Transcripts For CNBC Squawk On The Street 20240712

This astrazeneca oxford. I do say at this point, carl, you get the pfizer news about germ germany. What you have to watch is the crawl underneath there will be endless buying and things like vaccine inc. And im seeing buying of glaxo i think people want to calm down i have sorrento tonight. Not all news are good. 100 companies doing vaccines and lets take a breath because other things including a stimulus which is needed if the vaccines fail. The analysts are not discouraging traders or investors from trying to play the vaccine race jpm cuts moderna run and no one is preaching a message of slow and steady wins the race here. Nova just continually up. People who love these. Mark cuban had some great comments, carl people who come to this market, initially were in the early phase of this, but people who cannot resist. When i get up at 4 00, 3 30, theyre in there buying these stocks i dont know who these people are, but theyre having the time of their life and i just hope they take something off the table. Boy do they hate that talk, carl they go to the casino and constantly rolling the dice, constantly because not all these companies are going to make it theyre not all going to hit right and then were still awaiting this news that we think were going to get on oxford it was supposed to be sunday night and then this morning. Theyre not in tune with what we, in the stock market where were expecting something before the opening. Look, thats where i first got turned on to how bad things can be very editorially and the moderna down grade is the most important thing because the possibility that not everything is going to come through moderna has never taken anything to the market. They still is a lot and get a lot of stock the fact that they augmented their selling product is something that i would look at which i thought was ill advised because you dont do that if youre about to hit a home run as we await more progress in vaccine data trial whether the policies we have in place are enough in the interim. A big oped in the journal talking about six months in. Not enough masks and not enough personal Protection Equipment and not enough testing capability you have the Surgeon General on fox this morning, jim. The whole administration is now supportive of masks which depending on how you read that quote might run afoul of what the president told Chris Wallace over the weekend heres what he said. I dont agree with the statement that if everybody wear a mask, everything disappears. Hey, dr. Fauci said dont wear a mask ouuy said dont wear a mask everybody was saying dont wear a mask and all of a sudden everybody has to wear a mask and masks cause problems, too. With that being said i am a believer in masks i think masks are good jim, made a point last week certainly large retailers in this country are saying, forget it were not waiting for National Policy any more. I think they all feel pretty committed to the idea that somewhat like mark said when we unveiled the mask challenge through xprize. Org which is, look, if everyone wore a mask and practiced social distancing this could be suppressed in tloo three weeks. Are the nba and nfl using all our tests. You have to test during halftime what can we discover i do think that every time we feel like we caught up in masks or when we feel like weve caught up in testing, we find out that theres a new hot spot and we havent done it it is interesting to hear that interview with fox that the president is very against masks and hes very in favor of masks. Thats a tremendous thing to be able to do within a span of 90 seconds. Ive never seen anything like it yeah. As far as the data over the weekend, jim, i mean, enough kernels in there to argue that at least in some states. Lets take arizona maybe were going to see a plateau in cases but others if you listen to some of the commentary out of miami at least and some areas of texas. There is concern that this could still spiral out of control. Im looking at the death rate the president is right, you have to consider the fact that the fatality rate is much, much lower than it was in new york. I think we keep learning about the disease. It was a novel disease i think the president took dr. Fauci to task and he is an amazing man because he keeps on ticking and i dont know why he stays because he made a mistake at the beginning of this saying that we dont need masks we dont know if that was motivated politically or because he wanted to be sure that all the Health Care Workers had masks or they got it completely wrong. Ever since then, hes tried to catch up, as the doctors have caught up. I dont think its necessarily fair or single out a guy that was wrong given the fact that all the great medical practitioners that we talked to in new york are completely wrong. They didnt know you were supposed to turn people over and remdesivir and they didnt have plasma and a lot of blood oxygen ideas and they didnt have steroids lets just forget about what happened and start thinking about the future the future is brighter than the past when it comes to deaths and darker when it comes to testing and Contact Tracing out of the picture in our country the New York Times and wa Washington Post this weekend and today said it is a total disaster and im trying to figure out what kind of disaster that our country had that is ever as bad as this that is selfinflicted vietnam has no tests and japan has very few deaths and taiwan almost no deaths those are big, big countries and theyre fairing so much better and its not just masks, they do Contact Trace and theyre also discipline and were unruly this may go down as us being, id say, a lesser developed country versus those countries yeah, well certainly more focused on personal freedom. Live free and die its a terrific way. I think that there are people who fight overwhelmingly for the right to be able to live unobstructed for masks there is a new honeywell mask that is quite stylish and has a filter inside. Do i like wearing a mask around . No because you see, i keep asking my wife why shes mad at me when i cant see her mouth. I like to live not as interested in dying id rather compromise my free speech and my freedom in order to live, but you know what, maybe im an anomaly if i lived in the south of course, the other way to think about masks its not about protecting yourself but an instrument of kindness towards others which gets into a whole other debate, jim. Just the opposite the contest which is for 15 to 24 year olds is develop a mask that is good for you and good for me thats when people will wear it. Thats the mistake the current mask makers. Theyre doing this joke and study of certain birds has ever been able to demonstrate reciprocal the turns. Mark meadows says today talks begin at the white house with mnuchin and mcconnell. All kind of questions here will the white house insist on a payroll tax and cut back funding