Transcripts For CNBC Squawk Alley 20240713

Possibility china might make efforts to im pose security measures on hong kong has some worried especially in asia today. My goodness, thats despite the fact that we did actually get some we started with vaccine data driving the markets. Look at the rally on monday to start the week off of the moderna news you had those positive vaccine comments from dr. Fauci saying the data looked promising, but its being overshadowed by everything playing out in china, whether its the situation with hong kong and what is essentially being seen as something of a power grab through a National Security lens or intentions between the u. S. And china more broadly and some of the policies that weve seen start to come in this week as well its interesting to see in general how this week has played out in the markets because reopening from a week to date standpoint has really led the way here it is the russell 2,000, the small caps which are seen as a proxy for the reopening efforts now that we have 50 states with some sort is of phase under way going into the Holiday Weekend its the transports which are up 8 and some of those beaten down sectors within the s p, industrials, real estate and energy, that are leading for the week even as we see some breathers being taken today, carl yeah. And on the other hand you have some names like nvidia with the massive earnings print last night which the bulls would argue does well when its a stayathome environment, does well when its a reopening environment. Fascinating things going on in semis. Lets bring in mark to talk about the dynamics and how its playing out in the markets always good to see you. Hey, carl. If we believe that reopening is truly happening and the stayathome phenomenon is topping out what kind of implications does that have for the names you cover and the tailwind for the last two months well, okay, the question is the were going to be looking at curves here for the companies that were materially negatively impacted like advertising names, facebook and google of the world, how rapidly do they recover to what we call fullthroated growth we think thats probably not this year but first half of next year to the names, for the names that structurally benefited from this, the at home, work from home, live at home, shop from home, home, entertain at home companies, the question whether its a permanent change in consumer behavior. I think with this time that you spent two months with People Living under a new regime my guess that does lead to permanent changes in behavior. A little cessation in the activities, but i think they will be permanent moves in this and i think names that have been structural winners will remain that way, whether thats shopify, amazon or netflix you mentioned amazon, mark, and joe biden was on squawk this morning and asked about their tax rate and a bunch of things i want to play a brief clip of what he said about that name specifically and get your take i think amazon should start paying their taxes, okay i dont think any company, i dont give a dam how big they are, lord all mighty should be in a position where they pay no tax and make billions and billions of dollars, number one. Number two, i think that companies should be in a position where they start paying their employees a decent wage and protect their employees. So mark, the question here is, are they a bigger mark under a Biden White House than they have been under trump . And how much political outrage can be engendered given the fact that theyve helped as you said so many households get through this tough period . Lets see i think we just hosted a call with an author of a book called bezonomics studies on the widely admired institutions in the country and actually amazon came in as one of the top five most admired institutions, including things like the Supreme Court and the military, and my guess is that amazons stature among the public has probably risen during this crisis because the amazon vans have been life savers for a good number of households that said, this issue of them paying taxes, the reason theyre not paying taxes now is that they had an enormous amount of losses in the past and they should be working through those, burning through those and they should be paying their fair share of taxes in terms of the amount they pay their employees, i thought they did the right thing early on during the crisis upping that hourly wage to 17 from 15. Amazon has the ability to pay. By the way, rolling out 4 billion in incremental spend in the june quarter alone for the health and security of their employees is probably a good thing for namz a lot of ways, including competing for employees in the future. I think amazon has generally done a good job. However the tax issue is outlier and something they need to address. Yeah. Im sure we havent heard the last of it, mark im curious what you think about facebook given the fact that it announced this shops platform product this week. The stock is taking a breather, but we saw a rally 10 in the last three trading sessions. Facebook is clearly negatively impacted by this pandemic what i find really interesting is, what happens to these companies, youve got a crisis, how do they react . Great new opportunities. Two for facebook, one is whats clearly going on in terms of the elevation in Online Retail facebook is sitting there with two massively large user bases, instagram and facebook there already is a fair amount of commerce activity that occurs on those sites we ran proprietary survey