Transcripts For CNBC Squawk Box 20240712

Ten year is yielding around 0. 65 . Yeah, 0. 648 30year is at 1. 383 andrew thanks, becky nice to see you. Meantime, civil Rights Groups involved in that meeting with facebook which we previewed for you yesterday right here on squawk, well, the companys platforms, they are calling that sitdown meeting disappointing. They say they were unable to get commitments from Company Leaders on how they plan to combat hate speech and misinformation on the site facebook spokesperson said this was an opportunity for the company to reaffirm the commitment to combatting hate on the services well talk a lot more about this later with somebody who was on that phone call. I dont know if it was a phone call or a zoom. They dont do zoom, guys. They didnt i thought it was a zoom . Facebook now has their own. They do they have their own platform now. I dont know if you are going to meet with well, ive had meetings on facebook they often use blue jeans. I thought it said zoom but it might have been used saying kleenex or something we might be using it that way these days thats true. Everything is a zoom call. Be funny if facebook just insisted were using our stuff, you know, just the corporate profit yeah, weve got to use that while theyre doing this to show that its not all about you know, ive been thinking a lot about this. Them . Andrew and becky. Im uncomfortable. Im uncomfortable. I saw something about over in europe they have dealt with this in a much more strident way they have an actual independent human rights monitoring body of the council of europe. 47 members each member, all the e. U. Member states, they each give dealing with racism, xenophobia, antisemitism, intolerance and they get together and they do dictate whats okay and whats not okay i just wonder how does facebook walk the line . What happened to the old aclu . They used to just i mean, i used to see things from the aclu where i said, thats too much you cannot possibly think its okay to say that now it seems like its all switched where its just hard for me to understand who you put in charge of deciding what other people are allowed to see. Well, thats the great conundrum with facebook. You really do have one person. Right facebook would rather see somebody else in charge with this he would like to see regulation and somebody else deciding. It would help to get it out but what do we want do we Want Companies to regulate themselves or do we really want a more heavy handed approach from regulators. Obviously, we is a lot of different people who want different things. The royal we. I thought about the three of us. What do we want . Its interesting. In a strange way, maybe the now you could argue that maybe the advertisers are being coopted by organizations or this and that. Whatever the outcome of this ultimately is could be a quote, unquote marketbased solution. Now youre appealing to me. The corporations are trying to make money. Fine line based on the corporations i dont know i think right now facebooks in a particularly complicated position because if they i dont want to say if they if they if this group and the advertisers quote, unquote, win, right yeah. Then people will say Mark Zuckerberg again, only doing things completely unprincipled, will always go where the money is if he goes the opposite direction and says i have this principle about what he thinks about free speech, which other people may disagree about, then people say, you know, hes allowing hate speech on his platform i also think theres an issue of the philosophical view of this which is i think theyve gotten about 90 of it probably somewhere right. I think were talking about the 10 that is up for grabs then there is the technology piece which is you have to have Artificial Intelligence to catch this stuff early unlike frankly pornography and other things, its demonstrably harder to do there are things for example, you know, a rap song that uses the n word, theyll allow that on the platform if its used in a different way, they wont allow that the technology has to be able to figure out how its being used right. So its very complicated. Andrew, its complicated but they have solved much more complicated problems part of it is not wanting to be in a position of doing this. Thats what im he saying 100 i do think the technology is not as simple as in some cases its made out to be. Look, weve solved much more complicated technological problems though. Except that if you use only ai, you miss a lot of things and then if you use only humans, then youve got the subjectivity of every human and what he feelings we need an android. You cant keep up part human, part machine. We dont have those yet. I was talking to max about this, to our producer. Look at the supreme court, how difficult their job is every time we try to put a new person on the court, look how we try to get the 5 4, even 4 4 with the swing vote because the issues are so difficult. The slightest issue goes through the court. Finally this really specific issue ends up these guys labor over which is the right decision to make, 5 4 it comes out. How do we do that with facebook about every single issue i mean, its very difficult. Again, back to facebook not wanting to be the one making this call. Mark zuckerberg would love to see regulation, somebody else who is spons sishl for making those decisions. We dont want a group of 47 people to tell us do you want a company telling us id rather see certain things that i might find that i dont like than not see anything than just see this perfect world. I dont know were talking about the policing youre not talking about whether or not its going to be policed, youre talking about whos going to police it is it every companys responsibility to do that . Right. I cant imagine any of these Companies Want to be in that position over there they have laws and people watching and if you do it u youre in big trouble. Okay lets talk about the ryder cup. This is not so great but maybe its good. Compared to what we watched last time with our team, id like to delay it another year before seeing that torture when the euros just eat our lunch espn and golf tour reporting the pga is going to postpone the ryder cup for a year because of the coronavirus pandemic this was delayed until the same time frame in 2021 the president s cup, which is the u. S. Versus the rest of the world, scheduled for september 2021 that will be pushed back a year as well. And this makes sense to golf fans i can watch them play without crowds but not in the ryder cup. Thats the whole deal with the ryder cup. The euros all of that and its really good its really fun. All in good sportsmanship, most of it. Right so i can understand why theyre going to do that everything is different, isnt it yes, it is. New normal yeah. All right when we come back, President Trump said yesterday that he will put pressure on governors to open schools in the fall. Well get reaction from dr. Scott gottleib thats next. United airlines is scaling back its flight schedule for august in a securities filing the company said that it expects to fly about 35 of what it flew last august. Thats down from a 40 pro jerktion that it issued just last week. Squawk xilbeig bk. Bo wl rhtac you say that customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g, everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item, corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. President Trumps Administration will put pressure on governors to open in the fall. We hope most schools are going to be open we dont want people to make political statements or do it for political reasons. They think its going to be good for them politically so they keep schools closed. No way were going to put pressure to open schools, get them open. Its very important. Very important for our country very important for the wellbeing of the student and the parents. So were going to be putting a lot of pressure on open your schools in the fall. Separately dr. Anthony fauci said he thinks governors should mandate the use of facemasks and he said indoor bars are the perfect setup for infection and he cautioned on complacency based on one particular metric. Its a false narrative to take comfort in a lower rate of death. Theres so many other things that are very dangerous and bad about this virus dont get yourself into false complacency. Meantime, floridas Health Agency is reporting that more than 40 of hospitals in the state have maxed out their icu capacity or are close to running out of beds. Theyre running at 78 capacity. Another hot spot, texas. Texas reporting a record surge of more than 10,000 new viruses. There are three more states on the tri state quarantine list. Delaware, oklahoma must remain guaranteed. Joining us to talk about this is dr. Scott gottleib he is a former fda commissioner and cnbc contributor dr. Gottleib, another day and so many more questions for you all over again why dont we start with this question of the schools. Obviously parents would like to see their kids go back to school but they would also like to make sure that their kids are safe in that scenario. What would you be thinking as a governor knowing the president wants you to reopen these schools. I would imagine the governors would like to reopen them but every governor is dealing with a different situation in terms of what the caseload is in his state. Thanks, becky weve long talked about the importance of getting the schools open in the fall, not only because of the social and educational benefits for children but youre not going to be able to restart the economy until youre able to open the schools more fully i think the way to achieve that is get resources into schools to better protect the teachers in particular and also the children proper ppe, protective equipment for teachers testing in schools Different School districts are looking at testing i also think its important to give local discretion to districts. Give the districts discretion to make the decisions base. There may be schools that dont have the same physical infrastructure they might want to go to a schedule of two or three days of Distance Learning and one or two of in class learning that may be appropriate where you see a lot of spread and certain schools dont have the same infrastructure and resources. Giving instructions on what the resources are and what the guidelines are for keeping the schools closed. Do you think theres any governor that wants to keep the schools closed for political gain ive talked to a number of governors about this question, both republican and democrat they all want to open their schools. Different states are adopting different measures here in connecticut they may require the wearing of masks by children theyre trying to test both the kids and teachers on a regular basis. Massachusetts has looked at some of those issues as well. Maryland has done the same when i speak to the governors, theyre focused on getting the schools open they realize the importance of opening the schools to the kids and economy. Distance learning didnt work that well in many states this does have a detrimental effect on kids, on the social wellbeing and educational advancement. Doctor, thats actually the argument, as you know, that the American Academy of pediatrics made on behalf of why children should go to school and why that should be the goal and i think it is the goal for so many of us, including parents, who would like to see their kids back because of both the learning issues, social issues and so many others. The question i would ask you is there are so many different studies going on around the world trying to ascertain whether children not only get it, but lets decide theyre low risk unto themselves, which i think they are, but whether they spread it. You look in certain places like israel and theres an example where there clearly was an outbreak you look in places like denmark and they will tell you that theyve done a great job and havent had problems theres that paris example, france example where things went very well but then there was an outbreak in australia. Is there anything that you can as scertain from that where you say kids are going to spread it or arent going to spread it why dont we have better data on that at this point look, this has been the challenge. There is data on both sides of this debate. This debate is pretty intense. People feel very strongly on both sides of this question. You can find a study to support your position depending on what your position is the challenges that we havent studied this systematically. Countries that did open their schools didnt study the impact on what the infection rate was there was one study, a seroprevalence study and found lower exposure for children 5 to 9 but then equivalent exposure for children above the age of 9. There was another study that looked at younger children and older children, in younger kids, 2. 8 and 3. 5 in the older kids here in the United States its probably the case, we dont know, theres a askedy of the exposure to kids is lower people make comparisons between covid and flu and say not a lot of kids have had bad outcomes with covid, thats true. Covid appears to be less risky in kids than adults, but with flu you get 11. 