for testing at cdc what is on your mind when it comes to evaluating the progress this week . I think larry kudlow and when i worked with larry at cnbc he loved the payroll cut tax and he felt that was the way to get things going there was a cap so those who make a ton of money will not benefit beyond a certain level but i do think that it is a small price to pay to get a deal through and what we have, you say, carl, youre right. The 600 goes away and 70 of the people will be making less than what they were making right now 600 70 of the people are making more than they used to 15 million workers involved in restaurants. The restaurants, if you have inside it looks like thats going away bars going away. That industry, going away. Which is why the stayathome food stocks continue to go higher to see a whole profession obliterated with the exception of fast food, its rather extraordinary. Not talked about enough because many of the companies are not public thats true i mean, just the emphasis last week alone, jim. Chipot lerx hiring 10,000 employees and comps out of dominos and reports that mcdonalds comps might be positive this quarter. Certainly dining as we know it has changed and we hope not for too long look, i had dominos last night and it is Pretty Amazing tomato pie, no cheese and really good than banana peppers dont get the wings. Youve paid him already and the next thing you know youre eating your pizza and i have to tell you the companies that theyre putting out of business with that are extraordinary. Most of the pizzarias have tables and also delivery and delivery is third party and takes a huge percentage. Here dominos owns the delivery force and its safe. Tremendous number of pizza parlors will be wiped out. Will secretary mnuchin think about that yes. Will the president do it i dont know how much take out the president has really ever done i think not clear. When chipotle reports will be a fabulous money because they make as much money in takeout as they do in store and theyre also pushing for some rent relief not that they need relief because theyre doing well starbucks which was upgraded today and chipotle able to get from the investment trust. Simon property a stock that trades at 4 00 a. M. And the cruise ships and spg trade because they are the ones that people think could double if you get a real vaccine right chipotle wednesday night and starbucks overweight 92 target if the vaccine target this week is decent and stimulus talks are not a complete disaster and earnings roll in strong, can we make a decisive move above 32, 35 absolutely. I dont think it will be a problem. We did come up last week in a strange way and about how abbott labs is only up a little and Johns Johnson johnson up a little and bank stocks were down with the exception of wells fargo and black rockwhich has had such a big move. So, its difficult netflix wasnt that good this is a better week for earn ea ings ibm may be tough and doesnt have to blow numbers away and later in the week, we have Fabulous Companies and do some good numbers including microsoft. Tesla can do whatever number it wants and the bulls will like it honeywell will be exceptional and at t get over 30 and cocaco cocacola is down too much and microsoft surprised and hershey ups that surprise and slumber shade down that was great the way you worked your way across that table, jim people are pointing to texan as an important one, as well. The reason why its so important because they have apple. Now, last week taiwan reported a great report and they have apple and always worried about midday bombs from the president just saying something negative about china. Look, he likes to attack fauci that happens a couple time s a day and china, once or twice a day and tends to want to attack some democrats and then praise georgia a real outliar and thats what he does as president right now. Not bad. Not bad. Should we be thrown if, in fact, the Airlines Talk more about demands stalling out the degree to which they can get people to take early retirement. Reuters has a piece of delta they could avoid layoff physical enough agreed to early exits its incredibly southwest had very big buyouts today i think, look, i listen to what phil lebeau says i hang on his every word and his every word it is just a slower comeback again these are vaccine stocks you are looking at a list of five vaccine stocks and putting together the actual vaccine stocks the ones that people feel will double if we get a vaccine. That is not wrong. I mean, the problem is getting a credible vaccine which will probably take three shots including one being a booster is not something that is going to happen overnight unless its j j that has the ability to put out two billion vaccines within a very short period of time, which is kind of what we need what happened in polio in this country. They beat it by putting out as many vaccines as possible. Thats certainly the playbook wed like to see and still watching the tape for any news later this morning well talk to mike wirth about the Company Buying noble energy. Biggest in the energy patch since the pandemic began. Along with disney, facebook a bunch of calls and price increase targets at twitter, google, amazon ba ia meckn mont rld in a highly capable lexus suv. At the golden opportunity sales event. Get zero percent financing on all 2020 lexus models. Experience amazing at your lexus dealer. 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. Stocks by the slice from fidelity. Save without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Its time for cramers mad dash. They have all been terrific American Tower and gone to lo Lockheed Martin and the most exciting nonvaccine stock in this morning may be crown castle 3 yield and growing year over year and eliot partners convinced them to get rid of their portion. I never want to say you cant lose doing something, but, holy cow. This is a great stock with a very good match with jay brown and pressure from elliot where this stock which is at 168 and would go to 200 if they agreed with elliot tomorrow i like this stock. If they dont agree with elliot. Tack on 30 points right now. They do have a july 30th conference call. Its a real win. You got to be in this. I know its not interesting to a royal caribbean, but its really good i would say if we make a list of areas, what would it be i just think that whats going on in 5g and whats going on in towers and whats going on with tmobile its just so exciting and the spend is so big and it has to be because we want to regain, of course, the crown of 5g and we can do it because we have a lot of companies. Thats why invidia doing data center and well hear something about 5g tomorrow with texas instruments. Its a great secular growth trend that is being overlooked because of covid and i really think that people should be rethinking their whole approach from covid and not just rolling the dice and buying astrazeneca or nova vax and be diversified into something other than airlines, cruise ships. That has been your mantra, jim. Be more creative is what you have been telling people to do. I love norwegian cruise and i was going to take a february 22 cruise with my wife, but, you know what. This is in the hands of the cdc and the president wants cruise and the president wants everything the president wants you to be able to eat with a mask on and hold it with the mouth, i guess. I dont know i do know that there are other stocks besides things having to do with vaccines and covid and why not own a couple theyre really good. Certainly noble and chevron are two. Well talk to mike wirth later on to acquire noble for 5 billion in stock well take a quick break here as we kick off, as we said, a week with all kinds of cross currents dont go anywhere. 