Transcripts For CNBC Squawk On The Street 20240712

Consternation about the opec meeting. Jim, another day of Business Leaders addressing racial inequality whether its gorsky on squawk, moynihan, ballmer, this letter by cory barry, theyre out in force yeah. I thought that one of the themes echoed by alex gorsky is no more dodging. Look, im white, i am part of the problem because im not doing enough i think theres been a long history of people who have said im white, im older, im a ceo, i cant do anything other than have a committee and put some money at it. Theres far more soul searching this time. These are heartfelt sentiments but also sentiments that say im rolling my sleeves up. Im not going to say my heart is going out with them. The hearts going out with them doesnt work it is something that is a platitude, something that gets nothing done and when you hear it now, its code for, hey, okay, i finished that lets talk about the numbers i think that a lot of courageous actions, different tone. David, you have to admit, this is a tone which just says i have to change the way i do business, not i have to throw some money at it. Yeah. It does feel a bit different than in the past, or that it did four years ago well have to wait and see whether there is an impact from some of the things being discussed now. As you point out, the committees being formed, the money being raised it does sort of move along as well with the overall esg movement i made that point yesterday. Again, its something we spent so much time talking about guys over the last couple of years as we seem to be moving to a certain extent away from a soul focus on creating shareholder value. This, jim, could also sort of be part of that effort and perhaps even lead it in certain areas when were dealing and talking about things like diversity. One thing that i think is the elephant in the room, you dont even hear the protesters say this, its the federal government that has the money. Federal government whats big enough to help change things federal government can help the schools. Federal government is led by someone who i think a lot of these leaders perceive as not as involved as they are with these issues that is something that i think is wholly different. Hate him or like him, President Trump is not unique in any of these discussions. I struggle to figure out whether that is because he is dangerous to talk about or whether people just feel like theyve given up and they have to take the problem themselves but hes never involved in the conversation with the ceos i think thats im not saying its disingenuous, im saying its a shame because the federal government is the only one really big enough to tackle these problems i know the ceos want to do it. They all set up different organizations. They all have infrastructures within their organizations and theyre not as big as the federal government theres a lot of pretend here. The pretend is that, you know what we can solve the problems ourselves. I love the fact that the ceos areinterested in esg i struggle to listen over and over again to people who never say anything about where the president stands jim, how many times have we seen ceos line up at the woushie house around a big table with the president to talk about the airline business, the hotel business, talk about manufacturing in the United States whats stopping the white house from bringing in these very leaders who are on our air every day to talk about this the answer is it should be done today, right . Ken frazier, whom i think has been the most eloquent on our network, ceo of merck. There are pictures of him being next to President Trump and pictures of him no longer being in the room. Part of that is but ken frazier is a man of great courage. But yes. Look, im not the president. Im not a political guy. But i do hear all these great speeches by these terrific ceos i would call them into a room and say listen, ive heard you this is a different conversation lets get together and lets do something big, not 50 million, but 50 billion but that has to come from the federal government i think that youre absolutely right. The meeting is overdue but again, the reservations of anyone to mention President Trumps name is extraordinary. Yeah. I would be curious to show up at th that meeting you point out ken frazier, he decided to withdraw from the president s council, the Advisory Council early on in the administration after charlottesville. You wonder who would be willing to show up at the table or not right its the president , but thats still a question. Can we all admit the federal government is the only one big enough to solve the problem . I love that the companies are all trying to do their best. But this is a big country. We have a federal government this is a federal problem. It is requiring federal dollars, besides just talk. And talk im not saying talk is cheap these guys are putting time in theyre raising money for the issue. But it would be fantastic if the federal government were to join the effort because were 50 states and no Company Brian moynihan, its a nationwide company, okay . Fabulous note today from best buy, ken frazier, fantastic. Steve ball m steve ball mlmer doing his best, fabulous companies, but you need to coordinate it, harness it and do something theres only one person that can do that, thats the president. But no one seems to say im ready to meet with the president to get the job done. If thats regarded as being left wing or right wing to hell with you. Im saying if you want to be practical, it has to be done with the white house in conjunction with these people. Yeah. Heres a quick listen of what alex gorsky told the guys on squaukz th squawk this morning. Just as in business, when we take on any issue, there should be a plan, there should be objectives, accountabilities, responsibilities, so thats what we tried do at Johnson Johnson. It starts by having all of our leaders do a dialogue. Just yesterday, in fact, we had hundreds of these around Johnson Johnson involving thousands of employees where we talked. We want to create a safe space where employees can bring their authentic selves, have a discussion and have the freedom to create a better understanding. There you go. Thats not the thoughts and prayers, thats not the generic, thats not the cliche. Thats a man who wants to roll up his sleeves, this is a man who is intensely interested in solving many different diseases including, of course, covid, but hes saying my time needs to be reallocated. And thats fantastic but i think that what hes saying is i want to lend a hand. I want to make a difference. Hes the ceo of j j. I need the ceo of the country. The ceo of the country needs to sit down with the ceo of j j and say i see youre committed i want to do that too. As big as j j is as important as it is, its just a company im so thrilled that the ceos are more involved than ive seen, but they need to be they cant just come on cnbc this cant be the end of the discussion theyretalking to their employees. They have to talk to the president. I hope the president is listening and says you know what maybe we need a fresh start. We have people who are just such amazing alex gorsky, westpoint, fantastic great company. I have to listen to what he has to say hes not talking about left wing or right wing, hes not talking about democrat or republican, but hes not going with hearts and prayers. I find it a pleasure not to hear hearts and prayers yeah, jim one thing that they didnt quite focus on as much this time with gorsky is news about a potential vaccine. Im sure you saw the comments from fauci in this live q a with jama that 100 million doses by years end seems reasonable to him. Couple hundred million by 2021 he did zeroin on moderna i think he should have zeroed in on regeneron. Two weeks regeneron starts i know regeneron is monoclonal antibodies, but if the country is open and we have illness, if youre going to be in the hospital hospital, it will be intravenous, but they have the possibility of an outpatient injection cocktail so if you got it, its not a death sentence i think that weve that i know dr. Fauci, some of that interview was like, listen, the vaccine may not last long enough the whole tone of the science is better start catching up to the rest of the country thats open for two weeks, three weeks and we have not seen the spike now were getting more cynical saying theres no spike. I think a lot of the spike up north ended when you had social distancing and masks i dont know how you can have all those people at the beach and not come down with a big spike of cases other than other than a small number in texas, its not happening. Its not happening well, at the you know, listen, there is again, were always learning more what we know now is a lot more than we knew two months ago, very different perhaps than some of the things we were told, jim. At the but one of the key things if youre outdoors, clearly the opportunity to actually get sick is a lot less. That said, were still at 20,000 cases a day, and were not really going down. I think thats an important point here 1. 