Good morning, everybody. Welcome to squawk box on cnbc. Im becky quick with joe kernen and Andrew Ross Sorkin well start with the markets after the dow fell for the first time in four sessions. Airlines, cruz and retailers all fell during yesterday sessions those have been the volatile stocks if you look at u. S. Equity futures this morning, youll see green arrows the dow indicated up by 28 points nasdaq up by 24 and s p up 4. 5 yesterday, the dow was down 170. During the course of the morning, we were watching the futures and up as much as 250 in the morning. Weve been keeping an eye what is happening with the treadsry markets. Right now, it looks like that 10year yield is just at 0. 71 andrew good morning. Thank you. United states pulling out of talks with europe to tax tech giants Steven Mnuchin saying international talks have hit an impasse and there wasnt even room for an interim deal it threatened retaliation if they move ahead with plans of their home a number of European Companies were hoping to impose taxes above threshold which would have mainly hit u. S. Tech firms frances finance minister calls this a provocation the u. S. Threatened to retaliate with 100 tariffs on french champaign, cheese and hand bags. The uk, italy and spain have all developed their own digital tax approaches in case the International Deal failed. Why are you laughing, joe i dont want to be an ugly american im just hesitant to step out there. You are in europe. Lets see, what can we do . When is the last time we developed a really great new tech company we havent developed any why dont we tax Big Tech Companies that are all based in the United States where theyve developed things we have sap, i think thats about it. It is typical. A great way to do it we are taxing everybody. Every Digital Company of a certain size it is just that there arent any. You realize your people are spending their time and money trying to advertise on those things you are right. If you intentionally set out to tax something that hurts somebody else and not you, they are going to retaliate disruptors, are they any Domestic Companies does it matter no. Weve had International Companies on the list. There is one from israel. Im just waiting now for somebody they made you do this anyway. This was another one look what you made me do. Exactly i heard homer when i heard this story oh we almost had it they looked at the fine print. Hertz is halting plans to sell 500 million of worthless stock. Pending a review of the sec. I am surprised the sec stepped up on this we heard from harvey pitt yesterday. I thought maybe the investment banks would bauk after he pointed out they were the ones that would get sued. Your days are merging together i think it was tuesday or monday all one long week lets just stick to weeks. We might be able to keep our weeks straight but not our days. Earlier this week, hertz said it got the okay from the Bankruptcy Court but warns that it faces substantial risk if they buy this that is worthless. Investors take a risk. I was trying to think if it would ever make sense. Shorting the equity, go long the debt could you ever be historic and belong equity and short debt i dont think there is no because you are behind the line. Hertz was going down to 40 on the debt now i stumped you. Easier for the Retail Investor to buy the equity not the debt that explains who is getting stuck. In most cases when you let a company know those comments on the disclosure, they do not go forward until those comments are resolved if those shares are listed meaning the continuing requirement and there are investors involved trading in hertz was halted and it was choppy when it reopened you can see it is back firmly in the penny stock range right now. Ford announcing plans to launch the Driver Assist that will control the vehicles speed and braking through radars and sensors and will only operate on premaped highways. Additionally monitoring drivers attentiveness. Available to order later this year followed by other select vehicles for the 2021 model. The software wont be activated until the Third Quarter of next year thats weird maybe they need more time to make sure the other pieces are in place thats weird. Tesla, i dont even believe it matters that it has been fully mapped it doesnt work in the roads where all the lines are in the ground these are specific roads they feel comfortable with. Similar with the approach gm has done it, maybe even a little less in terms of the full mileage but nonetheless. If you are a music fan, spotify reaching a deal with reality star if you keep air fans in your ears all the time. Kim kardashian west will be hosting a podcast focused on criminal justice terms have not been disclosed but connected to her work with the Innocence Project that fights wrongful convictions. Spotify has been trying to lock up a lot of exclusive deals. Struck a deal of 100 million for joe rogans podcast, which i believe is the most popular podcast in the country time to mention you should listen to our podcast which you can get on spotify behind the scenes news and access we are available everywhere. Spotify, apple wherever your favorite podcast can be found what did rogan get . The number out there the number out there is 100 even on my own reporting, i think it is actually higher. I think it is actually in the 150 ish range. For a podcast hes doing a daily radio show i havent decided what to do with our podcast money yet i dont have a place in florida. I havent spent any of it. I guess because i havent seen any of it. I havent seen it either . You havent either . I think they may based on your talent. Both of you should have said you are getting paid really you havent got yours. They pay us on the amount of talent and effort we put into it being able to come in and work for such a great company, i dont think i would accept it. Shout it out, the person who deserves it is katie cramer, the person who produces it she should be getting a check in the mail. We do this and they find stuff. Katie makes the magic happen. Hard to believe did you know the podcast wo a gracy . That is all katie. It did . I think. It was up for one made a finalists moving right along google is spending 175 million to supporting blackowned businesses and will end what it calls peer badge checks which some have said encourages racist behavior when we come back, governments are taking different approaches to the surge of the virus in some states futures down by about 35 for the dow. It was just just five minutes ago. S p down 2. 5, nasdaq down 8. 5 but that is up 24 points from where it was moments ago well be watching jobless data at 8 30 eastern. Stay tuned for that. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver, in new ways, to new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back, but bounce forward. And now, with one of our best offers ever, were committed to helping you do just that. Get a powerful and reliable internet and voice solution for only 29. 95 a month for three months. Call or go online today. Welcome back an update on the outbreak in beijing. 21 new cases yesterday linked to wholesale food market. Officials have canceled hundreds of flights in and out of beijing. Renewed closures of businesses and schools. They have tested 356,000 people between saturday and yesterday and plan to expand the Testing Capacity in coming days. A little over an hour ago, the countrys chief such a tough word for me. Said the outbreak has been brought under control. Epidemiologist. Florida, arizona and texas are siege a rise oklahoma continuing to report a surge days before a planned Campaign Rally for President Trump in tulsa reporting 359 new cases in the last 24 hours. Ranked third in expected spread on rt. Live the tests positive has been ticking higher in the past week. Michigan is not one of the states hitting new highs, the governor has decided to extend the state of many everything si set to expire on friday. Joining us now is dr. Scott gottlieb, former fda commissioner, cnbc contributor and serves on the boards of illumina and pfizer. Good morning can i say this has gotten to be one of the most confusing points in all of this i know there is still a lot we dont know when you hear about the different extremes of reaction from beijing saying we are shutting down hundreds of flights because of a handful of cases weve picked up and other states saying weve seen big up tiks but saying we have to move on i have to say living in the mist of all these rules, it is completely confusing to what we should be doing and allowing what advise can you offer any of us to try to navigate this it is very clear we have made a decision we are going to accept a certain level 20,000 diagnosed cases a day, which probably represents well over 100,000 actual cases. We are probably only diagnosing 1 in 10, 1 in 8 cases. China has made a decision what they need to do is crush the virus and eliminate it entirely and keep it out. China is making a bet they can get more quickly to a vaccine. They are trying to keep it out of the country weve decided and it is clear that we can accept a certain level of infection and keep it from getting out of control. The challenge is can we keep it from getting out of control . This virus wants to infect a certain population and not going to adhere to our rules in the states in the south and southwest. Arizona, houston, austin, parts of florida look very concerning right now. I think one of the tougher things you are trying to figure out. You have to go back to work. It is the things around the edges, if we are saying it is not safe to go to school on friday but if somebody is having a Birthday Party at the beach on saturday saying you cant attend graduation in july but two weeks later volleyball practice starts again. How do you navigate it as a parent making sure your kids are safe but also mentally engaged and not depressed . Going into the shutdown, it was patch work approach. A lot of states making different decisions. The states hardest press took the toughest measures. The states that were aggressive are seeing the outbreaks right now. We expect these numbers to go up it has gone on more than predicted. Look at texas, about a quarter of all hospitalizations are between the age 20 to 29 around austin, a majority of the new cases are under the age of 30. It looks like a lot of young people the governor there leading to maybe bars are part of the study and that they might take action against the bars they have to take certain measures in texas but many arent conforming. The state can step in and maybe limit the amount of people in those settings and start enforcing the rules around social distancing. As far as individuals are concerned, i think this is very much still with us and going to be with us until we get to a vaccine. If you feel you are at risk or vulnerable, you need to take steps to protect yourself for the foreseeable future there are certain things that dont bounce back quickly. If we are not willing to accept that or accept the Slower Growth and recovery over the next six months or five months until we can get to a better vaccine, well have a larger outbreak if we want to get back to where we were in january or december, well have to contend with large outbreaks and a real risk of the second wave in the fall. Quick question from a viewer who has been writing in says, can you ask dr. Gottlieb why this country cant produce enough n95 masks for the senl general population there has been a little bit of domestic manufacturing that has been stepped up. There is a Global Demand a lot more capacity and supply has been brought up across the world. What you are seeing now is hospitals, states and the government stockpiling these and in some cases hoarding them for themselves they dont want to be caught short again. There will be more these are obtainable to consumers right now. There are sites selling these to consumers. The niad masks, not the fdacleared masks. They are costly, between 5 to 10 a mask right now consumers at risk. Think of an older person that has to go out to a doctors appointment. We have to get our hands on these to be used in an atrisk setting would be prudent to do for the fall. The other day when we first heard about the new drug, dexamethasone, i noticed moderna and other vaccine companies, their stocks were a little lower because people think these new therapies would replace vaccines certainly not the case. The only thing maybe they thought is perhaps if you took more of the fear out of coronavirus, youd see people more reluctant or less likely to get vachl. Dexamethasone isnt going to have enough of an impact that outcomes of people will no longer view coronavirus as something they want to protect themselves from. Scott, are you more concerned and pessimistic than you would have been three weeks ago based on the numbers we are seeing in some states . Im more concerns than i was three weeks ago heading into the fall the numbers are higher outbreaks are higher than expected we expected numbers to tick up we have seen doubling times now falling. I think these states still have a week or two to take action we have better tools and testing in place to do that. We can do it the other thing that makes me more concerned is the Political Landscape and lack of political will to