Andrew is out, so i have to find a way to annoy you what you asked for. Your birthday is tomorrow, right . Tomorrow, not today tomorrow. Its friday. Everybody deserves to be embarrassed. Well do it anyway this is the last day youll be 19 23. Exactly. Anyway, lets check out the futures this morning as joe mentioned, youll see the dow down slightly by about 26 points s p down by four s p off by eight getting ready to wrap up another week the dow up by 2. 5 over the last four days. S p is higher. On track for a Third Straight positive week. A little different story for the nasdaq tech has been on an incredible run. Many of those names have pulled back not by a lot nasdaq down by 1. 4 this week. If you are watching it, the index is up nearly 17 for the year thats about 58 above the march 23 low and above the march intradate high we hit on monday. We are continuing to watch that. The 10year is the one we watch so closely it looks like the 10year is sitting at the 0. 604 . The bottom level of that range weve been watching where it has been sitting at forever. Alltime low for mortgages. Is it bad luck to wish someone happy birthday the day before i dont think so. Im not really superstitious, so i think everybody out in twitter land, since it is used for such negative things, twitter. I think it should be used in a positive way i might do it tomorrow not everyone can do it tomorrow. Everybody else can do it today or tomorrow. Out of sight, out of mind i heard that song you played. It didnt affect me today. I have to find out a new way to annoy you what happened . It used to be the thing for you. I need one of those programs that comes up and reminds me when it is someones birthday so i look really considerate. This was twitter sphere that tipped you off to this it was. I need one of those programs and ill put everybodys in there and never miss anyone before welcome to 1999 our top corporate story this morning is netflix shares are under pressure. Adding significantly below the subscribers analysts were expecting. It is all about subscriber growth i guess last quarter, it was 16 million. Not covid editions but because of everybody being locked in, it was a huge quarter they had only guided to 7. 5 million editions the one just ended was 10. They had forecast only 7. 5 so 33 above but some thought it was down from 16 it is never enough for people. I dont know why people are surprised by this. You pull so many subscribers forward, you anticipate this will slow down i dont know that it changes the longterm for the country. Including the coceo, he was previously the chief content officer where they are just head and shoulders above other places here is what they said on the conference call. Weve worked together over 20 years. Hes been an unbelievable role model. Weve navigated some of the toughest decisions from mailing dvds and streaming around the world. To continue this successful train weve been on to continue around the world ted has big plans with future series and animation we got lots of places to put them on we are definitely focused on creating franchises the shares had done pretty well. You can see down it is great to have such an unbelievable amount of content that big aussie guy, liam or chris. You dont know the difference i dont know which name is which. Big guy. Dark or blond dark hair big guy. Similar body to mine are you going to get a cake . Can i send a cake tomorrow sure. No surprise if you are sitting there waiting. You going to pop out of the cake with your hemsworth body well continue to follow that cyber attack too revealing hackers targeted 130 accounts including a number of highprofile figures and companies. They will continue to assess whether they were able to access those accounts because they were such highprofile accounts. Every blue check mark was shut down i started thinking about it saying we really needed to monitor closely. There areemployees that potentially have access to really important peoples twitter accounts was this just an accident waiting to happen. As twitter has gained more and more influence youve got President Trump who uses it in his words because he thinks Mainstream Media doesnt cover him. And the dahli lama he does i follow him if you are just some guy on twitter that could put something in there the idea that there are twitter employees, that is not something any of us had really contemplated before. Have you ever left without closing down your stuff. Ive done that and i forgot, my god if mack gets on my twitter account. We used to do this. I used yours or davids to top line one of your bosses to say i hate your tie because you had walked away. Think about now the damage you could end someones career with a single tweet. Im going to log outright now, mack in case i have to go to the bathroom which will probably happen in three hours. The cruise lines under pressure again. The cdc to ban cruises the order set to expire next week i wonder if they were booked my guess is no because earlier this week, i got a call from carnival saying i had won a free cruise. I dont know how but im the lucky one. I cant imagine im the only one who got a phone call the second prize is two free cruises. I dont think it is time yet to stick your toe back in the water yet for cruises. I dont know airplanes, theyve convinced me. They say the air is cleaner. It has been recirculated around. I never felt that way on airplanes. Pre covid. Recirculated air never i think the bigger problem we have, you are still in a tube with a bunch of people and it depends if they are safely wearing mask weve all heard the story of push back or customers who choose to put it over their eyes or throat instead. That would be a concern if you are sitting in e. To somebody then on acrues shi cruise ship you have to wonder how they are going to get to you the port you are supposed to be at in time. We have Quarterly Results dr. Fauci pleading with young people saying that they are propagating the pandemic well talk to dr. Scott gottlieb next as we head to break and look at this mornings biggest dow movers flexshares may look like other etfs. But inside. Theres advanced research, modeling and refinement. Constructing funds that dont simply follow an index. But explore new terrain. Helping you fill portfolio gaps. Connect to client goals. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Welcome back the futures right now are mostly flat 23 points on the dow the nasdaq is now negative down about 4 points making headlines, tiktok has removed 29,000 coronarelated videos in Europe Social media platforms are trying to fight the spread in this case of misinformation. Speaking of social media, the nations top Infectious Disease expert talked to the head of facebook with a plead for young people to stop the spread of the virus. I would urge and almost plead with the younger people. I know if they really understood this, they would take it seriously. You have to have responsibility for yourself but also a Society Responsibility that your getting infected is not just you in a vacuum you are prep gating a pandemic when i see pictures of people at bars, i understand that. I was there at one point in my life or see people in crowds you say, they are not doing anything particularly harmful but they might be. Zuckerberg is making his own headlines criticizing the Trump Administration for handling saying the resurgence of the virus this month could have been avoided. Joining us now dr. Scott gottlieb, cnbc contributor, serves on the board of illumina and pfizer i was discussing this last night with my family the United States is almost like how many european countries. It started here kind of on the east coast and we dealt with it and we are ahead of texas and arizona, i guess, youve said there may be hope in that regard that maybe texas, the curve will eventually flatten and well get this under control or did they already blow it . It is a second wave well probably not have a third wave we are taking a lot of this into the fall once we hit flu season, that will head up unlikely therates will hit a low again like we did see in new york it will run its course in states like texas, florida, alabama, georgia, mississippi looks hot right now. The states are not taking a lot of policy action just withdrawing activities and staying at home more you are seeing that in google andres everybodiations at rauns. We have a few more weeks of continued spread the states are starting to show new cases. Not necessarily because the pandemic is ebbing but because we are reaching the capacity on tests. It will look like cases are starting to level off. We should look at hospitalizations we are almost back through where we were in the peak of new york pandemic the numbers will be back to that this weekend the difference is that we can preserve life better more are younger people, so they are not as sick. Two weeks ago when we talked to you and in fact, dr. Fauci talked about it not being the best metric, that is death two weeks ago, we thought people were using that as a positive data point you thought that would deteriorate as well. I looked at a website today. Death toll set records is that true just in terms of total deaths we are siege or is that just a false headline the deaths were 977, well cross 1,000 which is a level we have seen since may. Well probably not get back to those levels well start hospitalizing a lot more people because this will increase over the next few weeks. Well see deaths go up the people looking at crude number of death saying the death rate was going down, maybe that was true the death rate was going down but once you infect and hospitalize twice as many people, the total number of deaths will increase youll see the deaths go up. The lag is about 21 days you started to see deaths go up in the United States, 21 days after you started to see the infections go up that headline is 1,000 versus 2,600. That just seems irreresponsible. I didnt see that but it seems wrong. Typical what about the headlines from frazier at merck his company is working on a vaccine along with others. Do you feel companies have either been too optimistic or released data too soon have we been miss lead about the potential for an effective vaccine in the time i read it and i was like, wow, thats depressing. Look. Im on the board and companies will put that out when they have it putting out the data when available and publicing it is very important i think there is reason to be optimistic you can use that to generate immunity against the virus and likely to have a they are pew tick effect i think the most challenging is just getting to manning and putting it in viles and distributing it i think that time frame is early 2021 we talked about this a couple of days ago but the controversy is still kicking around. The cdc no longer being the ones they are sending data to i know you talked about how youd rather see the cdc collecting that but that information is no longer available to the public. Any new information doesnt seem to be available at this point. Is that a concern and when do you think well see that data . The data has gone up. The cdc made the decision to pull that data off the website after that responsibility was taken away from the agency they are implying that moment was peak by the agency to do that i think youll see an effort from hhs they made a decision recognizing that data systems in cdc were old and it is true they were. They werent able to keep up with the collection to recreate the systems inside i would have tried fix what was inside cdc rather than recreated. They made a decision to do that. They are sure that information now flows publicly you are right. It is no longer being collected by cdc they are involved in analyzing and distributing it. They are not taking the charge in running the data bases. The only Public Information out there is through july 14 the cdc chose to put down that dashboard and put it back up hss is the only place that has ha new information to me, that is concerning the idea that we dont see Realtime Data on this i think they are playing catch up and youll see it reposted again i think they recognize theyll put that Information AvailableJohns Hopkins says they dont need this data do you go along with the numbers and think that is a good substitute we should be using . And the covid tracking project. If you want to look at hospitalizations, thats a reliable source. It will be hard for the government to do anything to sub press this information a lot of hospitals and states are independently reporting to other venues so the cdc wasnt the goto site for this anyway. It is important for the government to provide transparency i think they will based on what im hearing. Okay. Scott, thank you always good to see you well talk to you early next week have a great weekend by the way, black rock results just crossing the tape it looks better than expected. 7. 85 versus 6. 99 the street had been expecting revenue better than expected 3. 6 billion versus 3. 55 billion. They do say the numbers were better than expected because higher nonoperating income, lower tax rate and diluted share count deciding to sell ownership. Blackrock brought back shares because of that. We also track assets over management 7. 3 trillion in assets under management up from 6. 