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 futures mixed this morning china was up 3 as they lift the equity cap on what Insurance Companies can hold and buy a lot of things to watch this week earnings, vaccine news and stimulus talks just three of them lget wel the opening bell with about eight minutes. This selenite grey is so pretty isnt it . Wow. Jim could you pop 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. Mark zuckerberg says he is denying that he has a secret understanding so to speak when it comes to trumps Facebook Page i heard the speculation, too let me be clear. No deal of any kind actually the whole idea of a deal is pretty ridiculous. I do speak with the president from time to time just like i spoke with our last president and political leaders around the world. Jimmy also points out we paid 5 billion in fines were under antitrust investigation from multiple agencies and we might lose section 230. Yeah, i know. Mark zuckerberg would tell you this theyve made maybe hundreds of changes to try to appease people and no matter what they do, theyve not ben able to do it. Theyve not been able to satisfy anyone including disney which was a giant advertiser one thing zuckerberg refused to do and would change peoples minds is refute the president. I dont want anything to do with him. The stock woul advertisers. The other Companies Getting ads. Not twitter, too complicated right now but snap that reports this week. Theyre getting ads because theyre not political and google not political although they were attacked by attorney general barr and a totally illadvised speech he is in a curious box and tried to make concession after concession after concession and his appeasing strategy has to stop and he has to just directly say, you know what, i met with the president and im done with him. I just think that we ought to just stay away from politics i want your advertising, i want to help minority businesses. I am going to stake minority businesses with 500 million, he has not done this, who do instagram shops and im going to listen to what shopify does. He doesnt do all these things is he going to do them i think he does it all in good time 500 million to help minority businesses would be the right thing to do and he hasnt done it and i think thats far more important. Why isnt he committing the money to minority businesses why isnt he i have no idea interesting reflecting sort of what steve case told andrew this morning. He will make changes as you said in good time i was struck in the axios interview. He went on to cite many disagreements with trump including Climate Change and his divisive rhetoric. Something we havent heard from zuck so far. All this concern about the company. Credit suisse goes to 305. These big adveed advertiserse did this town hall with gary and hes talking about the greatest bargain in advertising history to place ads with smaller businesses with instagram. It was rather incredible its down and out mispriced. I know he said those things on axios against the president. He has to say, im done meeting with the president he doesnt understand that it sounds like equivocation coming from the man and he cant equivocate and repudiate yes and i do believe that his Small Business is just fantastic and gary v who is a brilliant, intelligent guy and i have known him for many, many years if he says buy instagram ads and that is the best bargain, great return on investment, thats what you got to do gary v is not political. Thats interesting. Well certainly watch the disney element, as you said the journal saying that disney has cut back their ad spend on facebook and instagram the number one u. S. Advertiser in the first half. So, well see about that, jim. We mentioned some of these target increases snap goldman to 49 and twitter to 43. I wonder whether or not that is something that pivots around facebook or Something Else this is heath terry just going. Its astronomical the number of price boosts he has and what im focused on amazon that we know traded poorly last week. 3,000 to 3,800 amazon led the nasdaq down last week microsoft delivers on wednesday and we are going to say that index is back, but it has to be back because right now people are buying cyclicals and theyre buying dow jones stocks and likely disappointment when they report ally jpmorgan last week just to put last week into perspective on amazon, jim down five in a row, 7 but only four weeks in the last five years where amazon has been down that much in a week i mean, yesterday was or last week was significant, right . I did think it was very significant because so much of the country where you have to believe they dont want to go out. Amazon is the alternative to going to a store and its been fabulous but people just feel the stocks had too big a move. It is ugly chart and its a lot of money coming out of it and money going towards the youth money all going to vaccines and cruises and i think the big institutions are saying, after netflix disappointment, amazon is next to disappoint. As if somehow they have anything in common, which they dont. And Reid Hastings was his usual circumspect which hurt the stock. Amazon carries across the board price targets and i cant figure out whether its late 1999 it is either way it is not what i want to see right now. Right, right. By the way, goldman. Not the only one to go to 3,800. Jeffries did the same thing this morning. You have two of them at street high jim, we havent talked about noble yet, but it is leading the s p on the chevron news. That and the oxford vaccine showing some positive. We are going to find out some more this is an amazing deal by mike wirth because he is considered to be the guy who has a vision whos got, by the way, just absolutely terrific Balance Sheet which is not, which is highly unusual in the patch and, remember, he dropped out august 8th of 2019, he was in a bidding war with oxidental paid 25 billion. I think noble is a better property and mikes paying 5 billion. So, he saved for a tenth of the amount of money that oxidental paid he got a fine asset mike wirth literally other than Matt Gallagher