take mitigation steps. We are not going to shut down the economy. If you are texas and you think the bars or the setting affecting a lot of 28, 29yearolds do you shut the bars and tell them to go back to 50 capacity rather than 75 probably probably step in quickly the cities havent done that they havent mandated masks in those locations. Unless we get our hands around that and get comfortable taking some common sense, limited measures, well be stuck with more stred look at us compared to china we havent done much in the wake of these outbreaks yet dr. Gottlieb, as always, really appreciate your time and council this morning thanks a lot. Coming up, hope springs eternal for live sports this year Golf Tournament today. Well bring you up on the nbas plan to monitor players and the troubled talks of the mlb. Have you heard we have a chair segment. Im moving over to a chair it is a chair. This sad, lonely chair here. Im going to go sit in it and put a dunce hat on like im in the corner im going to go sit in the chair for the sponsor. Well get to see your legs. You wearing the lululemons today . Gray pair of lululemons on today. So you are comfortable. And i have my allberg sneakers on. As we head to break, look at the biggest premarket decliners on the s p 500 im going to the chair okay, give it a try. Between wisdom and curiosity, theres a bridge. Between ideas and inspiration, trauma and treatment. Gained a couple of more pounds. Thats good for the babies. Between the moments that make us who we are, and keeping them safe, private and secure, theres webex. Beautiful. Yeah yyeah yeah hey, hey welcome back to squawk box. We are still socially distanced but we are going to bring you what we call chair stories in a modified way chair chair. We are all in chairs. I asked them for you to change your background i can do that for you thank you i can do it what kiechnd of background do y want thank you that way it all looks like weve moved to the chair segment and not just me. It looks like ive messed things up andrew, let me know what you think of this. I dont have a problem with this, this story do you im not an alcoholic so air travel is going to look a little different. A number of airlines including delta and american suspending all or part of their alcoholic drink service limiting the amount of time passengers are spending with their masks off and limiting other components. Drink options to water only. Im cool with it i dont think i want people drinking on a plane. Remember what happens when people drink too much like that guy who jumped up on the cart and relieved himself relieved himself . He took a Bowel Movement on the cart i have never seen that and i dont want someone to bring it up now i saw somebody go on a rant like this guy cant even fly if he cant imbibe if it is like an overnight flight, maybe a glass or two of wine fw it is a dayflight, dont you feel crappy enough already jet lag, you dont want to feel like that at the height anyway would you want 90 passengers breathing on you is. No. No just from the heightened tensions, everybody is nervous weve seen all kinds of problems and the air rage people get into you dont need that. People are tense enough as it is just wait. You could power a couple in the terminal before you go on if you are a nervous flier or something. I dont see why this is not just a no brainer ill make it there are been times a cocktail come on, with one of those little bottles then you really do feel like, the lost weekend. If you need one that badly it is not the plane. You need to see bill w. And go to one of those meetings three days after you decided you are not going to drink except for the weekends. Big talker i had a steak last night and a glass of red wine. So you lasted three days. Three weeks but i discovered something called paloma. Very low sugar good in the summer look it up have you tried those grapefruit, lime, tequila and seltzer. I dont like any of those ingredients except maybe lime. You had bad experience at rutgers. Is that what happened . Yeah. I dont drink any hard alcohol at this point. There is no way. It is just not necessary eamon is texting me about berlin and you are texting me about rutgers. You can keep your mouth shut. Not. Mlb is one day closer to starting its season. Holding talks facetoface with executive director to talk about the possibilities of resuming operations according to the athletic details include a 60game season that would start july 19 and offer players their full prorated salaries. Also options to expand the postseason play in 2020 and 2021 thats the big deal. Owners are worried about how much they are going to be making this season but if they can extend the postseason, then that is big bucks potentially down the road media bucks to try to replace from the fans. I think it is not all parode around the league. Cubs make a lot from the stadium. I guess players for a while were going to do prorated but get 80 . But now they are at 100 supposedly it is not a done deal but they are talking thats a good thing if they dont figure this out quickly, there is not going to be any season. The nba releasing plans to restart its season on the disney world campus players will be required to wear a mask except when playing, eating or drinking outside like on an airplane just kidding not anymore if you watched the last dance. They were powering. Sometimes at half time when you heard about michael jordan, when he first started with the bulls remarkable god, i love him so many times someone would just Say Something to him. Maybe i could guard you. I think it was clyde or someone comparing themselves to him and he would burry them scoring like 80 points the next game. There is a reason hes called air. Everybody knows all these things but when you watch it again and you see i would need there is no way. To get up where hes this far from the rim hes only 66 maybe, lebron maybe. They will be isolated and have regular testing and temperature checks maybe well have an nba season, which will be good sorkin, there is an interview coming up about these new rules. I got my new background from something called ars technical is that part of deal book . No. It is not, is it . It is not they do a good job though. They do a great job, i will say that i thought it was another division i thought this guy is everywhere i thought it was a division of deal book. Well get the lawyers on it but no ive been reading them for years. They do a really, really good job. Did you ever notice that that was your initials . Im not actually that vain. I never thought about it i noticed i never thought about it. False false. We got to go. Coming up when we return, we are going to talk about todays Market Drivers and the surge in cases in some states to key jobless data that comes up at 8 30 eastern. Take a look at futures at this hour we are up marginally lexus will welcome you back with exceptional offers on exceptional vehicles. Get zero percent financing and make no payments for up to 90 days on all 2020 lexus models. Experience amazing at your lexus dealer. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Welcome back there is a push pull investors weighing the virus infections against recovery. Joining us now cio at state street Global Advisors good morning lets talk about this push pull. A lot of investors getting whip sawed around we expected a turn from certain policy responses it wont be anywhere near as darconian where you saw a complete collapse. Well have a lot of choppiness we do believe markets are unlikely to test the lows that we saw earlier this year but you are still talking about lows or some kind of dip of sorts are you holding cash or buying right now. What is the thought. We do think the market has brought the rally sharply and will rely on more upside surprises to go materially higher from here we do think some of the opportunities. Dipping into the industrials for select names and theyve been so beaten down to the stages relative to the broad market where they see the benefit in an out size way. Would you play any travel companies . Do Airlines Look interesting to you . Does that look like a scarey place to live . Interesting how the whole sector is scarey even there, you can find selective opportunities where the Balance Sheets are stronger and the capacity to weather the storm is greater and where more d domestically sourced travel. Select name as cross various sectors definitely more overweight to more pandemic sensitive sectors. How much of this is dependent on the fed continuing to do what he does and maybe do more, depending on what more looks like, out of washington . Look, one of the reasons why the markets have recovered so quickly on the back drop of huge uncertainty is the fact that weve had massive support on the fiscal and monetary side weve heard repeatedly that the fed is prepared to do whatever it takes applying liquidity where there is a liquidity crisis and to make sure borrowing costs stay low. In that expansion where individuals can borrow at the rate we think that report remains critical at this stage in this crisis okay. Thank you. Appreciate it. Talk to you soon still to come this morning much more on the volatile week for markets. Take a look at oil prices. Up 1. 3 . Crude sitting at 38. 46 a new report that Venezuelas Oil outpuck has collapsed to 570,000 barrels down from a peak of 3 Million Barrels a day you can watch or listen to us live any time on the cnbc app. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. And right now, is a time for action. So, for a second time were giving members a credit on their auto insurance. Because its the right thing to do. Were also giving Payment Relief options to eligible members so they can take care of things like groceries before they worry about their insurance or credit card bills. Right now is the time to take care of what matters most. Like weve done together, so many times before. Discover all the ways were helping members at usaa. Com coronavirus discover all the ways were helping members yeah, everything is runningis smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. It is time for todays executive edge former google ceo argues that huawei is a National Security risk and says that it is no question the company routed data to beijing huawei has denied accusations it passes data to the Chinese Government coming up, we are going to talk to a fourtime cnbc disruptor pivoting their efforts in recent months to fight covid including partnerships with roche and moderna. Ginkgo Bioworks Jason Kelly next as business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will you can rely on the people and the network of at t. To help keep your business connected. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Ginko bioworks is on cnbcs disruptor 50 list. It has chosen to pivot on some of the efforts to fight against cov covid. Joining us is jason kelly, founder of ginkgo bioworks do you have any employees . Do you do all of this yourself no, we have an amazing team at ginkgo. You could, i think. Ill tell you what i see here. That is we think of ginkgo as using cell engineering to biologically create products for food, perfume, all of these different uses using the most beautiful automated machinery in the world obviously because it has 4 billion years of evolution and its the cell, but im trying to figure out how you apply that to dealing with covid, and i guess you have developed high through put Automated Systems which will work for testing covid so it happens what youve learned in other areas can apply to covid have i got that right . I had to read it a couple of times. Yeah, you have it right i was going to say, joe, with your biology background, this is biology meets business in the case of covid here its a good topic for you. So youve got i will lllumin technology for next Generation Sequencing youre going to make a machine to do millions of covid tests simultaneously, very quickly yeah. 4. 