work and seen a jump up in the percentage of Internet Users that purchased something on the sites, so there is an untapped, mostly untapped opportunity for facebook to get into ecommerce, not as a retailer or marketplace, but creating more inventory on its site for Ecommerce Companies with shopify. I think theres a really nice upside to facebook if they package it well, set up the user interface well the other opportunity for facebook is this completely unmonetized asset called whatsapp that has over a billion daily users. I thought they would have done it, but they havent those are two great catalysts for the stock and company. I dont know about anybody else but ive been using whatsapp quite a bit in the shelter environment as well. I dont know that we talk about it enough as one of the stayathome plays because its not monetized yet. Facebook had record alltime highs. You like the name at these valuations we do weve got a series of companies now that are in the alltime high club, so youre going to go amazon, netflix, spotify, shopify, and facebook. Theres a series of other tech companies. I think theres two broad points here one is that when there is no growth or there is negative growth as were seeing in the environment and companies that can generate growth and they can generate robust growth they deserve even more of a premium in this environment than they do typically. When gdp growth and overall growth slows down, usually robust tech stocks their multiples go higher and their ability to sustain and generate that is more impressive. Investors want to buy that secondly with facebook, yeah, we continue to like the stock we think theres a rebound basket, Companies Negatively impacted by this crisis. Facebook was one of those. The three at the top of our list are facebook is one of them but i like uber and lyft here. These are good contrarian plays and we will start commuting again and we will start ride sharing again. Were starting to see it i like good assets that have been beaten down fundamentally and stock wise that create buy coming out of this those are three names i like finally, mark on baba, a trillion dollars is remarkable but layer on the china risk, are you in a mood to touch anything that has to do with china xh xhix economics and cooperation . Im into china economics. In terms of the china Regulatory Risk and the political u. S. Regulatory risk, thats an unknown. You have to deal with that if you want to buy alibaba shares i think valuation is pretty reasonable they just told you they think they can do the equivalent of roughly 100 billion u. S. Dollars in revenue the next fiscal year, growing almost 30 go back in history, amazon, when it was at 100 billion in u. S. Dollars, they were only growing 20 . There is Something Interesting and unique about alibaba and that dominant position, truly dominant position they have in china. Something like 85 of all citizens in the developed parts of china and 45 was the data point they gave in the lower tier cities, so its the single best play by far, we think n terms of Online Retail in china and shows up in the growth rates. Its an Impressive Asset and we think its still a good long all right well watch that one too thats going to be as fascinating story. Mark v a good weekend. Talk to you later. You too. Morgan . Thanks, carl. Up next, hp Ceo Antonio Neri in an earnings exclusive. Stock is dn . 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And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. Welcome back shares of hewlettpackard enterprise taking a hit this morning. Quarterly results missing street forecasts as covid19 impacted hps business. The company also unveiling cost cutting plan designed to save 1 billion by 2022. Joining us on a cnbc exclusive is hps Ceo Antonio Neri thanks for being with us today. Good morning. Thanks for having me today all right just digging through the numbers right now, i know one of the things you disclosed on the call was a backlog two times normal at 1. 5 billion. You find that encouraging. Where is that demand coming from and when would you expect it to manifest into sales . Sure. Obviously this was a different quarter and we had the full quarter impact of coronavirus because our impact was the entire coronavirus quarter we exited the quarter with a significant backlog, two times historical levels and that amount was across, was across compute storage and High Performance computing and Mission Critical systems what we call taking the bookings was pretty steady, one of the best audits weve ever had because of the supply Chain Disruption we couldnt convert all the book into revenues we expect that to improve in q3 and in q4 and that has been my priority to continue to improve the supply channel recovery with our partners we have made Good Progress obviously it created a significant disruption in our supply chain, but we are making progress every day so listening to your comments about supply Chain Disruption then, do you see the quarter that you just reported as the bottom in terms of the impact from covid19 . I believe so. I believe so also because as i think about our pipeline and the progress we made in some of the key areas despite the covid19, our business, the intelligence business, did extremely well we outperformed the market we grew in north america 12 we grew our wireless solution by 7 worldwide obviously our strategy is to pivot and make available everything thats a service by 2022 and our hp business did extremely well where we grew our annualized revenue by almost 20 , 17 , and, you know, and so those are the signs that give me some level of comfort. Ultimately we have to clear the backlog and thats why our priority is to continue to focus on that area antonio, its not uncommon these days, especially in the last quarter, where companies have come out with a restructuring program, a costsaving program, the street says well were going to bet that these headwinds are temporary and the cost structure will be fixed lower, thats a good thing in the long term. Why do you think the stock is not reflecting that viewpoint today . What would you say to people who doubt that well, you know, i have fundamentally were going to live a new normal. Im talking to you from my house. We see the world where it will be way more than before which plays great to our strategy with products through secure connectivity and moving the cloud experience fundamentally we believe we have the right strategy and to become the Cloud Platform as a service company, and i believe in tough times like this which is an unfortunate event, is the time go faster. This is where were going to take these unfortunate event opportunities to really accelerate our strategy and, therefore, we announced a cost optimization and prioritization plan which allows us to continue to make efficiencies across the organization as we improve the Business Performance of our core business and go faster to be able to deliver everything as a service. Thats the intent here we learned a lot in the 2008 2009 and these are the times where you need to take deterministic action with assertiveness and this is what were doing. Youre not the only ones to think of a Buyback Program and a dividend as two separate things. I just wonder can you explain to investors and viewers what was the calculus of saving the dividend is more sacrosanct than the buyback . In our stock we have different type of investors and generally our investors are more in the value side of the house we believe, you know, paying the dividends is important and we plan to continue to pay the dividend in april we announced our q3 dividend that will be paid in july and yesterday my cfo articulated were going to review the dividend for q4 and q3 we look at the buybacks as an opportunity, depending on the stock price, but fundamentally we want to deploy economic Capital Allocation for our is strategy for us dividend plays a significant role but the rest is about making the right investment for the best return for shareholder value. We have a stringent and disciplined return on Investor Capital practice here which we have executed very well in the last two years considering in the first two years we did 7 billion of return of capital to shareholders between 18 and 19 which is what i committed in my first earning and we delivered that but now is a different story and we believe its important we invest also in the future you touched on the fact that this pandemic is going to create opportunities for hp and what that means in terms of the conversation weve been having a number of weeks on this show through the acceleration of the digitalization of everything im curious what its going to mean internally at hp as you think about bringing workers back into the office, real estate footprint, what all of that will look like for the Company Moving forward yes in 2017 i launched a program which a component of that was to simplify our business processes and modernize our i. T. Infrastructure we are well under way. In the end when were done some time next year, well have one integrated end to end platform for the company where we can build now these digital engagements. We have been on a journey on a Digital Marketing side but ultimately different customer engagements through the digital motion thats an important aspect obviously we have the technologies like aruba which provides pervasive, ubiquitous connectivity from the cloud and the platform has more than 65,000 customers already connected through the cloud. For us as i think about the workforce and what it means, i envision the place itself, the sites as a way to come and collaborate, to inspire yourself, to really drive that innovation, not to come and do the regular job that everybody does at a desk for us, you know, we are envisioning that and we believe we have the technologies to develop and deploy these new Workplace Services which were going to make available to our customers as well. As i think about returning to the work, i think it will be in a phased approach when we feel its safe to do so yeah. I see about half of employees you expect are going to work from home permanently, is that the case i believe so. Obviously its going to depend from the job function what they do, but okay. We measure, you know, how many employees come to the office on a regular basis. We understand what type of work they do. So i think its an opportunity to provide a whole new experience and at the same time automate everything for our employees and ultimately streamline that real estate Site Planning that we have. All right antonio neri, the ceo of hpe, thank you for joining us. Thank you for having me interesting wire story crossing right now from governor cuomo, pretty decent metrics on new york state coming up at the top of the hour, dr. Anthony fauci of nih with the judge on the heels of his somewhat positive comments about moderna and eir cce thvain candidate. Thats coming up at noon we could never do what they do. But what we can do it be a partner that never quits. Verizon is the most Reliable Network in america. Built for