84 trillion a year ago and ahead of income in the Second Quarter well speak to larry fink, the ceo of blackrock coming up turning unused concert tshirts into potentially lifesaving mas. Sk well have that feelgood story just after this. Sflush s so they can keep more cash in your pockets for when it matters most find out more at usaa. Com for when it matters most our Retirement Plan with voya gives us confidence. Yeah, they help us with achievable steps along the way. So we can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Oooh, well. Im good at my condo. Oh. I love her condo. Nana throws the best parties. Well planned, well invested, well protected. Voya. Be confident to and through retirement. I see a new kitchen with a grill and ask, why not . I really need to start adding less to cart and more to savings. Sitting on this couch so long made me want to make some changes. Starting with this couch. Yeah, i need a house with a different view. And this is the bank that will help you do it all. Because at u. S. Bank, our people are dedicated to turning your new inspiration into your next pursuit. Finding a use for unused tshirts mussic 4 masks the founder of the grateful dead has battled much to get on the stage but the coronavirus is one of the biggest obstacle yet. I have spent my entire life lighting people up from my place on stage and i cant do that now. He knows the virus has to get under control. Hes joined others to repurpose unused concert tshirts for masks. When the lights went out, many were stranded. We have thousands of shirts printed with tour dates that arent going to happen making 100 recycled shirts and using what could potentially become landful and repurposing them others donating shirts. For the basist, it is a mart of doing the right thing. There are so many more people than the six of us on stage. It is a big chunk. Wearing a mask is crucial to get back to a place where crowds can enjoy music again. This is the plea for folks to come together and make it possible for me to get back out and light you up already expected to ramp up to others where there is concern around the country from ppe. You can get 4 to 6 masks out of each if you want to help out. Go to everywhere u. S. pages u. S. For masks. There is information there for you to turn old tshirts to masks. Im trying to figure out how that would work. I hope you appreciate your job the ability to get to joe weibo weir if you put some wire rimmed glasses on him, he turns into jerry. The combination of the two of them we dont want them to turn into each other the amazing thing, joe, hes still lighting it up hes in maybe the best shape of his life becky pulling an elon musk there. When you said lighting it up. I was like what . I meant from the stage. Got it. I appreciate it this thing hes doing. You know, it seems like a really good thing they are going to donate the next round of masks that will go to tier one schools. Bob is not that optimistic about getting back out on the road he thought maybe the end of the year now hes thinking maybe a spring but even that is not a sure thing, he said ive actually gotten to ask my question of bobby through you. About why he misquotes the lyrics and he says f off you remember, there is one word he uses. I dont know whether he forgot you got a hang up on that that they changed the word they are consistent. They did change the words to bobby mcgee. You are right. Now we play for live instead of now we play for they changed that too they were playing for clive davis. They changed that word if youve been on stage 50 years. I think bob may have played more concerts than any human being, you dont have to answer questions to joe kernen. If you told him that, would you apologize for me, please my one chance. If we could do this show afternoon which is more when bob wakes up, hed come on in a heartbeat. You got to get him to come up one day. Get up early i dont think that would happen i leave a message at 6 00 or 7 00 in the morning. Hell call me back and on musicians time, joe. That is different from us. He could still be up at 6 00 a. M. East coast time you know the old saying, it is too late to go to bed early thanks, steve that is pretty cool. Analysts coming up top of the hour, dont miss blackrocks celao rry fink stay tuned well be right back. 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 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. Netflix shares dropping sharply after the Current Subscriber forecast fills estimates. Shares up 50 . This morning, youll see a big drop last i looked, down 6. 9 joining us now, michael nathanson. It is great to have you here, michael. Thanks, becky good morning good morning. What do you think of netflix numbers . I cant say i thought it was huge to hear the big numbers year to date that they might pull from perspective gains that would come later in the year i can agree with that based on a narrative of subscriber growth that will slow the next few quarters. I understand why stocks are down we dont have a buy on the name. The valuation is so extended that will wait for the next few quarters to pass you buy as it happens the anniversary the next half of the year thats interesting. To me, it wasnt a huge deal to say, okay, it is going to be choppy they have seen huge growth already. The valuation is a different one. What do you think is fair for this company how do you go about changing that when theyve gone about that so rapidly and there is so much any directions in terms of direct to consumer we looked a couple of years out. This year is unusual on many fronts including the cash flow growth lets look where we are in 2022. Not much has changed two years out. Just looking at price to sale which is my favorite metric because it is so squishiy. Its trading above the highest change enclose es to eight times sales on 2022. Historically, it is 5. 5 times. The multiple will come back to the sales range. It puts it probably at 400 stock the way we are thinking about it unfortunately, weve been consistent on that our focus has been on the Free Cash Flow that has not been the concern but all been about the subscriber growth. That growth starts to decelerate and the multiple will come on in michael, it is hardly the only name particularly in the tech sector trading in a hard valuation sector if you are looking at the broader i h broader things in terms of what you would normally thing as a growth versus the same stock, there is so much liquidity out there. Is it hard not to change your mind and chase after the momentum when you see the stocks like this to continue to be so loved. The narrative is so good, right . We know talking about the media names, there is a shut down in production and sports. This cord cutting is going to rise a ton youve got movie theaters closed it is a perfect narrative. We have the buys on facebook and google those valuations to suggest are not the same degree. We are focused on those names. Those are easier for me to fend for valuation. Those will be slow to recover. They just havent run as much. Thank you for your time good talking to you this morning. Thanks, becky coming up, the 30year Mortgage Rate hitting the lowest level ever a reminder you can watch or listen live any time on the cnbc app. We are coming right back how does the world reopen for business . To return to the workplace, safely, companies will need the right tools. Thats why salesforce created work. Com its an allnew suite of apps, expertise, and services. To manage this crisis today, and thrive tomorrow. Everything Companies Need to return to the workplace. Lets reopen. Safely. Hey, our workers comp insurance is expiring. Should i 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 . Sure get a quote in 3 minutes at easyaspie. Com. That is easy. So, need another reminder . No, im good. Reminder for what . Oh. Ho ho, yeah need workers comp insurance . Get a quote in 3 minutes at easyaspie. Com. Still to come this morning, blackrocks Ceo Larry Fink on his companys Quarterly Results. Better than anticipated. 7. 3 trillion in assets under management now at blackrock. Well talk about markets and what he sees on the horizon and much more. Stay tuned announcer dont forget to subscribe to our podcast youll get interviews, original content and behind the scenes access look for us on apple podcasts or your favorite podcast app and subscribe today. 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. Schwab. Some Companies Still have hr stuck between employeesentering data. A. Changing data. More and more sensitive, personal data. And it doesnt just drag hr down. It drags the entire business down with inefficiency, errors and waste. Its ridiculous. So ridiculous. With paycom, employees enter and manage their own data in a single, easy to use software. Visit paycom. Com, and schedule your demo today. Welcome back our next guest says valuations are in the market. Joining us navid akbari. Angel investors has 9. 1 billion in assets under management were going to talk about stocks, navid, but heres your expertise. Fixed income markets, focusing on Corporate Credit trading, risk management, structured products you know this stuff inside out it actually helps with picking stocks and with equities, doesnt it it might even be better than people who dont have an expertise there looking at the actual core Balance Sheet assets of the company it matters, especially now we agree. Given the corporate sectors nearing or approaching alltime highs, being able to understand the risk is key to the current markets. Recently with the banks, were looking at provisions and theyre talking about past and the future, but the number of companies that have that they have length mont money to that survive, we dont know with Interest Rates this low, the tide hasnt gone down where you see whos naked. There are companies that may not make it that are sort of being propped up by these low rates. Absolutely. I think thats one key consequence. That policy, the amount of funding and liquidity injected markets has really allowed Many Companies to lever their way through this crisis. We think thats long term sustainable. Something that in the longer term will have to be resolved. I think one key about the Banking System is that its really exact inverse back since the great financial crisis, banks have delevered and derisked banks have 40 more equity capitol than they did in 2007 creating Balance Sheets we think should be able to weather the Current Crisis and economic situation. Stepping over this, not talking specifically about banks. I mean, default risk in this environment you think should be a key consideration. I dont think everyone is thinking that. I think people are looking at valuations based on earnings per share, things like that, revenue. You say 20 of listed u. S. Companies have Debt Service Costs that are greater than earnings, one in five cant cover their debt based on earnings and thats something investors should probably Pay Attention to absolutely. Thats the key point that we would like to make is that as you look at these Balance Sheets, i think were really focused on valuation without necessarily looking at the down side risks that are inherent in some of these entities i think being able to find strong Balance Sheets in this market is really where investors will be rewarded thats something that we focus on significantly. I was planning on, you know, watching netflix i dont want to do all of these things youre telling me i need to do for investments. Have you done this analysis already . Do you have some stocks that pass muster with you in this context . What do you like yeah. I think theres a couple sectors that really in the post 20082009 Balance Sheets, thats the Banking Sector leading the charge but also areas associated with real estate and residential mortgages. In the Banking Sector i think theres two names that we look at that are positioned very well, one being jpmorgan obviously a Market Leader in the Banking Sector but also Goldman Sachs. I think the beauty of these two entities is that they will be led by their Investment Banking divisions through time and volatility if there is a recovery, fees and income may be declining. You have the offset where these entities can start releasing some of the excess capital that they hold as well as normalizing the environment. As you look at the profile of some of these institutions, being able to create a limited down side scenario while still having that up side is something thats very attractive. Like a couple of community banks, Hingham Institute of savings, south shore thats right. Wheres green county bank corp yeah. So both of these are Banks Community banks, Smaller Banks that have longterm track records of double digit earnings growth. Very small. Very small we should point out. Very small market caps. Yeah. Okay. And then but also sorry to interrupt because we have to go. Do you like paypal or is that too expensive . I think the pricing on paypal is a little bit stretched. I think theyre well positioned to perform well in this post covid commerce landscape that is clearly changing, but if you look at valuations for 80 times current earnings, really the entire payment sector has seen valuations increase dramatically and in our mind theyre a little bit stretched especially when you compare it to some of the other banks that weve mentioned here today most of the banks trading around ten times earnings. All right thank you, navid we appreciate it. Thank you. Thanks. Very small take a close look at the market cap but, you know, i think maybe appropriate for some portfolios. Appreciate it. Thanks becky. When we come back, our newsmaker of the morning dont miss blackrock ceo larry fipg next here on squawk. When we started carvana, they told us that selling cars 100 online wouldnt work. But we went to work. Building an experience that lets you shop over 17,000 cars from home. Creating a coast to Coast Network to deliver your car as soon as tomorrow. Recruiting an army of customer advocates to make your experience incredible. And putting you in control of the whole