5 billion Market Cap Company focused on programming cells we do that with a lot of automati automation back in march we pointed the platform at covid. We were partnering with Companies Like moderna trying to speed vaccine manufacturing. Its important its going to take time. I think what people dont realize is there was a testing need in sort of the acute phase of the pandemic, right it was almost like a nuclear bomb went off and there was a shock wave we needed all of these tests for people in the hospital, overwhelmed, heroic effort to scale testing. Now thats over. We are getting out of our bunkers, trying to go back to work but theres fallout what were waiting for, will there be a vaccine to take that away in my opinion, we need now screeningbased testing. Not diagnostic testing, workplace, university or other organization collected tests that say you dont have this screen like youd have a cancer screen you dont expect you have it, you want to check. In my opinion, if we did that at large scale, that could end covid19 before a vaccine. Youre building a place to do that we need new technology to do that ginkgo is doing that were using genome sequencers, using a single washing machine size genome sequencer could do 50 to 100,000 tests a day building workout. Thats what i mean, looking at all the things youre doing youre trying to streamline the search for an antibody therapeutic, which your technology applies to as well. Yes. And to manufacture some of the components for the vaccine in a more an easier and faster way for moderna so all yeah. Prior to this before covid you were doing totally Different Things yeah. The way to understand this, the platform is general purpose, right . Right kind of like you have a pc at home we have a platform that allows us to program cells for whether its for bear and agricultural, now its covid19. Can imagine trying to do an interview like this. Id like to go to a four hour seminar, you know . Yeah. One thing ive found thats interesting now is every sort of leader of a business or dean of a university, mayors of a city, they all have exactly the same thing on their mind right now, which is how do i bring my work force back safely . We launched our testing platform concentric which allows an endtoend process which helps people who are trying to be novice epidemiologists trying to understand how do they contain outbreaks among their community of workers its partially a Workplace Safety and its a Business Continuity tyson had to shut down ford shut down the f150 plant, right . If you want to maintain your business during this fallout period, you need to have testing, right yeah. The good thing is, thats solvable at the scale of imagine a university in the northeast. I wish we could talk longer did you go over to coke at different times . It was called center for cancer research. Yeah, at m. I. T. You know tyler jacks . Yeah i did yeah yeah. Totally involved with all of this stuff good man. Good, joe. Keep in touch, jason. Id like to talk to you again about this im parlly scratching the surface of understanding it. Thanks, joe good to chat okay coming up when we return, the latest on the feds view of the economy and plans to directly buy corporate debt evercores ceo krishna guha joins us [narrator] the shark vacmop combines powerful suction with spray mopping to lock away debris and absorb wet messes, all in one disposable pad. Just vacuum, spray mop, and toss. The shark vacmop, a complete clean all in one pad. At mercedesbenz, nothing service will do. Class thats why were expanding your range of choices. Many dealers now offer optional pickup delivery and athome maintenance, as well as Online Shopping with Home Delivery and special finance arrangements. So, whether you visit your local dealer or prefer the comfort of home you can count on the very highest level of service. Get 0 apr financing up to 36 months on most models, and 90day firstpayment deferral on any model. music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. Fed chair jay powell says Economic Risks what investors should take away. Chinese Health Experts say the new outbreak of coronavirus in beijing is under control. We will take you there live. And the doj takes on big tech former u. S. Chief Technology Officer weighs in on the proposed changes to hold Internet Companies reliable for content. The second hour of squawk box begins right now. Good morning welcome back to squawk box right here on cnbc im Andrew Ross Sorkin along with becky quick and joe kernen. Take a look at futures this morning. Dow is up about 17 points. Nasdaq up about 21 points. S p 500 up about 3 points. Now the index snapping a threeday win streak that happened yesterday during jay powells second day of testimony with yesterdays pull back the blue chip still needs some 870 points to gain back last thursdays more than 1800 point selloff. So a lot going on. Joe . Maybe well do it well keep the fed cranking, right . Unprecedented monetary and fiscal policies are helping support the economy and the recovery, but the fed chair is warning that the gains are at risk if stimulus ends prematurely. We need to know what that means, steve liesman. Would it be in this century if it were to end would that be prematurely . What are we talking about . I think were talking about the summer and july, joe powell said very exquisitely yesterday during the end of day two of his testimony, we at the fed need to keep our foot on the gas and very much urge dong do so his concern is, look, you have this shutdown. Phase one. Second phase is you have this recovery we have some people coming back, but hes talking about people who are not going to go automatically back to their jobs and may actually end up without a job because of whats happened. It would be wise to look at ways to continue to support both people who are out of work and also smaller businesses that may not have vast resources for a continued period of time, not forever. But for a period of time so that we can get through this critical phase. The economy is just now beginning to recover its a critical phase, and i think that support would be wellplaced at this time of course, the house has the heroes act that the Senate Republicans have rejected. Treasury secretary mnuchin is talking about highlevel talks with congress on an additional or a phase 4, they call it, set of stimulus. But powell very much saying its going to be needed he does not want a cliff event where basically you have stimulus and then nothing. He wants to see the stimulus go through and at least gradually edge off today we get the jobless claims. A reminder of why we might need that stimulus. 1. 3 expected it will be the 12th straight week of decline. Still a ridiculously high level. Ian shepard son writes the labor market is so fluid with layoffs so alarmingly high while millions of people have been rehired in states which have reopened that working out the net particular tur, that is whats happening to pay rolls, is extremely difficult its not done a great job at forecasting claims, not done a great job at forecasting payrolls they dont know what the right metric is right now, guys. So well just await that claims number thats come down each week still, its a really misleading chart here because it fundamentally shows that its been down, down, down. 1. 3 million. Where are they coming from, joe . Thats the question economists are wondering. So it declines. Its a double youre talking about the number of losses has been declining i mean, we know that yeah. Okay. Because theres still a lot of jobs being lost obviously i mean, at least a lot of new claims for Unemployment Insurance, right right and theres four sources at least. The one is you have the shutdown, and maybe some still from the virus shutdown tself. You have some people who may be late filing because theres some requirements for filing. Some people didnt get the first time so they may be filing again because they were rejected and then the bigger question, joe, is do we have a second wave of layoffs that have to do with economics. For example n a town or a place that had no virus issues and no shutdown, are they feeling the economic effects of whats going on elsewhere and do they have an economic downturn there and you have layoffs because of that do you think that it matters what the number is is it market moving if it was really bad or really good today or not anymore i think theres some up look, first of all, can i just tell you lets not talk clinically that every one of these is a problem i know you know that, joe, but i just want to make sure were not giving numbers to that idea. I think theres some up side if this were to improve faster than markets thought f. It ends up being higher than expected, still scratching our head here. Higher . Yeah. Looking at the High Frequency data saying, where are they coming from . We have to understand that process a little better . The other day he said empire . It sounded like higher when the Empire Survey comes out. Thank you, liesmania. Rick does a great job with the data, joe. He does he does. Hes from chicago, which is next to minnesota not next to it, close to it. Somewhere in the same vicinity i flunked geography. Becky. Thank you. Joining us now to talk more about the feds response to the coronavirus and reopening the economy is krishna guha, evercores vice chairman good to see ou. Huge pleasure lets talk about what were hearing from the fed because i think we all knew the fed was going to be doing enormous things maybe its been dawning on us slowly how enormous some of those things are and what this might mean for the markets and the economy beyond that. Has there been anything thats surprised you, lets say, in the last couple of days coming from the fed . So i wouldnt say really big surprises, but i think theres a message, and the message is that while the fed welcomes this slightly better than expected High Frequency sequential data, the fed is focused on levels and level gaps a huge level gap in employment as well as activity as well as actually inflation relativeto what it wants to see, conditions of true full employment, the kind that we saw earlier this year so the fed is saying no matter that weve got this better news, which is welcome, the fed sees a long haul ahead and it is absolutely committed to staying the course to get the economy back to where it was a few months ago we were just talking with steve, im not sure if you heard part of that conversation, but weve seen obviously the huge first wave of layoffs. Thats from businesses that shut down because of the coronavirus. Steve was talking about the second iteration, places that might now be feeling the crunch, not because they had shutdowns in their own town or because there were coronavirus cases severe in their towns, maybe you think of it as a place thats not receiving the tourism that they might have been receiving at this point . Yeah. Maybe you think of it in terms of big or Small Companies that say, hey, as a result of whats happened, we are we didnt do layoffs initially but we have to do layoffs to make up for the loss of revenue were dealing with and the loss of the ability to or maybe demand for our product thats out there. I think the second, third, fourth iterations, thats what people are concerned about do you have any idea how that plays out . How would you try and model it at this point . I think the honest answer is that thats the right set of issues to be worrying about, to be thinking about. Incredibly difficult to actually put any very precise modeling around that. I will add to the points that you raised this concern that some of the strength that weve seen spending but also perhaps associated employment does seem to be very strongly associated with the boost in low income househol households income from the fiscal programs that were in place, the 600 a week additional ui, the tax rebate checks those were heading at the same time the ppp funds are being made available to smaller businesses so fantastic news that those programs seem to have had a big effect but as we look forward, i think the question is, well, you know, how much of that fiscal support will be maintained going forward, both income support for unemployed and other households and, you know, assistance for small businesses, and if that starts getting tapered off, then the question is, you know, what will the economy look like when it has to stand on its own two legs so it really matters a lot, you know, first of all, what comes out of the negotiations on potential fiscal stimulus but also how the jobs market sort of operates as some of these supports are at least moderated, hopefully not just withdrawn. The markets actually sitting at these levels, these relatively high levels considering all the concerns you just laid out, and i guess thats because they are assuming that both the fed and probably the federal government, too, will be there to act as a cushion if there are these other repercussions. Do you think thats the right move, the right move by investors i should say it will be several certainly be the case that the fed will stay all in with the instruments that it has. I think the last set of announcements from the fed that they would continue buying at 120 billion a month with treasuries and mortgages through the coming months and the doc guidance, certainly a bridging where they will make long range in terms of qe and Forward Guidance in terms of rates it looks as if theyll get to a significant fiscal haul over the course of july there is execution risk around that particularly when you throw election funding into the mix. Then it will depend on the political constellation. Theres a core question about how durable the fiscal support will be if we look ahead over time i think the other reason markets are holding up for somewhat troubling developments in terms of the virus data itself is, of course, belief that, you know, both fiscal and monetary stimulus warrants coming but also i think a bet on human ingenuity that over the coming quarters both on the therapy side and on the vaccine side were going to make some important breakthroughs. If youre trying to think what will the world look like this Time Next Year if we do have a lot of stimulus its working its way through the system because of the medical innovations. Then the outlook looks pretty good krishna, thank you. Good to see you. My pleasure any time coming up on squawk box, thanks, becky, just a moment, Chinas Center for disease prevention and control saying the capitals recent outbreak has been brought under control well bring a live report from beijing after the break. Then wall street