over at Parsley Energy and maybe, no, lets just leave it at that right now those are the two guys that had the great vision and lets pioneer and this group is beriffberiff people with any imagination. Mike is doing many good things jim as were talking, some headline flashes on oxford antibody t cell response, good immune responses researcher says were very encouraged by the progress it will be interesting to see how much the market reacts to this we were looking for the headline which just says its all systems go but we have to take that were in a situation where if we have t cell and we have any sort of thing that could make it so that there is hope between now and year end, you have to be positive astrazeneca is a company that no one thought was going to be in the running but people misjudged how good oxford was. Oxford doing a great job will this stock be up at the end of the day the day traders rule right now with this group and sorento is the one people suddenly want novax up constantly and moderna cooled off today but i think the vaccine race is going to end up being multiple companies and what will matter in the interim is what dr. Jon connen husband to say and i am wondering if they dont have the nfl and can they make enough tests . It is having enough tests that is really what is making, having enough tests and the desire not to wear the mask is whats making it so that were, i dont know, we, who else, mexico, brazil thats the worst brazil we know the bahamas are no longer letter americans in that was an amazing tweet i couldnt believe that tweet. Its just terrible do we, do we read the astrazeneca news through the context of the framework of saying theyre farther along than oxford has 10,000 participants and therefore they know more . No, i think the astrazeneca news as being this is going to be one of them that is in the running. J j was ignored last week because they chose not to pound their chest. Regeneron completely quiet being in the mix means youre not going to make as much money. Oxford has historically also not been promotional why . Theyre a university they dont trade but i do think that what were after is kind of a handicap. Were trying to figure out which one pfizer is doing very well. Regeneron quiet and j j remarkable youre not going to get alex saying were in the lead and youre also not going to get a moderna situation where everything is really good and thats why they end up selling a ton of stock im sorry to be so brutal about mode moderna. They should have called the sec and said were cancel. They didnt do that and its so ill advised that it is a travesty really. So, you think even with all the explanations and all the justifications for the sales of the cmo and the ceo, you think it just lends itself to guilt by association . Ive been in these situations before personally and i know exactly what you have to do. No transactions. No buying, no selling. Any good attorney whos working with moderna has shopped or i think would be a shyster you dont just simply do what theyre doing. Theres so much news theyre so rich, what do they need to sell for lets be a little philosophic for a second why do they have to play this game they should come on and say, jim, heres the reason why because i dont know it and nobody else does either. Ive done sell plans ive set up sell plans at goldman and consistent knowledge about sell plans and what moderna has done is completely off the reservation. Moderna has paused due to volatility well watch that intra day action astrazeneca not good enough not good enough. Yeah. Really quick, jim, before we get to pasini. 53 million new shares related to warrants stock was down 19 yeah, you know what isreall credible about these, they get bit up and bit up and bit up until the insiders say this is such a great opportunity they dont care about robinhood or whos buying. Norwegian cruise needed to sell. Theyre playing the game theyre looking at the day traders and taking things up and theyre just smacking them right in the face. Like a dead fish and it stinks. Thats going to take us back to june 5th on nikola price. Lets get to bob pasani. Split open here mega caps are split. And amazon is up today else where, indeterminate open here tech is slightly up and health care slightly up and banks slipping again and industrials on the weak side where are we the big story is the reopening fault story. It was early june and thats when we peaked in the market the last peak 3232 look the last few months were basically sideways since june 8th as we try to figure out how serious is the reclosing story versus the reopening story. If you see the way the market acts, the work from home beneficiaries since june 8th have done much better than Everything Else here and the usual names your docusigns and zoom video and amazon all notably up. This is since june 8th and the reopening plays you know all of them the cruise lines and the live nation and the companies we put every day. Those companies have underperformed you put up the reopening sectors and you can see theyre notably underperforming since june 8th here theres the story. The reopening faltering that is moving the market. The people hoping the earnings will move the markets. Im not so sure about that giving that were not getting any signs there is any more guidance 40 declined to provide any guidance right now were set for 44 decline in earnings we have about 9 reporting and 20 coming out largest year over year decline since 2008 what i think is alarming is the profit margin declines here. Industrials are 1 Profit Margins and normally 9 Profit Margins. Thats terrible. Yet technology which is tremendous Profit Margins like 20 normal Profit Margins have only 19. Thats amazing one reason tech is holding up so well because the margins are holding up at the same time. Finally, i want to note a really big potential ipo out there and thats the tech play of all time here not only is it the listing in hong kong and in Mainland China but not listing in the u. S that is one story. The second story, its really big. North of 20 billion the biggest at 25 billion if you get to 22 billion, this could be the second or third biggest ipo of alltime and, carl, of course, that story is theyre not listing in the United States. By itself that is notable. Guys, back to you. All right, bob, thanks. Bob pisani when we come back the ceo of chevron mike wirth is with us on the allstock deal to acquire noble energy currently leading the s p. Dont go anywhere. Come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. Whow does the worldding a way treopen 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. Now is the time to support the places you love. Spend 10 dollars or more at a participating Small Business and get 5 dollars back, up to 10 times with american express. Enroll now at shopsmall. Com. A lot of news headed our ways this week but a couple things on the front burner sh chevron buying noble energy and were