interoperability and puts First Responders first, giving their calls priority, 24 7. We do what we do best so they can too. Welcome back european markets are set to close in a moment and seema moody has the breakdown. A mixed day of trade in europe in its latest Meeting Minutes the ecb fueling expectations of increasing bond buying in june back to march lows weve seen european stocks rally around 27 trailing the s p 500 which is up 34 from its lows. Germany lifting most restriction in the latest week, shops and restaurants open again, daily mobile indicators tracked by jpmorgan are rising including restaurant booksings linking such indicators is not easy but their best guess is that germanys gdp has increased from 84 of normal to around 90 . New infections have not picked up but say that still remains the biggest risk lastly burberry canceling its fullyear dividend after reporting a 27 plunge in sales in the fourth quarter. The company says there will be significant pressure on the Luxury Consumer going forward, though it did note early signs of improvement in asia stock is outperforming its peers in todays trade back to you. Thank you very much lets get to sue herrera and a news update this morning good morning, arl, good morning, everyone. India records its highest single day spike of new Coronavirus Infections the country of about 1. 3 billion people reports a total of more than 118,000 cases and that is up 5 from yesterday. Oxford university and astrazeneca are recruiting more than 10,000 adults and children for the second phase of human testing for its coronavirus vaccine. Cnbc. Com has more on what researchers are hoping to learn from this newest phase and in the florida keys a very special tribute to honor those graduating seniors there who will not be able to have a traditional ceremony banners featuring their yearbook photos are hanging next to the florida keys overseas highway. At least they get that tribute morgan, ill send it back to you. I love that what a great idea. Sue herera, thank you. Medtronics new ceo will join us on the other side of this break. Dow is down 147 points stay with us take a look at shares of medtronic down 2. 5 this morning. The brand new ceo of that company is going to join us on the other side of the break. Stay with us n is to give you truly transformative sleep. So, no more tossing and turning. Or trouble falling asleep. Because only tempurpedic uses proprietary tempur® material. That continuously adapts and responds to your body, to relieve pressure. So you get deep, uninterrupted sleep. All night. Every night. The tempurpedic summer of sleep starts now, with all tempurpedic mattresses on sale, and savings up to 500 on adjustable sets. With find a stock basedtech. Mattron your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Hey its me, lily from at t. Im back working from home and here to help. Hey lily, im hearing a lot about 5g. Should i be getting excited . Depends. Are you gonna want faster speeds . I will. More reliability . Oh, also yes. Better response times . Definitely. Are you gonna be making sourdough bread . Oh, is that 5g related . No, just like why is everyone making sourdough now. But yes, youre gonna want 5g. At t is building 5g on americas best network. Visit att. Com to learn more. Medtronic falling one day after missing its Quarterly Results and announcing a dividend hike. Joining us is the new ceo of medtronic geoff martha, thanks for being with us today. Thanks for having me. All right reported earnings yesterday morning. Want to start there. Certainly we saw a profit and revenue decline pretty significantly year on year, but where you did raise that dividend, why . Well, look, its two reasons. One, its our commitment to returning capital to our shareholders but also a sign of our financial strength at a time right now when many in our industry are raising capital, were out there raziisn our dividend its our commitment to our shareholders. Yeah. In terms of the noncovid part of your business, certainly weve seen deferred procedures and a lot of focus from the Investor Community on the reopening efforts were seeing take place, not only in the 50 states right now as phase ins begin to happen but really around the world what are you starting to see in terms of a comeback and where are you starting to see demand for your products tied to those procedures begin to tick up . Well, the i would say the recovery, were seeing definite signs of the recovery happening right now. Its going to vary by location its going to vary by therapy. Some of our therapies are more urgent like if youre having a stroke, for example, we have devices for that, and others can be more deferred, deferred longer the ones that are more urgent were seeing a they fall lower. I mean they didnt fall as far during the pandemic and theyre coming back faster places where the virus has spread has been there longer, youre seeing those country comes back faster. For example, chinas longer into the recovery but seems to be a slower, steadier recovery but in the united states, for example, were seeing in the last few weeks in particular, were seeing what i would characterize as a snapback, a very quick recovery here over the last couple of weeks. Its a little too early to extrapolate that too far, but its encouraging signs. Yeah. Certainly weve had oh, go ahead, carl. Okay one of the other focuses and certainly weve had your predecessor on to talk about in multiple times in recent months is ventilators and production, what are those numbers looking like as ramp up continues