veteran Henry Cornell will discuss u. S. China tensions. Before we head to the break, lets look at the markets. Dow off 60 points. We were in the green 20 minutes ago. Nasdaq up 4 points s p 500 f pots ckft ts. Of6 in there are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Welcome back, everybody. A rise in coronavirus cases there has forced the worlds second largest economy swiftly to contain the spread. This morning news that the latest outbreak is under control. Eunice yoon joins us were watching this pretty carefully just to see if these extreme measures are working. Reporter yeah, thats right, becky. Chief epidemiologist here said, as you had just mentioned, that the epidemic in beijing is under control. I wanted to pull up a photo that has been circulating online where people have scratched out the word epidemic and are joking that beijing people are under control. That is because several categories of people have to take a covid test before they go about their business anybody related to the wholesale market as well as residents in the area, of course, but also anyone whos public facing so front line staff when it comes to health care also people who, for example, might work at a hotel and then the other category of people is anyone who intends to travel so beijing airport announced today that you need a negative covid test if you are to board the plane as well as meet several other requirements and then several people who are basically mainly associated with the wholesale market are also banned from traveling altogether even if youve been in the vicinity of the market, you cant leave the city so this drivethrough testing has created a backlog as you can mention for covid tests. It has capacity to test 90,000 people a day but people who we talked to who are standing in line at the testing centers, also online, people who are complaining that they havent been able to book a test, the average wait time is 15 days sometimes a month. That has been very disruptive for peoples schedules and their plans. Theres still no word on the origins of the beijing outbreak, but today the Commerce Ministry reassured the public that officials are stepping up measures at ports and other places in order to ensure that imported food is safe. In fact, today some food that was coming in from a german plant, pork, actually, those pork imports were suspended. All right red herring of blaming food imports. Eunice, really quickly, the idea of testing people makes sense if you could stand there and get an instantaneous test if you have to wait 15 days, whats the points . You may have been infected in the meantime reporter yeah, thats right. Also you have to have the covid test has to be good within the past seven days so it does make thats one of the reasons why people are complaining. They say not only do they have to wait, the timing isnt quite working there. Eunice, thank you good to see you. Well continue along these lines. China fights on the second wave. Investors are having tensions simmer with the u. S. The potential market impact, founder and senior partner at cornell capital. Private Investment Firm in new york and hong kong its good to see you you labored for 30 years at Goldman Sachs building out the Merchant Bank operations there a lot of that was expanding into asia and your own firm now your own shop has strong ties to asia with a lot, i guess an emphasis on cross border trade with China Financial Services sector. Is there a china angle to all of your company, henry . One way or another, yes you know, having spent lived there for 12 years with a number of my partners as well, its core to our Investment Strategy to be able to take u. S. Companies to china and then take Chinese Companies to the states. So what is on the top of the list now in terms of concerns for your businesses . The second wave of covid that wouldnt be good if it was anything like the first wave well, joe, if you look at the color of my hair, i tend to worry about everything yeah. You know, this year has been one right after the other. January, no potential war in iran, then the virus shut down our factories in china, shut down customers in the states now we have obviously issues with civil rights in this country and then youre about to launch into president ial politics this year is like one punch after another, but the benefit of private equity is you have to take the long view and position yourself for the bullets as theyre flying and try to duck. Where are we in u. S. China tensions at this point is that a back burner issue now with both countries dealing with the pandemic i think its front burner, actually its a critical issue. Both countries need to cooperate. Theres so much to be gained there are legitimate trade issues that should be negotiated out, but the idea of shutting down communication doesnt benefit everybody. Does the virus and the way both countries have dealt with it in china, im talking about, whether there were transparency issues, cooperation issues and early transparency, is that an issue that then goes into the tensions with between the two countries . Quite clearly i think you make a very good point. This should be a Public Health issue with complete transparency and cooperation and, in fact, its not and so each side is doing a little titfortat im not sure the sharing of information is as good as it should be, and between chinese scientists and u. S. Scientists, they should be working closely together this obviously affects business. It affects peoples consciousness about cooperating or traveling you cant travel to china right now, which is tough for our firm because im usually in china every six weeks or so. We havent been there for six months. I mean, i assume you are a globalist, so to speak in other words, you think we dont want to pull in our horns and have a domestic economy. Even so, if youre not a big promotor of globalism, i mean, dealing with china and trading with china is a given no matter how you feel personally about things like that one way or another theyre going to be a big part of our future in this country, right absolutely. Welcome to the nfl and trade relations. We negotiate with our european partners, with our north American Allies in china chinas a tough competitor, but we are a great power we are a great and powerful power and when you lead the world, you need to make certain concessions in order to keep that leadership position china wants to have a strong seat at the table and deserves it, and they also need to make some concessions in order to cooperate and peacefully compete. Not afraid of that competition i actually welcome it. The idea of as you say pulling in your horns and going back to fortress america, fortress china sends us all backwards its just not good for anybody its certainly not good for people its not good for Wealth Creation and it certainly runs the risk of world peace issues. Have you tried to identify new opportunities in this environment . Are you just trying to manage the companies you already have doing both. Right now the bar for us is very high for all the reasons we articulated, but were very active in building out what we have in china. For example, we own the company that manufactures pyrex and insta brands if you dont have one, ill send you one. We are going to open instapot in the region in the fall pyrex is a global product. 20 of the revenues is in china and the rest of asia were making sure everything works there. At the same time there are still a number of chinese countries that want to come to the states and american countries that want to expand their position in china right now. Its terrific. It is a tough time, but were keeping at it. And we need to keep at it and get through a tough time a lot of people would give anybody to have your hair. I know its gray, but it is its ample its good. Isnt it its excellent im happy i have it no matter what color it is. Thats what i mean. Me, too. Anyway, you said you worry i worry about ive got a little little bit here. Maybe im not worrying enough. I dont know clueless maybe thanks. Thank you, sir. Good luck hopefully were one day closer, as we always say, one day closer to hopefully Something Better than this year thanks andrew given how much i worry, im going to go gray sooner or later. See coming up, theres transformational shift happening in the way americans shop. Were going to find out if its here to stay as we head to a break, take a look at some of the Online Retail winners since the outbreak squawk returns a of this it started with a few smaller bills. Fifty dollars here. Eighty dollars. A hundred dollars. I had good health insurance. Why isnt this covered . Well, then they started getting bigger. Eighthundred dollars. Eighteen hundred dollars. I saved for this. But not that much. Im glad i had aflac. They gave me money when i needed it most. Thats why aflac is here, to help with the Expenses Health insurance doesnt cover. I love that aflac duck. Aflac get to know us at aflac. Com now the answer to todays aflac trivia question. What was the worlds First Television ad . The answer the Bulova Watch Company in 1941 it was 10 seconds long and was seen by about 4,000 people in new york as americans live, work, learn from home, a transformational shift is underway in the Retail Industry with people changing what they buy and how they shop. Courtney ragan joins us right now. Shes got a look at america at home hi, courtney. Reporter hi. Good morning, becky. The covid19 crisis poured lightning fluid on some retail trends that were smoldering. They have been growing by double digits annually but surged during the pandemic. Some of the surge is coming from firsttime Online Shoppers hard to believe, but theyre out there. In fact, 43 of u. S. Consumers never or rarely shopped online since march, since then 90 say theyve bought something online according to adobe a rakuten intelligence analysis looks at who these might be. Older americans, more at risk. In the 65 plus age group, their share of new buyers outweighed the share of all buyers in 13 of 15 retail categories and shoppers on the lower side of the income bracket are also making more Online Purchases apparel, 50,000 a year in their household made 54 of new Online Shoppers during the covid outbreak but only 40 of all shoppers Online Grocery overall saw a huge surge the permanence is in a bit of question 38 of Online Grocery shoppers did do it for the first time in the last three months but adobe says grocery online sales fell 14 from may as stores reopened the hybrid shopping model does seem to be gaining steam 32 of americans used buy online and pick up in store and 35 say theyre going to continue to do it andrew okay. Courtney, thank you for that joining us right now to continue this conversation on the oneyear anniversary of the launch of his retail and ceo of verishop who knew a year ago that youd be living in the middle of a pandemic lets talk directly about your business and then i want to get into the broader landscape of retail whats it look like for you in the last three months . Yeah, its obviously a very incredible experience. You have to worry about your employees health, Customers Health and running a business in a virtual environment and growing the business, we all have to learn new thing every day. It was pretty incredible in terms of pickup, whats it look like . Yeah. I think we saw our business grow 30 month over month in april and then 33 month over month in may. Now i want to caution you that were a new business and were getting new value proposition. Its hard to say how much because of covid and how much because of our business are going to be growing. And whats your take though on more broadly the sustainability of the kind of growth were seeing online meaning do you think weve fundamentally changed our buying patterns forever is this about certain types of businesses retail clothing and the likes . I mean, a lot of people are buying food on things like gold belly and things like that does that hold up . When and if we can all return to a real sense of normal yeah. I think a year ago i was on your set and you asked me why am i creating ecommerce business . Ecommerce at that time was 10, 11 of the market. I think over the next decade, two decades it will be 30, 40, 50 . If you look at markets like china, ecommerce is 20, 30 . I think ecommerce was heading towards that direction this Health Crisis will help accelerate that. I think if you look at market like china, they have prices in 2003 which accelerated the growth of Chinese Companies doing business at that time. Do you look at this as a straight short on commercial real estate when it comes to retail, meaning i think part of it is whos the winner but whos the loser in all of this yeah. I think i hesitate to say straight loser of a specific group, you know, based on whats happening today because, you know, i think over the last 100 years if you look at history, different crisis comes and they call a group a loser they come back i think obviously because of that some of the businesses has to rethink how they will live in next decade and companies that would be able to reinvent themselves will do well. I hate to call a conclusion based on two months trend but i think its really on simple execution. Lets talk then why dont we flip it around