5 million kids who become symptomatic from flu, that was the 20182019 year. We havent had that many kids infected hopefully with covid when we do the seroprevalence study. You cant make the cross comparisons between the experience in flu each season where it becomes epidemic and the experience in covid where the exposure has been low so fa in kids. If you think the key is making sure we get enoughppe equipment, personal protective equipment at the schools, who should be responsible for that, the federal government or the states the states are looking at doing it and theyre getting resources into the schools thats my discussions with some of the governors i think the federal government can assist with that that would be a role for the federal government to play to try to get the schools reopened. Theres ways that you can support the schools, especially with testing i think testing could be used more widely to get the schools open and maintain the schools and make sure you dont have outbreaks in the school setting. I think its hard for the schools to implement that. The states dont have a lot of excess resources to do the testing around the schools and thats why you are probably not going to see a lot of schools doing that colleges are starting to do testing but theyre using their own resources for it in many cases they have Research Labs to repurpose for research use only to do testing of students if they get a positive they can verify with an approved test. Dr. Gottleib, thank you great to see you well talk to you again tomorrow. Thanks a lot. All right. Later on squawk box, were going to talk more about the plan to reopen schools in the fall in this case Purdue University and president Mitch Daniels will join us at 7 30 a. M. Eastern. Up next though were going to talk about the impact on the pandemic on executive jobs squawk box coming right back the economic fallout from the coronavirus has resulted in millions of lost jobs. New report shows theres been high turnover in the c suite especially in the entertainment and leisure sector rahel solomon joins us do tell. Reporter ceo turnover in this sector is up almost 83 this year compared to the same time last year through june there were 42 departures compare that to 23 for the same time period in 2019. The finding from challenger, gray, christmas is interesting when you consider this is the same area of the economy, the bars, restaurants, hotels that were the most impacted by covid lockdowns. We see it in the unemployment numbers each week and the jobs report each month and records suggesting that the disruption we saw play out with employees may have worked its way up to the c suite as Companies Struggle to respond to the pandemic when we broaden out and look at top areas of departures, thats government thats followed by health care and the services industry. Finally, there were also at least three departures due to racism challenger Senior Vice President andy challenger saying in the report that the black lives matter movement, quote, may lead to a me too Like Reckoning for not only chief executives but executives overall as they demand equity in hiring practices, joe. This has legs, rahel. I have a feeling we report on it a lot and its something that were going to have to watch closely. There are times that i think about that as c suite executives try to transition and transform their entire work force into a more diverse work force. Right. At the top its invariably being done by white guys right. Not even not many women either i dont know that certainly is part of the conversation, right . Yeah. As these companies try to make their work force more diverse, as you said, part of that diversity should work its way to the top so some of the people making these decisions also reflect what the country looks like right now. Rahel, thank you. Appreciate it. Andrews going to take us out. Andrew im going to take us out when we come back, stocks on the move take a look at futures right now. We are in the red on the dow but not by much. Nasdaq looking higher, up 35 points well talk strategy. As we head to a break, look at yesterdays s p 500 winners and losers back in a moment youre first. First to respond. First to put others lives before your own. And in an emergency, you need a network that puts you first. That connects you to technology to each other and to other agencies. Built with and for first responders. Firstnet. The only officially authorized Wireless Network for first responders. Because putting you first is our job. U. S. Equity futures and the dow are adding to some of those losses that we saw yesterday, which came after outsized gains the day before turning around the nasdaq continues to shine though in terms of being in the green most of the day setting some new records and being up more of the time becky, whats this whats this . Warren buffet . Joe, there is just some news hitting the wires. Warren buffet has Just Announced his annual charitable donations to the five philanthropist that will be receiving his fortune. He is distributing 15. 9 billion Class B Shares of Berkshire Hathaway valued at 2. 9 billion. That brings his total philanthropic donations to 36 billion. He plans to give away 99 of his fortune. A little more than that. Key beneficiaries are the bill and Melinda Gates foundation, Susan Thompson buffet and charities by each of his three children he will hold 248, 734 shares of berkshire. Hes been giving his money away since 2006 hes made the installments away every year the only reason he sold the shares and converted them into b. Shares is to give them into charitable shares. He has been accused of making the donations due to tax benefits his combined federal and nebraska income tax paid including projections for 2020 has been reduced by about 43 cents for every 1,000 hes given to foundations over the past three years theres always questions about this particularly now i think because politicians are looking at this as a way to make sure that they go after the richest, the billionaires and tax their money even more heavily. But i do think kind of looking at the tax benefits that buffet got in this, they were quite a bit smaller than a lot of people had anticipated. I was thinking about this with andrew. I want to talk to you about this im coming around on this, too do you remember the news yesterday . What was the news . 1. 6 billion goes to a private to a company to try to help us get a vaccine its like, the government does need money i always have been of the opinion, sorkin, you know this, that really wealthy people would rather have the private sector philanthropy affect their interests rather than the government, but suddenly i actually was going to use the expression theres no capitalists in a foxhole there arent there are no atheists in a foxhole. Were all save us, please. Give me ppp, give me therapeutics, government, gimme, gimme, gimme im willing to give free market people a pass, andrew, because this is a 1 in 100 year situation where everybody is just at the mercy of covid and everything else. I can certainly see how people would say the government is bailing your sorry butt out again. Lets get some money from i dont think it should be from corporations necessarily, andrew i think thats where the jobs are. Someones got to pay rich people someones joe, you realize even if you took all of the income from all of the billionaires, its he not enough. It wouldnt work. It has to be going down the pay scale in terms of who they take money from. Dowe buy gold do we eventually try to do something about all of the money were spending, printing, doing out. I dont know what else to do, were all mmt people, too. The question id ask, and its not specific to warren, but its specific to this issue, is i think one of the issues around charity is when you give shares, you effectively theres no step up so theres no taxes paid on those shares so i havent looked, becky maybe you can explain it because i didnt do the math i havent done the math on how theyre calculating the tax benefits or lack of them. No, thats the tax benefits directly to right what i wonder those are the go ahead. I apologize. No. What you wonder is what . What i was going to say, look, my view is that when shares at a certain number you might decide over a million dollars, 10 million, whatever number you want to make it, you have to sell the shares, pay the Capital Gains taxes on those shares and then you can begooquh it so you get the benefit of the increasing value like everybody else thats not a crazy idea. If i were to sell shares i would pay taxes on them. Thats not a crazy idea but, andrew, if you were to sell shares tomorrow, you would pay taxes on them. If you were to give them to charity, you would not. Correct the difference is is it going to line your pockets or is it going to help a Charitable Foundation youre right if there is an incredible buildup and you want the government to get some i tonight think bill and Melinda Gates would argue about that i dont think they would argue with it. Right well, but i could argue against my own position which is to say by default if you have to sell the shares, youre going to be giving a piece of it to the government that piece to the government is not going to the foundation and may be going to good works, may not be going to good works, who knows . I think there are both sides to the argument but i do think as this whole debate and covid has sort of made it maybe more pronounced we clearly have to figure out how to raise some money. There have been times where to revenue raisers, people that have eyed that, they have eyed the charitable deductibility wellintentioned people trying to do the best that they can would actually Cap Charitable deductions then you have other people that are philanthropic. Its like what are you even thinking about doing here making it harder for people to give to charity . Both sides, once again, theres some merit to the argument for both sides a lot of money does not get to the government because its used because its tax advantaged. Then it goes to philanthropy what should we do . The Bigger Picture there are certain things that only governments can actually move the needle on theyre the ones that have the big funding. When it comes to philanthropy. If you have worked in any of the philanthropy industry, i know several philanthropies ive worked with. If you realize what that would mean for those that are doing things governments cant, they experiment with things look up harlem childrens zone thats something the government would not be able to do. The experimentations that take place hopefully lead us to the point where you can see something that can scale up and have the Government Funds that get behind it at that point. The richest person in the world, gates, one of them, what hes tried to do with vaccines. Bezos. This is one Company Called novavax. Maybe it works the government is like, 1. 6 billion. That would be a huge deal for someone in philanthropy. Thats only the government can write out the Gates Foundation right right. It might not even work. The Gates Foundation has thrown 100,000 to covid not a billion when you have the philanthropies working with governments, some of the most successful programs are started by them like aids. They start out in philanthropy then they have to be partnered up with governments to get the spending behind it and to get the number of people actively involved right the flip side is we say only government can do it but government has to be funded to do it. As we know, government is not funded to do any of this when we say that the government spent and weve taken a loan off of our children and grandchildren. I already realized that before the whole discussion that there needs to be money unless youre going to just buy gold and just print to your Hearts Content or whatever. Right anyway. Its a complicated one. Its a complicated one but, you can say all of these things, but there are good intentions behind i think what warren, bill, so many others are trying to do right right. You know where good intentions usually lead right the path theyve paved. Anyway becky thank you for bringing us that news were going to get back to the markets now for a moment our next guest says we are due for a pause and that were going to get a better opportunity after earnings season. Joining us is sarat sethi. A cnbc contributor sarat, youve been relatively optimistic about the markets and have said not only stay in, and youve said to buy youre saying maybe now is a time to hold off for a moment . Thats right, andrew. Youve got 40 of companies saying we cant give you guidance looking at where the market is, the s ps close to an lltime high if you look at the five stocks guiding the s p, theyre trading at 45 times pe the market to us seems pretty fairly valued. Really in the short term, were longterm investors. Stay in your allocation, take some profits from some stocks that have become a big part of your portfolio timing will be really hard and you will see fallen angels or pickups in stocks that have been beaten and when they give guidance you can get more opportunities there. Be cautious. So much money has flowed who do you put in the fallen angels category . Who do you put in the beaten up category so fallen angels, you know, High Quality Companies like a honeywell, jpmorgan, chevron, disney blue chips that once we get through this will come back quite strongly what do i call beaten up some of the energy stocks. Look at some of the Insurance Financial stocks and then you want to go down deeper, look at kind of some of the transportation stocks in the true value i would wait for the true value until we get some better opportunities in terms of where earnings are going to go, but the fallen angels, you know, those could go down even more at this point just because we dont have any future earnings perspective. Today the investors looking to where theres growth, where the stay at home stocks are. Those are getting so over valued that youre getting into this, quote, kind of budget of stocks that i would try to avoid at this point right so as we get these numbers though, as we get earnings numbers, lets assume theres no guidance or the guidance is very wishywas wishywashy, thus far it appears investors have almost discounted all of that, that theyre trying to look past all of that you think when they actually see the numbers right in front of them theyre going to say, okay, maybe i want to sell some of this so i think we have to look for a couple of things, andrew this will be an interesting earnings season. One is what are companies doing with their cash flow do they have the ability to go back to the Capital Markets and raise more cash, especially those whose earnings have been compromised . You if look at medical product companies. Are they looking to grow their top line if that is the case, i want to be in these companies. If theyre looking to divest and say, look, were not going to have the growth rate, those