8 million overall, 106,000 deaths, just checking the latest numbers. And were not going down were plateauing at around 20,000, but texas is going up, california is going up, alabama is going up. North carolina is going up tennessee is going up. Now, theyre overall not that large of numbers, though some now are larger than new yorks new case load. Thankfully new york and this area that we live in has come down dramatically. So it is even below that of what texas is adding on in a daily basis. Its not completely going one way. Youre right. I dont detect i would love to hear that theres a big social distancing movement and a big Mask Movement down there i hear the opposite, which is that there are many people belittled if they wear masks some of the national stores, they are required to wear masks. But youre right, in italy, theres still some spikes periodically madrid it seems gone youre right youre absolutely right. I feel like there are many people in the south questioning the whole policy yep we knew very little going in and still know very little as david points out guys, it will be a big morning david has the head of warner music as we look forward to that ipo today. Big story in the music business. Well talk about zooms earnings last night, this employee meeting at facebook, vegas opening tonight. A lot more to come when squawk on the street continues 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. A blowout quarter for zoom last night sales doubled the estimate the market cap is approaching ges, amds, targets what a Conference Call. Eric is quite a man. He understands the enterprise, comes from cisco he understands cybersecurity admits he didnt necessarily do the job. The Conference Call is amazing for the first time you hear analysts not just say, hey, great job, you hear them say thank you in this difficult time for keeping us together. Someone as hard nosed as Heather Bellini who i love at goldman sachs, they starts her questioning by saying thank you for keeping our country together basically. Its a remarkably positive Conference Call. He added general mcmaster to his board. Some people felt i questioned eric about whether hes too close to china mcmaster, hes a hes a former National Security adviser of the president mostly known as a great academic who studied war and what weve done wrong and i just am so impressed with eric i do go back and forth with eric hes been a guest of mad money many times his enthusiasm for our country and bringing people together is exactly what we need there is not this man is not cynical. This man is someone who just is so glad he did Something Like this obviously he has to talk about the amount of money he needs to cake it to the next level at all times. Hes conscious that the numbers were sharply better than expected but he still doesnt think he knows theres more to do patrick walgraves says hes talking to his kids about zoom strategies this is a remarkable company that was just a nothing in december a nothing. Its now become part of the culture. I have never seen a company have this quick adoption in our society as a verb, doing things that brought people together in a time of terrible stress. So im counting eric yuan as one of the good guys great Conference Call the analysts are like thank you. Thank you. Zoom wedding thank you. Theres a lot of catch up on the sell side regarding zoom today. Well talk more about some of the metrics which did tick down a bit from april in the month of may. A lot more to come on this wednesday morning with futures looking higher aiming for a fourth day up on the s p and a third day up on the dow. Back in a minute i love these fries. You know, the chef here trained in france. Mmm, it shows so good. Oh hey, did you say you needed help with investing . Because i know someone whos really great. And you trust him . Totally. Yeah. We went to school together. Ill check him out on investor. Gov. So, whatll it be . Ill just have the burger. Before you invest, get the full report. Check out an investment professionals background for free on investor. Gov. Before you invest, investor. Gov. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Time for a mad dash as we count down to the opening bell in about ten minutes from now well start with trading it is a hump day crowdstrike is the name you want to focus on. In the time of the pandemic, hump day seemed its almost impossible to reach. Crowdstrike, another company, cybersecurity that was made for this moment. They talk about how the covid19 pandemic created a breeding ground for cybercrime and crowdstrike is in there fighting it this is not an area theyre alone on palo alto think theyre doing it, too. Crowdstrike, i have them on tonight. Theyre talking about being the structural winner in this period george kurtz has not fully taken advantage of whats going on this work from Home Movement is supposed to be dead. It gets a second wind from the riots. All we know is when you work from home the bad guys know it you dont have the level of security that you have in the Central Office you need a crowdstrike, crowdstrike is doing a fantastic job. The numbers go much higher, the stock goes higher. There seems little doubt that working from home is something that theres more of once we are truly through this pandemic. How much more continues to be a key question in terms of commercial real estate and in terms of just so many Different Things that are based in part on people actually going to the office clearly well have more people working remotely if you go over that dell call, which we didnt spend nearly enough time on, michael dell is tracing out a world where your home is every bit as good as your office. When i watch carl and david, i say, okay, its really the difference of me being here and you being there. The answer is somebody brings you coffee and i have to do it myself just kidding everybody brings their own coffee we want to be together. Lets not make any mistake about that we want to be together. Our executive producer has brought me cups of coffee. That never happens at your house. Were much better off together together we know that youre my friend . Are you my friend . I know, but even when i come to the office now youre 30 feet away from me i miss you i miss carl what can i say i miss my wife, ive seen her a couple times the dog i missed nvidia the dog is 13 that whole thing well well talk warner music the company was once public, got taken private in 2011 there is Stephen Cooper, hell join us on a first on cnbc interview. Company is going public today. 25 a share is where it was priced 77 million shares. A lot to talk about as warner music enters the public markets. More squawk on the street after this 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 to squawk on the street. As our viewers know, we typically follow mergers and acquisitions here when theres an announcement of a significant deal in the current period its been much more of a he foct focus on that are in jeopardy, those that have fallen apart by mute cal agreeme mutual agreement and one side trying to get out of a contract. Tiffany is now on the list of deals that are concerning for investors who are hoping theyll happen you can see where the shares are headed now the question is whether or not lvmh will follow through on that deal one of the largest of last year when it was announced. 