We shouldnt accept that we have to do better we think our technology and the waymo driver can be helpful in that way john, thank you for joining us this morning. The ceo of waymo becky, ill send it back to ou thank you when we come back, we have what to watch ahead of the friday opening bell. The dow on its best pace for more than a month. Can the eresavag hold these gains . Stay tuned, squawk box will be right back clean is a feeling. Its the satisfaction of upgrading to a bidet seat, just like that. And the simple joy of washing your hands, without ever touching a faucet. We think its the Little Things that matter. And we know you do too. Thats why we create moments to feel kohler clean, every day. I think amazon should start paying their taxes, okay i dont think any company, i dont give a damn how big they are, the lord almighty should not be in a position where they pay no tax and make billions and billions of dollars. They should start paying their employees a decent wage and protect their employees. That was former Vice President and president ial candidate joe Biden Joining us earlier this hour. We covered a number of topics important to investors including, of course, amazon and whether to break it up or what should happen given all the questions out there about it and so many other big companies. Joe . It would have to be some type of thing for corporations. Amazon is hes talked about a minimum tax for corporations thats what they they just do under the law what their the depreciation and Everything Else joining us now is the managing partner and Portfolio Manager at douglas c. Lane and associates serat, as someone who manages money and tries to figure out what the environment will be for the next four years, i was wondering, do you think at this point a President Biden would govern more like where the center of the Democratic Party is now, the aoc wing or the sanders wing or the Elizabeth Warren wing . Do you think he would be more like the administration he was part of when he was Vice President , more i hesitate to call the Obama Administration more moderate, but more moderate than what were talking about. How do you think hed govern i they we have to look at what the policies will be. A lot of that depends on who he has as a running mate. The markets will tell us quickly what will happen if we get, you know, policies restrictive for free markets today the markets are reflecting the ability to be free if large corporations are prohibited or taxed at a higher level and not hiring, i think that will be reflected pretty quickly in the market and you will see a sharp selloff, even if the fed is there because if companies cant make profits like they were in the past, your cost to capital will go up and your future cash flow will be lower. When do we worry about paying some of our bills as a country then if its obviously the revenue is not going to be anywhere near what were spending when do we start worrying about that i think the big indicator there is going to be Interest Rates. If Interest Rates start going up because the market figures out that were not going to have enough future cash flows, well see the worst combination of higher rates, deflationary cycle, and thats just going to hurt not just the u. S. Market, but Global Markets at the same time so, markets will be a leading indicator of this. Well have to see where things go thank you have a great memorial day weekend. We want to wish everyone a great memorial day weekend andrew and becky and thats it for us today you were right, andrew, another huge show like you always say. Squawk on the street is next good friday morning welcome to squawk on the street. Im Carl Quintanilla with mike o you live from different places we have improved after dr. Fauci made some positive comments on modernas vaccine data oil did fall below 31. Watch for thin trade today ahead of the long weekend as once again were asking what will it take for the bul