thing with powerful technology. Thats why weve become the nations Fastest Growing retailer. Because our customers love it. See for yourself, at carvana. Com. Green arrows futures turning around pointing to a higher opening on wall street. A big beat for Blackrock Well talk about the firms latest Quarterly Results and the broader markets with Ceo Larry Fink. Plus, tech coming under pressure netflix being hit hard with a less than upbeat outlook the second hour of squawk box begins right now good morning and welcome back to squawk box here on cnbc im joe kernen along with becky quick. I was thinking about mack here i was going to introduce him as crocket or tubs. Hes running. Hes running there he goes. Look. There he is wow you have the stuff, man. Go, mack. We replaced andrew with crocket, tubs from either the movie or the series. But we digress. Im liking it, mack what do you think when you wake up and your wifes sleeping, obviously, yeah, okay. No, i said im down with it. Embarrassed, but im down. U. S. Equity futures he looks good. For beckys birthday tomorrow happy prebirthday i sent you a cake on twitter i showed you that. You need the application. That you stole from somebody else i did i regifted anyway the dows up about 18 1 4 nasdaq up just over a point and the s p up a little bit. I dont have any confidence in any of these numbers being anywhere who knows by 4 00 today but there had been an upward bias for months in the market which is surprising given the covid backdrop that weve seen well, guess what . We have somebody that knows a lot more than we do so lets get right to our newsmaker of the morning. Blackrock, the Worlds Largest asset manager just out with the Quarterly Results. Earnings and revenue topping expectations joining us right now is blackrock chairman and ceo, larry fink good morning great to have you here this morning. How are you doing . Very well, becky. How are you . Hi, joe. Good to see you thank you. Lets talk about your earnings first up because thats the news of the morning. Those numbers were better than anticipated and by a big margin, too. Earnings per share the number came in at 785 versus 6. 99 the street was expecting there were a lot of things to make that happen one was lower taxes. You had higher nonoperating income and you bought back a lot of shares, 1. 1 billion it was a smaller share count talk us through what you think was the most important about the quarter . Well, i think the quarter really represents the position blackrock has with our clients clients are confused clients have been witnessing extreme volatility, extreme emotionalism related to our pandemic and what its doing to parts of our society we saw a dramatic decline in the market in the end of the First Quarter. Now weve seen a dramatic rebound. Markets are still down anywhere from 4 to 11 worldwide from the start of the year, but clients have come to blackrock more than ever before. Theyre looking for more contextualized information theyre looking for a purpose in which how to navigate around the markets. I think throughout the quarter blackrock has enjoyed deeper, broader relationships with clients across the board even in our retail platform worldwide we were able to raise over 16 billion throughout the world in Retail Assets we had active equity flows very different than the industry for the fifth consecutive quarter. We had active fixed income flows, 51 billion of etf flows and then our allotted Technology Platform grew by 17 in terms of revenue. So you put that all together, it really was illustrative of more and more clients are looking for blackrock to get information to interpret the information for them and to help them invest their Retirement Savings or investing for any purpose. And i believe that was one of the key characteristics of the quarter with 100 billion in net flow. Larry, it is kind of amazing, 7. 3 trillion in assets under management you have a good idea in what investors are thinking what maybe the broad overview is for the things that are happening. Jamie dimon earlier when jpmorgan was out with its earnings said that he thinks the entire recession has just been pushed back but that you could see bad things come towards the end of the year. All of the fiscal stimulus, monetary stimulus has put off what you would normally see. There is real concern about a cyclical economic downturn happening as a result of the economic shutdowns what do you think on that front . We are in an economic downturn but because of the great policy responses by governments worldwide, as you suggested, becky, both physically and monetary, we have really stabilized major components of our economy. Corporations who had fear of accessing the Capital Markets were able to access and so we saw large fundings of debt and inequity to stabilize the our corporations worldwide and so theyre in a much better position and i think what jamie was saying, what the other side of the problem of the economy, we are still seeing major segments of the economy that still have not been able to reboot, whether thats entertainment or travel or restaurants. All of the many components of the service side of the economy. This has been very devastating to many small and medium businesses this is one of the big issues were confronting. Large corporations have been able to fare basically better than the smaller organizations and so were witnessing an economy that is running very fast in some areas of our economy and very slow in other areas. What weve witnessed from banks in the last few days of the earnings and in terms of the provisioning, theyre provisioning some very large loan losses in their small and medium businesses and that identifies why theres a need for another fiscal stimulus, which i know congress is contemplating right now. There is a need to assist the economy for a little more time at the same time, we need politicians, we need Business Leaders to show more compassion. We need to be more courageous. There is we were witnessing many, many states reopening but reopening without Wearing Masks. We need a world of compassion and that compassion is meaning wearing a mask if we all wore masks, if we all cared about our fellow citizens a little more, we would be resolving this crisis much sooner and hopefully in fall, hopefully in winter or early next year were going to have some antivirals that will minimize the impact of the disease and maybe sometime next year we can even have a vaccination. But at this time we are witnessing a very uneven economy, and at the same time though investors sold large pools of equities in the First Quarter and then we had this big rebound. Year to date theres still the net outflows in equities in front of this big equity rally were seeing investors are scrambling looking where to put their money the other thing that we are witnessing though, Pension Funds are going to become more and more under funded because with persistent low Interest Rates, with interest with 10year treasury, you know, at historic lows, this makes their liabilities to be larger and so the mismatch now in Retirement Assets is only getting worse were witnessing so many families who are struggling. Theyre using some of their Retirement Savings to feed themselves, to pay their rent. Right so this is going to take many years to resolve, and we should be all aware of that at the same time, i believe theres very Good Progress in our economies in the world i actually believe were all learning how to operate under covid. Blackrock showed that weve been able to operate quite successfully with 99 of our employees working remotely im actually in my office for the first time in four months today, and i actually enjoy it im sure joe enjoys being in the studio yeah. Larry, youre right. The government has helped to this point theres very likely going to be another stimulus package that comes. Big companies are in better shape, but when you start thinking about the small and Midsized Companies and whether they can withstand an extended shutdown without having the full customer capacity coming back, thats when i wonder if it catches up to us at some point, are we looking at much tougher times, much tougher economy. If some of that spirals, the end of this year, the beginning of next year, does the market reflect some of those or do you think the market is right to think the governments and the fed are going to be able to carry us through no matter how long this lasts . Well, i think if we can have a more Compassionate Society we can all wear masks, we can get through this much quicker. If we can do that, as i said, we will have the development of antivirals that will mip mize t the severity of the disease and we will have more normalization. If the disease continues to grow, if mortality rates grow from where they are today, then were going to have to see another shutdown of parts of our economy and then the small and medium businesses, those organizations that you were speaking about, becky, are going to have a harder time. You know, blackrock has never believed were going to have a vshaped economy we believe this is going to be a slower, more persistent rebound, but we do believe there is a rebound, its just going to take longer were seeing segments, as you reported earlier, housing is very strong right now. We are seeing consumers actually wanting to normalize their lives. Theyre looking forward to it. So we need to focus on how do we normalize our lives . How do we make our lives more certain . We need to do this with greater compassion and we need we need more leaders to have courage by speaking out and by trying to build societies to bring our economies that have, i would say, a broader rebound in our entire economy, not just segments i think its going to require more time and more leadership. Larry, ive been wanting to talk to you about your bhoel environmental sort of initiative and trying to i dont know whether youre actually forcing companies to adhere to some of your viewpoints on these things, but i did see a piece, i know you saw it in the wall street journal, i thought sort of encapsulated some of my thoughts about it, by a very smart guy, c. Boyden gray, special envoy to president bush in fact, he was an architect of the Clean Air Act of 1990. So he actually thinks that your efforts could result in actually being an antitrust issue. Some of the stuff that he did point out i thought eloquently check this out and i want you to respond to this. This is sort of how i felt, and i know that you get some pushback cant be across the board. Check out what this first one says got it lear. Americas largest Financial Institutions are picking winners and losers in the Energy Sector for political reasons in boyd den grays view. Under pressure from environmental activists, banks are withholding desperately needed capital from oil and Gas Companies and in doing so they put millions of jobs at risk and may even be violating federal antitrust law. When americas financial industry starves them of capital, that is not fair free Market Competition it is barrelling towards collusion and inviting billions of dollars of antitrust liability. Do you just reject that out of hand, that this is some sort of collusion that youre entering into that you could be liable for down the road . Blackrock is not a bank were not involved in any. Lending so we should not conflate what he said about banks. Im not even aware of what banks are doing related to Energy Companies so im not i dont know i mean, i read what he said but he was conflating one thing versus another let me just talk about the flows, joe last year in our etf sustainability products we had 12 billion of flow for the entire year. In the first in the First Six Months we had 17 billion of flows. So this is not our money our clients are looking to invest in more renewable, sustainable products thats not starving other sectors, its just a surge of investments in new energy, in new technologies so what were witnessing worldwide is a surge of interest in clients looking to put money in more renewable components of energy and that surge is going to continue. So if you think about our Energy Network today, were using now more Renewable Energy in the United States. Thats continuing to do that we look at that as a good thing. So we are responding to our clients wishes where they want our money where they want their money to be placed. Larry, youre also taking a lead role yourself here. You took you even point out, youve identified 244 companies that are making insufficient progress integrating climate risk into their business models. If we took voting action against 53 yes. So you are actually you are doing certain things as an activist and im just wondering whether thats an appropriate role for you would you do it for pro choice go ahead joe, let me tell you what we did. We in my 2020 ceo letter we asked for companies to report on tcfd and sasby and Many Companies have not moved forward, and thats what were asking of them were looking for better transparency in how they are navigating their company, and thats what we are doing we have not made big, bold changes but were asking for better disclosure. And i dont think theres anything wrong about asking for better disclosure across the board. And i think going forward, we are seeing more and more companies doing that, and theyre doing it because its Good Business for them the one thing that is very clear in this covid world were living in, beyond the sustainability world, joe, stakeholder capitalism is only going to become more and more important the companies that focus on all their stakeholders, their clients, their employees, the society where they work and operate are going to be the