135 a share, all cash a huge deal for lvmh to acquire tiffany, part of their strategy to battle the likes of richmond and Companies Like that. Yesterday womens wear daily reported on a Board Meeting of lvmh where there was uncertainty raised about the potential of the transaction. The article also citing debt covenakoat tiffany. The contract is a tight one. The contract in a lot of these deals seem to be tight and it would take gymnastics to get out of it never seemingly impossible i can tell you from my perspective, having done work on this as well prior to that womens wear daily story is that advisers on either side dont seem to be aware of anything it may be coming from the lvmh board. Tiffany has heard nothing from lvmh with regard to problems with the deal and or desire for a price cut in the transaction they have heard nothing at this point. Does it mean there wont be . Does it mean there is not a desire on the part of mr. Arnot to see if he can wrangle a lower price for this asset lvmh stopped paying some rent to its landlords. This company was in a position to have done so. As one person said to me, bernard arnot did not become the richest man in europe by being a kind and gentle soul right now theyre working through the antitrust. Theyre moving at the typical pace things are slower as a result of everybody working from home, including regulators they have an august 24th drop dead date, it can be u unilaterally pushed out by three months if all that is pending is antitrust approvals. The other question is does bernard arnot want to end up in court if he wants to get out of this deal or is this a drill balloon to see if they can get a lower price . Arent there strict debt covenants that tiffany would be in violation of . They have a three and a halftimes leverage ratio that theyre committed to being at or below. Yeah, business is bad. No doubt thats a deconsideratikey consie if they say see you later, theyll end up in court and theyll never be able to buy it. Im with you. Restoration hardware has a great note out which says look, one area thats holding up is luxury why walk away from uber luxury theres the bell. Capital three celebrating its recent listing at the nasdaq, its Warner Music Group celebrating its ipo today. Biggest of the year. David will talk to the ceo in a few minutes. I think even the pricing was changed yesterday due to floyd there is Stephen Cooper who will be joining us shortly 25 bucks it was changed to i hear this all the time, a seemingly well placed book of investors. Well see how the stock goes this morning we have not seen many ipos this one and then zoom info after as well. This is a remarkable thing. This market does have no conscious. Look at this thing the brokerage stocks have become along with the cyclicals just loved. Morgan stanley coming back to reacting to its great quarter. Obviously the issuance has been extraordinary. Those stocks are very cheap. I saw wells fargo getting out of the riskier loan business for autos. That stock has become a loving stock of the people who believe things are Getting Better. Theres a big cohort of people who believe things are Getting Better and theyre buying the banks and companies that have to do with autos. Texas instruments up five. Thats auto. Thats just auto and industrial internet of things nxpi, industrial, internet of things, auto, thats whats working. Theres a lot not necessarily go ahead, carl. Apologies, david. Reutersers h has a headline flag saying the u. S. Is set to bar chinese Passenger Airlines from flying to the United States in response to chinas u. S. Airlines resume passenger service. Reuters says we will hear more about this later on today that would be incremental to the ongoing u. S. china trade tensions which have been market negative, wouldnt you say yeah. This is the area you keep going you want it to get off the radar screen im waiting for the next positive news from boeing. Thats what im hoping for im hoping for it because i want boeing to do well. The airlines are part of the cyclical trade the cyclical trade is overwhelming the covid trade there is no stopping it. Boeing has been a major leader follow ge and honeywell. These companies have been strong amazing the rally has been ferocious we are looking at an s p down 4 for the year a year in which we had a worldwide panned, unemployment numbers the likes we have not seen since the great depression. Social unrest which continues. So many other exciting things. We have germany we found out what Angela Merkel is worried about shes worried about social unrest that has been an issue in germany. They remember it well. Shes opening the pocketbook 750 billion up for grabs there i think a lot of the European Countries are doing well its worth watching. When you come in the morning and see the market up, its a reflection of how big europe is up starting at 4 00. Holy cow, and europe has been up for many days. Now other companies that do business in europe dow chemical, that was the biggest dog. Jim fitterling in there buying stock. He came on mad money and said stop worrying about the dividend the stock is at 41 were seeing a remarkable resurgence in the companies we had written off. Incredible. Yep lets talk more warner music this morning it is a feature, given the companys reentering the public market, the First Time Since 2011 is when len led a group that acquired it Axis Industries is still the largest single shareholder, they are the selling shareholder here this is not the company raising primary capital, its an ipo but a secondary offering shares of 77 million plus shares being offered were for sale by other shareholders lets bring in Stephen Cooper, the companys ceo. Congratulations on the offering. Nice to have you this morning. Thank you for being with us. Thanks so much. I appreciate the invitation. Lets get to the business itself specific to some of the questions you got during the socalled road show, it was a different kind of a row show because of Current Conditions, business has done well the value thats been created since the company was bought nine years ago has been extraordinary. Nonetheless, now that youre back in public markets, margin improvement. Lets start there. Some investors are worried it has not occurred as much as you said it would, the thrift from physical to digital. That should improve margins and hasnt how would you respond to that . We do see better margins with digital. The spread between digital and physical is about 15 points. However with access support and patience, we have consistently reinvest reinvest eed much of our free ch flow into buildings, the brain power and muscle mass of the business we can see as a result of any number of those programs our margins improve nicely in 19. And we have some well laid out road maps to continue to enhance margin in the future particularly as the physical side of the business continues to contract. Right obviously streaming has been the engine of growth for your company for some time. The growth of streaming is quite strong but its decelerating is that a concern to you its decelerating because the numbers continue to get bigger, but when you look at not only the mature markets, but the emerging markets, streaming has from our perspective still meaningful growth. The number of people utilizing streaming when you look at that number versus the smart device population, were still in early stages and because we believe that music really is the only global language on this planet, that streaming and the ease of utilizing streaming will continue to drive adoption both in the developed and in the emerging markets you go into detail on that in the s1 apple and spotify are 27 of your revenues. They are growing but thats a meaningful amount of your revenues does that give them more power to extract more value from you and other distributors as well no. Content is a critical component of any service were on very good relationships with our streaming partners. I think weve reached a point where the economic model has a high degree of stability and there are new models that utilize music as one of their foundational Building Blocks emerging every day a couple years ago peloton was associated with people dressed in colorful uniforms riding bikes over the alps. Today its an exercise app nobody heard of tick tock two years ago. The social platforms are embracing and adopting new uses of music so we think distribution will continue to be fragmented. New use cases will continue to hop up and that will drive the utilization of use and the music. The artists are key to all of this you have a great stable of them. Do the artists have more power and if they continue to have more power with you, does that result in royalties and advances becoming higher for them, perhaps again coming out of your side of things well, first of all the way we see it is the role of the label and music publishers, in our case warner chapel, all of our labels are more important than ever not only streaming, but these new models that are emerging are making the music echosphere more complex than ever. And navigating through that echo sphere ensuring that artists get the appropriate exposure and separating truly, truly great music. Is really what we do today, tomorrow and the day after, more than 40,000 tracks will be up loaded on all of these services and being able to navigate our way through that and get our artists heard is what we do right a couple of questions on the Current Conditions we find ourselves in lets start with the social unrest and the concern you have so many high profile africanamerican artists, a lot of revenue for your