and talk about winners. What do you think of the valuation of some of these companies . Im thinking of the shopifys of the world which has just been a rocket ship. Yeah. Its hard to talk specifically about the valuation, but i think in general, you know, i think a lot of times, you know, there is investors are looking at future earnings potential and anything that becomes an exhibition story. I used to be a Research Analyst many jobs ago. A lot of the times when you are dealing with technology companies, you are looking at the earnings potential of the companies and thats, you know, obviously in many ways our verishop is over value, but its looking at the future potential of the companies and in terms of marketing and advertising, which is so which is such a fundamental requirement to bring in new customers, what are you seeing in terms of facebook, twitter, instagram, your former company snap in terms of whats really efficient right now in terms of spending your money . Yeah. I think we have a very strong Marketing Team and its led by productive engineering team. We continue to look at every channel and, you know, were trying to be as efficient as possible but i think from very beginning i think one of the promises we make that rather than spending a lot of money on marketing, we want to give the value to customers so, for example, for one of our neighbors we have some incredible value the key thing is i think Many Companies focus on advertising we dont focus on our customers and how can we transfer the most value to customers. Just real quick in terms of Customer Acquisition costs, efficient use of money, you can give it to google, you could give it to snap, you could give it to twitter, who do you give it to . I think you have to run a Marketing Mix model where you actually allocate dollar across many channels because just one channel you are never going to get all the customers and the other thing is looking at just Customer Acquisition is not the right way to think about it. You have to look at the lifetime val value. I wish i could give you simple answer but different time we have to make different decisions. Imran, thank you for joining us congratulations on the one year anniversary. We hope to continue to follow your progress. Thanks. Thanks. Joe . Coming up, an update on the auto and Airline Sectors as america continues the reopening process. Speaking of cars, Ride Hailing Company lyft says every vehicle on its ride hailing and car platform will be electric by the end of the decade. Squawk box coming right back today, that philosophy extends to how we connect with you. We call it, audi at your door. Whether a remote test drive, shopping, tradein, or even service pickup, audi at your door can do this and more at participating dealers. The premium audi dealership experience, on your terms. Audi at your door. Im an associate here at amazon. Step onto the blue line, sir. This device is giving us an Accurate Temperature check. Youre good to go. I have to take care of my coworkers. Thats how i am. I have a son, and he said, one day im gonna be like you, im gonna help people. Youre good to go, maam. I hope so. This is my passion. If i can take of everyone who is sick out there, i would do it in a heartbeat. Welcome back to squawk box. This morning the pandemic has changed the way millions of americans get around that has forced the airline and Auto Industries to rethink the way they do business phil lebeau is joining us with a look at america at home. Phil reporter andrew, big changes for the Airline Industry and the auto industry. Really it comes down to each of these industries having a huge shift. Its the fact that lower Corporate Travel, thats the business right now theyre going to have to try to figure this problem out at some point, but nobodys when Corporate Travel will come back. Well talk about that in a bit in the auto industry, used vehicles are red hot used auto industry, 40 million new vehicles were sold last year thats a record high the auto auctions, they cannot keep up with demand. Dealers are saying we have more people coming in saying i need a vehicle. My life has changed in some fashion so that i am going to be doing more driving either i want to or i need to so as a result youve got used auto prices at a record high. Take a look at the last three months for car vanna, carmax, sonic auto all of them have moved higher and the reason why is because theyre seeing greater demand, greater sales. Meanwhile, toyota earlier this week, they gave an update on the business one of the executives said they are hearing from their dealers that they are seeing more firsttime buyers. Sales last week of new vehicles are down 4 adoreding to according to the Airline Industry its not just because of covid19 but its because Corporate Travel is down as much as it is look at the states of play the percentage of people who have a fear of flying, that says it all right there it has improved slightly when you have passenger levels down 80 , that tells you why the airline stocks, the big four, their cash burn levels, a daily cash burn between 20 and 40 million. Again, its all about Corporate Travel you talk to the airlines, they just are not seeing it theyre not sure when theyre going to see it in any measurable way phil, in terms of pricing on Business Class seating, how much has that come down reporter no. Its come down a little bit. Pay a little extra . Reporter its come down a little bit, but it is not thats not a factor. Pricing right now is really not a factor either on the leisure side or on the corporate side. The airlines when you talk with them are not finding a case where you really throw out low fares where youll get a corporate manager that says, yeah, im going to send bob the sales guy out on the road. This is Corporate America saying were not comfortable with it or weve realized bob can do it through zoom so bob doesnt need to get on a flight or fly as often. To the extent theres conversations taking place inside these airline companies, i know you have such great access, what are they talking about . What are they saying they can do reporter not a whole lot that they can do in terms of spurring Corporate Travel. Look, they are stuck to a certain extent what theyre trying to do right now is mainly manage the cash burn that is job number one for the airlines right now would they love to have more Corporate Travel back . You bet. Right now their focus is almost entirely on how do we bring our costs down how do we have enough cash to get us through the next 18 to 24 months finally, is it really cheap if i want an upgrade right now reporter yeah, to a certain extent it is it depends where youre flying and how many seats are available. Remember, while there are fewer people flying, you are having fewer people up there in that Business Class area or who want to be in Business Class. Yeah, ive heard stories from friends who are a few froerchds who are saying, oh, i was able to get an upgrade phil lebeau, thanks reporter you bet appreciate it becky. When we come back, doj wants to hold platforms like twitter and facebook accountable well speak with anish chopra. Then at the top of the hour senator rob portman talks china, reeng topinofhe economy and much more. Squawk box will be right back. [shouting] [clapping and shouting] [cymbals clanging] [knocking] room for seven. And much, much more. The firstever glb. Get 0 apr financing up to 36 months on most models, and 90day firstpayment deferral on any model. Bbut what if you couldg do better than that . Like adapt. Discover. Deliver, in new ways, to new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back, but bounce forward. And now, with one of our best offers ever, were committed to helping you do just that. Get a powerful and reliable internet and voice solution for only 29. 95 a month for three months. Call or go online today. The department of justice wants to crack down on big tech in a proposal to congress the doj recommends rolling back the liability shield for an Internet Company thats been around a long time. Suggests revisions to existing law would change the way social media content is moderated just the latest in the tug of war between Silicon Valley and washington joining us is anish chopra current president of care journey, a Health Care Analytics firm anish, last time you were on, that wasnt the only time, youve been begging, begging for the industry to figure out how to do this with stakeholders in mind, how to do it themselves to prevent Something Like this. They have not and now this is what youre seeing its a baby step which its not going to become law, do you think . It shows something going on here that they should have tackled it themselves already its a 25yearold piece of legislation and its kept the industry on a reasonably strong footing. Its an obvious economic success story. It was designed to give safe haven or room for the industry to do more to protect consumers. We see today the challenges around election interference and even historical challenges around terrorism and content around that. We have to see the industry do more several former colleagues have launched a professional society getting the Safety Professionals working on the ground in these companies to come together to share best practices, but we have to do more to bring responsibility in these environments and the industry can do this on its own the debate now is does there need to be some baseline standards, requirements. Thats going to be a healthy part of the discussion this piece of activity were seeing here is more akin to political theater but moving forward i think there is going to be an opportunity for a thought full discussion around how to set the right rules of the road for the next chapter of the internet politically its hard to figure out whos where its bizarre there are some strange bedfellows the doj looks like its trying to thread the needle leave section 230 in there but make certain things if theyre, for example, criminal, then that would give you certain car vouchers Vice President joe biden wants to get rid of section 234. The left is worried about election if a nagling and the right is worried about conservative groups being kicked off of twitter and facebook. Its bizarre can you describe the landscape to me . Just to give you a little perspective. If you agree theres a problem, theres Information Online thats propagated that is perhaps doing more harm, the question is do you want to see more engagement to bring some of that information off or do you want to see less thats the divide that you saw if you think of the good, the bad, the ugly coming out of the doj report the bad, if you were to think about if you believe that there should be more misinformation, less moderation, then you might embrace some of the provisions in the doj report that say, look, unless its absolutely, you know, criminal or very specifically, you know, narrowed, you cant moderate i dont think thats where the majority of American People are. They want to have honesty in our elections. They want to have some consistency with respect to how misinformation is propagated and to me that means the industry should do more and i think when you hear politicians on both sides of the aisle bring this issue up, the premise is in part get the industry to move but its also to say failure to move is going to require us set some baseline moves. Youve seen this in the privacy debate where theres almost bipartisan movement around establishing baseline fairness so we have privacy protections on the internet. How we get there and finding a piece of legislation is going to take some time in this area the Political Parties seem to be at odds on whether we need more moderation or less. Im on the more side im hopeful the more will come from the industry getting more organized. The ways we see it on the criminal side with intellectual property theft if you accuse the platforms of stealing your copyright, your music, they have built technologies, they have built them to help identify those areas of copyright infringement, which is criminal. If theyve moved that in a more thoughtful way offline the notice and takedown procedures reflect a bit of an industry tether to get there we need to see some of that on the misinformation and election interference side. I dont know. I need a ben franklin. Josh holly wants to revoke it yet most conservatives, if you revoked it, then theyd be complaining about frivolous litigation i dont know whos everybodys on the wrong side of where they normally are on these issues i dont know i need help. Out of the political lens and into the right answer for the economy, this is an Economic Growth companies are more mature and have capabilities and we have room for disruptive innovators to come in right i dont know. Its all subjective. I dont know how you write down a list of things that you definitely want to do and its going to be subjective instead of objective should be the industry itself needs to do this yes. Or you need to quit your job and go back and help we do what we can. Thanks appreciate it. Im sure were going to need to talk to you again in a couple of weeks because this is not going away andrew okay coming up when we return, senator rob portman is going to join us to talk about a new proposal to help