companies i want to avoid. You have to be really picky as you go through this because Capital Market is going to be important. What are sales growth going to look like. Margin is hard to tell because we know businesses are struggling for the next couple of quarters. Indicators like that because you also have the put. Right now if youre an Investment Grade company you can go back to the capital grade markets. I want to own companies for the right reasons, when we get this vaccine, hopefully we do, they will have a much better trajectory and come back stronger than some of the weaker competitors. The other thing i would look at, andrew, given were going into the fall, whats going to happen to mna youre going to see more of it come down and i think those companies that are going to be acquiring are going to be interesting because they are going to grow. I think people are going to put a premium on growth, especially as weve seen in the last few months. Sarat, always good to see you. Love the fireplace behind you. Cant really get a tight shot to figure out what those books are. I was treed to read the spines nice to see you always. Nice to see you, too. Becky, over to you. Thanks, andrew when we come back, facebook meeting with the organizers of a boycott of its platform yesterday. Participants now calling those talks disappointing. We have much more on that and the companys just released civil rights audit thats straight ahead. Hey frank, our workers comp insurance is expiring, should we just renew it . Yeah, sure. Hey there, Small Business owner. Pie insurance here with some sweet advice to stop you from overpaying on workers comp. Try pie instead and save up to 30 . Thirty percent . Really . Get a quote in 3 minutes at easyaspie. Com. Wow, that is easy. So, need another reminder . No, no no, im good. Uh, yes please. Oh. Ho ho ho, yeah need workers comp insurance . Get a quote in 3 minutes at easyaspie. Com. I know that every single time that i suit up, there is a chance that thats the last time. 300 miles an hour, thats where i feel normal. I might be crazy but im not stupid. Having an annuity tells me that im protected. During turbulent times, consider protected Lifetime Income from an annuity as part of your retirement plan. This can help you cover your essential monthly expenses. Learn more at protectedincome. Org. Coming up, facebook just out with a report from its civil rights auditor that says the company has made decisions in the last nine months that are serious setbacks for civil rights details coming up next news just out earlier this hour facebook publishing its third civil rights audit the report recommends that the company enhance the team and processes put in place to oversee civil rights issues. The auditor said its policies have improved significantly but strongly disagree with the companys policy not to fact check politicians. Facebook hired a former aclu executive to lead the audits back in 2018 she told the ap that the company has made painful decisions over the last nine months as real world consequences that are serious set backs to civil rights the audits finding are not binding. It comes a day after facebook executives met with organizers of an advertising boycott that had prompted more than 700 companies to pull or pause their ad spending. Joining us now to discuss the ad boycott and facebooks road ahead, the fine are and ceo of a could you approximate i cane you are envious where they fine themselves would you like to be in that position and have some how would you advise facebook at this point i mean i think that good morning. I think were seeing i agree with the naacp, aclu said we want more action i think a lot of that is actually i know the complexity but ive been straightforward. I invite mark to speak to my 2 1 2yearold son and ask him if its okay to promote and violence and he would say no its not okay in preschool and not okay on facebook a lot of it is pretty much straightforward. I would double my head count and hire 50,000 content review people, create 50,000 jobs, invest few billion dollars and build the largest team in the world. You dont think ai can do it . I think ai is really great but this is a human problem and we need humans to solve it so i think that ai has a tendency to amplify certain signals and hate in people it creates small hate. I dont think ai can solve this. You can use ai to get better we must have humans on board if i were facebook, to go through this period and they can gain so much trust from the world in just really doing less listening and i would put billions of dollars and tell the world im creating 50,000 jobs and im going to solve this. Andrew. Adam, just to this issue of ai, theres arguments facebook has made, i made the argument, on the other side you have people including the head of mr. Greenblatt who said technology can solve this problem is that right or wrong right now, just maybe you can help us because you understand this Technology Better than we do, can Technology Actually tell the difference between what to me seemed oftentimes very nuanced complicated issues i dont think its good enough i can tell you weve started a few years ago, we employ 50 people we review 100 of ads. Thats a much smaller scale than facebook or google things change so fast. Theres so many nuances when you review a piece of content than whats temperature of that and the tone you want to make this a vivid, vibrant policy you want the policy public so i just really dont think machines can solve this exclusively. Its worth the investment. You at this point when youre advising people obviously and companies that advertise on facebook, how long do you foresee to be an issue its not going to go away. Is there a way to i mean what is your advice to people that cant, you know, that need facebook because they cant do it any other way they need be there but do it in a socially responsible way what do you tell them . I think we all need facebook. Facebook is like oxygen, like coffee i dont foresee the movement hurting facebook financially what i hope it does is it forces facebook to commit to do things that make us feel more, you know, happier about the progression. Its not looking for perfection, were looking for information in the right direction. My question is why do we even need a hash tag. In the old world you would fire a vendor the way they were doing and behavior we have no choice. We can fire facebook so we come up with a hash tag to force them to give us attention my hope is that, you know, that we will go slightly bigger alternative to facebook and we will give people a choice. Jessica wrote her hope is advertising for journalists and advertisers. People dont look for terms. Its a pause until they come back to facebook adam, thanks. We will be speaking to the aforementioned a little bit later in the show. I dont know what he has planned. Hell be on with his thoughts on yesterday. Thank you. Andrew judge two big hours ahead on squawk taen we come new data on real este well bring the housing hardship index next i am totally blind. And non24 can make me show up too early. Or too late. Or make me feel like im not really there. Talk to your doctor, and call 8442342424. Come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. Stocks winning streak comes to an end amid the growing Coronavirus Crisis in this country. Hitting a grim new milestone while officials grapple with massive surge in cases what it means for the markets Trump Administration pushing to get students back into the classroom. Purdue president will join us with his thoughts. An outlook for the ipo market for the second half of 2020 and the names up need to watch. Nasdaq president will join us as the second hour of squawk box begins right now. Good morning and welcome back to squawk box right here on cnbc. Im Andrew Ross Sorkin along with becky quick and concern the dow has turned positive in the past couple of minutes we were in the red, now were in the green. About five points up nasdaq up 50 points. S p 500 looking to open about four points higher right about now. Joe . Lets get to breaking news on the Housing Market. Diana oleck has the latest report on Mortgage Applications. Hey, diana reporter after a brief pull back at the end of june home buyers rushed back into the Mortgage Market last week taking advantage of yet another record low Mortgage Rate. Mortgage applications to purchase a home rose 5 for the week but a remarkable 33 higher than the same week one year ago and thats according to the Mortgage Bankers association seasonally adjusted index and another adjustment was made to account for the fourth of july holiday. The average rate on the 30 year fix pelle 3. 26 for loans with 20 down home prices are continuing to heat up given the very tight supply of homes for sale it increased to 365,700 applications to refinance a home loan which are more sensitive to weekly Interest Rate moves they rose. 4 from the previous week but 111 higher than the same week one year ago. Refi demand has been so strong for so long, theres limited number of borrowers left who can benefit from that new record low rate were getting another record low Mortgage Rate every week, becky. Yeah it does. Diana, thank you very much stay with us well take a deeper look which areas of the country are getting hit the hardest because of whats happening with the coronavirus and economic devastation thats come with that an analyst for bank rate. Com is here thank you for being here thanks for having me. Good morning good morning. I know youve taken a look at a lot of different metric, things like mortgage delinquency, unemployment rates and something you call housing hardship to try and measure the 50 states plus washington, d. C. To see who is faring the best and who is faring the worst how did you first of all come up with these metrics and what is housing hardship i was just trying to come up with a real simple way to look at how the coronavirus has affected different states because obviously the effects have b uneven across the country and across industries. So this is a nod to the old misery index which was two metric, unemployment and inflation. So instead of inflation i substituted mortgage delinquency. I took a look at state by state unemployment and state by state mortgage delinquencies the list is an interesting one and maybe because the ones that have fared the worst on the list like navy, hawaii, michigan, ohio, new jersey and rhode island some of those states i expect to be there because of nevada and new jersey because theyve been hit so hard by coronavirus but not necessarily the states with the worst case of crcorona. Nevada has been hit hard. But nevada and hawaii both fared the worst in april and may the two months i looked at thats more about the structure of their economies those are very tourism heavy states and no tourism in april and may. So nevada has had 25 to 28 unemployment over the past few months hawaii also had very high unemployment so those two states have the most effects by far and thats because theres such tourism dependent economies, not very diversified, not a lot of tech, not a lot of other employment in other industries to buoy those economies. When you get into the other states, michigan, new jersey, those two definitely have been hit very hard by the coronavirus. So its been a mixture so, yes, in some cases states that have been hit hard by the covid19 are faring poorly and in other cases states that have a lot of employment and powerful Industries States that fare the best, south dakota, north dakota, montana, idaho and nebraska, what do they have in common . I guess they tend to be fairly steady and have less than a boom and bust cycle thats part it. They are smaller states. They havent had a lot of coronavirus cases. And states in the upper midwest and these numbers are for may so its not like there was a lot of tourism or a lot of people coming in to those states from other states during the late spring. And so those states definitely have done well they still have single digit unemployment for the most part i think the one disheartening thing states that have done well tend to be small in terms of population and their economies diana, watching this on a regular basis, knowing whats happening even in the most recent weeks what kind of questions might you have in terms of what were seeing more recently reporter well, what im think is how is this going to affect home prices weve seen such a low supply of homes for sale and high demand in the Mortgage Applications that if a state has certain hardship especially when it comes to mortgage delinquencies and were in this mortgage bail out where borrowers arent required to make those Monthly Payments they can put it off until they sell their house does this hardship translate into lower prices because we dont see those home price gains accelerate because of that low supply and that high demand. Will this affect prices, do you think . Well, youre right. Nationally we have seen home prices hold up surprisingly well because of that supply and demand equation you talked about. The supply of homes for sale has gone down but the demand of homes has not gone down as much so were still seeing bidding wars, prices go up so the answer really kind of depends on the states. So new jerseys Housing Market had not bounced back as strongly as other places. Michigan is another place that hasnt bounced back as strongly. Nevada had been seeing a lot of demand from californians moving into the state to take advantage of lower home prices in nevada so, yeah, youre right were not going to see foreclosures in the near future but a state like nevada or hawaii that has 20 unemployment that doe not bode well for the Housing Market in those states presumably in other states it wont be as severe diana, when would you anticipate seeing foreclosures begin to take place . Reporter you know, i would not expect a wave of foreclosures, certainly not what we saw during the Great Recession because you have the mortgage bail out where people can delay their payments for six months even up to a year and then wait to make up those payments later if a borrower feels they cant stay in the home, they wont get employment in the near future or make that you want, theres, again, so much demand for housing right now. Not just from the demographics of millennials wanting to buy but heavy Investor Presence in this market. They would likely sell the home and be able to get a good price for it now homes are not necessarily one water the way they were during the last recession, that is owing more on the mortgage than the house is worth. We have record home equity most people could just sell the home outright and not go into foreclosure. But it depends on what type of mortgage you have, if you had a low down payment loan and very low equity in your home but nothing what we saw a decade ago. Yeah. Diana and jeff i want to thank you both jeff, thank you for being with us today thank you okay when we come back a lot more on squawk President Trump say cools unfortunate open in the fall well speak to Purdue University, former indiana governor, mifrp daniels about his plans to reopen the market breaking a two week winning streak this morning dow looks like it will open 15 points. S p 500 open by five, nasdaq by 53 well see how things go as the morning progresses squawk returns right after this experience the adventure of a bigger world in a highly capable lexus suv at the golden opportunity sales event. Lease the 2020 nx 300 for 339 a month for 36 months. Experience amazing at your lexus dealer. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. I. Welcome back to squawk box this morning a big drop in boeing yesterday dragging the dow lower but the story remains big tech apple, microsoft, facebook all hitting record highs during the session. I want to get over to mike santoli with more on what he thinks is moving the markets thats a familiar story as confidence drains away a little bit on the timing and strength of economic recovery. Reinforce the bid in the Digital Economy over the physical economy. This is a yeartodate chart of the semiconductor against the industrials. This is the new industrials versus the old traditional industrials. They were riding each other right up to near the marlow. Essentially they were trading similarly on global macro expectations then you see this classic alligator jaws type chart open up since the crash keep in mind the industrial sector includes transports thats part of the drag. Aerospace transports big allocations in the industrials semiconductors a good bellwether very much reinforced last month, one month ago that the s p hit that postcrash high of 3232. On a one month basis what youll see the growth sector, mega growth cap stocks still dominating over everything else. In particular this is reopening play. Leisure and etf does have hotel and travel and retail names and restaurants you expect to benefit from reopening. Here again the market essentially the keeping itself supported by gravitating towards areas thats better insulated. Maybe that will change if we get more confidence on the recovery. Yields will go up. More cyclicals work. In the meantime same old Growth Stocks keeping things together have you seen that technically before the alligator jaw thing . I seen it used. I dont think its an official tactical formation as opposed to a crocodile would it be different i always have trouble. The rounded snout lets ask brass rine hart who is with us grind higher weve had a lot of guests that said grind lower and been so horrifically wrong grind higher is not something everybody would agree with given this uneven opening and record covid cases every day. Why grind higher is it completely about low yields andthe fed . No. Look, its really a couple of things the market for sure tracks the amount of cases of the virus, right inso as virus cases go up markets tend to go lower when you think about the size, speed and scope of the monetary support its easy to see equities are likely to be higher yes equity market will have some ups and downs as cases start to have these little hot spots in different places across the country. But mike made an important point on the semiconductors. The bellwether tech sector and growth is very sensitive to bone yields as bond yields go lower growth outperforms. The reason we feel growth will continue to anchor fleeter ship to the equity market is that bond yields are capped to the upside really youll be fluctuating, between 30 basis points at the very low frontal boundary bring something close to 90 basis points at the top of the ten year treasury and thats in part because youre seeing yields going lower in the u. S. And thats very supportive of the equity markets why you make i didnt ask you about dollar, i dont think, but you thought it was important to say the u. S. Dollar is not in a bear market and, i guess, its better than my neighbor, i guess compared to everybody else, our yields arent as low as everyone else if you continue to see credit as attractive and yields going lower why isnt dollar why wont that be a problem for dollar i dont think yields can continue to go lower we think they are capped to the upside we do think dollar had a very big rally during the crisis, especially into the teeth of it into march and april we also note the rest of the world is going to be unable to tolerate very strong currencies. With the u. S. Even having bond yields at the ten year below 1 thats still one of the highest bond yielding trades across the world. So we believe that its going to continue to support capital flows into the u. S so the gold will dont rally even if dollar does not decline . I cant speculate on gold we dont put it into our Asset Allocation specifically. The period that we had of nonu. S. Equity nonperformance for japan and other parts of the developed markets we do not think its going to continue think the u. S. Will be able to maintain its leadership. Mike, are you still with us yep so, if schools have trouble, we have Mitch Daniels on from purdue, schools have trouble, then reopening you have trouble because kids are at home and everything else. Is there some is there something directly in front us that the market just is refusing to acknowledge, or is it looking even beyond that i think its i would say its a combination of the market if you believe the market operates on kind of a six to nine month forward time horizon in terms of what it is trying to handicap and price in, its going to take you to that point of where probably some progress will be made i think thats probably the consensus. Maybe its overoptimistic in the near term but this idea youll be looking through it and in six months youll be looking at what 2021 looks like in whole its a combination of that the average stock is down 9 , 10 in a month the cyclical stocks are not much participating and not contributing to the upside here. Im not sure the markets ignoring things. Its kind of clinging to the kind of cautious, but not pessimistic kind of scenario that it sees out there the volatility index up near 30 and people hedging their way in election volatility potentially it shows you this market still is on guard and ate fairly hedged up market that means theres not a lot of i need to sell in a hurry when you get these pullbacks. Thats, i think, why weve been sticking in this range and not going back anywhere near the loss of a couple of months ago do you feel youre in a minority with your peers in terms of being positive . I mean theres a lot of people that are quick to point out a lot of the uncertainty and risks in the market. Where do you think sentiment is . Is it with you or people that are negative joe, i think thats a very fair point and i do think theres a lot of uncertainty and the vix being high is not something thats conducive for big equity gains Going Forward the way we think about it is on a 12 month basis you can think about it in the next day or two, too difficult to manage. If you think about it on a 12 month basis the amount of fiscal and monetary support and ingenuity on arresting the virus with either therapeutics or a vaccine. Dont dismiss people doing the right things, we know those things are very effective against combatting the virus as well so we do believe that if you dont if youre not invested in equities youre betting against ingenuity over the next 12 months to two years mike, nine months, even the pessimist about a vaccine if we dont have it in nine months that would cover that time guy back to what dr. Gottlieb said one way or another this is over in january. Kind of the easy way or hard way. Im not sure thats true thats one assumption. The world or the outbreak i believe he meant the outbreak im thinking either with this year i dont know yeah yeah. I dont think he meant the world, joe i hope not but, you know what theres a lot of things i said could never happen that happened thank you. You get a hair cut, mike you go to a salon . What happened . I call at it barber you did you ventured forth over a week ago they remove one side of the mask and then put it back. Its unbelievable. Crazy. At least you didnt get mobbed by viewers because you had the mask on. Its hard for me to go out at all in that case anyway, thank you. Becky. Ahha. When we come back, President Trump plans to pressure governors and educators to reopen schools in the fall despite some soaring rates of covid infections in some states. Purdue University President Mitch Daniels has a plan to open purdue next month for 45,000 students hes going tell us how he planned this out hell join us in a bit to talk about it an outlook for the second half of the ipo market. Nelson griggs will be our guest. Squawk box is coming right back trivia question. In terms of total value which nfl player was the highest paid before Patrick Mahomes ten year extension with the Kansas City Chiefs the answer when cnbc squawk box continues aflac. These are all the cab rides to my physical therapy. And aflac paid me directly to help. Aflac. What he said. And this unexpected bill is from. The twothousanddollar specialist. Thanks. Aflac. When youre sick or injured, aflac is there. We can help with Expenses Health insurance doesnt cover. Get to know us at aflac. Com we can help with Expenses Health insurance doesnt cover. Youre first. First to respond. First to put others lives before your own. And in an emergency, you need a network that puts you first. That connects you to technology to each other and to other agencies. Built with and for first responders. Firstnet. The only officially authorized Wireless Network for first responders. Because putting you first is our job. Now the answer to todays aflac trivia question. In terms of total value, which nfl player was the highest paid before Patrick Mahomes ten year extension with the Kansas City Chiefs the answer, matt ryan of the atlanta falcons. Ryan signed a five year deal worth 150 million in 2019 still to come right here on squawk box, when we return what cool will look like in the fall Purdue University Mitch Daniels will join us with his plan then at 8 40 this Morning White House National Economic director larry kudlow will be our special guest. Futures right now, dow has turned from the green a little bit into the red now off ten ltapots wel lk about it when squawk returns after the break. Introducing stocks by the slice from fidelity. Now you can trade stocks and etfs for any amount you choose instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. International students who are studying at american universities on visas will have to leave the country if their classes are entirely online this fall the announcement was made earlier this week and could result in a big blow to colleges bottom line among other things its disruptive. Im hearing anecdotally about this from my daughter and a lot of people she knows. This is a major issue. Do people know that . Its not just money its peoples lives absolutelypeoples lives. Youre right so much turmoil here colleges and universities scrambling this week to keep their International Students after immigration announced plans to revoke those students taking online schools. Students attending schools that are switching to online like harvard must transfer. Students with visas who are not in the u. S. Will be barred from entering if their school is offering only online classes there are more than 1 million Foreign College students in the u. S. Who account for 15 20 in enrollment and larger share of tuition since they pay full fare and spend 45 billion a year just on school costs harvard president calling the decision a blunt one size fits all approach to a complex problem. Columbia president calling it destructive and indefensible under the rules if the course load is not entirely Online Students can stay. So students at the university of washington yesterday launching a petition to create a one credit in person course with only one meeting a quart and excused absences to get around that rule they already have 14,000 signatures there but another issue here is a lot of these students who are in the u. S. Who are now forced to go home cant go home because of travel restrictions. Request. I was going to ask the same thing not knowing about this petition why wouldnt the schools just set something up like a oneonone in person independent study that these students in particular are there for it seems that would satisfy the requirements by i. C. E. Yeah. Thats what a lot of schools are doing. So, we had harvard saying were going all online what they may do go hybrid which many school are doing which is adding some online courses and some in person the issue there is, there are some people who are going hybrid schools but still blocked out of any in person classes so you had u. S. Students yesterday giving up their slots in in person classes to the overseas students so they could stay in school robert, we keep hearing the argument why this shouldnt happen can you make the argument why i. C. E. Did what it did i. C. E. s argument is they are universitying back to the precovid rule that stated overseas students couldnt get a visa if they were attending online classes only to prevent fraud. But there are some who think the administrations real