company is generated in that community as well what are you doing and how are you approaching what is going on now . Its a shame that in 2020 that racism, social inequality, violence are still even present on the planet. We announced this morning the formation of a 10 mil 100 milln that we will utilize to fight social injustice and bring more social equality to the forefront and to support in the music echosphere musicians in need yesterday we observed blackout or the show must be paused but yesterday was one day of reflection well play the long game by supporting groups that are working to eliminate racism, inequality and violence. Its the right thing to do, and were committed to doing it, david. Yeah. As well, of course, we are still in the midst of a global pandemic, which certainly is having an impact on concerts and things that go along with them, licensing revenue, for example, as well, for movies given production is not happening. How significant is that going to be in terms of a hit to your overall revenues about 70 of our revenue is digital. Weve been quite resilient during this crisis we were also very quick to pivot literally in a 24hour period around the globe. We moved from roughly 100 work from office to 100 work from home we have been able to continue to bring our artists and their music to the marketplace, even though were doing it from home and virtually. We continue to sign artists and songwriters. Apart from our physical by thenes business, merchandise, touring has slowed down, but we expect those to recover over the coming months as the world opens up a b bit. Weve also been exploring and experimenting with, you know, Virtual Reality livestreaming new use cases for music. So that we can continue to impactfully connect our artists with their fans. Interesting finally, back to the offering itself, Access Industries is a huge win for that company from when it purchased it and how its changed warner music and the value its created controlling 99 of the vote. Do you expect len to continue to sell shares over time . Well, i think that just to get it said, access has been a great owner, very supportive, they have encouraged us to reinvest in the business and play the long game from everything i know theyll continue to be deeply involved and substantial owners for the foreseeable future, david. All right well be following, of course, given that you are now a Public Company once again congrats on that thank you for joining us thank you for your time have a wonderful day thank you Stephen Cooper, ceo of Warner Music Group. Carl all right, david. Thanks for that. Watching the markets this wednesday morning. S p 3,106. Watch europe the dax is up 7 in the last five days above its 200day for the First Time Since late february limu emu doug [ siren ] give me your hand i can save you. Lots of money with Liberty Mutual we customize your Car Insurance so you only pay for what you need only pay for what you need. Liberty. Liberty. Liberty. Liberty. Woi felt completely helpless. Hed online. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Welcome back to squawk on the street. Rick santelli here live at cme hq what a day we have so far with respect to the market. You heard from carl the dax is flying, the euro is flying, and job losses or at least what we suspected on adp this morning was just a fraction of expectations listen, down 2. 7 million is not a good number, but its much better than down 9 million that was expected you see at 8 15 a. M. Eastern how these bond yields moved higher if you move towards midmarch, were at the best levels on the closing basis for 30s since mid march. If you look at tens and 30s together, you can clearly see how the 30s have outdistanced themselves if you look at the note over bond spread known as the knob, its the widest, furthest up and furthest apart its been in four years. Dollar index, the image of the strength in the euro is at the weakest level in 12 weeks. Year to date, ever closer to 9640 where it closed one of the reasons europe is doing so well is because shared debt opens more possibilities and theyre on track to try to deal with some of the stimulus issues of their impacted economies. Carl, back to you. All right rick, thanks for that. Rick santelli. Jim, i want to get you on the ndx. 3 away from an alltime high. Bespoke did work yesterday looking at up 30 in 50 days you go out a month, three months, six months its usually up even from that yeah. When i look at its actually a great theres not i was going over the components. Its pretty much everybody you think that theyre a hand full, but do it, led by faang or something, but no. Its just very, very broad again, so Many Companies seem to be made for the moment it is hard to believe whether it be the moment for work at home, whether it be the moment for 5g or the moment for return of the autos or the moment for the return of housing and its not a faang rally. Although, facebook played a role amazons got so many things going. Its a zoom rally, for heavens sake zoom, they wanted it lower they felt they could press it down good luck. We never even got to purchase applications, up 18. Year on year, if i told you surpass applications to buy a home would be up 18 year on year in this pandemic, that would have gone nowhere. But people are coming up telling me id like to buy my house. You want to look at it i havent redone the floor im just happy no i mean, theres just this movement no one has seen it in a long time particularly to the suburbs that has not had it in real the counts are urban is what david calls it hes right yeah. As the Dow Jones Industrial average just a shade under 26 k. Mo baker he. Were back in a minute right now is a time for action. Thats why usaa is giving Payment Relief options to eligible members so they can pay for things like groceries before they worry about their insurance or credit card bills. Discover all the ways were helping members today. Banks, industrials, materials all leading today. Take a look at jpmorgan up 3 . Best performing dow stock getting awfully close once again to that highest level since mah h en irc6twht closed at 108. Were back in just a moment. Woman my reputation was trashed online. I felt completely helpless. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Its time for jim and stop trading. Another time wed only be talking about the note where they said think thought the forecast for Service Revenue might be 35 might be 18 . Its going to be 35 this stock is a few points off the alltime high for four points i think it blasts through it retaining the note the Services Component is insane people are at home what are they doing . Ordering things from apple my big issue with apple is contactless credit because boy, people dont want to get that covid entrusted key port you get the number in. Apple contactless and apple services, to the moon, alice katie, no one is talking about it i just did i know. I saw it this morning, jim even as were talking, the president s on a radio show saying hes not excited about anything with respect to china trade right now. Where did the trade risk go on apple in china well, they just cut prices. The president is off the reservation. Listen, you know, whats good for apple is good for america. Its like gm in the old days youve got to get with the program. I said it. Tweet me i dont care jim, how about tonight . Okay, i got crowd stryke. And then ken romanzi, b and g food, comfort food green giant. I have that because my wife believes were going to have Thermo Nuclear covid. The president ought to take down nike does the president say hes boosting going on hold to buy young china . Is he focussed a lot of headlines this morning. Im not letting boeing have a single order from china, because china. There, i do. I did it i articulated the whole plan i did it peter navarro, come on its okay. We have a 20 unemployment could you let us have some employment and then we go after them there, i spoke again smooth, holly, hoover, trump all them thats been your view, jim. Yeah. Consistent. Thats okay never take your Economic Policy from hoover. We knew that hoover no good. Doesnt work fdr. Smarter. Sorry. Sorry i didnt praise hoover its all good well see you later. All right there. I said it. Criticize me well see you, jim. Good wednesday morning, everybody. Welcome to squawk on the street. Im Carl Quintanilla quintanilla with david faber and sara eisen coming from various locations. Ism, back to Rick Santelli for that better than expected. We were looking for 4. 44 we ended up with 45. 4. Much better. That follows 41. 