and what does demand look like as not only medtronic but a number of other Companies Continue to develop these types of products even as numbers in places like the u. S. Begin to come down . Well, were very proud of what weve been able to accomplish in a short period of time regarding ventilators in a number of areas and theyve played an Important Role fighting this nasty virus. A couple comments. One on production, we are on track to the commitments that i think omar shared a couple weeks back in terms of taking up our internal production 5x by the end of june and we are over 600 ventilators per week as we sit here today and well be over a thousand a week by the end of june which is five times more than when we started in january. But on top of that, as you know we open sourced one of our ventilators. When the demand greatly out stripped the supply in the middle of this crisis, wes chose to open source one of our ventilators and put all the designs on the internet and as of a week ago we had over 250,000 downloads ranging from an entrepreneur in his or her garage to some large multinational companies. As a result of that, medtronic partnered with five of the Larger Companies around the world and that is going to create is in the process of creating more capacity in the tens of thousands. It will be i would say ten times more than what were going to do over the coming weeks. Wow. This is coming from places all over the world like bangladesh, in india, foxconn and another facility in wisconsin as well. Weve created through that move its exceeded our expectations the other thing weve done on ventilators, physicians and hospitals have asked us for different functionality, increased functionality. For example, we had a couple requests in the u. S. To be able to remotely monitor our ventilators and remotely change the settings from outside of the icu. You can imagine the benefit there of not having Health Care Workers have to constantly enter the icu. This is a challenge. Its not easy to do. And we, again, turned to some partnerships outside of medtronic to augment our capability we turned to intel and within just two weeks in partnership with intel, we were able to redesign basically the computer on board the ventilator that allowed us to remotely control and monitor patients from outside of the icu and we got that to market with the help of the fda in just under a month. Really amazing progress and again, a couple its just great to see how so Many Companies have come in to really help with this crisis, including spacex and tesla theyre helping us with a critical part as well that allows us to scale these ventilators much quicker. Yeah. Its been interesting to see how quite literally the rocket scientists have played a role in all of this. You mentioned remote and i think it really sort of speaks to the role that tech is playing in all of this right now. How do you think technology in the digitalization of the Health Care Industry in general is going to change things on a more permanent basis when were talking about services and the way care is given . Look, i definitely see a convergence of traditional medical technology with some of these Digital Technologies i mentioned the Intel Partnership that has helped us with that. And i do believe this whole idea of remote procedure support, remote device management, remote patient management is going to be the new paradigm and right now, from a medtronic perspective, we have this timely convergence of that paradigm shift in health care with our portfolio. Our portfolio right now is at a i would call it an alltime high and something i know omar has talked about in the past and these virtual and remote capabilities is something that were bringing to the market in a leadership position. I even brought with me our latest pacemaker this is our leadless pacemaker and i talk about two attributes of this pacemaker called the micro, its small, 93 smaller than a traditional or conventional pacemaker, and it is its also it affords a low invasive procedure this thing can be implanted in a patient through a vein in their leg using a catheter its completely selfcontained it doesnt require the normal leads or wires that go to the heart. This conventional pacemaker is immeanted in the chest with wires to the heart this goes through a catheter no leads required. Its much less invasive and as a result, theres a lot less complications. A patient doesnt have to come back to the hospital for these complications. Thats one big benefit less foot traffic in the hospital the other is the remote capabilities with this little guy, we can remotely what we call Distance Program during the procedure so only a physician has to be in the room and our field representative who is usually sits besides the physician and programs the device we can program it outside the room. We need to be about ten meters away then to make wow. That programmer is connected to the internet and the electrophysiologist can be anywhere in the world dictating the programming. Maybe the electrophysiologist has his or her fellow or resident doing the procedure because its simple and they can be programming anywhere in the world. Just think what this means for countries like i heard you mention india before the break where you dont have that many electrophysiologists they can be leveraged across many patients this convergence of remote, you know, and with todays new paradigm is going to play well for medtronic. Its absolutely fascinating geoff martha, thank you for joining us ceo of medtronic thank you dr. Anthony fauci is with the judge on the Halftime Report thats about 20 minutes away must watch interview ayitusst wh i came across sofi and it was the best decision of my life. Were getting a super competitive Interest Rate on our money. Were able to invest through the same exact platform. I got approved for a loan and it was a gamechanger. Truly sofi, thank you for helping me prepare for whatever the future has in store. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. I would repeal the 2 trillion tax cut for the folks making over a million bucks a year, because its demonstrated little or no growth. Corporations too, sir the Corporate Tax rate i would move back to what i had proposed at 28 . Okay. , but we proposed 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 with the main Street Lending program. Its out there with billions of dollars. It hasnt lent a single dollar in over three months farmers who are needing the help were told they havent gotten the money out and not until june 1st. Why is he so slow off the mark his slowness is costing lives and jobs and our ability to rebound. Former Vice President 2020 president ial candidate joe biden on squawk box this morning Andrew Ross Sorkin joins us with some of the highlights it wasnt just about Corporate Taxes. You got to m a, health care, keystone, cap gains and more we did. It was a wideranging interview, youre right i would just make one point on the tax piece which was so interesting was not just his plan to raise taxes and to raise Corporate Taxes but that he would be prepared to do that and do it almost immediately even during this crisis, that one of the things we pushed him on was the timing of that given there are questions about what would happen if you raised taxes in the midst of a pandemic as youre trying to balance both the growth issue and getting people back to work at the same time that youre trying to balance the cost of so many of the things weve done during the pandemic to help people. We talked about the idea of the democrats view of the pharmaceutical industry at a time when we humanity is reliant on them and whether he would push for price controls on drugs. He said he would not push for price controls on a vaccine or therapeutics but wanted to make those drugs available for free to all americans he also took a shot at amazon when we asked him whether amazon should be broken up. He didnt make a point on that, but did say that amazon should pay taxes referring to the past year or year ago when amazon did not pay taxes. I should mention, by the way, that amazon has paid taxes historically and was not paying taxes illegally but didnt pay taxes in this instance because they had write down from other things i asked former Vice President joe biden about the disconnect between the markets and the real economy and whether he thought we would have a vshaped recovery as investors seem to think. The vast majority of the American People are suffering right now. They dont measure their public health, their physical security and their economic stability based on the market. And as for the vshaped recovery, he seems to be perhaps more pessimistic about that than investors. Carl andrew, what i liked about the interview is largely policy, not much on process in terms of will the convention be held in person, whats it going to be like trying to campaign or do retail campaigning in the midst of this pandemic i assume thats a conversation were going to be having with him and the president in the coming weeks. It is the next part of the conversation, and he is right now both of them, its the ultimate work from home conundrum. How do you campaign from home. Hes doing it, of course, from his basement in delaware, as im doing it from my basement in connecticut or im on the air, not campaigning but on the air with you, but well see. Of course the president doing it from the white house yep were all learning to do this in our own ways it was an informative interview, andrew well play more all day long and see you soon have a good, long weekend. Good to see you, carl morgan . Yeah. Definitely ending the week with a bang here. Coming up on the Halftime Report, dr. Anthony fauci will join the judge want to stick around for that. In the meaimwee ckn o. Nte rba i welcome back all 50 states are now, at least, partially, reopened. Were looking how the rules are affecting the country. Case increases below 40 since reopening and the darkest shows states with increases above 80 . Its been one week since virginia, maryland and regions of new york state have roped in virginia, new cases have risen 23 . Hospitalizations have risen 20 . Thats 151 patients per day. Cases week over week have ticked higher by 1 testing in the state is up 31 16 returning positive in maryland, new cases are up 21 . Hospitalizations are also up, 14 . Thats an average of 131 patients per day week over week, maryland has seen a 17 increase in cases testing is up 23 with 20 of those tests coming back positive in new york, new cases are only up 4 . Hospitalizations are up only 3 . Thats an average of 311 patient percent day. Testing is up nearly 20 with 23 of cases returning positive. When we look at new cases week over week, that average is falling 14 . A lot of numbers there but to give you some context about what were seeing on a day by day basis but a week by week one as we head into the Holiday Weekend, beaches at the jersey shore are set to see a mass influx of visitors for the long weekend. Joining us on how Small Businesses are planning to handle the