goal is to perhaps force colleges to further open in the fall and have more in person classes and perhaps also one other agenda here might be to get more of those slots for u. S. Students and further restrict the amount much overseas students coming to the u. S. But we just dont know. Yeah. Robert, thank you very much. Good to hear from you. Thank you very much earlier this morning dr. Scott gottlieb spoke about testing at school and what it would look like. Testing could be used more widely to get the schools opened and maintain the schools and make sure you dont have outbreaks in the school setting. Its hard for the schools to implement that the states dont have excess resources to do testing thats why youre not going to see a lot of cools doing that. Colleges are starting to do testing but using their own resources. They have Research Labs they can repurpose to do testing of students if they get a positive they can verify with an approved test joining us now to talk about the reopening of universities and what the path forward is for his institution is Mitch Daniels. He is the president of Purdue University and the former governor thank you for being here i know you have been early with this and have been working on a plan for a very longtime youre going to be bringing 45,000 students back to West Lafayette starting next month. Its going to look different you have put a lot of things youve been preparing for including southeast testing that dr. Gottlieb was just telling us about. Everything will look different, becky our returning students will feel like freshmen because of all the changes. All the safety for students and those more vulnerable, potentially staff and so forth, physical changes, policy changes and just to witness your last report well be announcing today every student will be tested, will have to submit a negative test prior to moving into a Residence Hall or attending the first class. Youre right weve been working on this we started early because were daunted by the implementiation challenges and we now got to the point that i hope he would get to where we can add this to all our other plans. President daniels, in terms of what it will look like on the college campuses, i know you said it will affect the dining halls, affect the class rooms, affect the residents i know you also had a huge number of people who have confirmed that they are coming back i think i read you said tuition deposits for incoming freshmen shattered last years records by double digits. So where do you put these people how do you handle dorm room situations when you have such a full capacity . It will be tight. We have had to deal with that before about half of our students and this is a problem as much as a solution live off campus. But thats just one of the challenges that well face thats one were not unfamiliar with i will say, you know, first of all, very clear in our case and i think with everything that i see nationally says this is general rule, students want to be on campus very much they know and we agree that there are elements of the on Campus Experience that no one has figured out fully how to replicate online were offering an online choice to students who cant get here like many of our International Students or who dont want to come yet to campus but overwhelmingly our boilermakers want to be here and its our job to find ways to allow them to pursue their education and get their lives launched on schedule i know you cant control what happens on campus. Part of that you said there wont be things like concerts, there wont be fraternity parties. But half your students live off campus will the bars in West Lafayette be opened and how do you work with that to try to deal with that situation knowing that bars have been a place where a lot of these most recent outbreaks have picked up and taken off . Its an extremely per septembperceptive question here and other cools ive been talking to, were in a relationship with our communities in so many cases were one. The school is the heart of the local economy and its the largest employer and so forth. And we now see that, first of all, we need our community to take all the steps it can take also we dont want to create a problem for our neighbors in the community. And maybe even a bigger problem we dont want casual outlook there to allow the virus to come on campus when it wouldnt otherwise get here so working very closely with them wthe local Health Officials and, you know, literally in some ways one of the safest places in our entire county will be in a purdue classroom. But we cant control nearly so well what happens in more congregant spaces or control directly what happens when someone crosses the street and enters our neighboring city. Mitch, i have two quick questions. One is your plan relies in large part on testing and tracing. And i wanted to get your thoughts i dont know if youve been following whats happened with major league baseball. They have a plan, obviously they are a professional league with a lot of money at stake and over the past couple of days their testing plan has not been working the way they anticipated in part because they cant get the results quick enough and in fact therefore you have the potential risk that people are getting infected between when a test is taken and afterward. How are you planning to deal with that . Were watching very carefully and we under there is no perfect here where in life do you fine it we do believe we have now found a system and found partners to ensure, we hope, with few, if any, mistakes that students arrive on campus negative and then so much of what well be doing here have to do with distance more than half of our adult workforce, faculty and staff will not be open campus on any given day. Whats the cost of the program that youre going to be running in terms of testing and how frequently will you be testing . We talked to the president of cornell who put a 3 to 5 million price tag interest they will do it every seven days harvard will be testing every three days in the millions the total cost of all the steps were take, the miles of plexiglas, the reconfiguration of buildings and so forth in the tens of millions we will we will ask of every state of the union and every person on campus faithful allegiance to a set of behaviors, socalled protect purdue pledge. It starts with taking ones own temperature, i did in the morning well test anyone with any sort of symptom immediately we may do some surveillance testing on top of that but we believe weve made arrangements for quarantining of those who do test positive no one says this will be easy but the cost of not attempting it, i think, in the lives of in our case tens of thousands of young people would not be acceptable mitch, im not sure if you heard our conversation before with robert frank just talking about the new plans for International Students how they would have to leave the country, not be able to have visas at cools. Where do you come down this. I know youve been involved in terms of International Students and trying to lower physiology of International Students that come to purdue which is a good idea considering purdue is a State University and takes money from the states and have more spots for local students weve been monitoring its still a large number. Population student population in as big as ours. I thought the decision was not a good one not sure what motivated it in our case, i hope this is correct, we dont see a big impact first of all, the vast majority of our students as i say are coming to campus and want to be on campus. Probably 90 or more are taking that option. In the case of International Students, unfortunately, it appear that most them are out of the country and their problem is travel restrictions, not this new decision so were looking to see how many, the subset of the subset for us is a small percentage that are in the country already, and opted in the small percentage for an online option. I hope that it doesnt present a big challenge to our students. I do worry about those elsewhere. Governor daniels, thank you very much for joining us today, and well be watching this closely. I know you got people coming back starting in august to go through november 24th and we would love to get updates from you. Glad to do that okay. Thank you much andrew okay thanks, becky. When we return well check on whats moving in the free market nasdaq president Nelson Griggs will join us to discuss the pickups in ipos and what investors can expect in the second half of the year. Levi strauss reporting loss. Revenue falling. Company warning business will be hit in the second half as well even as sales have improved in stores that reopened. Well talk about that. Squawk will return right after this welcome back, everybody. News breaking earlier this morning. Warren buffett announcing his annual charitable donations to five philanthropies that will receive the bulk of his fortune he told us how much that will be it totals 2. 9 billion hes distribute the 15. 9 million Class B Shares in Berkshire Hathaway valued at 2. 9 billion and brings his total donation since 2006 to more than 37 billion. Buffett plans to give away 99 of his fortune key beneficiaries are bill and Melinda Gates. After making the donation buffett will still hold 248,734 class a shares in berkshire and that would be valued at 67. 5 billion. Aldo nations hes made has been the only reason hes ever sold or exchanged any of his class a shares if he hadnt given those shares away he would be worth 129 billion. Buffett has been accused of making charitable donations in order to accrue beneficial tax status this year he revealed his tax benefits income tax paid has been reduced by 34 cents for every thousand dollars. Its all complicated. You were crunching some numbers. You said the other day i cant remember what it was you were crunching the numbers you got a call from someone. How far figured this out 43 cents per thousand dollars . Right but the math were not doing is on the shares themselves going back to this issue i know its an issue i keep bringing up, and i dont know what his basis is, maybe you assume his basis is zero in those shares if he gives 3 million and youre at 20 tax rate on those, a cap gains basis, you know, what do you actually think will you tax the entirety of it . Thats not calculated in this particular calculation because of the rules its not calculated because andrew just to back it up, i understand your broader point that if you want to tax these donations that are made to charities to make sure that the government gets his take thats entirely fair. To back it up, its not a tax dodge to be doing this hes never used any of these shares cashed it out and used for his own needs. I dont think he would have any problem if the government chose to go ahead and say we want our cut, okay. It just goes through that middle ground to where its headed. Not taking anything out of his pocket because he hasnt cashed any of these shares to use for his own planning or own needs. The reason hes only cashed out any shares of berkshire is to give it to a charity right 100 nothing nefarious going on the question is correct i think its totally fair your idea, if you want to change the policy for everyone and say that if youre going to give shares to a charity you have to first sell the shares and faye government its a reasonable conversation what will that do to Charity Donation im not saying its not a fair discussion markets were up again on the dow. Nasdaq has stayed higher through the premarket session but up right now when we come back, nasdaq president Nelson Griggs will join us to talk about the state of the ipo market in the second half of this year. The name you need to watch is coming up next. Plus does samsung have an iphone killer . We could find out in august. 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Some reports say it will unveil a new version of its high end galaxy note smartphone could also release a new version of its foldable smartphone meantime the ipo market came roaring back in june after two quiet months but it is still lagging. Last year according to Renaissance Capital in 202065 ipos price raising 22 billion and 98 have filed while some highprofile offerings have more than doubled like lemonade. Albe albertsons is struggling. Nelson griggs is here president of the Nasdaq Stock Exchange nice to see you remotely usually we do this in your own home, if you will, now were really in your own home and help us understand great to see you. Great to see you. Help us understand what youre seeing youre talking to a lot of Companies Many of which are thinking about going public even during which feels like a crisis across the country i dont know if its crisis in the markets just yet, but what kind of confidence or lack of confidence and what are those conversations like right now yeah. Theres a high degree of confidence we were really stunned with the activity we saw actually in late may and june initially when the pandemic hit we really felt the market freeze completely we did see Health Care Ipos go down and what that established was a process to do those ipos then you started in may, june when the markets firmed up, the vix settled down a bit, we actually had a very good pipeline going into the pandemic then the process got ironed out from testing the waters as well as the shortened virtual road show we saw some amazing deals. You mentioned a bunch of others. And theyve done exceptionally well on average the nasdaq ipo is up about 50 . So with the buy side its given us confidence in the marketplace to be set up for a strong july and august and thats about as far as our visibility goes we think we got a great july, very good august for maybe two or three weeks until labor day break and then were talking deals already for septemberoctober and then the election well see what happens then. In terms of just the physicality of doing that quoteunquote road show in this environment how does it work what is it like virtual sfli do you think it works as well do you think it works better yeah. As we talk to companies and the eco system, a