processing this news out of the oxford study on astrazeneca potential vaccine candidate. Back in a minute and you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Getting some vaccine news to start the week as lancet weighs in on astrazenecas covid19 candidate. Lets get to meg highly anticipated results coming from Oxford University which has partnered with astrazeneca. Still digging through the details as they literally just came in. But essentially showing that the vaccine induced an immune response in these participants this is the phase one two trial in the uk, one of the first human studies of this vaccine. And they looked at both giving one dose and two doses of the vaccine and they did find that after giving two doses, the immune response was stronger based on how they measured the generation of these antibodies from the vaccine they found that all of them, all of the participants generated h another way of measuring with the second dose, all of them did so. Youre seeing astrazeneca stock down more than 2 on these news. These were highly anticipated data with very positive sort of preembles last week coming out suggesting they were very strong as people are parsing through the data here, we will get a read on whether this matches up with extremely High Expectations but importantly, the researchers also reporting this generally appeared to be safe. They did note that about 70 of participants reported fatigue and headache and tended to help with any of the effects of getting the shot, guys but still reading through these data they do say this generated immune response and, of course, theyre taking this into a much larger set of phase three efficacy trials to get a read on whether this will be protective. Jim . Megan, headache, fatigue. So many people wont wear a mask, how about people who say, i dont need the vaccine let me ask you something, i have serrento on tonight and these are not necessarily in the same league say as pfizer and j j, are they no. Pfizer and Johnson Johnson are Huge Companies that have been around for decades so, they are much more proven in terms of the work that they do so, you know, the younger companies, some of them like novavaxhave Government Support but everybody should be looking at that as they are looking into these companies, too thank you, meg. I thought a dose of common sense would be fun there, too. Thank you, youre the best. Chevron announces it agrees to buy noble internal energy in5 billion deal ceo of chevron, mike, congratulations on this great deal thanks, jim good morning good to see you. Last year, actually last month, last year in july, you were in a bidding war over anadarco. Got 55 billion. I actually like the assets of noble a lot more that you got for 5 billion think thats wrong well, jim, you know, that was a very different time and this is a great deal that really builds on chevrons strengths. Three key things number one, these are highquality assets at a very fair price its a good deal for the shareholders of both companies and it shows why we are a little different than many others in our sector so, we like this deal very much. Noble is a very fine company and were excited about the combination. I love the combination, i also like the mystery but what excites me which wasnt talked about on the call and i am thinking now that you have a pipe, some field, some say in the world off the mediterranean with the israel field. Since they just opened that pipe from egypt, what do you think the odds are that maybe you get a pipe from egypt through even say, turkey, because its no longer ideologically opposed to egypt as it is to israel and right to germany and put an end to the dominance of russian natural gas its been a prolific hydrocarbon basin. La vie thin is a discovery there. And theyve built out this understanding of the regional geology. The gas currently goes into multiple countries informal israel, jordan, egypt, and certainly there are plans and efforts to try to build pipeline access to markets. The world is moving to a larger mix for gas. As coal based generation comes down and this is a lowcost high quality large scale resource that will help meet the needs as the power system in that region and world continues to go to a greater gas base and this that has decades worth of running room. Actually, noble has never had enough capital to explore and i think to work closely with in the middle east with all parts of the different natural gas world. Im wondering if noble didnt feel like we didnt have Balance Sheet to explore and exploit the Eastern Mediterranean but also the permian. They had volatile curtailments of their best properties in may and june these can open instantly once you guys get together. I think youre putting your finger on why this is good for both shareholders. The eastern assets are better for those with exposure to operating arenas around the world. Theres a portfolio diversification play there we have a large and successful position in the permian. Nobles position is nice but smaller. The efficiencies of scale were at work there, and they have a nice position in colorado as well their shareholders do get access to a stronger Balance Sheet. A stronger dividend, and i think thats good for their shareholders this is a deal on earnings Free Cash Flow and returns and it creates a stocker company with resilience to the downside and continued lerchl to the up side we think nobles Shareholders Benefit from that end and we believe chevrons shareholders do noble is cut very little for the properties in it green river is really good everything out of colorado what are you going to do with an asset that frankly people hate right now. The partnership is due if they are well capitalized and chevron will make it so. Have great value and yet, i look at this property and i think its given no value at the valuation of noble at 10. Well, its tightly integrated to nobles operations in colorado, in texas, and a lot of it is field gathering and field processing capability. And then there are longer hall pipelines that give you access to different market centers. Were excited to bring that in along with the other assets, and we think its a very nice integrated Package Company with talented people, a culture thats very compatible with ours its the right time for a deal like this. And in the midstream its part of what we think is a very attractive overall combination for the two companies. Would you do this deal if you didnt believe the oil can take out 40 and go higher well, were focussed on longterm Value Creation i expect choppiness in nearterm commodity markets. The trajectory of this pandemic continues to be uncertain. The vaccine news this morning is encouraging, but i think we have to be prepared for an economy that experiences some ups and downs. Longterm we think that the prices do head back as the Global Economy grows, the population grows, the middle class grows. But this isnt predicated on a High Oil