companies that are going to be the winners for the future and we do believe these issues around social issues and how they operate, and this is why we have Companies Report under sasby and under tcfd so we can truly understand how theyre navigating around this whole longterm trend of Climate Change. Right, but we believe more than ever before, joe, that Climate Change is investment risk and were seeing that through our clients and how our clients are allocating capitol were not denying capital to the Energy Companies if our clients want to put money in the s p or in a specific energy fund, we are not denying that. Do you think its the only segment the only segment where we said were not investing it is in thermal coal. We are not denying in other hydrocarbons we are working side by side with many of the great, great Energy Companies. In many cases, some of the leaders of these great Energy Companies are trying to transform themselves in moving forward. Okay. So i dont want to get involved in a political commentary, but much of what was said was so conflated. What we are doing is trying to move everybody forward were not an activist. The boyden gray piece, then youre saying he conflated blackrock with these banks do you think its appropriate for banks to be cutting off capital to companies that are doing Hydrocarbon Exploration . Do you think theres a risk that we lose these very high paying jobs, that theyre actually taking an activist role in picking winners and losers in what should be a free market decision on how we move forward . You said thats the banks doing, were conflating you with the banks. Do you think the banks should be doing it, too, larry i dont think banks i think banks are strong capitalist organizations i think they also look that climate risk is investment risk so theyre navigating their portfolios you know, i dont want to respond to any one thing, but i believe they are very good at allocation of capital. Theyre withstanding the covid crisis very well despite their reserves im not here to i dont know what theyre doing in terms of holding back capital i dont see that myself but i cant respond to it. But i once again, if you truly believe that climate risk is going to be an investment risk and youre trying to navigate your asset allocation, thats a proper response that is not that is not an antitrust issue, that is an investment decision. Hey, larry, i want to ask you about blackrock being chosen by the Federal Reserve to oversee the three Government Bond buying programs what can you tell us about whats happening with that program . And has it worked, had the intended effect of stabilizing the corporate debt market . Throughout the last four months blackrock was retained by five different governments to be working alongside with them in helping them develop policies to stabilize their economies. The specific programs that youre asking for have been highly effective, highly successful we actually have i think the announcement by the Federal Reserve about these programs way before we started initiating the programs, they have stabilized the Corporate Bond market, stabilized many other markets. Corporations who in mid march were frightened whether they had access to capital, within weeks after the Federal Reserves announcement were able to access capital, access the full amount of their need and we stabilized many Great American companies through the announcement of the Federal Reserves programs and the programs that blackrock was initiating over the course of the last three, four months. This is something that were very proud of, becky we have our Financial Advisory group was started in 1994, it is an organization that we have built throughout the over the last 26 years we did a great deal of work in the 2008 crisis and i think it is because of our fiduciary culture. It is because of how strict we are in terms of containing information in the fire wall i personally am not on that side of the wall so i dont know what we were doing there, but i do know in having my conversations with the policy makers, that the work that weve done has really helped in designing the programs and in implementing the programs no argument at all in terms of the impact. I think it has absolutely stabilized the bond market, as you mentioned, even from the feds decision on this it has been a little weird to see some of the companies that are being bought, you know, Companies Like walmart, Berkshire Hathaway or something. Its funny to think of the fed stepping in and spending money on those companies that really dont need any help or assistance with some of these things how do you go through, is it just the idea that the governments there, they dont know investors dont know where theyre going but they know theyre going to be supporting things and nobody wants to fight the fed how does it work i think the objective is to stabilize the Capital Markets so anybody who has the ability to access the Capital Markets can do that. The idea was not to pick winner or losers but to protect jobs. This was a very different these were very different policies and programs than 2008. I mean, in the conversations i had back then and the conversations today, every Program Everything we were trying to do is stabilizing markets so we can stabilize jobs, so we can protect america, build america back again it wasnt like stabilizing Financial Institutions like which was, what, a major component of what was done in 2008 when the Federal Reserve had a buyout of big blocks of assets from Financial Institutions these were to stabilize and to rebound americas economy. I applaud our Treasury Department under secretary mnuchin and chairman jay powell. They were they had a lot of fortitude. They had a lot of strength and conviction and i think the results speak for themselves larry, just going back to what happened in 2008 and 2009 versus whats happening right now, hard to compare, theyre very different, but which do you think is a more dangerous and deeper recession, what we saw then or what we could potentially see now . I think our present situation is far more difficult because its touching so many parts of our economy. Its and the unequalness of how its impacting segments of the economy, unequalness how its impacting segments of businesses and i think its very its going to take a longer time to restabilize the entire parts of our economy, restabilize the entire components of our society. I think this is just much more difficult because its much more embedded in the base economy it is not embedded in the in one industry like housing principally was and Financial Institutions in 2008 this is embedded in our entire economy. This is much more psychological, too, because of the fear of the virus, the fear of elf this is an existential problem, too, so its way beyond a financial crisis that we saw in 2008 and thats why i do believe its going to take longer for us to find that stability, because it has a real psychological impact on so many people. People feel unstable, they feel uncertain. Theyre looking for hope, and i do believe the policies of our governments, i do believe what were doing, were trying to find solutions and hope and hopefully we do have those medical breakthroughs that that hope can be realized very rapidly. I just think back to all of the fallout from 2008 and 2009, the longterm implications from that, how entire generations were changed in their mentality about what they thought about the markets, about what they thought about jobs, what they thought about governments as a result and were still living with the after effects of that what are the potential implications that you play when you look two, three, five years down the road from this situation . I think theyre going to be dramatic when you think about the young people joining firms like at blackrock, we have a Training Program remotely very different very different results versus being in Office Working side by side with people but think about these young people who are joining the work force now. They were quite young during 9 11 in the United States. They were young teenagers during the financial crisis and now theyre entering the work force and we have covid and theyre working remotely i believe their lifes experiences are so vastly different than, well, my Life Experience i was innocent and idyllic childhood. I think the experience of these young people today are vastly different and their behaviors going to be different. Quite frankly, you know, just getting back to what joe was talking about related to sustainability in environmental, the young people in all our surveys are more vigorous in terms of the protection of the environment more than ever before i think the existential risk of covid, the racial inequalities that weve witnessed in the last two months, i do believe the Younger Generation is going to be more vigorous in terms of social issues and Environmental Issues i know that in blackrocks own work force this is not just going to be a slow change but i actually believe were going to see an accelerated attitude towards these issues i do believe this is why i have been so vigorous in myself in making sure that black rock is as purposeful as we can be and why stakeholder capitalism has to become a major component of what every Business Leader is focusing on. Larry, have you talked to the biden to the Vice President or people around him about treasury secretary would that be something that we always ask you that its been how long has it been since last time would you you would serve if asked, im sure. Joe, i am extremely happy with my job. I have never deviated from those views and im happy where im sitting now. Was that a no if i were you, i would be happy, too. How many trillion, becky what did you say i lose count of it 7. 3 trillion. I want to you are treasury secretary. We could call you mr. Fink you still can call me larry. Call him secretary fink. Just as long as we call you for dinner. Thats great. Thats right. All right. Larry, i want to thank you. Sorry, go ahead, joe. So he didnt answer would you would you if they asked you for your country, larry . I think you would, wouldnt you . I am happy where i am i am thrilled im honored in what weve accomplished at blackrock. Okay. Good answer. Thank you you trained me, joe. I did. All right. Good to have you for an extended period, larry. Thanks, guys. Enjoy. Stay healthy, please byebye. Thanks, you too coming up, what investors need to watch in the day ahead first as we head to break, lets get a check on the markets squawk box coming right back lets get you caught up on some of the headlines this morning. Freddie mac says the average on a 30year mortgage has fallen to 2. 98 . Thats the lowest level in the nearly 50 years that records have been kept to put that in perspective, the average rate on the 30year was 3. 78 at the beginning of the year and that makes a huge difference later this morning well be getting june Housing Starts and Building Permits those numbers are due at 8 30 eastern time starts are seen rising 18 while permits are forecast to have risen by nearly 5 . When we come back, why private schools in the suburbs are seeing a surge in applications and what theyre doing about that we have that story and the implications when squawk box returns. Time now for todays aflac trivia question. On average, which country consumes more ice cream per capita per year . The answer when cnbc squawk box continues this was an unexpected bill not covered by my health insurance. And this is the aflac duck who helped me cover it. 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 healapps except work. Rywhere. Why is that . Is it because people love filling out forms . Maybe they like checking with their supervisor to see how much Vacation Time they have. Or sending corporate their expense reports. Ill let you in on a little secret. They dont. 