few aspects have gotten better. A very important part of the ipo is when you test the waters about a month or so before the ipo, and that used to be a very exhaustive process with a lot of travel you wouldnt get to the Broad Investor space you can get today as quickly as you can and doesnt consume as much of time in management. That process has gotten better road shows are typely four days. One of the biggest things that came up ipos would be scheduled to price on a wednesday or thursday and we get a call, you know, the week before saying well move it up a day maybe two. Because of demands already there. I think were seeing fundamental changes that are here to stay and virtual road show is working very, very well. Also i want to get your sense, two other things. Just the retail investor, you know, we talk about sort of the robin hood revolution, whether that has been a big boon, one of the things thats created some confidence around ipos right now. Good thing, bad thing, where are you on this . Definitely some confidence in the market were seeing a pickup in retail activity across equities and options. Still on the ipo front, though, you know, the banks and the companies allocate shares to institutional and some retail and that really hasnt changed a lot. It may be driving some aftermarket performance but in terms of pricing, im sure you watched, theres been many deals gone out on the road in the price range and had the ability to increase that range, increase the offering size and thats really a testament to demand nelson, i want to thank you appreciate it. Nice to see you. Hopefully we get to do it in person ill send it back to joe im here, nelson. If you were to come in its up to you. Great to see you coming up, north island chairman Glenn Hutchins joins us to talk about the economic recovery. Later dont miss our squawk news maker of the morning, National Economic Council Director larry kudlow. Good morning futures showing modest gains ahead of the opening bell but were coming off a volatile session. Saw the s p 500 snap its longest winning streak of the year well talk about whats driving the markets and whats weighing on investors minds not good enough. That is the message from civil Rights Groups on facebooks stance in a highprofile meeting focused on line hate the ceo of the antidefamation who was on that phone call will join us. A special interview with the economic director larry kudlow will be joining us to talk about coronavirus case surging faster than ever and what the Trump Administration is planning on next to help shore up the u. S. Economy. The final hour of squawk box begins right now. Good morning welcome to squawk box here on cnbc im joe kernen along with becky quick. Andrew ross sorkin u. S. Equity futures are positive up about 50 points if youre not watching this every day we lost 400 or almost yesterday. The day before we had gained 400 and last week the averages gained anywhere from 3 to 4 . That puts it in perspective. Well look at treasury yields. The nasdaq is once again up. It was down yesterday but had set a series of new highs. Treasu treasury, 65 basis points, theoretical. Oil and gold multiyear high above back 1800 that goes back i think i dont know, 2011 or so i believe was the last time people guaranteed it was going above 2000 it never did not like the fed wasnt active after 2011 it had already reflected all the easy money, i guess. Its getting interesting now you wonder what the future holds for gold with this incredible amount of stimulus in fed printing and is that not interesting from minus 35 . Its been a 75 to 40. Swing . Obviously, wondering about the man around the world as economies start to reopen and get hammered wti is a pretty direct measure of where we think the demand outlook is on any given day. I mean couldnt you have bought i guess we cant we cant even do the futures more options on futures. At ten bucks a barrel, couldnt you have just taken a position and that would be worth so much right now. Right . No yeah, but unfortunately you would have it deliver. Have had to store it on your property and that could get messy. I would have rolled it. I would have rolled it you know what . Those nasty tax that was the trouble. Ten bucks i think you could have we went to minus 35 no, no, not on that one we would have all those nasty tax problems nobody needs that. Anyway no, definitely not. Lets tell you again about where things stand in this country with covid19. U. S. Coronavirus infections now topping 3 million and rising quickly. Both the World Health Organization and the white house, the White House Health adviser dr. Anthony fauci warn the death count could lag case numbers and increase soon. The surge has driven many local officials to pause or delay reopening plans its also got politicians in washington talking more seriously about new stimulus measures joining us now to talk about all of this is north island chairman Glenn Hutchins he serves on the board of the new York Federal Reserve and New York Presbyterian Hospital glenn, its great to see enthusiast morning thank you for being here good morning, becky, joe and andrew becky, i have images of joes Swimming Pool filled with crude as he Takes Delivery of i had oil. Exactly one place i thought we could keep it. I think glenns Swimming Pool could be the spr, the size of that thing in my above ground i can change oil in one of my cars. Anyway glenn, lets talk about the idea that there could be additional stimulus coming additional stimulus packages just based on what were seeing, based on the idea that some of states where senators have been holding out they are now seeing higher cases of coronavirus. Do you think well get another stimulus plan that makes its way through the entire washington process . I hope so, becky but lets talk a little bit about the crisis for a moment, if we can. I think right now its clear to all of us that the economy is a hostage to the virus you and i talked about this from the very beginning of this crisis where i pointed out that the economic problems will be determined by the duration of the pandemic the economic problem is a core health problem, the two are linked the big problem we have today is that the reopening has gone poorly very poorly. Its clear Health Statistics that you quoted at the beginning of this piece today, and its becoming increasingly clear in the High Frequency data thats beginning to affect the economy. I saw some data yesterday from a professor at harvard which was credit card receipts at Small Businesses they had been down 33 during the peak of the shutdown had gone down to being 12 , but now are up, back up to o20 . Its very clear whats happening in the economy its negative we are going to need a new round of relief, but i think the most important thing we need right now is a National Plan for a lockdown and reopening. Its time for that it would have to be national in scope. It would have to be based on science and medicine with clearly defined indicators of the sweeteverity of crisis. Dr. Scott gottlieb was an author of one of these. Look whats happening in new jersey, new york, connecticut, rhode island and massachusetts and it would, i think, be the only way to lead us out of this crisis because the pandemic is likely to continue unless we have a plan like that and as a consequence ever which were unlikely to have a steady upward trajectory in the economy which means well need more relief i dont see national leadersl will to go along with that there would be places that would. A lot of place where cases are very minimal right now and where they would not agree go back into a lock down i dont disagree with you the economic damage could come either way weve seen that what happened in sweden and how they handled it but i just dont know that there is the will, the new political will to push through Something Like that. Do you think otherwise i would make two points one it certainly is working and working reasonably well in the northeast part of the United States and so we have had the political will some political will comes from our leaders clearly in cogent relief why we have to do it. Then practicing the behaviors in their own conduct, taking leadership but some of it also can to be done on a regional basis within the context of the National Plan this is my second point if you have indicators of the crisis then you have clear phases of the reopeningthat you can put into place so if you had a different situation in massachusetts than you have in arizona you could have different kinds of actions in those two places based upon the clear scientifically based indicators i mean the problem is right now we dont have a uniform approach that allows for that kind of regional application dr. Scott gottlieb has talked to us about how this is really a critical six months or so, and its going resolved one way or the other. We were talking about this earlier. He told us this a couple of days ago. Look youre either going to see a resolution because we agree to step down with it and green bay very careful for the next six months or its going resolve it self and it will burn through the population i dont know how quickly you can put a plan like this in place but it seems it has to happen almost instantaneously if you want to stop the huge growth in the coronavirus numbers. Its growing every 32 days he told us a couple of days ago thats right. Ill listen to him hes the scientist and medical expert that sounds right. Quoteunquote burning through the population is a very ugly, painful and alternative we should avoid at all costs. He yeah agree. Lets talk about if additional stimulus comes and then also the ppp at this point. Theres been so many revelations who took this money and questions about why it went to some places, not others. Whether it was best used for Small Businesses and even some money thats still there for the ppp, who it should go to what do you think as we go into this period of time where everybody is second guessing with what . I think the second guessing is inevitable because of the speed which the plan was put into place as a consequence of which there are going to be. We talked about the time there would be a fair amount of errors and steps needed to be corrected and even some amount of substantial corruption. But i think the more interesting thats understandable i think that can be fixed. We now know who got the loans and some will be paying back some will not be asking for forgiveness on the loans so that all can be fixed now i think the more interesting question is why the 130 rough number billion wasnt claimed, has not yet been claimed and i think there are two i understand there are two reasons for that the first the is that the conditions for the loans have changed significantly. And its confusing to people and that can be sorted out i think secondly i under that theres so much money in the Banking System right now, the liquidity is another reason why the other broader based programs like the main street programs and other lending programs didnt have anywhere near the uptick that was potentially expected is because theres so much liquidity in the Banking System and cost of money is effectively zero that any credit worthy business can get a pretty good loan from the bank and the bank wants to keep those loans rather than lay them off to the federal government and so i think right now the ppp program seems largely to have worked it needs to be fixed it needs to be cleaned up. Its Still Available now if we get no as into as we talked earlier into another phase 130 billion there to help Small Businesses its good to have it i think were out of time but i appreciate you being on with us regularly to keep us updated and let us know where things stand from the many different hats you wear and many different views that you have of whats happening well see you back again soon. Thank you for your time. Entirely my pleasure. Stay well. Coming up, the next moves from facebook and civil Rights Groups leading a big ad boycott against the social Network Organizations like the naacp not pleased with facebook executives coming out of yesterdays highprofile meeting about online hate. When we come back well speak with the ceo of the Antidefamation League who was on that panel. Check out walmart shares they are up again after yesterdays nearly 7 gain walmarts answer to amazon prime called walmart plus will launch this month, reportedly cost 98 per year features same day grocery delivery and fuel discounts at walmart gas stations stay tedun youre watching squawk box on cnbc you say that customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. Welcome back to squawk box futures right now on the dow up about 20 they were up more earlier. They were down, they were down, i think they were down close to 100 points at one point this morning. And been up 50, 60, 70 nasdaq has been up throughout the entire session now about 52. Becky. Joe, thanks. Facebook outwith its latest civil rights audit it recommends the company enhance its team and processes put in place to oversee civil rights issues. Auditor said facebooks efforts to fight Voter Suppression but disagrees with the decision not to fact check politicians. Facebook has made painful decisions over the last nine months with real world consequences thats a serious set backs for civil rights the company coo Sheryl Sandberg admits the platform has a long way to go but it stands firmly against hate top executives sat down virtual ly Julie Boorstin joins us now and she has details of that meeting and what might come next reporter good morning. The critical tone of that audit was coked by the organizers of that stop hate for profit boycott. They called their meeting with facebooks management disappointing saying Mark Zuckerberg and Sheryl Sandberg are not ready to address hate on their platform and didnt respond to demands of dozens of their largest advertiser the ceo of naacp spoke after that meeting we provide them with a list of ten things weeks ago. They asked for the meeting were happy to meet. The outcome of the meeting we got from the last meeting, very little to no action. Reporter