8. Very nice number not so nice is factory orders for the month of april down 13 of course, 13 is an alltime low for this 1956 series of dabt data points. We want to pay close attention to see if its the bottom. If you take transportation away, its down 8. 5 durable good orders, april finals replacing mid month minus 17. 7. Slightly worse than mid month read extransportation, similar to factory orders, down 7. 7 and the very, very important cap c Capital Spending proxy largely as expected. Following the 5. 8 read on the mid read so we are looking at numbers that certainly arent good seed corn for the future, but we have to pay close attention as to how it may change. If you switch gears from orders to shipments, down 5. 7 so basically the data on this is as expected. Manufacturing better than expected market pmi, a little bit better than its mid month read as well. Adp not nearly the big jobless that explains why the long maturities are starting to zoom in terms of Interest Rates and many equities including Global Equities seem to be following the u. S. And on the Foreign Exchange side, keep a close eye on the euro. The strength coming from Christine Lagarde and her pursuit of the shared debt on the coronavirus. And how it morphs in the future. Back to you. Rick, well watch all those things as we watch the dow try to reclaim 26,000. To begin the hour, well continue with the civil unrest across the United States joining us this morning is the mayor of cleveland thank you for the time this morning, its good to see you. Nice seeing you, too. You extended the curfew, i think to june 5th like a lot of cities have. The overall impression this morning is that last night was peaceful relative to prior nights is that true, and do you think curfews made a difference . Well, its true for cleveland, and curfews did make a difference here. We had one night of disorder and that was saturday night. And we madly locked down as a result of that action, we were able to mr. Mayor, what is the citys view on activating National Guard, the involvement of federal authorities to maintain order . Are we back i know mr. Mayor, can you hear me . Yes, i can hear you i was asking about the citys view about the involvement of National Guard and federal authorities to maintain order. The National Guard has been very helpful to us sort of as a essential backup for our police division. And it allowed us to then go out and deploy resources in other parts of the city. The National Guard was able to sit on some areas that allowed us to then move out. They also assisted in the neighborhoods, so National Guards were essential. In terms of federal troops, thats a whole different story, and anybody who understands the culture and mission of a citizen army or National Guard in a professional Standing Army would understand how that doesnt work the same way t sara. Whats your assessment of the damage to local businesses and what are you doing for them . Well, they have been damaged, not only in terms of physical damage, but theres some damage in terms of a loss of business during the time of the curfew. We dont know exactly what that is were still in the midst of dealing with hoping we dont have another night of disorder but we are working with the business community, and well have that assessment going forward, and then well have a better sense as to whether or not what type of support we can give them. Mr. Mayor, its david faber prior to this social unrest, the concern of a lot of cities was the budget given fallen tax revenues as a result of the lockdown im curious j is that still an issue for you. I know ohio was not particularly hard hit, but you were locked down what are you seeing when it comes to the budget in cleveland . Well, fortunately for this year, we budgeted in a recession for cleveland. We anticipated one coming either the Fourth Quarter this year or First Quarter of next year unfortunately, it came in the First Quarter of this year with the covid19 and it was a deeper than we would have expected, and it appears the duration is going to be longer this. But because we built in that cushion, we have been able to ride the story the question with us is how long it will be that well be able to do that. Adding in the civil disrest and the added cost, particularly in Public Safety to address that with the declining revenue, as you can see, will really expedite whatever issues that we will be having so were looking at it and were reviewing it on a weekly basis were looking at our revenue stream and costs and were anticipating if things dont level out soon, then well have to make cuts, and as you know, with local government, 85 of cost is in personnel and benefits so that will result in layoffs which will Impact Services well, youre certainly not alone in that, mr. Mayor i know the National League of cities did a study that said 90 of cities see a budget short fall we appreciate you helps us start off the hour obviously cities are hugely important to our coverage right now. Thank you. I thank you thank you very much. Mayor frank jax of cleveland. We want to get you news regarding flights to china and vice versa phil has official word from d. O. T. These are details this is the order from the d. O. T. , essentially calling for a complete ban on commercial Airline Flights from Chinese Airlines starting on june 16th if this goes through and theres no reason to believe that it wont, this will effectively cut off flights between tw t two countries. Remember the u. S. Carriers, they suspended their operations, starting january 31st. They havent had any flights back and forth youve still had about 30 to 35 flights per week from china coming into the United States. Coming into either new york, chicago or los angeles the u. S. And china were negotiates couldnt work out a deal now the d. O. T. Said you cant come to an agreement to letting us come back to china, maybe you shouldnt be coming here this is an escalation of tension between the u. S. And china now were seeing it with chinese carriers essentially being banned from flying into the u. S. Starting june 16th th. Part of the broader story, for sure phil, thank you. After the break, campbells soup ceo on the impact of covid19 and civil unrest. That stock is a mover after upso sales rose 35 stay with us dow is up 260 points c campbells organic sales jumped 17 due to increased demand for athome food comsumption during the pandemic joining us is the ceo. Wow, what a quarter. 35 sales growth in soup talk about sort of the trends that you saw from consumers from the early pantry loading, the stockups to what youre seeing right now. Yes thank you for having me back on. Its an an interesting i think the early phase lets call that the psychological buying not too different than when a blizzard is projected to come in. In this case, it was as if it was happening in every city in the country. That drove pantry loading focussed on products like soup with long shelf life that are consistent with what you do when youre trying to create some comfort that if youre stuck at home for a while and that drove demands as high as on ready to eat soup of 140 . Really, truly, unprecedented but what weve seen and probably what in a very tough moment, a lets call it a positive to draw from it is weve also seen now in the second phase, very distinct behavior changes. This is more about demand by what people are doing. So increases in what were describing as quick scratch cooking or the need for simple lunches as people are spending more time, more meals at home, as they look for comfort, simple recipes, and are cooking on their own. Sadly, as we all know, one of the byproducts has been the economic pressure in this moment value has also become and is playing an Important Role in our products and portfolio are wellpositioned in that moment as well. And i think as we think about moving forward, you know, what were seeing is that the growth in household penetration is being followed by very solid repeat, and so we do expect the stickiness, if you will, of these behaviors to continue moving forward you know, as we now move into the next phases and what a new normal might look like, i think were watching closely, but in the meantime, were investing heavily into this moment to do the best we can in retaining the households, building relevance, building equity, building usage, all the things we know that will be important in retaining the new consumers going forward. I guess the repeats is why you felt confident to raise guidance but what about the sustainability of this kind of growth in soup in particular given the weather is warming up, and so is the economy with people increasingly going out the restaurants . Yeah. You know, i think thats a question that weve got to watch very closely, but when i think about what were seeing and remember, sayra, our