Price we test transactions like this at a range of prices and stress them at relatively low prices to be sure we understand the risks involved and that we dont head into a transaction thats unduly exposed to a down cycle. We know down cycles will occur we dont know when this is a good deal even in a low price environment, it looks even better if prices recover. Mike, youre talking cycle. Later this week elon musk, tesla reports. Theres a lot of talk about the idea that we has a battery that could last ten, 15 hours basically wh basically what they need for gas stations if they take over the world. I think people know he cant take over the world, but are you prepared for batteries that last much longer like a ninehour battery that makes it so oil demand drops radically well, these battery applications have certain markets they work well in. There are other markets where its more difficult. Vehicle transportation is one we have this electric batteries making an impact and beginning to penetrate our projections expect significant penetration of electric vehicles over the next couple of decades in light duty transportation. Theres more work to be done on long haul transport, industrial applications, shipping, aviation, petrochemicals our commodities go into a variety of markets many of which really have not proven to be suited to todays battery technologies, and were working on technologies that can help address the emissions concerns across the wide range of applications of our products, and so the world needs all of this, i think technology is going to be the answer to the concerns on greenhouse gases, and were working alongside many others to try to find the solutions. Congratulations on the deal, and i know youre doing more alternative energy than almost any other oil company. This is a deal that i think you lets say you did much better on that than if you bought Something Else last year. Great to talk to you, mike back to you, carl. Jim, thanks a bit of a slit market chop to start the week dow down 150 as travel, airlines, retail weak. But nasdaq up largely due to amazon up 3. 5 were back in a minute d 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. They get that no two people are alike and customize your car experience amazing insurance so you only pay for what you need. What do you think . I dont see it. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Astrazeneca shares down 4 day traders the world take note we have them on tonight, sorrento, its good for those who who dont know anything. And by the way, dr. Jon cohen knows a lot. His company is in charge of the testing for the nba. Youve got that opco theres a stock the day traders are taking up furiously that may make sense games a couple days ago very exciting they have them all in a bubble its kind of like if we were on mars thats right. We cant wait. Jim, good hour well see you tonight. Mad money, of course, 6 00 p. M. Eastern time good monday morning. Welcome to squawk on the street. As we watch, again, disparity between some of the cyclical and growth names the nasdaq in the green as amazon tries to reclaim one of its worst weeks of the year last week just a little bit of spillback from last weeks trend. So the huge nasdaq stocks, four and a half days in the wilderness and now theyre back. I dont know if we want to overinterpret, but theres a constant interplay the market has remained the upper end of the trading range and they can do it one or two ways its not as if one has to not work for the others to work. It seems right now the churn is a rule and a rethink of exactly what a lot of these Health Care Developments mean, and Second Quarter earnings coming in better than expected but how much of it was paid for with the rally. Yeah. And leslie, youre trying to calculate your play book here. While you weigh the news on the vaccine with news on stimulus, not just in washington today, but in brussels where the eu is trying to get things together after days you also have to look at the bifurcation of the economy right now. From the earnings that weve seen so far, youve got in one camp, wall street with the more wall street trading oriented investment banks from last week with massive profits hedge funds, new data showing 2 00 billion in inflow . Thats a record amount of inflows into hedge funds during this time. And on the other hand, well start to see more earnings that week that may paint a broader picture of whats going on with more of the main street economy. So that will be interesting to Pay Attention to as well guys, lets check in once again with meg on this oxford news after two doses potent response from antibodies and tcells. Is it about pricing or Something Else there was a huge runup last week into the data being reported, because they said the data was coming monday and there were reports from the telegraph and others saying the data is positive now were digging through to see what the specifics are it could just be a sell the news phenomenon in terms of the stock perspective. Vaccine perspective, the reporters are reporting here that the vaccine does appear safe they report fatigue, headache as examples of some common side effects. Some took a med to reduce the side effects in terms of the efficacy, they say the participants generated neutralizing antibodies. Those are the ones that block the virus at levels similar to patients who have actually recovered from the disease they also report that they generate tcell response its thought to be an important immune response to fighting off this virus now, im still digging through the report to see if we can get details on how this compares to the pfizer data weve seen, also partnering with bio intech and moderna. Both of the Companies Reported their vaccines generated antibody levels at two to four times what was seen in people who have recovered from the disease. Looking through to see if i can get that specific comparison for you and ill come back to you. But astrazeneca saying these data support the continued development of this vaccine. They are already striking deals to produce this and to supply this if they can successful in these large scale Clinical Trials and of course, they have plans to start a phase three efficacy study in the United States of 30,000 participants in august and theyre already in larger state trials around the world. Looking promising if not, perhaps, stacking up to the expectations that were set high last week. Right so meg after getting pfizer news and moderna news and oxford news today, looking at calendar, what are you most interested in in the coming weeks in terms of new data well, these were the data i was most looking forward to getting but we do expect that moderna is starting its phase 3 trial i believe in the United States next week if all goes according to to plan well be watching to see how it goes and how the enrollment goes in terms of timelines for a vaccine, pfizer put out new data this morning from