incentive advise as the economy begins to reopen thats next. Later, dont miss our exclusive interview with recent volatility in markets, esg investing and so much more take a look at futures right now this morning we are in the red. Dow off 182 points nasdaq off 21 points s p 500 off 18 pntois. Big hour ahead derek, seems like your team is operating just fine remotely. Yeah, everything is running smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. Good morning whats the next catalyst for stocks is it the feds market intervention, reopening u. S. States or maybe its the troubling rising coronavirus cases around the country were going to talk portfolio strategy for the days and weeks ahead. And a backtowork bonus, could it be an important step in getting the labor force up to full strength . Rob portman will join us with that idea. Speaking of work, we are 30 minutes away from the weekly unemployment claims. A measure we pay such close attention to during this pandemic the numbers and expert analysis is coming up the final hour of squawk box begins right now. Good morning and welcome to squawk box here on cnbc. Im joe kernen along with becky quick and Andrew Ross Sorkin weve seen a steady move lower in the last half hour, 45 minutes in the dow futures now down about 250 points. We were right around the flat line at the beginning at 6 a. M. And the premarket up a little, down a little. We have seen it slowly deteriorate. In fact, even the nasdaq, which was up yesterday while the s p and dow jones were both ending lower, even the nasdaq showing some losses this morning treasury yields have been trying to tick up a little bit this week nowhere near where they were we were at. 9 or. 9 of a percent on the ten year. Here are some of the stories that we are watching that investors could be talking about today. The bank of england has added 100 billion pounds to the Bond Buying Program while keeping Interest Rates unchanged thats the latest news to boost Economic Performance shares of carnival are falling this morning they released preliminary warnings to have a widerthan expected loss. It says its seeing some improved bookings for 2021 Supermarket Chain kroger out beating on both the top and bottom lines kroger also said it expects to exceed the outlook that it gave back on april 1st. Becky . Thanks, joe. Congresss c. A. R. E. S. Act was meant to help americans weather the impact of the coronavirus. As part of that it created a 600 a week federal supplement to state unemployment payments take a look at this analysis from the American Action forum based on 2019 wage data, it shows more than 60 of American Workers could make more by not working than working though only if they also received their states maximum unemployment payment. In Congress Representative kevin brady and rob portman are now proposing backtowork bonuses to incentive advise workers to return to their jobs senator portman joins us to talk about this great to see you this morning. Hey, becky. Thanks for having me on again. This is an idea you first brought up with us at least i think it was about a month ago, although its hard to tell how much time has passed over that your thought at that point was people on the front lines who were going back to work should have an incentive to actually do that, to get back in what kind of progress have you made on that front since well, for the last six weeks weve been talking about doing it now as part of the 600, but as i talk to you today, you know, the july 31st date is looming. Thats when the 600 ends. Democrats are insisting that there be 600 not just for the next month or so but into next year republicans for the most part are insisting that the 600 end. I think theres a good way to deal with this, which is to say lets have a lesser amount as a federal supplement to the state Unemployment Insurance but lets provide the bonus. I think we should be having it now, it doesnt seem to be working. Its a disincentive to work, the 600 lets allow people to take some of that money back to work with them it helps them get back to work, get their health care back, most people get retirement. If they have a 401k, back to training and dignity of work small business, theyre desperate to get this. You hear it across the country and i hear it across ohio. It helps at the state level but also this federal supplement would be less than the 600. So i think its a good idea and its encouraging work, which everybody should want to do. What kind of level are we talking . When we spoke last you were thinking 400 to go back to work, 400 a week . 450 out of the 600 is what we came up with really as a way to make people equal to someone whos on minimum wage. It wouldnt be a disadvantage for someone coming off of u. I. If they were at a minimum wage average. I support that now i Wish Congress would pass it. I cant see it happening i think when we hit the july 31st date, which again is a cliff. We go from 600 to nothing, the democrats will insist on 600 going, again, into next year and some well into next year and republicans saying we shouldnt continue because its a disincentive, which it is. The chicago American Action study shows that the bottom20 of wage earners are making twice as much going back to work i think we need to come up with that that needs to be a lower federal supplement during a period of time, between now and the end of the year and a return to work bonus. That will help get people back to work. Senator, what do we do with with those folks who really cant go back to work, either because of their age or because they have comorbidities or other issues that make it unsafe for them to go back to work . Well, this is a voluntary program, andrew. Anybody wants to stay on ui, they should. The question is what kind of federal supplement should there be the return to work bonus is a voluntary program. I think a lot of people would take us up on it they want to go back to work that disincentive is huge. Its hard for employers to ask people to come back to work when you have that kind of a gap. Under the ui system youre supposed to be searching for work if you have an employer asking you to come back, youre supposed to leave ui and go back to work. The ui systems are overwhelmed and its hard to enforce it. Senator, it seems like your plan is a pretty common sense, down the middle plan is it breaking down the lines as to who will sign up . I dont think so. Ive talked to a number of democrats about it, four or five of them were interested in working with me at one point they were told by our leadership, our plan is 600, thats our negotiating plan going forward. If you talk to them, as im sure you are, theyre getting the same thing im hearing in a state like ohio if you have to make 53, 54,000 bucks a year in order to make it worth leaving unemployment, its a dis disinsendtive. The question is how can we work out something to deal with the july 31st deadline i think the return to work bonus is the way to do that. One of the other issues weve been dealing with is the tensions rising up weve heard about a lot of Different Things and then there was an accusation that we heard today that the former chairman of google, eric schmidt is making against huawei. They do feed much of the information back to the Chinese Government there have been concerns about competition, and i understand you are introducing a bill this week to try and protect some American Innovation from chinese theft. Whats the bill . Hows it work . Becky, we spent a couple of years working on this one issue of avoiding china coming here and taking our best Research Back it has helped to help the chinese economy and the military over the last couple decades, actually they do this primarily through the talent program, particularly the thousand talents programs. Weve had hearings and its Bipartisan Legislation its based on a report that was thorough and fact driven but also shocking to find out that china purposefully and systematically comes over here, targets american researchers doing promising research, pays them pays them to set up replicate labs in china to do that work. I testified at one of our hearings that theyve been asleep at the wheel for now and theyre going to make up for it. They have started to make up for it to their credit, there have been a half dozen public arrests in the past months on this. Weve had 54 researchers fired because of a conflict of interest, taking money from china or other countries, mostly china. Also working on nih contracts. Theres no law against it. Our legislation puts a law in place. Innovation at our Research Universities it helps the state Department Keep people out who are coming here to steal our research there are things we need to put in place one of the points i made before, this is about us this is what we can do within our control to better protect ourselves. Theres a lot of criticism of china and finger pointing of china. We have to get our own house in order here thats what this legislation does. Senator, related question on china. As you know, theres this book by john bolton thats going around and specifically he talks about the senates role and the way we treated zte was misused as part of a bargaining chip with his relationship with president xi he said this should be investigated do you think it should be been investigated the bolton stuff is interesting. Ive known john for a while. I have considered him a friend i worked in two white houses if i felt that way about either of my two buses, busch x41 romo, i would have resigned. What happens in the oval office and conversations with the president are meant to remain confidential to allow those conversations to remain open and candid in terms of Chinese Companies, telecom is a problem we just issued that. What we found was of the three Chinese Telecom companies that have not been addressed by the fcc or the department of justice or department of homeland security, again, we have been naive. We have allowed them to operate in this country, collect data, much of what we believe goes back to china. In terms of zte and telecom generally, i think theres more we have to do. Again, i think we have not protected ourselves in this country and we need to realize in this century this is happening. Its not just china, its north korea, iran, anybody who can get access to this china is the main perpetrator and we need to protect our selves better. Senator portman, thank you for joining us we hope to have you back soon. Thanks, becky always good to be on with you. Thanks, joe, andrew. Eli lilly says its beginning a phase 3 clinical test for its drug. Its approved in 65 countries to treat adults with moderate to severe rheumatoid arthritis. Data is expected in the next few months rheumatoid arthritis, one of the most wellknown or common autoimmune conditions. It causes a problem with your joints so if you could suppress that, thats part of the notion that it might help Covid Patients that arent just sick because of the virus but because of the way the immune system is treating the virus which is why dexamethasone is helping some of the sicker patients. Ive heard they were using this or at least considering whether it was efficacious in covid. Andrew. Thanks, joe. Meantime, we are now seeing the Major Airlines all trading lower this morning i dont know if youre looking at this, guys. Phil lebeau joins us with comments from deltas ceo which may be leading some of this situation. Phil reporter andrew, this comes from the delta Virtual Meeting it just wrapped up during the q a session how many delta employees have contracted covid19. He said approximately 500 have contracted the covid virus of the 500, ten have passed away he didnt go into any description of what jobs those were whether or not they were front line workers, and thats one insight into one company, one airline and the impact the coronavirus has had on them. Ed bastian saying overall since the coronavirus started about 500 delta employees have contracted the disease ten of them ultimately passed away guys, back to you. Phil, did they give any clarity around the timing for any of those issues . Was this something that was a big problem at the beginning before we really knew what was happening . No. Because that would make a big difference absolutely. If there are different Safety Standards if this is something that they have just stepped up right. I think that would tell me to be concerned about the level of Safety Measures that can be taken. Great question. They did not get into details in terms of timing, the jobs people held who ultimately had coronavirus and those who passed away remember that delta is in the midst of this. Its set up with a dedicated staff working on aircraft cleanliness as well as front line cleanliness they also announced, i think it was about a week and a half, two weeks ago, that all delta employees will have access to covid19 training. You bring up some great questions. Questions that were going to follow up with with delta now that ed bastian he was asked very straightforward question by a shareholder and this was the answer he gave 500 approximately contracting the disease, ten who ultimately passed away. Hey, phil, just to get the denominator right, how many employees do they have when 93,000 so i havent done the math there in terms of how that works out. Right the other thing is, an dry, im not sure how Many Companies have said this is how many employees have contracted the disease. Theres no way of knowing if other companies of similar size have experienced it. That number is a 2 mortality, but we dont know if everyone was tested, again, phil, right . Its possible that there are asymptomatic people. We dont know if delta knows every person who had it. They didnt have the detail. 