guidance i one more quarter we have about two months were projecting into. I think the combination of although we may see some slowing of demand within the summer months as you might expect with overall cooking or some of the categories were in, i think it will be on an elevated level than what we could have seen historically and also, as youve watched, this demand, were talking about categories that in some cases had been flat to declining for ten years. This kind of demand, obviously, has put a lot of pressure on capacity so even if demand slows, i would expect us taking the balance of the Fourth Quarter even into the First Quarter to fully recover on inventory levels. Said differently, even if consumption is a bit down, i would expect shipments to outrun that as we replenish inventory levels in our retailers. Mark, were obviously having the conversation with a number of executives this week about the civil unrest taking place in this country campbells soup just across the river from philadelphia. Industrial down with roots, i think, back to the 60s and 70s of civil unrest. Whats the experience been like for you . As i told my team this week, the covid19 virus in many ways as reflected some of the best humanity has to offer, but i think in the last couple weeks weve been reminded of the horrific problem that is truly systemic of racism in our country. Im sure i share with many the sickness of having to watch time and time again people targeted and persecuted because of the color of their skin. I think for me personally, through this experience, what i recognize is althoughmy sympathy and understanding is important, my black colleagues at campbell need more than that. They need action they need us to educate and be part of the solution theres a zero tolerance policy in our company, but that needs to be accompanied by first in this moment, i believe compassion, giving support and room for our black colleagues and all of our colleagues that are impacted by this current situation. Then move strongly into education and then implementation into involvement to be able to make a difference. I do not want to wait for another video to be a call for action although we may not be able to change the entire world, i think we can be a better example of what it should look like its hard to find numbers on diversity for companies these days i know that you guys in your esg reports and your annual reports have mentioned gender. Youve gotten credit for that from bloomberg andothers, but where are you on diversity this general, corporate has been behind in the numbers from cooperate management to board members. Are you looking at that . Absolutely. I think were in a unique position given our geographic position we have a wonderful opportunity to come from rich, diverse areas that give us the opportunity to i think better attract talent and ensure were creating and this boils down to are we creating an inclusive environment where all our colleagues feel they can come and be their true self in the organization and i think all of us need to feel a sense of being behind theres no question in my mind that i can and will do better and i thinkthats the attitude that weve all got to bring to this solution, but i come back to the starting point of really this understanding of education and making sure that we better appreciate the problems and challenges so we have a better chance of solving them together. So although i feel good about progress weve made in many areas and continue to make, i want to feel that sense of being a bit behind so that we make sure that we do not do anything that slows our urgency or commitment to making a difference here. I remember, i think it was under your predecessor during the ceo meetings i remember when we introduced campbells soup and said good soup, President Trump that is. Whats your engagement level with the white house, and what are you looking for from President Trump in terms of leadership on this issue i think that although im sure what Many Americans want to see us working together and trying to make progress across the board. I think more orientation or philosophical belief is i have to make an impact in the environment that i can control so my focus is really in working with my team and the communities that were in directly i would certainly hope that we can find a way to bring the power and the scale of all of us working together in the same direction and in addressing the things that i described. Right . Education. Working together to build a better position. Ive got to say one of the bright spots in what was a relatively tough weekend to walk through was waking up on sunday morning and seeing in our own backyard here in camden an image of protesters and Law Enforcement marching together. And knowing the progress and the history within camden, not to say that we dont still have many things we need to work on together in many ways, i think it was a great example of the possibility. And so if we can take some lessons from where we are making progress, i think it gives a blueprint or play book of things we can really do to try to have an impact. If we can accomplish that in camden, i think theres great hope for us across the country well, that is encouraging thanks for weighing in on it mark, finally, i want to ask you about the impact of covid19 the fact that we are starting to see businesses reopen. You had a Food Services company hit. What do you see of early indications of people going out . I would describe it as slow progress in the away from home arena. As a reminder, i do think something that is a little bit more unique is that away from home only represents about 5 of our business and of a good portion of that happens to be in support of health care and Health Facilities where weve seen a steady demand what i expect to happen is certainly i think it will continue to recover. I think its an important part of the economic recovery of the country. I think well still see an increase in inhome consumption and cooking. Its like anything else. Once youve learned the behavior and the value equation that comes from what we call quick scratch cooking or simple lunches at home, i think thats going to stick and i think the balance will certainly move toward a return to away from home, but i think there will be some very strong resilience as you think about the behavior and the increase of behavior inhome yeah. I just want to ask you what you guys are thinking about in terms of the shape of recovery in this country from a very, very, very deep economic slide here in the Second Quarter and whether the protests will get in the away and affect consumer behavior. Yeah. Clearly that is a tough question to answer. What i think were trying to do is create an appropriate spectrum of scenarios and put the right contingencies in place based on what we see and think is needed. I think there is no question that in the immediate future were going to experience economic pressure, no matter how you kind of cut the scenario i think value will remain an important part of what were doing. On that continuum, i think what we have to do is work and dedicate recourses, think about alternative supply the other thing you didnt mention in the scenario but i think is in my mind as well is what if we see a step backwards as it relates to the virus as we get into winter, and are we going to be in a position to action on the learnings weve had this time through to be as ready as possible . And although you cant plan for every possible outcome, i do think time is well spent in planning against the scenarios to be as ready as possible and although i wish i could give us a better idea of what i think that exactly is going to be, i think our adaptability and remaining nimble is going to be whats important is that something youre doing actively is preparing with a second wave with your manufacturing and production i think you have to see through that scenario. The significance of what it represents with movement in demand is something that we dont want to be flat footed on that we dont want to assume. I certainly hope that is not what we see and that were able to kind of sustain normality, but at the same time, i know how important it was for us to be able to keep our supply chain going. And i have been so proud and impressed with our team and their ability to react and achieve what theyve done to keep our retailers and our communities with food availability i do not want to let them down even if the probabilities are getting lower that they may occur, i think we still have to be ready without making longterm big Financial Investments that might not be appropriate, theres a lot of things we can do in the near term that