their german study of their vaccine in the release they said that if all goes well with getting the results and rolling the trials they could be filing for some kind of Regulatory Approval probably at an emergency use basis by october so these are timelines wed heard talked about theyre putting them in stone here as long as the trials all go well. All right certainly the market loves a steady diet of vaccine news. Well see how it handles pauses between. Meg, thank you for helping us dig through oxford on the news its a good place to start with our first guest. Jim stewart. Jim, its great to have you back happy monday good to talk to you. Good to be with you your colleague of the times has an interesting piece up this morning really about the ceo confidence and he quotes the ceo of marriott, im less optimistic today than i was 30 days ago the virus is in so many different markets of the United States i mean, investors are being asked to weigh that kind of commentary versus the positive news even though incremental on the vaccine front. Yeah. I think short and maybe median term up six months, things are not looking good we just do not it was not realistic i think for distancing, masks and all of that to stop the virus which obviously it has not in this country. But ive been talking to quite a few ceos in the last few weeks, and longerterm, im hearing optimism, sociespecially on the vaccine developments the vaccine news is very good, and lets face it. That is a successful vaccine that can be produced in the billions and distributed widely is the Silver Bullet here. That is whats going to stop this and stop it without additional severe curbs on peoples behavior you know, people can go back to movie theaters and plays and concerts and sporting events thats the Bright Future i think people are looking forward to, and this virus news is now suggesting that thats the vaccine could be distributed starting before the end of the year and i think that is a positive development. It doesnt sound like you think stocks are necessarily going to go for sale or that anyone interested in getting in is going to have that great an opportunity in the coming months well, i think as long as the vaccine news stays on track, and at this point, you know, there are so many candidates that look like theyre doing very well, that even one failure, i dont think is going to derail the optimism on that front but as long as that stays intact, i would definitely see any sharp pullbacks as opportunities. But without that, you know, the good news on the vaccine is pretty much reflective in current prices today i dont think youre seeing a huge rally. Investors, i think, especially, have been looking at the vaccine front. Theyre overlooking the immediately shorter term setbacks and the even the Earnings Results coming in now i mean, even the banks, for example, you know, a lot of those big reserves theyre taking, its unclear how much of that theyll have to spend theyre anticipating losses. In many cases they havent materialized yet so the shortterm results, i think people are discounting and looking at this at the longerterm outlook. The focus has turned to november and the election that will take place then if there is a change in party in the administration in the white house in november, what do you believe a lame duck administration would mean for this pandemic if there is novak seen in the last few months of the year well, i think if theres novak se no vaccine, i would expect more policy making coming out of the federal government much more federal intervention and much more issuing of guidelines i think it would take clarifying to know exactly what the federal governments powers are here, because a lot of it does belong with the states. But i think you would see much more of an insistence on following guidelines which would mean closing down the economy more than we have now. It seems to be the case as you mentioned earlier that the market in the six to eight month forward horizon has used the likelihood of a vaccine as a premise. One thing weve been debating since the beginning of this is how long the bridge would have to be in terms of fiscal policy and other measures to keep the economy kind of supported in some way through this. Now we have this deadline about the fiscal support measures. The market is not having to throw a tantrum to try to get any of these different phases of support. So what are you thinking right now in terms of the prospects . I think there will be more stimulus legislation coming out of washington. I mean, i think that the parameters at the moment is that Senate Republicans are talking about something around 1 trillion, and the Congressional Democrats would like to see 3 trillion lets say they cut it down the middle and we get two. Thats a substantial stimulus. What seems to be Holding Things up now is the white house itself, which is doesnt want to Fund Additional testing and Contact Tracing which hard to fathom its a small part of the bill. I am confident i know there are key numbers of the administration who understand the need to continue the stimulus and want to do it and lets face it. One thing we know is that the white house keeps a close look on prices. If it looks like no further stimulus and we go off a cliff, you will see a sharp decline and the white house will not want to see that jim, does a suspension of the payroll tax bother you is that a reasonable price to pay for an overall package well, im not an expert on this ive certainly read a lot of people who feel its not a particularly affected stimulus that there are better ways including the direct payments that went out. This was an idea that was prominent during the first round of stimulus, and it didnt get through in the end, but personally, i have to say i think in these circumstances, a stimulus is a stimulus you can define points and is it really going to the right people, but from a broad macro perspective, any stimulus is good and we need it. Certainly thats the tone out of businesses. Front page of the journal today, big piece on how Business Leaders are prepping for a longer road back than some operated well leave it there and talk to you soon always good to talk to you good to chat. Have a good day. Up next, the largest oil patch takeover deal since the start of the pandemic. What the ceo of chevron told us last hour on the 5 billion acquisition of noble energy. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. This is a great deal that really builds on chevrons strengths. Three key things number one is the high quality assets at a fair price its a good deal for the shareholders of both companies and i think it shows why were a little different than many others in our sector so we like this deal very much noble is a very fine company, and were excited about the combination. Chevrons mike wirth with us last hour. Brian sullivan joins us to talk about it you made the point its a good deal for price versus six years ago. Yeah. Or maybe even six months ago or a little bit longer than that, carl jim brought it up about occidental 38 billion price tag. Occi buying a company and then chevron buying noble either way for 13 billion including debts. You assume debt. 13 billion there. Shareholders of nbl make out okay they get a small premium to whatever the stock was trading at its at 10. 