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Robert frank, youve got so many different ways of looking at whats really going on, and this is another example, i think, of what youve been bringing to us on a daily basis. Yeah. Its a really interesting window nearly 1 4 of a Million Students attend private schools in new york city, but wealth flight from new york is now creating School Flight with students and their hundreds of millions of dollars in tuition flowing to the suburbs. From the hamptons to Westchester County to connecticut, private schools around new york say applications have more than doubled this spring and summer from last year the Greens Farms Academy in westport, connecticut, typically has about 25 applications in the spring and summer. This year they had 69. Only a dozen will get slots since theyre now full school like ours, we have 44 acres. We have a lot of kids outside. Were able to take advantage of small faculty student ratios ultimately its a quality of life, not something that will be a short period transition but something to commit to over the next several years. Now some manhattan schools are seeing an enrollment decline of between 10 and 20 in the fall the average tuition, guys, in manhattan is 50,000 a year per student. While manhattan schools are still debating the fall plans, many schools in the suburbs say they will open in the fall thats the big difference, guys. Hey, robert, is that the big difference, just because the schools in the city dont have the space to be able to spread out and the schools in the suburbs do reporter its the space, its the money, and its really the ability to have all of this tracing and equipment. Private schools in general have more money and in the city they just even though they have the small class sizes, they just dont have 40 acres to spread the kids out so that is the big reason. And theres a lot more certainty in the suburbs when it comes to the health than the path of the virus than there is in new york city. So all these wealthy people trying to get into schools in connecticut and the hamptons and beyond, what do they do when they dont get one of the slots that are there do they, oh, gosh, go to Public School reporter yeah, oh, gosh is right. And obviously the Public Schools in those wealthy areas are terrific and so that is exactly whats happening i talked to a lot of Public Schools in the hamptons and parts of connecticut, they are seeing an increase as well unclear whether this is going to be permanently lets keep our kids in the Public Schools for the rest of their terms or whether this is for a year or so this shows once your kid is in the school, that means youre not coming back to new york city in the foreseeable future. Big impacts on new york city real estate, economy and of course on the tax base. Yeah. The private schools in new york city, i guess theyre feeling a pinch with this. If you dont come back this year, do they then turn around and let you come back a year later . If you leave them in your time of need, youre out . Well, becky, you know how hard it is for kids to get into a private school in manhattan. The fact that they worked so hard to get them in and are now taking them out shows how serious and permanent this decision is. I dont know whether a lot of schools will take back kids that just leave for a year, but that just shows what a major life decision these wealthy families are making its not just camping out in connecticut for the summer, this means they are out for the foreseeable future robert, thank you great to see you. Reporter thank you you, too. When we come back, weve got this mornings stocks to watch and dont forget, be sure to check out our podcast, squawk pod. Look at the days top interviews, analysis and so much more i dont think we have the stuff we say in the commercial breaks, but maybe some day you can subscribe for free wherever you get your podcast. Stay tuned, squawk box will be ghback welcome back to squawk box, everybody. The futures are on fire this morning. Not really take a look at this. You see the dow down by a 1, s p down by 1. 5 and nasdaq down by 18 points. We have seen pretty significant moves this week for the s p and dow. Those have been up the last four sessions in a row. They have been up cumulative, up three sessions and then down yesterday. We are seeing decent gains for those two averages this week. What happens in a covid world during those slow days in august, becky . Does it happen are there vacations . Are there dog days of august i dont know. Thats a question i think i asked mike santoli that earlier this week, because it has not felt to me like weve seen any of the really dreary days where everybody is on vacation and everything is out. It seems like people are traders are more active, more paying attention because what else are you going to do, right . Right nobodys traveling. Im just wondering, you know, everybody obviously just being working from home is not on vacation, but it kind of feels like youre do people take a vacation from the vacation and then they dont watch the market as closely in august when its hot i dont know i dont know if that happens. Maybe heres a couple of stocks that we might want to keep an eye on j. B. Hunt, the shares are trading higher this morning. The Transportation Company posted better than expected earnings in revenue despite a slowdown earlier in the quarter because of the pandemic. Shipping demand has seen a steady rebound though since then interesting chart. Less of a slope on the righthand side. Lending tree getting a boost this morning the company is raising its outlook citing higher demand for refinancing as Mortgage Rates have dropped to historic lows. Coming up, closely followed analyst rich greenfield on the latest numbers from netflix. The stock under pressure this morning down almost 9 stay tuned this is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Lookentertainmentour experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Netflix shares are trading lower this morning the company missed on earnings per share and beat on revenue and subscriber additions the light Third Quarter guidance led the stock to plunge. Netflix also announced chief content officer ted sarandos will be taking on the role of coceo Reed Hastings saying its de facto. Reed hastings noted the emphasis on content creation. Got big plans to spend future billions in our movies, series, animation. Weve got lots of places to put the money and were definitely focused on creating franchises joining us now, rich greenfield managing partner at Lightshed Partners and one heck of a fortnite player. Let you get back to that what what joe, ill play with you any day. Well play any day. That is a cool shot lightshed logo is cool how is 10 million . Is 10 million good for the quarter that ended it was above the 7. 5 people were expecting. Look, netflix is all about the whisper and do they get to the whisper, whats the guidance remember, they reported last quarter and people panicked. The stock i think plunged down to 400 i think it was 420 after hours and look at where it is now its at 480, 475, 490. I mean, the point is, you know, fast forward three months and the stock is over 10 , 15 higher so this stock has moved in step functions for years. Its been the most volatile stock ive ever covered in my career covering stocks whats the fundamental shift here people are streaming more video. People are moving away from linear tv. Your own Parent Company nbc comcast had a huge announcement this week with peacock i watched Linda Yacarino talk at signal and shes talking about the need to embrace technology, shift into the future. I think that is all netflix. If you think about it, netflix is the leader in this category theyre dominating theyve added almost as many subscribers in the first half of the year as they did all last year i think the most important fact if you look at anything from earnings yesterday, the most important fact to walk away with is that u. S. Subscribers are excacceleratin accelerating theyre at 73 million subscribers and theyve been accelerating which just speaks to how big the global opportunity is the global opportunity is way bigger when you realize how penetrated the u. S. Is 73 million subs, joe were getting up to the place where paid tv is in the u. S. In terms of cable subs. I was thinking they needed content for everybody, but the dubbing is getting better. Its not perfect but i watched stuff from the Foreign Language stuff i dont notice it after a while that im watching something thats in a different language, although at this point with nothing getting made, dont you foresee a slowdown in content . How do they handle that . Do they buy more i watched ron howard, he has his first show or first movie he ever produced, hillbilly elledge gi it comes out in november the crown is coming out. Netflix is a year ahead. They have content where most of hollywood has nothing. Joe, as you said, they create content and theyve restarted production in a lot of different markets. Theyre going to be dryer than they were in the first half of 21. They talked that it will be back end rated in terms of 21 in terms of the content that was supposed to come out theyre definitely behind schedule everybody else is far further behind schedule. I think on the movie side, that is an important point. Netflix is continuing to put out movies movie theaters are not opening up any time soon its pretty clear this virus is aerosol. Hoover reversed their position i was watching dr. Fauci with mark zuckerberg. If this is aerosol, movie theaters cant open. If they cant open, the position of being direct to consumers is a huge advantage for netflix the advantages are going to grow because of covid, not shrink the stock may go down today. I think its going to rally throughout the day the reality is wait to see where the stock is three months later. Its always hard to look at netflix on a daily basis. When they forecast 7. 5 and they did 10, is this forecast were seeing now below what its really going to be, do you think . First of all, i dont think if you were to go back and plot what netflix said their number was going to be versus what they actually did, you know, their ability to be, quote, unquote, accurate is pretty low i think they do their best i dont think its intentional theyve missed big several times. Theyve blown out the number a whole bunch more times rarely do they come in where you expect in terms of that forecast i think its hard. This is a business thats all over the world and trying to predict not just u. S. Subscribers, thats hard enough. All over the world in all of the various markets is very challenging. Look, the one thing that i think has been pretty clear with Hong Kong Disneyland reclosing, you look at the stats out of the u. S. That are pretty depressing in terms of whats happening in california, florida, texas, arizona, if the pandemic is not ending any time soon for a lot of us around the world, certainly in the u. S. , the overall tailwind that netflix has and streaming broadly, not just netflix, this is benefitting prime video, hulu, hbo max, disney obviously, everyone is benefitting, i think that the expectations are pretty low for q3 and i wouldnt be surprised to see that number come in meaningfully better, especially outside of the u. S. Those numbers look pretty that expectation just feels conservative but, look, a lot could change over the next few months vaccine wise. Well see where we are my guess is that they crush that 2. 5 million forecast. Just a general question, i guess, a little bit of a plug for peacock. Have you noticed like a minute worth of ads is no big deal . I dont even notice it i watch the little thing go and im almost done and then im really then im done. Thats because were used to four minutes of ads. Its like i mean, it really is not bad to watch. I dont mind 30 seconds or a minute worth of ads and i dont have to pay for them. Look, the reality is a lot of people are not paying for peacock. If youre not paying for peacock, five minutes an hour is almost nothing its a far better yeah, but it also pushes you away from linear tv faster because its less time. Its a better experience you have both its tough to navigate, rich thats why we have you thats not a real shot if thats a real shot, we need will smith because theres people coming down from that thing. Thats like Independence Day anyway, we have to go. Thank you, rich. Thank you fortnite, bye becky. You wont pay for no ads . You are a cheap skate. When we come back, investor Mario Gabelli will join us with his best ideas youre watching squawk box and this is cnbc at leaf blowers. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start trading Commission Free today. In a highlyconnected lexus vehicle at the golden opportunity sales event. Lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. Experience amazing music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. Good morning home stretch a dye verivergent f the markets. The dow up 2. 5 . The nasdaq going the other direction as the tech trade suddenly pulls back. Another new coronavirus case record the u. S. Sees more than 75,000 new infections in a single day and the highest death toll in over a month this hour were going to speak with the testing czar from the White House Coronavirus task force. And netflix adding way more customers than expected during its last quarter, but the company not so bullish on the current one. Well talk streaming competition, media, and much more with legendary investor Mario Gabelli. An hour of squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc im becky quick along with joe kernen andrew is out today. Weve been watching the u. S. Equity futures nothing to really write home about today. The dow futures are indicated higher up by about 37 points. S p futures up by 2. Nasdaq down by 2. 5 joe, we were having the conversation about volume when it comes to the market, how many people are around, is there going to be a slow, lazy days in the summer. Right. Fortunately for us we have smart people listening bob pisani wrote in and gave us the answers to some of those questions. June was much lower, Trading Volume in june was much lower than what you saw march through may, but and that july has been down even from what we saw in june but if youre looking at this july versus last july, trading has been much, much stronger in terms of the volume thats out there 10. 