allows us to create flexibility without necessarily deploying significant capital before we know or validate with the demand looks like mark clouse, thank you for joining me thank you lets hit our etf spotlight. Today, consumer staples. Ticker xlp up 8 over the past two months underperforming the s p 500 during that period still in negative territory so far this year. As for the top three holdings, cocacola outpacing pepsico and Procter Gamble this morning. A quick break. Stay with us on squawk on the street. A grandfather of 14. A newlywed. A guy who just got into college. Thats why behind these masks, Johnson Johnson scientists are working to accelerate development of a covid19 vaccine, drawing on decades of experience responding to Public Health emergencies like ebola and hiv. For the life behind every mask, the clock never stops and neither do we. We thought you could help ray bring hiwhat . S to school. Kelly, do you know him . Hes a new friend. You ok . You know you can tell me. Im ok. Oh, i trained her in the car. Shes not gonna break. [ laughs ] we talked a lot about the reopening recovery trade in place today. But you dont have to look any further than boeing. Up almost 6 to 161. Almost 162 which would be the highest close since march 27th more squawk on the street in a moment this moment. This moment right now. This is our commencement. No, well not get a diploma or a degree of any kind. But we are entering a new chapter in our lives. Our confidence is shaken; our hearts cracked. The kind of a crack that comes from the loss of a job; from life plans falling apart. We didnt ask for it. But we are rising to meet it. And how far weve come isnt even close to how far we can go. We just have to remember how patient we were. How strong we can be. how strong you can be. and remember this; theres a crack in everything for a reason. How else can the light get in . Tomorrow starts today. Heres your update at this hour moments ago defense secretary mike esper says he does not support using the roughly 200yearold insurrection act to send active duty troops to state. He said theyd be used only as a last resort. President trump says he wasnt the person who ordered that Peaceful Protesters be cleared from in front of the white house before he walked to a church and he claims he wasnt to a white house bunker friday evening to inspect it. Protests against the death of george floyd continued overnight largely without the violence and looting that marred earlier protests in portland, thousands marched peacefully for hours protest at the citys Justice Center also peaceful until police say projectiles were thrown at officers and tear gas was fired to disperse the crowds go to cnbc. Com for updates on protests around the country. Youre up to date. Carl, back to you. All right. Sue, well see you then. In the meantime, lets get a check on todays trade stocks are looking for their third day up on the dow. 3110 as the nasdaq 100 is inches away from an alltime high describing why theres a glaring disconnect between the stock market and whats happening across many major cities in the u. S. Thats on tradingnation. Cnbc. Com we live in uncertain times. However, there is one thing you can be certain of. The men and women of the United States postal service. Were here to deliver cards and packages from loved ones and also deliver the peace of mind of knowing that essentials like prescriptions are on their way. Every day, all across america, we deliver for you. And we always will. Nationwide protests were largely peaceful here at cnbc were exploring the connection between race, the american economy, and how Corporate Leaders can be part of the solution and a path forward. Joining us now, desiree rogers, a former special assistance to president obama. Nice to have you with us this morning. Nice to be here good morning id love to initially get your take an what weve seen from Corporate America the statements, some of the creation of funds and efforts to combat racism, to create more diversity. We saw the same thing four years ago. It doesnt appear that that much really changed do you think this is going to be a moment of change heres what i would say this inflection moment for america. We see many different types of people that are marching young people, older people, whites, blacks, different minorities, and weve got to do something. We cant continue to cycle and so it is great that organizations and theyre wonderful organizations out there that we can help at the same time, weve got to change we need great education. We need an investment. We need investment in blackowned businesses we need support of minorities inside of Corporate America. How many ceos do we have of the major corporations that are minorities not many how many are in the boardrooms what kind of Investment Strategies are they incorporating that incorporate diversity . So we applaud all the organizations that money is being given to own the good work theyre doing in social justice. All our we need more than that we need everyone to take a stand regardless of what industry youre in whether its corporate, whether youre in education or fighting for social justice or health care for that matter yeah. Weve had the merck ceo who has been very articulate on a lot of these issues, talking about the opportunity gap. Do you see an opportunity gap as well is there anything youre doing as a black entrepreneur to tackle it . Answer salutely we have a problem. There is racism in america what can you do to make the changes . What stand are you taking . One of the things were doing, were a Small Business what were doing is making certain that we hire were hiring other minority businesses to support us whether that be in product development, public relations, i. T. , those companies are out there. I am really tired of people saying they cannot find qualified minority businesses to support. And the only times that we come out and support black businesses is when we feel like were in turmoil or jeopardy. This would be 365 days a year. Not just a few days out of the year where were deciding that this is an important issue here in america its sara what specific policies or actions do you look for from the government right now whats happening with the consent decrees. How do we allow this kind of drama to continue to go on and on how many people have to be killed theyre killed and then things go away and we say well, thats a black lives matter issue this is an american issue. How do we begin to heal . How do we begin to really hear whats happening and its not personal. I mean, you dont have to internalize it and say im not a racist it really isnt about each of us individually its about the stats speak for themselves i dont think theres any getting around the statistics around whats happening with with black america and in particular black men i think everyone has seen the visual we know that this no one can fake this did not happen so the question is certainly you want justice for the floyd family, but we also want progress we want sustained progress not fits and starts. We want sustained progress we want better education Better Health Care Investment in black businesses investment in black neighborhoods. Sustained. Not just as i continue to say fits and starts. I feel like ive been here before i feel like were just cycling and so how do we make that turning point . And how do we make this real and sustainable . Sustainable, i think is the key, and real change. You know, it feels particularly acute right now because of covid19 and the impact thats had particularly on the black community how have you seen that exacerbate this issue . Well, this is you have to stay home. You stay in. Well, guess what i cant stay in, because this is my livelihood. I am on the front lines and im talking about myself and im talking about many of my brothers and sisters that happen to be minority theyre working the front lines. Have you been to a hospital lately lots of nurses and caretakers happen to be minorities and african americans. Have you been on a bus lately . Guess what minorities are driving the buses. They are ringing your groceries at the Grocery Store they cant stay in and guess what when they do get home, theyre Multigenerational Families in the homes. So theyre putting their family members at risk, and so they dont have that luxury of being able to stay home, and in addition to that, you look at some of the neighborhoods in chicago, south side, west side, guess what theyre food deserts this is real and so people dont have the ability to eat in a certain way or have food be available to them that is not pricey. We have Health Care Issues you cant blame people you say oh, well, this is a