2 is a high number but its not 5 or 6 . If you tested more than thats what it indicates, too. Then im wondering about the ten that did pass away, we need to id like to know age, comorbidities and Everything Else just to get the whole picture. Correct and the things that becky brought up w45r7 the jobs how long ago did it happen obviously well say can you share more insight with us. Okay. Phil, thank you for bringing us that and adding all of that context to it. Meantime when we come back, Civil Rights Group taking aim at the Facebook Advertising machine upset over hate speech on the platform calling for companies to temporarily stop futures have deteriorated this morning. Lets show you whats going on in the red dow up 183 pois ghnontrit w. Squawk returns right after this. 300 miles an hour, thats where i feel normal. Having an annuity tells me my retirement is protected. Protected Lifetime Income from an annuity can help your Retirement Plan ride out turbulent times. Learn more at protectedincome. Org. Bbut what if you couldg do better than that . Like adapt. Discover. Deliver, in new ways, to new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back, but bounce forward. And now, with one of our best offers ever, were committed to helping you do just that. Get a powerful and reliable internet and voice solution for only 29. 95 a month for three months. Call or go online today. Welcome back to squawk box. Futures right now on the dow, were down 250 a little while ago. Down 190 thats all been in the last hour seeing losses getting a little bit worse than they were at the beginning of the broadcast basically unchanged. The nasdaq is also low, but thats coming back around. Down 35, 40 points down 18 now. S p indicated down 18. Meantime, yesterday several civil rights organizations, including Antidefamation League and naacp took out a full page ad asking advertisers to boycott facebook stop hate for profit is in response to what they say is facebooks repeated failures to stop hate on the platform. People can opt out of seeing political ads on facebook. Joining us right now, jonathan greenblad is the ceo and National Director of the Antidefamation League. Thank you for joining us thank you for having me tell us about this effort and tell us specifically, youve been in talks with facebook for quite some time about this issue. Whats the back and forth been like its been challenging we have been working with facebook for years we have a center in Silicon Valley that deals with hate speech on social media and facebook which is far and away the largest such platform in the world, we have been engaged with them over the years to finally do something about hate speech and we felt like in the wake of the death of george floyd it had just reached a boiling point which is the naacp, col lovor o medad change, they said, its time to stop hate for profit. What have your conversations been with advertisers . As you know, advertisers have been reluctant to jump into these debates and, frankly, given the fact that facebook has such a large market share in terms of online advertising, especially during this pandemic, i imagine it must make it harder for businesses to make a decision like this we, yes and no. Weve had conversations with big fortune 500 brands the Campaign Launched yesterday. Whats important is that this isnt a boycott. Its a permanently abandon this isnt a walkout to say you should never use the service, this is a pause to show facebook that there are consequences when it doesnt deal with the racism on the platform, when it doesnt deal with the conspiracy theories on the platform, when it doesnt deal with the antisemitism and holocaust denials on the platform and all forms of hate. At the adl we track extremists and we found White Nationalists literally using facebook to organize their efforts to disrupt the protests over the past several weeks we saw examples on facebook of conspiracy theories that george floyd was paying protesters that george soros, excuse me, was paying protesters and george floyd was some kind of actor look, the time has Comfort Company to say, we are not going to allow this kind of hate which is further dividing our country to proliferate on their platform businesses can make these decisions all the time businesses have the right to say what will happen in their store, on their service, what they wont tolerate i think as the country struggles with issues of racial justice, as the country struggles with issues of extraordinary division, we think rather than waiting for washington to act, business has a role to play to say we support the quest for racial justice, we support the quest to tackle hate and we want to push facebook, show facebook that if they dont take action the bottom line will suffer. You mentioned government and waiting for government to act. You know whats now on the table. Do you think that facebook and other social media platforms should be liable for the information thats on their service . Yeah. I saw joes talk with my former colleague. 230 is very complicated. The reason we have the internet we know today from facebook to wikipedia to so many other services is literally because of the creative latitude that 230 provides let me tell you something, when they drafted that 20 some odd years ago, the intent wasnt to think that companies would allow neonazis to manipulate their services the thought wasnt that it would allow racism to proliferate. Right. Whether the companies should be liable or not, whether they have a legal liability jonathan, let me ask you this we had Mark Zuckerberg on the program a couple of weeks ago, and i dont want to speak for him, but i believe if he was here today he would say, look, weve made a lot of strides on this issue we may not catch everything. We are trying. Do you believe theyre trying . Is it an issue of theyre not trying hard enough theyre not taking this seriously enough is this an issue of bad algorithms and a whack a mole game thats almost ip r impossible to win . What do you think is happening inside of facebook ive dealt with mark, sharyl, so many good executives there. They are good people and they have made some effort but not nearly enough. They need to apply the same urgency that they applied to copyright protection look, this company is worth almost 700 billion. It is one of the most Innovative Companies in the history of the markets. Literally what theyve been able to do, its whatsapp, oculus, portal, insta and facebook, the idea that they cant tackle this problem is i think laughable, but they need to feel the urgency. Fortune 500 brands new at adl we have found many examples of fortune 500s flighted against White Nationalist content, flighted against some of the worst things i know have nothing to do with facebook. Right john, we appreciate you joining us we would love to have you back to understand how this progresses. Look forward to keeping you posted. We have to go. We have jobless claims well be right back with jobless claims 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. Yeah yyeah yeah hey, hey try natures bounty sleep3, a unique trilayer supplement that calms you, helps you fall asleep faster and stay asleep longer great sleep comes naturally with sleep3. Only from natures bounty. Cool . Drop the taco. Get in the car. Does this sentra feel like a compromise to you . Wait, what. . The handling is good, right . No compromise there. Nope watch this. Umm. Bbrie. Brie brie rear automatic braking. So if this Nissan Sentra isnt gonna compromise, why should you . Youre right atta girl. The allnew Nissan Sentra. With more standard safety features than any other car in its class. Reporter welcome back to squawk box. Rick santelli here live in chicago. Waiting. The most important data in my opinion the initial jobless claims 1. 058 million. That is less than our last look which is 1. 542,000 that got upgraded to 1. 566 million. So it is the 11th week in a row that jobless claims are down on the initial and a week in arrears continuing claims, 20,544,000 so 20. 544 million. And that follows 20. 606 million, which was the revision that, of course, is a bit lower than the original number, which was a bit over 20,900,000. So these are still very large numbers, but we are moving in the right direction on initial and on continuing claims it is lower also but not by very much philly fed, a june number, 27. 5. A positive number. In the Rearview Mirror is minus 43. 1 that was, of course, may the worst number is minus 57. 9 in 1974. We never challenged that this is the positive number. The last positive number is february and that was 36. 7 not bad on philly. We like to see the jobs of course reverse themselves completely and see numbers like we used to get hows the response in the marketplace . Well, if you look at yields, right now were at 70 basis points about where it was, which was minus 4 basis points from yesterday but it is unchanged on the week weve closed at 70 basis points as well. Many of the stories whether it was delta or the coronavirus in general, that seems to be some of the sticking points, of course, as we work our way through this week. Joe . Back to you. All right, rick thanks a lot in the rundown, steve, which i watch as i go along, i told you this is where i see it, intro liesman data it says intro to me, liesmania and thats immediately what i saw again. See in the rundowns see how it looks like liesmania its appropriate the lease maininiacs are lookino see what you have to say it is what err would he a it were wa confirm what we saw in the payroll data somehow the jobs market is stronger than indicated by the claims data. Rick is right technically right, i would say, no insult to rick on this claims are down, but only by a little bit and the rate of improvement has slowed rather sharply and im looking here at a claims increase in arizona, and its too soon to say if thats related to the rise in cases in arizona. Im trying to see where else there is a rise. Another rise in maryland another big jump there nevada i hope i said that right also up again. Ohio up as well. So its a little hard to see exactly whats going on and create a pattern here. The highest numbers remain in nevada, hawaii, puerto rico, michigan, those are unemployment rates. I want to turn to look at the philly fed numbers here. Rick is right. That is a big surprise that suggests maybe a manufacturing turn around faster than we thought, and that could be good news i dont have the philly fed data so im going to give you a pass on that and say thats good news, but i sure would like to see the claims numbers i will tell you, tomorrow im going to talk about a piece of data that maybe did predict the jobs number. Its this homebased stuff it has also stopped improving. As i quoted ian shepard son in the earlier hour there, forecasting was going on job markets with reopenings, some renewed closings, second wave has become very, very difficult to understand precisely whats going on certainly on a real time basis. Rick, do you have some comments reporter joe. Steve said you were technically correct. I wouldnt take that necessarily as an insult but you can if you want. Reporter technically hes not right either the rate of change is not smaller. I didnt want to do this. Reporter lets look at may 8th. 2,687,000. The next week it was 2,446,000 thats much smaller rate of change theres many weeks like that, as a matter of fact we can go back if you go to the 15th, 2. 446 million. The 22nd, 2. 123 million. These are smaller than the almost half a million difference between this week is no smaller this week than past weeks. That makes sense, steve. Reporter initial claims it is, joe. Rick, come on. Weve got to be talking about the same thing im talking about the continuing not continuing claims, im talking about initial filings for jobless claims which had been coming down kind of nicely here but now it seems, 1. 566 and 1. 5 is not a big difference there, rick reporter yeah, yeah, im sorry. Over 400,000 and its bigger than many other weeks. Its bigger than other weeks youre technically incorrect all right reporter rick, you have no idea what youre talking about. Civility reporter the difference between last week and this week, that rate of change is not smaller than it has been in other weeks so were actually gaining momentum, you could say from previous weeks. Were going to go i know weve got to go. Joe, it was 1. 8, then it was 1. 56 and now its 1. 