the Civil Rights Group saying that facebook did not address their demands. That zuckerberg offered no automatic recourse fortisers whose content runs alongside hateful post why facebook recommends hateful groups and didnt off ernie plans how facebook will address what he calls rampant disinformation and violent conspiracies facebook responding to that with a statement saying it also wants the platform to be free of hate and it has invested in billions of dollars in people and technology to make that happen saying quote we know we will be judged by our action not by our words and are grateful to these groups and many others for their continued engagement now the big question is what will well see how facebook responds to the critical civil rights audit which as you mentioned said facebook failed to invest more to fight organized hate and political organized hate speech. Combine that with the boycott now we have to see what additional steps facebook will take because, becky, its about very interesting facebook said were doing all these things, were working with the auditors now that we have the result of the audit, the pressure is really on. You think youll actually see steps that they take at the suggestions of the auditor, that kind of get brought in its interesting you hear from these civil rights leaders who say okay we gave them ten things they could do. Sounds like they wont be doing anything do you expect to see serious steps taken with both the advertising boycott leaders and on the audit i think were more likely to see something based on the audit than on the contiguous boycott in response to the advertising boycott both sandberg and zuckerberg made this point we wont respond to anything about revenue pressure, we wont respond to a boycott the reality is they are very proud of the fact they opened up their doors to this audit. This audit has been going on for two years. Hard for the home deny the results of this audit which say they have a lot more work to do. I think its the audit that will push them to make more changes thank you andrew thanks well continue this conversation now. Our next guest was on that call yesterday with zuckerberg and other top facebook executives. The ceo and National Director of Antidefamation League and helped to start all of this off from the get go. Jonathan, nice to see us take us inside the call. Put us in the room and give you just your, as much color and impression as you can about the reaction that you heard from facebook. Sure. Well, good morning, andrew thank you for having me back this morning so it was a little bit of what i would call a surreal experience. So it was a zoom call, the likes of which all of us find ourselves doing short of nonstop in our covid environment imagine a brady bunch screen there were four people on our side, myself, derrick johnson, head of naacp, and two others and there were a number of facebook leadership. You had mark, you had cheryl, you had chris cox, you had nick, neal potts and a number of other executives the meeting started out in a bit of a strange place where we did a quick round of introductions mark made some remarks okay i want to hear from you and then we looked at each other you asked for this meeting we want to hear from you you know the demands you know what were asking for its not just the fufr us. Its almost 1,000 companies from around the world is asking for this the headline is simple will you make a public commitment with really deliverables to fight hate and, in fact, there was this sort of dance that you go, no you go and ultimately we said hey look, guys, what we want is very clear what your advertisers is very clear. Theres no confusion about it. Lets walk through the requests, tell us what youre willing to do and when youre willing to do it and, you know, i am a former product manager. I used to manage software product. You sit down with your team, what are the milestones and whats the time frame and we got no milestones. We got no time frame so the start of the meeting was we were a little bit confused by the end of it we were deeply disappointed what was the tone of the reaction you got from Mark Zuckerberg, from Sheryl Sandberg on these issues as you pressed on that phone call well, we pushed we did push. And, you know, cheryl and mark and the other executives have a tone of what were here to listen and this is a journey and we basically said look, there is no journey in the fight against hate its pretty clear. Either you exhibit the kind of standards and practices that all other Media Companies do, and you say theres no room for hate in this business, or you kind of dance around the issues and make, give us platitudes by the end of the call mark said im pleased to hear the nuances of these issues. I said look, mark, theres no nuance to White Nationalism. Its wrong and it doesnt belong not on facebook or on any other kind of Mainstream Media platform so i think there was a sense of exas p exasperation they were unable to respond to some basic stuff. Another statistic that we heard i was going to say, when you say that to him, when you say that to mark, what does he say back well, theres a little bit of, you know there arent always the direct answers that we would hope for that we were expecting. That this call was sort of positioned to be again, its confusing to me why they are listening now rather than responding to what weve already asked for. Not just us. What it says to me, andrew, they are not serious about this marks comments internally last week that were reported in the information where he said all the advertisers will be back, i mean we brought that up to him and he said oh, well that was a bit of it. I released the whole comments. The bottom line is they believe all the advertisers will be back they believe this ad pause will end and things will revert back to normal. But this is the new normal the new normal is despite the fact that facebook and its properties have nearly 3 billion users, the most iconic brands in the world are saying they cant afford for their reputations to be dragged through the mud because as my analyst saw yesterday morning ads for things like sony or sirius or geico showing up on facebook alongside horrible hateful antisemitic racist content this just isnt feasible in any other media environment and shouldnt be feasible on facebook thats the point we made and just to address, you know, they said this is a journey. Were Getting Better four years ago we were told by mark all of our hate content was selfreported. Today our ai catches 89 of the hate content well i pointed out forget the fact that, i dont know what your denominator is. I dont understand the total hate content on your website Ford Motor Company joined stop hate for profit. They dont get to say 89 of our seat belts work. You know, or as kind snacks another company that joined they dont get to say 89 of our bars on shelf dont have glass on them 89 isnt good enough for the most sophisticated advertising platform in the world. Period jonathan, we had a long conversation earlier about this and we went on and same question for you, no one will argue with you about white supremacist or White Nationalist but over in europe the council of europe, 47 member states, got all the eu members, i know you know about this they have 47 unelected people from each country that are experts in combatting what they call intolerrance and accidexena and are able to monitor and look around the thought police to make it safe for much. Now jonathan, i know youve seen on college campuses, some of the articles about what constitutes a safe space and ive rolled my eyes on some of it its like you got to be kidding. You know what im saying were back to the slippery slope. For example, do you think someone could claim that George Washington represents hate speech at this point i guarantee i can find someone say a picture of George Washington on facebook to them represents hate. So who is in charge and how do we make sure that were not just coddling people. You get out the really bad actors, kkk, White Nationalism but what if you got the most woke group of people in their late 20s deciding i dont like this, hey this is hate, this is hate cant you see why zuckerberg and the others are treading so lightly on this . Well, joe, look a couple of things number one i hear you. Im someone who doesnt believe in safe spaces i believe in brave spaces we got hear multiple points of view adl is a nonprofit were a Nonpartisan Organization and we dont take signs these political battles. Ill tell you this when you say the kkk should be easy, when you say this stuff should be simple for facebook, were talking right now about the kkk. Were talking about facebook groups that have hundreds of thousands of members who espouse thinks that yous are controlling the government and should be killed literally live on facebook today you can go find those groups but let me draw an example thats closer to home thats less abstract. Got rid of hundreds and hundreds of those sites. They claimed to have gotten rid dont they say theyve done that . Youre telling me you can still find them every where. We can off line you and i or your producers and i we can pull that up literally. Unless they allow independent audit of their hate content we wouldnt know. Let me draw, joe, think about cnbc your producers decide what guests to book or not. Theres a reason why you dont have the aryan brotherhood picking stocks its not that people shouldnt be able to express their views does facebook want to host aryan brotherhood on their platform because thats what they are doing now. Do they want to host groups to overthrow the government thats what they are doing now they dont belong on cnbc or on facebook i can tell you we might have had someone that dont want us to book any fossil fuel ceos or any investors that recommend fossil fuels is that what we get to i mean there are places where, you know were so partisan in this country right now i can tell you theres some people on one side that will definitely think some of these things go far and have people on the other side that think oh, my god this doesnt go nearly far enough and i dont see how we arbitrate that when everybody is so subjective. Everybody has got their own opinion about things yeah. Again, i sympathize with your position i find myself pulled from the right and left running adl every day. Dont let this desire to fight Political Correctness to be a smoke screen theres nothing partisan on pushing back on prejudice. The aclu, there used to be when i was younger i would see the stance they would take thats outrageous. They are defending people that are the worst human beings remember they would. They say everybody has got a, whether its a terrorist, i dont know what the examples were has it totally switched now where the aclu will become more policing free speech yeah. I mean look aclu has been involved in this particular conversation the left. Free speech our organization has been filing amicus briefs before i was born. Freedom of speech is not the freedom to slander people how they pray or where they are from freedom of expression is not freedom to incite violence against people of who they love or how they look thats what were talking about here, joe. There are, again, theres some thick black lines about whats inbounds and outofbounds thats what were talking about here jonathan, just two final thoughts one is, do you give many credit for the fact that they did this audit and are engaging in some way, they may not be engaging the way you want but to the degree that theyve endeavored to pursue this, i dont know if youre suggestion this whole thing is a whitewash,do you have a thought on that they did pursue this conversation with you and this thing two years ago. Yeah. So look, i think laura kelly the whom led the audit who is a information aclu executive, very distinguished person, the audit seems very thorough because laura drove it the he question at this point and my opinion is actions speak louder than words. Our meeting yesterday was about meeting. What we need now again are commitments and time tables. Its simple. Heres the real thing, andrew to think about and i would talk to some of the advertisers about this starbucks, levis, ford, they dont want their brand subsidizing hate any more. There are other platforms they can use. Youll start to see that happen. Jonathan, final question then because thing thats baffling me, if, in fact, youre right, you look at this stock and im not saying the stock market is always right but you look at the Facebook Stores were showing over the past week but look at it over the past month and you say to your self even given this boycott that the Investment Community believes these advertisers are ultimately going to come back the same way Mark Zuckerberg does. You and i both know the markets are an imperfect predictor of the future but what we saw is the stock dropped 8. 25 a week and a half ago when we got the pause off the ground. It will move around. The whole market is moving up. I dont know facebook is really facebook share price today is an indication of the success of our meeting tomorrow or in the future okay. Jonathan its great to have you on the program and to get your perspective on all of it we appreciate talking to you yesterday and today and look forward to speak with you again very soon. Thanks. Its a pleasure. Becky thank you still to come this morning we have more on markets after yesterdays stock slide. Futures this morning have been bouncing around a bit. Right now green arrows across the board. Nasdaq up by 49. S p by 4. 5 well be speaking with larry kudlow on the surge in new coronavirus case and how the Trump Administration plans to head off another body blow to the u. S. Economy a reminder you can always watch or listen to us live on the cnbc app. Stay tuned youre watching squawk box right here on cnbc. Welcome back to squawk box this morning take a look at the futures theyve been moving af round off marginally on the dow. S p 500 up nasdaq higher by 41 points coming up realtime impact of a resurgent coronavirus on u. S. Airlines. United out with some revamped scheduling data days after it gave its last update check out some of the other Major Airlines that are trading in the premarket all in the red. Stay tuned, squawk box will be right back urate temperature che. 