7 billion shares for all the changes, equity trading for july so far 50 above the average of 7 billion from last july so significantly more trading than you would have seen a year ago but down from the heights when there was really a panic in the markets. And weve got this tech trade with Robin Hood Type investors and all the excitement with the day trading returning to some extent, too. That we have to factor in. Theyre out there. Theres no doubt in my mind and i dont know we said is that great . Democratizing the stock market for everyone or is it a sign of, wow, everybody is playing in this you know, sometimes youre getting into the mature phase of something. In covid you want everybody to be investors . Yeah, yeah, you do. I dont know you want them trading too actively but you want everybody being investors and having a piece in the american companies. You dont know if you want them buying hertz at 10 a. M. And selling it at 2 30 maybe you do you cant do draft kings u. S. Reporting a record 77,000 new Coronavirus Infections yesterday. Thats according to reuters. As cases surged, we heard additional pessimism about whether the economy can stage that much hope for a vshaped recovery joining us for a special interview, Mario Gabelli, chairman and ceo of gamco investors. Mario, do you have hope that the economy can look like some sort of v or are your hopes not high in that regard and you think its going to be a you weve heard it described as a w. Where are you, mario joe, thats a good question i look at a global economy, okay the world is 84 there wirillion. The economy will be down but next year will be up im looking for what you call a w with a swoosh at the end and trying not to suppress it and keep the liquidity going so the economy will grow better but slower beyond 2021 and the market will discount that and has been doing that. The big wild card in the market is margins and secondly, joe, taxes. Then, third, youre not going to buy back as much stock because its politically wrong until after the election youll be selling stock. Thats it. The market, you know, will do what it wants to do and volatility is there and it will continue. Do you think the market is telling us anything about the election senate, president , otherwise come on, weve got 105 days to go or whatever the day is and im not sure that the final vote will be in at that time though i dont think the hanging chads will be there again. It will be the hanging postmarks if its all mailin stuff. Exactly. So the things that youre describing, mario, you didnt immediately say the number of new covid cases in texas is everything is what youre keying off of well, come on i love texas and i love the free market on the other side of the coin, were going to have a vaccine at some point weve proved that back in 1920 and not necessarily in the 1300s but, joe, yes. California california is 3. 2 of the worlds gdp thats bigger than germany and bigger than india. To a degree they have a lockdown, youll have an air pocket such is life youll get past this wear a mask. We constantly, you know, try to walk the line between being cold and callous and talking about Financial Markets and money and also being sensitive to the human tragedy of this pandemic, but what were trying to do as a Financial Network is give people the best possible future for themselves and their families based on how they navigate the market. So thats why we do it sometimes, but even listening to you it sounds like youre blowing off the entire covid crisis and saying im looking through this and we just need to be realistic no, come on, you cant blow off a crisis when half a Million People have died, but lets talk about the next ten years, okay whats going to help the planet . Whats going to help people . Whats the potential for innovation that will be unleashed . Thats what were focusing on. Were looking at things with a microscope like you are short term were looking at a telescope, how good is good how bad is bad what is good then in the Digital World were living in, like the industrial world of 100 years ago, what companies will flourish and what new ideas and innovations will come on a planet, what are the democrats doing and republicans . England was project speed. Infrastructure roads, bridges, internet to the consumer in rural america, things like that you know, there are companies that participate in this and thats what were buying. All right then Renewable Energy, joe. You have a great list no ones better at just because you get so excited about the picks that you make and the businesses theyre in. Thats why youre worth a gazillion dollars. Yeah, yeah, going back on your netflix previous to that, joe, someone wrote, and it was me, 40 years ago, give the consumer what they want, when they want be it, at the lowest possible price and then make money doing it the same thing with ra rds to our planet, with regards to people and figure it out give us some. So you like well still like netflix lets go back to the planet and look at Renewable Energy whoever is elected is going to focus on wind, solar and then you need transmission, you need ballot ri storage and you need Cyber Security so Companies Like really simple company, which i happened to visit in february in florida, next air energy has a Company Called next air energy partners. Thats where theyre putting their Development Projects in. You have a company in madrid called ibidrola, ibe siemens gamessa. I like a Company Called yvon grid theyre going to do some financial engineering. In the infrastructure, joe, roads, bridges the internet how do we get speed . How does comcast do well in the cable world with xfinity how does charter do that as part of charter, tom does a great job. We look at financial engineering. In the entertainment world, you mentioned netflixment dont ignore disney, peacock i paid 7. You paid adding three zeroes who is providing the content if you looked at netflix with the microscope, they had more amortization in the Second Quarter than they had film content spend. So who is making content and where can you buy it globally . Those are simple things. Yeah. Keep going what other things . I mean, how early were you on the whole i always go back to that you knew we were going to fall in love with our pets and that entire i mean, youve got other big themes like that that was 20 years ago when you told me about that and its done nothing but go up, up, up. Youre talking about body parts. The aging population you wanted more hips, more knees, glasses, but elective surgery was shut down all of a sudden thats coming back and its sad. Some people who had some cancers couldnt get to the doctor, blah, blah, blah however, when you look at every candidate wants to have a product that helps the planet so tesla. Okay what does that mean . Right now, joe, we have in the world 1. 3 billion cars in the United States, 260 million. In 2025 youre going to produce 100 million cars in the world. In the United States youll produce 20 million the electric vehicle is going to be 2 and 3 million youll have 5 million in hybrid, electric vehicles. How do i participate in this right now the answer is you buy retailers who sell parts because the age of the cars is getting older. So theres Companies Like autozone, oreillys, Advance Auto Parts that are doing a good job at this and at a price well buy them. Were going to go, mario. I bet ill say keep going and you could get us to nine easy. Joe, its always good to say hello to becky and you. I miss you. I miss you. We missed each other in omaha. I know. Its been far too long we need you on more frequently far too long weve got a great picture of you, mario we couldndont need you live. Joe, im like benjamin button im going to have red hair in the next year or two. That sounds good. I have two red heads i have two red heads not at home i have two red heads no, no kids kids kids. Anyway kids. Your children yeah, my children yes. Positive thanks, mario. Just to be clear. Becky all right. When we come back, an interview with the white houses Coronavirus Task force testing czar were going to speak with admiral brett jarar as the u. S. Sets a new record for confirmed covid19 cases. As we head to a break, take a look at shares of blackrock which earlier beat on the top and bottom lines last hour Ceo Larry Fink spelled out the divergence in the economy that the coronavirus has created. Large corporations have been able to fare basically better than the smaller organizations and so were witnessing an economy now thats really running very fast than some components and very slow in other areas. Resqwkoxstight ahead. Some Companies Still have hr stuck between employees and their data. Entering data. Changing data. More and more sensitive, personal data. And it doesnt just drag hr down. It drags the entire business down with inefficiency, errors and waste. Its ridiculous. So ridiculous. With paycom, employees enter and manage their own data in a single, easy to use software. Visit paycom. Com, and schedule your demo today. Simon pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. Touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Dont want to go into the weekend with a sour note the nasdaq could turn positive well see. In the meantime, the head of testing for the White House CoronavirusTask Force Says that turnaround time for tests continues to be an issue, but even as cases surge across the country, he also says authorities are getting ready to issue guidance on reducing unnecessary tests. Joining us right now to tell us what that means is admiral brett jerwah he is assistant secretary at the department of health and Human Services thanks for being with us today. Its great to be with you this morning there is so much confusion out there about testing and anecdotally so many complaints from people who are in some of these hot zone areas saying they are waiting a week, up to two weeks to try to get their test results back seems like theres lots of testing but maybe its not being done in the best possible places how do you fix that . What are our plans thank you for asking that were doing an historic amount of testing weve done over 46 million tests. Yesterday we were over 800,000 the data you get about lag times, thats talking about half of the tests that we do and ill talk about that. The other half we do is point of care within 15 minutes or within hospitals that have an eight hour or 12 hour or 16hour turn around the big commercial labs are reaching saturation, we know that, but the average turnaround time in the country is still a little bit over three days with a very tight standard deviation. Yes, there are outliers, we know that some people do wait seven, ten days those are really rare outliers were still around three days. Were going to reduce that by doing a lot of things, like pool testing, increasing point of care we announced every single point of care facility will get those tests. I guess its not where we might have assumed we would be months ago if you were kind of planning things out and maybe part of that is that it seems like were going to need a lot more tests than we may have anticipated if you want to do things like get people back in the work force, there are a lot of workplaces doing regular testing so they can ensure their facilities are safe and their staff are safe a lot of schools are talking about doing this if you have schools, not only colleges and universities trying to do this but also potentially other schools, lower education schools trying to get out there and do it, it seems like the demapped for testing is only going to go up and up and up until we get to the point where we develop a vaccine or a cure youre right. We are planning for that we know that the demand for testing can be infinite. In the ideal World Everybody will get a test every day and it would be free, youd have the results immediately. Were not going to get to that point. We know we need to scale that testing. By september particularly with pooling, you know, we will have the capability of doing 100 million tests per month and thats a really good thing we have a lot of things going. Point of care is going to be an increasing share of the market we expect probably half the testing to be point of care as we move into the fall, particularly with recent approvals. And things like pooling for surveillance in colleges and universities are really the way that we need to approach this. We have a solid plan to get there. Should the government, the federal government, be taking more control in determining who gets what testing when simply because if youre always going to have more demand then there are resources for it inevitably what happens is the wealthiest areas, the wealthiest people get to have the tests whenever they want i coughed today so im going to go have a test maybe thats not the best way of allowing the market to do its work when you are dealing with a pandemic like this. We have to be flexible, and this is the reason early on we had a very tight limitation of testing so we were really dealing with only those who were symptomatic in the hospital or health care workers. Now its very, very important that we actually test those who are asymptomatic just feeling like you want to go get a test is really not the best strategy, but we know that most of the spread are from asymptomatic people, particularly young adults. So youve got to cast a wide net, and i think were able to do that. When i talk about unnecessary testing, we know that theres a lot of people who are being asked to retest them selves at the end of their illness some people are getting tested four, five, six times. Thats really unnecessary. According to the guidelines, if youre ten days sips the onset of your illness and at least three days asymptomatic, youre fine youre not going to shed the virus, you can go back whoever has the flu, you never go back and get tested two or three times for the flu. We need to decrease those tests but we need to allow asymptomatic people to be tested. I get it though youre right its not the flu i dont worry ten days after getting the flu the thought that if i see my mother, im going to kill her this is a different scenario and, again, just back to this idea, i dont know who you put in priority and who you dont. The only way we can do Contact Tracing is if everyone gets their test results back in a timely manner. Even three days is interestingy and there are a lot of people who wont stay home and do what youre told to do. Ive seen it from people who are getting the tests, waiting for the results and not doing it. Let me address a couple of things there is a natural course of getting over this virus. We know after seven or eight days from the onset, you are not shedding the