crowds, chris clayton. Thank you for being with us. Thank you very much nice to be here. In terms of your plans for the weekend, how youve prepared to reopen your restaurant to public this weekend, what has gone into that process and what are you expecting in terms of turn out very interesting. We been able to watch other states open and theres Restaurant Association plus we have help from our local municipalities on how to read the guidance coming down were fortunate in one sense we have two parts of our business we have been an ice cream place for 62 years we get to know our crowd, traffic patterns, weather and things like that that just matter of following protocols and distancing, trying to get folks to make sure they know they need their mask to come up with service stay apart and folks now have been living with them for two months its 99 of people are pretty complia compliant. The restaurant side, we have burger barns some are popular. We just put a lot of electric delivery bikes on the road its a lot of message and Good Communications get that message oupts to let people know this is how the dance is looking and bear with us because were all running this dance together. Yeah. In terms of the fact so much of your business looks like delivery and take out, what are the costs that are associated with it and more than that, what does that mean in terms of margins and youre ability to be able to longer term recoup those costs as we continue to move through this pandemic. Thats something that all of us are grappling with. You have to be aware of underneath you but you have to be looking down the mountain and setting your line and having to readjust your line we do expect that will, i dont know if it will resolve itself to last years levels but were at double. We dont change our blend. Right now we only added our normal increase. Ive moved that into advertising and let the Community Know youve been with us for 68 years. Be with us a little longer basic has to go out the door it means more paper cup, more bags, rethinking if im in customer on this side, thats the place to start as a consumer how do i want it how do i want that staff member to be . Our protocol starts with our employees. Were taking temperature were asking them how is everybody at home. We have been fogging clothesing with a nontoxic chemical that will help to get them clean. Be sure everybody is clean in the envelope we call it the envelope. We want them to start fresh and its the protocol of having to reteach it. Its the even before the customer, its how us employees deal with each other we really need to be cog any sants of every ones concerns, protoc protocol, best practice and taking that out. It has affected our margins. We believe some of them will be temporary and some many will more long term chris, you mentioned danny. Even danny has said our suggested that the psychology of the restauranteur is changing. Even if youre allowed to open and if theres business coming your way, a lot of people who got into this business thought it would be fun and never thought they would have to manage biohazards for a living have you had to struggle with that you have a lot of passion being in a Restaurant Business is a contact sport. Its a tough one its now when you get into it, theres not much sleep any way now you need to be at the end of the day already looking at whats broke apart that day and going how do i turn these dishes into a mosaic. I do think its out there. You have to have a positive outlook. It comes down to the margins on supplies a will the of us are taking a long time building our Customer Base a lot of us put into before making sure we have the proper protocol, changing our gloves, washing our hands. Not putting sick staff member on the line with other folks. Down the mountain. You cant be looking at do i have enough staff today. You have to be looking at the well being of the guest. We have an advantage theres a lot of good restaurants all around the country and even this our little enclave, we have some great restaurants. Were built for buying we dont have our jazz band now and musician now it makes us sad. You can innovate i think as a restaurant were almost a family around the united states. How do we do this. For some of us its harder than others my hopes are we can get them back and up and running. The other problem, is open is a four letter word just being open doesnt mean youre not going to go under i have friends in the theaters business and that go, if we have to open social distancing and cant pay our electric bill. Well probably still keep our Dining Room Closed because were doing more on take out now we hope it goes smoothly this weekend and hope the customers do turn out. Thank you have a great day you too. Before we go, tulsa, oklahoma is trying hard to recruit the next tesla giga factory the iconic driller statue has a tesla branded tshirt and belt musk says he would like to retract sochl tme of the tweets recent weeks and months. Have a great weekend enjoy the long waukd fauci is joining the judge on the half lets get to hq. Welcome to the Halftime Report great to have you with us on this friday. The end of a big week for stocks the question now for investors is whether theres sea change and where you can make the best money in the weeks ahead well discuss and debate that with our investment committee. With me as always, first we do want to go to our meg standing by with dr. Anthony fauci. Thanks very much. Dr. Fauci, thank you for joining us today everybody wants to hear your opinion on the dat