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 on cnbc. Here are some stories investors might be talking about today apparel brand Brooks Brothers filed for bankruptcy oh, no the retaileris in the process of closing dozens of its stores and will continue to seek a buyer. Shares of amc spike. Wall street journal reports the Movie Theater chain is getting close to a deal to avoid near term bankruptcy sources say amc is working on a restructuring deal that would have bond holders provide 200 million loan swapping out their unsecured claims at a discount currently amc is planning to reopen theaters in waves starting on july 30th. The Airline Business taking another hit in the past week with the number of coronavirus cases and new quarantine restrictions from northeastern states thats all been affecting the industry and the prospects and that slow down now being reflected in uniteds flight plans and phil lebeau can bring us that story with more. Reporter yesterdayunited paired back their august schedule plans a day after they warned their employees that look theres a possibility that tens of thousands could be laid off. They have not issued more notices to those employees those have to be sent out 60 days in advance. Its clear united is preparing to become a much Smaller Airline come october 1st which is when they are allowed to do mass layoffs. Look at how the metrics are changing for United Airlines in terms of near term bookings and were talking about, you take bookings, minus cancelations, they are down 85 . It is clear that thing have switched in terms of the impact of coronavirus quarantines august capacity, it was supposed to be down 60 they pulled that back in the last week and said no well go down 65 in august they are not expecting to fly as many flights passenger levels says it all while we have seen a slight increase and now youre looking at levels that are down 72 to 75 , were not seeing this snap back were not seeing the b recovery. Most of the industry says youre going to see only a gradual increase from here if not a plateau. If you take a look at the Major Airline stocks, remember they already they cut down their daily cash burn rates and down in the area of 25 to 40 million a day. They hope to get down close to zero by the end of the year. Weaker traffic in july and august because of covid19 is not going help this will be an interesting couple of weeks as you see the airlines led by united really outlining for their employees, okay here are the cost cuts coming in october. Okay appreciate it very much. Well see you very soon. Meantime when we come back on the other side of this break, how does reopening the economy work when coronavirus cases are setting new records daily. Well ask National Economic counsel director larry kudlow when he joins us in just a couple of minutes. You dont want to miss that conversation check out shares of kohls that stock is up graded to buy they think kohls positioning outside of malls will help sales to outperform. Stay tuned youre watching squawk box on cnbc we are about 45 minutes way from the opening bell and coming up a pretty big stock slide yesterday. Jim, it was a down day yesterday. Up day on monday were in a little bit of a quieter part of the summer i feel like coming back after fourth of july holiday what your watching theres no question the last few weeks have been characterized by kind of a second lie dating waiting period to see how this plays out. Yesterday was a particularly bad news for virus statistics but people have been putting it off a data dump after the long fourth of july weekend what im watching that is under reported right now is that gold is pushing all time highs and thats sending a clear message to me is that somewhere on the horizon there are limits to fed policy and fiscal policy thats propping up this market. Im fine with the stock market but im looking at gold and virtually as a potential hedge against currency if youre looking at gold would you eventually say okay im not going to feel great about stocks right now sure. If at some point in time because if gold is telling us that the government is at some point in time going to be pushing too much on the table its a long period of time stock market wants a little bit of inflation so it doesnt worry me immediately so right now im fine with the stocks the stocks heading lower that will give a signal to me that perhaps they are ready to throw in the towel its obvious to me the current economic condition doesnt support where the stock market is when you throw in the fed and the spending then it does. But if they start to get worried and start to worry about the currency then that could affect the took thats not a worry for today in my mind. No, but it sound like youre saying that you would not be buying the dips, that theres another big dip to come you might start to sell. Yes ill be buying small dips within the range weve established over the last couple of weeks if that range gives you thats when i have a problem. Thats when i put on some hedges below those levels, but beyond that like i said if you had to pinpoint me on this, i would say short term im fine medium term im okay long term if this continues, we need to see some real live Success Stories over the next couple of months regarding the economy. And a belief that at some point in time the fed and government will be emboldened to step back. That a part worrying me. Somewhere along the line is my belief that things will clear up and the fed and the government will stay with their foot on the gas pedal and then real damage starts to happen jim, you know the camera in your house is a weird thing, right . I have one in my house too yes its a very weird thing, yes you know, even after we go away, they will still see you in the control room i have it on Good Authority you wear boxers not briefs did you really see that or are your pulling my leg . I didnt see it i didnt see it. But the camera is still rolling. Well see you soon all right when we come back, top adviser to President Trump larry kudlow will be joining us. Well talk about everything thats happening in the economy. Stay tuned, squawk box will be right back for as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. I think hey, i wanted all of us to be on for a second because, becky, i have a camera i have a camera in my house, too do i really need to worry that you are going to just that was proprietary information. Its not me i didnt see it. I didnt see it. I didnt see it. I watched andrews face andrew, you looked like you got see, here is the thing, i didnt see i didnt see it, but i cant unsee it, even though i didnt see it, i cant unsee what i didnt see. Why is that . That was horrible. Youre welcome. And he got i mean, ive never seen him get that any way, larry is here but, becky, you little wow. That was Senate Majority leader Mitch Mcconnell says the next round of stimulus could include a check to americans making 40,000 or less joining us to talk about what the white house wants larry kudlow, director of the National Economic council larry, its great to have you. I want to talk about stimulus and what we need to do in just a minute, but i want we had a guest, i know you know glen hutchins, good guy, he was on earlier, hes saying the economy hostage to the virus, the most important thing we need right now is a National Plan for another lockdown and this would be based on science. Here is my question to you, larry, and i know im hearing this criticism from certain sectors and that is that the administration is underselling whats happening with the virus and we know there is an election coming up. Its almost as if the country has to be reopened if theres a chance for the reelection of the president. Is the administration at this point underplaying the actual threat that this pandemic still has to us . Well, i dont think so. I mean, the facts are the facts. No one has decide we have had a huge jump in cases and certain hot spots, particularly it looks like the virus migrated south and then west, so youre seeing, you know, difficult stories on the cases in florida, i guess a bit in georgia, huge in texas, arizona, Southern California i dont know anybody thats downplayed that. I think that there are a couple of issues involved, however. First of all, in general there may be some exceptions, but in general hospitalization capacity is plentiful, again, you might find a hospital in a neighborhood someplace, but in general thats what the experts, thats what the numbers show as the president has said, maybe he gets blamed, but its factually true, the fatality rate continues to fall in fact, its taken another decline just in recent days. Now, look, deborah birx spoke to a conference i guess yesterday and she was very plain and honest, straightforward, as she always is, a great lady, she said that probably at the local level and maybe at the federal level we werent sufficiently prepared for the breakout of cases among millennials. All right . Thats what she said she is the health expert, i am not. I put that out there in the spirit of honesty and fact so the good news here is if theres some good news is that millennials tend to be least harmed younger cohorts are least harmed by this. If it was the upper age groups it would be more heartache and hardship there you have it. No, look, the deal with this, we have to become accustomed to these flash points, i think, thats what the Health People think. So we know what to do, joe, its just a question of following good practices youve got to wear youve got to distance first and foremost, youve got to use face masks if thats the custom locally and if you cant distance, you have to be tested frequently in hot spots and you have to practice great personal hygiene you basically have to respect the virus, you have to respect each other and help out as best we can, be good citizens and i think thats how americans are going to do this. I thought the notion of a National Shutdown was absurd i wanted to mention it to you that people are actually saying that. No. Let me ask you this you cant take a step i dont mean to interrupt you, joe. Go ahead. It would really be a big mistake to take a step like another shutdown which itself as you know is controversial. Right that would do more harm than good and it would harm pretty much everybody, not just business, it would harm business, okay, but in the great v recovery might give way, i think it would also harm kids, i think individuals who have to stay home, you know, weve seen the numbers on depression, addiction, drinking and so forth and so on. I hear you. I just think that that solution would be worse than the disease. Let me ask you this, larry, the term Second Derivative has been used for how the economy is braving right now. Two great jobs numbers obviously as that was pre sort of resurgence of cases. There are some that say that youre going to see a bump in the road here based on the negative news weve seen and its going to translate into the economy decelerating in its recovery do you see that . Well, i dont see it yet, but one cannot rule out theres a lot of scenarios here and we really dont have any real experience in economic, you know, econometric modeling for this type of thing because so many is generated by the virus at the moment weve created 8 million new jobs the last couple months, virtually every indicator and we just had one this morning on Mortgage Applications for the purchase of new homes, retail sales of course skyrocketing across the board, new Business Applications are doing very well, various private sector, you know, trucking surveys, shipping surveys, people are driving more according to the apple mobility index. So many virtually every piece of data shows a vshaped recovery now, i acknowledge the threat, okay, and we are scouring the numbers and we are watching it very, very carefully to see and you just cant rule out anything, but at the moment the best guess is were going to be okay, maybe some places, you know, take texas, for example, thats important state for business and gdp and so forth, on the other hand new york and new jersey their case rate and fatality rate has come way down again so they are going to continue their reopening so it really kind of depends its a big country most of its doing rather well, some of it is in trouble here. I get that. Larry, you joined us kind of late andrew has a question but we only have a minute i know we have a minute, larry. I wanted to know what you thought of some of the details we got on some of these ppp loans. Steve mnuchin came out and had shamed some companies that had taken some loans early on. They are clearly millionaires and in some cases billionaires who got access to these loans and im curious what you think about that. You play by the rules in these things i think the ppp program was phenomenally good, it affected 85 of those working in Small Businesses andrew, as you know, to qualify you need 500 or less workers some of these lets say well to do operations qualified. Now, you had to certify that you would spend 75 on payroll, i guess now thats down to 60 , but overall its been a phenomenal success and probably saved 50, 51 million according to many estimates. You know, i thought in three weeks they phenomenal job, the reason those job numbers are picking up is the ppp temporary layoffs going back to work terrific. I want to see you again soon. Maybe tomorrow. All right. We are out of time. Anytime thank you. I hate cutting you off, its always at the end of the show. Thank you. Larry kudlow make sure you join us tomorrow squawk on the street is next good wednesday morning, welcome to squawk on the street, im Carl Quintanilla with david faber, mike santoli coming how live from separate locations. Futures have been in a tight range all morning long as the market weighs the tension as kudlow just said of reopening the economy. U. S. Covid cases top