virus if you have the tenday window, you are not going to hurt your mother or grandmother. Its not necessary to get retested in terms of turnaround time, i agree. We need to reduce it thats why half of our testing is 24 hours or point of care thats why were moving point of care testing into nursing homes. Thats why were doing all of the things with pooling. But the reality is right now if you send to a large commercial lab, given where we are, that turnaround time is about three days we have to be precautionary during that period of time if you are at risk if you were at a big gathering, a lot of people have infection, whether that test is positive or not, you need to sit at home and isolate yourself to make sure you dont become ill wear a mask, avoid big gatherings, going to bars particularly in the red zones is not a good idea. We certainly support closing indoor bars and limiting restaurants. If you wear a mask and do those things, we dont need to close the economy. We can keep the economy open, but we have to be absolutely disciplined and diligent about those simple measures and include hand washing in that wearing a mask, avoid gatherings and were seeing that. Were seeing it in the sunbelt states were seeing the early indicators that the outbreak is starting to become managed by the percent positive cases and the e. R. Visits going down we have a long way to go, but i think we are turning this corner admiral, there has been a controversy that started because the government has now taken over at hhs, taken over the reporting from states and from hospitals talking about the caseload, the hospitalizations that used to go through cdc and cdc had a dashboard that made all of that information public the cdc stopped getting that information or at least giving out the information that they had through july 14th and there arent new places where the public can see what the government is gathering on that. When will we be able to see those numbers . I think transparency is very important so people feel like the numbers arent being manipulated or withheld . Right cdc is not separate from hhs were all part of the same department i am a consumer of that data we have been absolutely transparent. We are committed to transparency and i am not absolutely certain when thats going to be back up publicly, but i know thats the philosophy of the department and we want the American People to know transparency is very, very important and critical i assure everyone its going to be up as soon as possible. The cdc still gets the information and they can post that its going to a new Central Place that will streamline all of the reporting and going to one spot i need that. This is synthesis of the data so i dont have a little piece in one place and a hundred other places to go this is ultimately going to be better and we are committed to transparency. You think those are numbers well see in a week, a month, six months look, its not going to be six months like i said, im not the chief Technology Officer here. Im a consumer of that information. I get that information we do want it to be transparent, and im certain it will be transparent and posted soon. I cant tell you when, but its not going to be a prolonged period of time because we want American People to know it. Admiral, thank you very much. We appreciate your time today. Youre welcome. Coming up, a new read on Housing Starts one day after the average rate on a 30 year fixed mortgage went ayb 3 for the First Time Ever st tuned squawk box coming right back coming up, braking down the data and june Housing Starts stay tuned, youre watching squawk box here on cnbc. Stock slices. 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. Welcome back Rick Santelli there. Live breaking news june housing doing pretty well up over 17 . 1,186,000. Seasonally adjusted and permits, up a little over 2 . 1,000 seasonally adjusted annualized units 1. 296 million. Yesterday we learned that mortgages with 50 years of recordkeeping on the 30 year, the long mortgage fixed 30 years under 3 i personally know three different people closing on houses today theres definitely a fire going on in housing no matter where you look and with the Interest Rate not only very low volatility in general, just think about it this way, ten year note yields are approaching four weeks of closing in the 60s, meaning somewhere between 61 and 69 basis points japanese Government Bonds, they trade by appointment the Federal Reserve and Central Banks taking a lot of volatility out of the Interest Rate complex. That certainly works in favor of housing. Joe, back to you. Rick, thanks. Lets bring in diana olick and steve liesman. Steve, to you first. Reporter you know, rick makes a really important point here, that housing has been one of the bright spots, and thats unlike the last downturn when housing was part of the reason we got into the great financial crisis housing was largely unresponsive to fed policy. And here with Mortgage Rates lower and we dont have a housing bubble, in fact, you could argue that housing never really recovered certainly if you look at the chart of Housing Starts going back to 2007, 2006, we never got back to the level that we hit. We had an over supply of housing and then thats become just an issue of people want a change in tastes as well what i do find interesting here is multifamily is down, and there may be an issue here of changing tastes thats worth talking about. People may not want to live in the cities and there could be a premium placed on suburban homes. Housing will help us get out of this along with defeating the virus and getting people back to work, joe. All right lets go over to diana reporter well, joe, i think these are good numbers i would have liked to have seen a little better especially in the permits. When you break it down to Single Family versus multifamily we saw multifamily down that tends to be a more volatile number we are seeing Single Family permits popped 11. 8 month to month. Thats fantastic still down a year ago. We talk about all of this demand that were seeing. We saw Builder Sentiment right back up to where it was in march. They reported that yesterday we have this lack of supply and the builders are telling us, you know, because they shut down in march and april, its been very difficult for them to ramp up production again they have high costs for land, labor, especially materials. Lumber prices are at a twoyear high because the lumber mills shut down again. Thats why when you go deep into the data and you look into the number of houses that are under construction right now that have already been permitted and started, it is down, both month to month and year over year. Thats the supply that were looking for because theres so much demand. You have to get the builders ramped up faster they are up against tough hurdles in that. Hey, joe . Yeah, go ahead, steve. Reporter i want to ask diana a question i did some Housing Construction in my day. It strikes me that Housing Construction is perhaps a place that people can turn to and work safely so, diana, im wondering with the resurgence in the south and southwest, do you expect these numbers to fall off or do you expect the builders to keep building despite the resurgence . Reporter well, thats a good question look, we are seeing the trouble. We talked to a builder yesterday who said theyre having lumber issues because at the lumber yards and productions its a lot harder to produce lumber when youre doing social distancing behind me here theyre all Wearing Masks mostly up there. The larger construction sites are working. Construction was deemed an essential activity even when we shut down back in march and april, but it is slowing down production, surely and its going to be a problem for builders because were seeing so much demand. They want to get it out there and they cant build it fast enough. Rick, these people are buying out in the burbs reporter yeah, absolutely. I think its pretty interesting. Its a lot of young people a lot of firsttime home buyers, friends of my kids, and i think its really pretty interesting theyre looking at the Interest Rate side as a big opportunity and theyre thinking that the coronavirus believe me, young people are very concerned about it even though i know we read a lot of stories that theyre all out at bars with no masks. The young people i know are concerned, but they see that that chapter isnt going to last forever and theyre really looking at this as an opportunity to make their claim into, you know, one of the great things about being an american, owning your own home wow diana, i just out of the all the ways to buy a house right now in terms of mortgage, whats the best, in your view, the best way to do it at this point . It hasnt been 30year for a while, has it . I havent done a 30year in a while. Where is the best value . And i guess you have to assume rates arent headed up any time soon reporter no. I mean, youre looking at record low Mortgage Rates across the board. If you are looking at the 30year, you want to be safe, you dont want rates to go up, thats a great one to do you are seeing people going into other products, a 10year a. R. M. Because they dont expect the rates to go up you can get the fix on the 7 to 10year a. R. M. And get the lower rate when you look at the number, the vast majority of people are going in for the 30year fix, that security. Theyre staying in their homes longer you think about it, was i going to do a 30year fix . People are saying, i want to stay put i want to stay where i am. The length of time people are staying in their homes now is much longer than it has been historically. All right were going to steve did you change did you get into a construction outfit or Something Like that . Didnt you have a tie on what happened . Reporter no. At the cape cod bureau, joe, the rule on friday is casual friday. The bureau chief mandated that no ties on friday. All right and you say you had some what did you build, a bird house, tree house you built some houses . What are you referring to . I worked a couple summers on a construction crew. They wouldnt let me build anything but i could demolish things i wasnt allowed to use i could just swng a sledge hammer, which is incredibly cathartic. Thats because you and weir were out god knows what you two were doing and they didnt want you doing anything important building a house upside down or something anyway reporter my wife doesnt let me fix anything around the house. I can destroy things. God, i want to be handy so bad, you know what i mean . Reporter i know, me too. No way. No way its impossible. I mean, bad. Anyway, okay thanks, everyone for more on the Housing Market, and this is interesting because tendai kafiza, chief economist for lending tree more to go on the down side on Mortgage Rates because of where the 10year is what would be your terminal yield projection to wait for yeah. So whats been happening is that weve seen this big gap open up and right now its at 235 basis points before covid it was at 170 since the fed announced the unlimited buying back in march, weve seen a 30basis point in that the full drop we can get is 65 to get back to where we are. That would be 2. 3 . Whoa. But i think were going to easily get another 30 basis points over the next three or four months to take us to 2. 7. You think that that is likely so then people dont need to rush right now if theyre thinking about doing this . Yeah. I think if we continue the trajectory we have seen since march, we can get to 270 230 is a bit of a longer stretch. I do think in this current environment, everything is uncertain. Two parts to buying a house and getting a mortgage one part is the Interest Rate, thats very favor annual the other part is your income and employment thats very uncertain right now. So i think if you think that you can save money right now by refinancin refinancing, thinking of buying a house, you should go ahead and do it now. If you do lose a job, youre going to be out of luck. Okay. Thats amazing because you are basing some of this on prospects for people with the crisis depending on whether youre you know, if youre laid off, if you could be a permanent layoff. You have to think about all of those things if you are going into the borrowing market right now. Those are all factors to consider yeah. Absolutely one thing thats very concerning right now is that the improvement that weve seen in the jobs market the past couple of months has been people coming off of temporary layoffs but if you look at permanent layoffs, those are actually going up what were seeing is that the jobs crisis is migrating into more permanent jobs and its migrating up the income chain, so to speak, into folks who would be potential home buyers we have a long way to go with the jobs crisis even if we get the Health Problem solved, which doesnt look like were going to get it solved any time soon. Housing starts are rebounding but you are still worried. Housing markets in a precarious position what do you mean why . Housing starts are rebounding pretty well. The new Housing Market is bouncing back. Existing home market is not back we are down 30 from precovid and 27 year over year we have a big indplaes Mortgage Applications some of these are what im calling speculative applications Mortgage Applications are up 20 year over year part of this is the really attractive rate environment. A lot of people are like, let me see if i can get approved. A lot of people are shopping for homes. The first thing a realtor asks you when you call them is have you been preapproved before they take their time to buy a house 23409 all of the mortgages are going to turn into home sales. Were all trying to help out here and think solutions and everything about our you know, so many things happening in 2020. You did an actual study for lending tree about black home buyers being more likely denied mortgages. Weve had conversations that there are times where certain metrics could be softened for loans the way things are graded on a curve if you really want to try to, you know, say extend a hand up instead of a hand out. Whats going on behind the scenes how do we fix this where are we currently in the environment for trying to get a mortgage yeah. Black home buyers, their denial rate is about twice the denial rate overall so, you know, if you are a black homeowner trying to buy a home, youre less likely to get approved from a mortgage this stems from the big gap in net income or net worth or income inequality that we have across the races in the United States all of that, of course, stems from hundreds of years, 400 years of racism and discrimination which shows up in this income disparate. So really we need to close that income gap we need to close that gap and probably the easiest or most direct way to do that is getting increased attention these days. Or perhaps more lenders that have access to funds in minority neighborhoods . Theres different ways to try to handle this, i guess its something obviously that you just gave the facts so it is the way it is. There has to be some way to free things up it seems like. We appreciate it we hope to see you again at some point in the future not too far. Great thanks for having me. Okay. Youre welcome becky. Joe, have you transitioned to a 30year fixed yet not doing it. Not going to do it ive got a 7year something or other. 