5. How that is not a slower rate of change in anybodys book makes me a little nervous about that coming from the guy who covers the bond market. Oh, boy we disagree without being disagreeable coming up, were going to get react am i right, mack . You said nevada really well. Lease maniacmaniacs. We brought jim paulsen back. We didnt talk to him very long. He got his main points in. Its a down day. Then later the head of the nations Largest Public Pension Fund talks about how shes navigating the markets there are two sides to every trade so there must be two sides to debates or else were just sugar coating it all youre watching squawk box on cnbc welcome back to squawk box. Jim paulsen, leuthold group. We can continue our conversation that was cut a little bit short last time you were on, jim i think you were making the case that earnings might actually surprise or estimates might go up and do better. I dont know if we had quite an insight into the spike in cases. Does that moderate your view of the improvements that were seeing and therefore what the market does . Well, i think, joe, that the spikes in the virus are to be expected here until we eliminate it and we get a vaccine, were going to see that. I think the pace of the virus thats ahead of us, you know, the epicenter being china, through europe, us, were kind of trailing their model. China continues to have three spikes as well i think were going to get that. If you look hard enough, theres so many different places, theres always going to be a hot spot somewhere i think the odds of having an overall shutdown is very unlikely here for a host of reasons. So, you know, we may have to shut down parts of houston or parts of arizona or whatever from here or there, but overall i think were going to continue to have better and better Economic Data as more and more of the u. S. And Global Economy gets restarted and continues it could go faster if theres less hot spots, but i think its not a situation where were going to shut it down again or not. Its more of a situation of how fast we recover rather than if we recover i think the data continues and june has been really good for the most part. And suggesting a pretty big snap back i think even with hot spots thats likely to continue. So but the would you say that the easy 40, 45 , thats done and now were at this point where isnt it going to be tougher from here . Youve mentioned the bullishness or has increased a little, maybe complacency. I dont know if its complacency. Its hard to be complacent with whats happening in the country and around the world right now dont you do you see the Market Making sustained advances in the next three months from where it is . Well, i think that youre absolutely right i mean, the big blastoff of this rally is behind us were not going to sustain that pace, no way but i still think this is probably a new expansion, joe, where the unemployment rates going to continue to slowly come down and other data come back and if its a new expansion, its probably a new bull market and that means were probably early in this thing. You know, there would be no surprise at all if we have, you know, a consolidation period over the next several months that certainly could happen, but i wouldnt i also wouldnt be surprised if before the year is out we take a challenge on the alltime record highs, whether thats now or whether its in the fall or towards the end of the year i still think that the data is Getting Better and that means wall street is going to revise up the earnings estimate suddenly the market looks more attractive and the policy push looks more attractive from policy officials then you have 4. 5 trillion sitting in money funds of dry powder as investors wait for that pullback opportunity to buy. I think theres pretty good support of this market doesnt mean we wont have pullbacks, periods of consolidation, but if you look at it as a new expansion and a new bull, then even if we have pullback or a period of consolidation, 12 months from now it will probably still be hard. All right, jim. Well check back with you. One be other thing i was thinking about oh, so youre just going to be comfortable with higher multiples for a while . Because earnings arent getting back where they were. You know, the interesting thing about that, joe, is the multiple on the s p 500 if you look at the price to trailing it forward earning average is not that different than it was each of the last three expansions when they started. So its about the same as it was in 92, 2002, 2009 that is they went way up and when the recovery took hold they went down. I think the same thing is happening here. I repeat, you must be no fun at home. Thats all you ever do youre looking at past things. I dont know what the wife and kids think hes not around again. Hes looking at books and numbers. Its hard to turn it off. I guess it is. See you later. Thanks. When we come back, where do you look for opportunity when your funds got a market value of 390 billion . To have such problems. The ceo of californis lpacaers joins us next. Stay tuned, you are walk squawk box right here on cnbc. Coming up, jim cramers take on the trading day then wthehas t head of the Biggest Pension Fund in the market sees. Squawk box coming up when the world gets complicated, a lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Lets get to cnbc headquarters jim cramer joins us right now. Most of the time i am coming to you at this point of the day and asking what you think of some of the interviews we have done already. This morning i want to shift, tap your big brain right now and ask you what questions you might have for your next guest, the head of calpers. Sure. I think we have to figure out what part of the v we are on obviously we have gone there was a little bit of discussion between rick and steve about how low we have gone down 11 straight weeks of dropping claims, isnt it time to get aggressive plastic . How about cars what phil lebeau was saying, demand for cars is incredible. Howe how about demand for housing when to we stop ignoring those and go into those stocks thats what i want to know. Excellent i knew i could call on you thank you for wrapping up everything what we have been hearing and telling us what to ask next. Thank you you are the best thank you. Great to see you, jim we will get back to you in just a few minutes. As jim was mentioning, 1. 5 million americans filed for Unemployment Benefits in the last week. More than expected this is the 14th straight week it has been more than a million. Joining us is marcie frost, the ceo of californias call , the nations Largest Pension Fund with a market value of 391 million. Marcie, nice to have you becky was asking jim what we should ask you the big question i would ask you is did you in terms of the Public Markets did you stay in the entire time . I was under the impression at one point you might have taken risk off back in april. Good morning, andrew, we stayed in. Remained open for business, if you will we found some opportunities nine months ago and we were able to fund those deals in february and march. We continue to work with our external managers, with our internal team to find opportunity. Again, we are open. What is the answer to jims question if you got to hear it in terms of how your chests and team are thinking about a recovery, v shaped or otherwise . I think our economists, at least the last time i spoke with the team, they are, you know, on a higher percentage. That there could be a double wave to this, i think we are seeing that in the Market Reaction here most recently as cases continue to spike in some areas, in some countries but the underlying cause is still there. Until that root cause is resolved, we will continue to expect volatility and reactions in the market. We have to anticipate that that will continue at least through the fall or at least until a vaccine is implemented you are doubling down on private equity now why is that . Private equity happens to be the one asset class in our portfolio that is expected to return at higher than our targeted return of 7 . Private equity rails a component of our asset allocation. We are currently at 8 we want to increase it to about 10 . We have strong relationships with the high performing Managers Private equity has certainly a wide range of returns. For us, we need to have act test the high quality i think we have been able to do that we are a little bit what i call it a penalty box for a number of years where we were not as consistent in our capital and fun raising through your gps we stopped our coinvestment program. We are reimplementing that program. If you look back in our history that shouldnt have been done. We are finding those opportunities. Again, it is a relationship. It is really important that we stay connected to those gps, particularly right now in order to get 7 , we need high quality assets, and thats private equity. Let me ask you, typically private equity does fabulously in terms of buying when there is opportunity. When, frankly, the public equity markets are not doing as well and valuations come down if you believe in a v and believe in higher valuations, maybe in large part because of the fed and the stimulus measures taking place, doesnt that make it more challenging for private equity right now yeah, i think they are as selective as we are right now in looking at those opportunities we are to the getting a lot of capital calls. But we are as i mentioned we found a couple of deals just under a year ago more on the private credit side but done through historic private equity. But the feds were timely and they were aggressive to stabilize the markets. Market valuations of companies, thats something we are going continue to watch. When we think there is an opportunity to buy, whether through a private equity manager or whether we do that somehow internally through some of our factor weighted strategies we are peased to take action when we need to we will be patient we are long term investors we are not market timers and we will be thoughtful how we deploy the capital. Policy question for you when it comes to your constituents, which are teachers there are a number of older teachers basically on the verge of retirement who may not be a i believe to work next fall. Have you had conversations about that. That le teachers are on a different system but i dont think our challenges over when our active employees will be retiring i am a strong supporter of they plans as it relates to retirement security. These are guaranteed benefits. We are seeing a number of our almost 2 million members actively engaged trying to plan their retirement some of them are certainly of appropriate age, have the Service Credits and some have questions whether their benefit are safe we are roughly 0 funded that causes some stress for our 2 million members whether the benefits will be there throughout their lifetime. Marcie, you know, you and i have had lots of conversations about esg over the years last time i asked you whether esg was more important or less now in this environment especially when you have businesses that are going to be genuinely challenges, companies who were trying to put money aside for different efforts. How do you think about that in this context today esg is not just about divestments. I think it has been defined that way a little too often for calpers and other institutional investors. It is a risk frame and perhaps portfolio integration. When you have the return hurdle you have to be careful about integration. We are long term investors nowhere to hide. We are universal openers of approximately 10,000 companies we watch the long side of the portfolio. We are concerned about climate even if there is sensitivity to calling it climate change. Lets call it extreme weather patterns for us it is a risk framework. We need to understand the risk that our capital is taking on through the long term. Thats through engage men. About transparency and data, so we can make decisions whether the companies are managing their risks appropriately and whether we should be continuing to invest in those companies. We always use delta as an example. Right prior to the pandemic they pledged to spend 1 billion over ten years. 100 million a year effectively buying carbon offsets. In this environment, what would you tell the boards and the companies also trying to think about their employees and the like Human Capital is one of the supply chains identified through this pandemic. They have disparate there are disruptions. They need to keep the company in the survival mode. We need to focus on the long term, howe do we get back on track once we return to some sort of normalcy and the Balance Sheets come back into an improved stage we understand the financial implications of this pandemic and as it relates to these companies. We will be patient but we want to understand this hear the thinking about the long term and not just the shortterm. Okay. Marcie, it is great to talk to you. Hope to have you back soon appreciate you joining us this morning. Lets take a final check on markets. We are looking at some red across the board before we toss it to our friends at squawk on the street right now. Dow off 170 points we were in the green before. S p 500 of a 14 points nasdaq off about 3 points. Make sure you join us em to squawk on the street begins right now. And welcome to squawk on the street. Im jim faber. Along with jim cramer. Carl quintanilla has the morning off. We begin trading a half hour from now as andrew just mentioned we are looking at what would be a lower open a half hour from now. Futures losing steam is the way we are talking about it. This after of course a number of strong days in the