population that is not taking care of themselves money is power and we have got to find a way to get more opportunity and more money into communities so that we can all take care of ourselves and be in a position where we can all sit home during this pandemic, but thats not the case with minorities we have to work. Were talking about Corporate Americas response to this and their commitment to helping to fix the problem. Im looking at a tweeting right now from mcdonalds, official twitter account. They name trayvon martin, michael brown, george floyd. We talk about enough being enough and this time being different, but dont you think this time really does feel different . One of the things about mcdonalds is there are many minority franchisees. They have been instrumental in helping work through the issues in the minority communities of america because they know about this because they are minorities so that is a very good thing the other thing i would say is that it does feel different. You know hy . Its not just black people and minorities that are out marching if you look at the rainbow of People Holding hands and marching, it is a swath of a full swath of america. And then the other thing that we havent seen before is literally Police Officers crossing the line not every Police Officer in the world is a bad person. Many of them are doing their jobs many of them happen to be minorities as well and so if we can just get people i call it the rope adope. Focusing on one thing. Focusing on the looters or people that have been violent. Thats a distraction lets get to the real issues and focus on what the real issues are. The issue is not looting the real issue is why is this happening . Why are black man being killed at the enormous rate theyre being killed . What is happening . Its racism its injustice its lack of opportunity and so those are the things that have to be addressed lets not be fooled by these occurrences. Lets not be tricked into fighting that versus focusing on the real issues and getting answers to the real issues we appreciate your time and thoughts thank you. Thank you when we come back this morning, Interactive Brokers chairman and billionaire investor Thomas Petterffy is joining us dow is up 330 points coming up on the closing bell. Ursula burns, she was one on the only black female ceos of a fortune 500 company. Well be back. Stay with us [narrator] at Southern New Hampshire university, were committed to making college more affordable. Thats why were keeping our tuition the same through the year 2021. [student] i knew snhu was the place for me when i saw how affordable it was. [narrator] find your degree at snhu. Edu. Welcome back to squawk on the street. Lets get to bob now who has a special guest for us bob . Thank you, david. And our guest today, thomas peterffy, the ceo and founder of Interactive Brokers, one of the big online Brokerage Firms out there. Thomas, good to see you again. Its a pleasure to be with you again. Thank you. You are a great market watcher ive been talking to you for many years im wondering if you can address what many feel is a disconnect between the stock market rally and the u. S. Economy, the s p is only about 8 from its old historic highs and we have historic high levels of unemployment and there is civil unrest in the streets. Can you address that disconnect for us i would be happy to to the extent i understand it closing down the economy in reaction to the coronavirus prompted the fed and the government to put more money into the economy by giving it to people and businesses who had to stop working it looks to me that like by the end of the year, they will have an additional 10 trillion in the economy. Unfortunately, there is no corresponding increase in the production of goods and services if anything, thats moved in the opposite direction so what happens to all that money . If if it circulates, it will create inflation if it accumulates in patient hands it will add to inequality. I think, probably some of both will happen. The situation will inevitably result in rising Interest Rates, which will increase the costs for financing the debt by the government and, therefore, they will have to bring even more money. The market is going up because stocks are viewed as a safe haven for inflation. So i think thats probably correct, but do you understand how people see that as a somewhat unsatisfying answer the idea the market is up because we got a lot of stimulus from the Federal Reserve and from the congress and Interest Rates are low and stocks are a safe haven, may be intellectually correct but not satisfying for a lot of people ive been talking to on cnbc and on twitter people are unemployed and theyre baffled why the stock market can be close to highs you understand the emotional issues people have with this i completely understand it. I have saw everything i had. I see this market going up day after day after day. Its completely counterintuitive i think the explanation is the correct explanation. One of the things that weve noticed is an increase in retail trading. Youve seen it too in your own firms, measure of trading is up 84 for your firm. New accounts up 31 . Some of your competitors have seen similar numbers im wondering, is the retail pie expanding . Whats accounting for the increase obviously people are staying home more, maybe thats the more likely thing, but are more people getting in the stock markets . Is the pie expanding at all . The pie has been expanding for several years now, but its suddenly taken a spurt and that is, of course, because of the stayathome nature of the situation. So, yes, the just like anything else, this section of the economy is becoming more and more digital and, therefore, there is more and more online trading and less and less call your broker on the phone trading. So this will continue. Thomas, you talk about inequality when does the market have to grapple with the prospect of true Income Redistribution or even a Biden White House and the implications that that would have for corporate taxes well, you know, if its conceivable that corporate taxes will be increased. I think thats quite its quite possible but, you know, any tax increase is not going to do anything sizable given these huge deficits so we are at a point now where people seem to think that deficits do not matter and its true that they do not matter until they do and that will come all of a sudden and i fear that time. There doesnt seem to be any limit to the amount of money that a government can comfortably issue and put into circulation. Thomas, its sara, youve been a financial backer of President Trumps, a supporter of his, given the moment were in right now, a crisis in america, an economic crisis, social crisis, how do you think the president is handling it well, the president is trying to handle it as well as he can id like to clarify that my interest in backing the Republican Party is because of my fear of socialism i have grown up in a socialist country, and i know what Socialism Means and what a terrible life results from that. So its my my choice is an ideological choice and i think all elections should be about ideology and not personalities its david faber, feels like a lifetime ago but march 16th, only two and a half months ago, you were quoted recently in a wall street journal story that went into detail in terms of the tumult on that day how bad were things on march 16th how concerned were you do you think we revisit a day like that . I think the higher and higher the market goes, the likelihood that one day a terrible collapse will come. The problem is, again, its not so much the market going up and down, the problem is there are times that liquidity suddenly disappears as we witnessed the other day when the oil price went to minus 37. So when liquidity disappears, thats frightening because then the people who would like to liquidate cannot people who trade on borrowed money blow up, the brokers have to make good on their obligations. So that is my fear is. My fear is the market goes up and up and up without basically any fundamental basis, it is im afraid that one day it will implode. Thomas peterffy of interactive, its always good seeing you and bob, thanks for bringing it to us. Well see you both a little while later. Good wednesday morning, welcome to squawk alley im Carl Quintanilla with jon fortt and Morgan Brennan watching the markets closely s p up four straight, dow up three straight highest since march as the market looks past u. S. china tensions as the u. S. Bans flights from china beginning mid june well start with battleground state voters and how black and White Communities are living in two very different worlds. Steve liesmas