7 year leg, a. R. M. Adjusted . Do you think i should i dont know. I got i refinanced a few months ago. So low. Really good if you dont go 30 years your actual you know the monthly payment. Yeah. I dont know. Youre not going anywhere no, im not dont i know it. I know stuck. All right when we come back, much more on the markets as we get set to close out a divergent week for the major indexes. The dow and s p both tracking their third positive week in a row but the nasdaq, its lagging a little bit thats unusual been leading the week so long and its down 1. 3 it is on pace to snap a twoweek winning streak right now as we head to break, take a look at the major cruise line stocks. The cdc extended a no sail order to the industry through september. That was set to expire on july 24th those stocks bounce around a lot but theyre down 2. 4 . Ayrnival down 1 st tuned, youre watching squawk box right here on cnbc. Apps are used everywhere. Except work. Why is that . Is it because people love filling out forms . Maybe they like checking with their supervisor to see how much Vacation Time they have. Or sending corporate their expense reports. Ill let you in on a little secret. They dont. By empowering employees to manage their own tasks, paycom frees you to focus on the business of business. To learn more, visit paycom. Com welcome back to squawk box, everybody. It is friday and on this last trading day of the week youre looking at the futures having picked up. The dow is now in positive territory. We started out in negative territory. S p futures up by 5 and the nasdaq hanging in just below by the flat line down by 4. 5. Joe . Something going on there are some things, becky looking around squawk box, the studio a person the studio in times square no longer packed with people but we have noticed a little pickup in activity so we decided to use our location to gauge the recovery heres what times square liked on the morning of march 23rd that was the day the markets ended up hitting their lows of this pandemic. At least so far. You can see what things look like right now still not happening times square. No, not times square like, thats for sure. Yeah. Doesnt look like vanilla sky anymore. You know. Or i am legend, god help us no. Thats what i was worried about. Like i said, we do have our falael truck out here. Oh, my gosh, here comes seven cars seven, eight, nine, ten, 11. People crossing the street. More people than what you can see right there. There you go thats a little more representative. Theres 11 cars i just saw go by. And theres a line outside of this mack, what does he have . It all looks fattening from here, right . I would im hungry. And delicious. Yeah, it does look good we dont do that have you waited in that line no. All right okay when we come back, jim cramer will join us well get his first take on the friday trading day ahead and then the stocks you need to watch in just over a half an hour when the opening bell rings on wall street. Oh, god. Its friday, were in love. Its getting to you. It is. See you cringing squawk box will be right back. Wow. Jim could you ipop the hood for us . . There she is. Turbocharged, right . Yes it is. Jim, could you uh kick the tires . Oh yes. Can you change the color inside the car . Oh sure. How about blue . Thats more cyan but. Jump in the back seat, jim. Act like my kids. How much longer . Exactly how they sound. Its got massaging seats too, right . Oh yeahhhhh. Oh yeahhhhh. Visit the mercedesbenz summer event or shop online at participating dealers. Get 0 apr financing up to 36 months on select new and certified preowned models. Last hour on squawk box black rock Ceo Larry Fink laid out one of the current challenges that he sees for investors trying to navigate a contradictory set of market signals. At this time we are we are witnessing a very uneven economy and at the same time, though, investors sold large pools of second wits in the First Quarter and then we had this big rebound and, you know, year to date there has been net outflows and equities in front of this big equity rally we have seen. Investors are scrambling looking to where to put their money. And then, jim, at cnbc headquarters we had mario on and, i mean, i let him loose and he just went off on individual exciting businesses in his view that he just sees i guess he is looking out a year, two, three years in advance and just saying these are all businesses that are going to thrive and i think thats what floats his boat, right . Well, look, i think, joe, your whole show has been devoted to what i like which is that if we just think about whats going to happen when the pandemic is over, we know that there are a lot of companies that will do very well, i thought that larrys comments were larry is so thoughtful about everything, but hes actually thinking about esg again because thats going to be what happens. Were going to return to what we were talking about, but a lot of people baled and and people have to come back and have tomorrow could back and buy things like what mario is talking about because those companies are virtual ever greens. I love the attitude of the show which is the attitude is not of hope but of what will happen when this is over. Right a lot of netflix we talked about that assel and i havent seen you tweet about that at this point i mean, netflix, can you believe we could have bought that at, what, jim. Oh, geez. Comcast we could have bought it for 5 billion, right i thought the quarter was great. If you actually listened to what reed said, hes talk being a tenyear plan. I think theres a lot of quick draw mcgraws who blew the stock out because they thought it was really meaningful, that the company said it was all pull through. Thats no different from the pantry food story, people bolted, like clorox, they bolted and then sold clorox at 180 on comments that were conservative and left 50 points on the table. I think if you are reacting, selling it down 37, youre probably thinking, wow, i could have sold it down 50, thank heavens. I dont know actually watch the call because its a watchable call and read the letter and you are going to say to yourself, why did i do that this company is Just Brilliant so, yeah, i was doing answering to some day traders this morning on twitter, ive got to go back and talk about why i like netflix. Answering, huh, not blocking . Blocked a few and answer a few jimmy chill doesnt block anymore . Jimmy chill does some blocking blocking and tackling look, anybody who actually says words that we know are offensive i block, but i welcome people who day trade and want to make money i thought becky had some great points this morning about we want people in, we dont want to criticize what theyre doing as much as we want them in, so im trying to encourage people to be in the robin hood cohort because what they will do is they will realize this works, this doesnt work, maybe you should end up owning a fractional some zon down 10 . If someone says why are you still on tv am i allowed to block them even though theres no curse words because i did. I think you have to explain to them. Huh first you look at their name and its usually like doc johns 53 and you have to say, geez, why did your mom name you doc johns . Why dont you have a picture. What is that outline yeah. Why dont you have a follower no, you dont. Exactly there are some people who just joined to be able to heckle you. They do they do. They should go buy stocks i dont care what i dont like is when people Say Something about how youre all washed up and i watch you every day and you are so washe up wait a second, why are you watching me every day if im washed up. I know. I love driving people crazy. Dont watch. Thanks, jim. Thank you guys, have a great weekend. You, too. Becky gets her happy birthdays, thats all you get. No, i get my share. Usually its not why are you on tv, its usually why are you on tvahole and then you have a reason to block them. The european supermarket chain, royal ahold, right exactly it was a busy week for earnings and its going to be even busier next week, ibm, coke, microsoft and tesla are a few of the big names we are going to be hearing from with analyst estimates all over the place its hard to know what to expect, where to invest or most importantly what kind of guidance these companies will be giving us, joining us to talk about that is joe taranova, senior managing director, a cnbc director, our friend who we havent seen in forever. Great to see you, joe he. Great to see you, too, becky and happy birthday one day in advance. Thank you i appreciate it. Lets talk about some of the names that youre long because i was looking through the list and its interesting, youve got some stocks like microsoft which is reporting next week and can i have done so well and been on this tear, but youre also long a lot of the financials, names like Goldman Sachs, jpmorgan, Morgan Stanley and those are some of the stocks that have not gotten the love lately how do you describe your investing sentiment at this point or what you really think is working well, in the last five days financials have actually outperformed, technology is down 1 as a sector in the last five days, financials are up 8 , jpmorgan, Goldman Sachs, Morgan Stanley are posting 9 to 10 percent returns over the last few days in the case of jpmorgan its clearly best in breed and they have Utilized Technology and thats being very advantageous right now for them to connect with their customers Morgan Stanley and Goldman Sachs is about the trading environment and you saw that this morning with the results that black rock is posting weve never had volatility as high as it is with the s p also at a very high price so i think the active management trading environment is going to remain a very favorable and thats why i have allocations towards Goldman Sachs and Morgan Stanley and im very happy with this week. Becky, we have a chance here if were able to close the s p above 3231, that will be the first weekly close where the s p has closed higher on the year since the week in february when we made the all time high. Are those trade secrets on that white board behind you . So ive been keeping a journal as this crisis from covid19 has unfolded and i keep a technical chart, i keep track of the debt markets, i keep my positions and then over my other shoulder those are the numbers, sports numbers of my children which i have retired i love that that is really good. Love the sports numbers. Joe, quickly, what do you want to hear quickly from the companies that are reporting well, microsoft clearly is the big one. I think technology unfortunately there is an overconcentration, we kind of need to relax that overconcentration. These are the very important positions. Everyone is long so the expectations are incredibly high. Dont be surprised by pull backs in these stocks, youre probably going to get them. I wouldnt jump right into them if you are not in them, but it will be a pause that ultimately will refresh for technology. Joe, buddy, great to see you. Thank you for joining us and we will talk to you soon. J joe, have a great weekend. You, too. Quail better rise to the challenge tomorrow i dont want you cooking, cleaning, nothing. It will be great to be there with all the little quick quails for your birthday. I just want to hang out in the family thats it. Happy birthday. Its going to be great. Thank you very much, joe you guys, everybody, have a great weekend, we will see you back here on monday, right now its time for squawk on the street. Good friday morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer, david faber live from separate locations futures are steady to cap what has been a wild week were going to watch the contest between growth and value as threat flicks guidance disappoints last night and as the u. S. Smashes through its record for daily covid case growth, 75,000 new cases oil 4. 5, ten year 60 basis points jim, we have had it all this week, banks, netflix, vaccine news, fed speak. What are