5. The market does not appear theyre pricing in another bidder coming in nbl, noble, was a 75, 78 stock. Pretty much six years ago today. What is chevron getting in the permian, but also a lot in colorado colorado and parts of new mexico seems to be the new permian in certain ways and theyre also getting a huge gas project off the coast of israel which jim talked about geo politically could do to blunt russian growing impact the market seeps like think think its fair. Down 2 right now. But i think theres one thing to be said, carl. At least there was a deal. It means things are getting done some things are getting done and brian, to your point about the premium, you know, it wasnt your typical 15 , 20 premium youd expect to see in a big strategic m a deal shares trading under where you expect if there is a rival bidder, why do you think the market expects no rival suitor in this deal is it that the large Oil Companies are in such distress that it would be part to make a 5 billion. Youre the expert ill do my best and you can tell me if im wrong. Number one, theres not that Many Companies that have access to an capital or cash on their books that can do the deal noble is not a small company, although every company has gotten smaller it would be a limited number of buyers exxon is reeling from the xto, a deal it did years ago. It was not well received by the market i think that maybe exxon is a little deal shy because of that. I think exxon kind of stepped out. Occidental is tied up in debt. Theyre not in the game. Chevron has a clean Balance Sheet. I dont think there are a lot of other buyers maybe an international could have come in or maybe an eog in the states could step in. But your field, private equity, you cover so well, theyre not coming in. Theyre tapped out the private equity funds are all committed. Theres no new capital on the private equity side ive heard of being rised i think its just called the lack of buyers the larger buyout funds are sitting on trillions of funds in dry powder one thing ive heard, and this may be a reason for muted deal activity in the oil patch. A lot of the bigger firms, not the energy specific ones, are concerned about esg implications of purchasing oil and gas right now. Even though theyre coming at discounted prices, theyre worried about going back to their limited partners and saying hey, i know we talked about this green energy stuff. Here i am buying more Traditional Oil and gas company. Yeah. And the p i was referring to are the ones that focus on the energy and gas side. But to your point, number one, their investors probably dont want it. Csg is not environmental so dont look at it number two, i dont know if you in elementary school, there was a book i read called where the red fern grows im going to cry if i think about it one dog died the reason i bring up that book is that oil and gas has been sort of where the red fern grows for capital. And unfortunately, its been no net return so i think that even if it wasnt free sg, im not sure people are going to pile billions of dollars into an industry that has done nothing but eat capital, and also an industry that they dont know a lot about, probably, and then an industry that is subject to the whims of an oil price that can go from 120 to negative 40 back to 40 in a year. You heard mike answer the questions about tesla and their battery life theres going to be a lot of demand for hydrocarbons. It may not be from us driving around, but it might come from airplanes and ships and trains and things like that i wonder what that means for the mopup process, the rationalization in the industry that you would think conditions are ripe for in terms of there being a lot of sort of distressed or pressured assets out there with a limited number of buyers. Is this the start of something or a oneoff in. I think its a oneoff, but ill give a caveat, because that protects me and i can claim to be right no matter what happens. You might see some smaller deals, probably not of this size, because, again, theres not many buyers of Companies Left of that size. Ive spoken with a number of Investment Bankers in the space of the last couple weeks i can tell you what the expectation is is that there will be deals, but theyre going to be deals to buy up bankruptcy assets because lets be clear 40 a barrel while better than zero or 10, is still not great youve got supreme cost reductions coming. Drilling rigs have fallen by 700. 700 since this time last year. These companies are trying to tighten their belts. But the deals we may see come are probably going to be in bankruptcy its been over 20 bankruptcies of oil and Gas Companies already this year according to a Boston Law Firm that will probably be more i think the deal making is going to be picking up sort of the scraps off the chapter 11 heat now, there will be companies that survive, but theyre not going to be in a position to do deals. The strong players are going to be pioneer, eog, exxons des anglais ok deal. I dont know who is left unless ten of the mighty mights get together and form the braidy bunch of oil all right brian, i think it was on nine of them 90 minutes last night right well, it doesnt show. Not at all and maybe the buyers will be patient this time around thanks, Brian Sullivan appreciate it. Its time for our etf spotlight. The ticker is bug. Its up 16 year to date. Helped along by the largest holding, that would be microsoft. Carrying a weighting of just over 10 in vog. Up also more than 15 the stock in the same period well tell you what to eecxpt from earnings from microsoft next hour on squawk alley. Stay with us experience the adventure of a bigger world in a highly capable lexus suv at the golden opportunity sales event. Lease the 2020 nx 300 for 339 a month for 36 months. Experience amazing at your lexus dealer. Heres your news update at this hour. In new jersey the fbi and local police are looking for a gunman who shot the 20yearold son of a federal judge in the familys home the attackers believe to have posed as a fedex delivery person the gunman wounded and shot before fleeing saudi arabias king has been hospitalized a visit by the iraqi mooims has been postponed because of the hospitalization of the 84yearold saudi monarch. United emirates spacecraft is on its way to mars. The rocket blasted off from japan earlier today. Its the first Interplanetary Mission for the country. Its named hope and is expected to take seven months to get to the red planet thats ourew ns update for this hour squawk on the street continues right after this before your own. Ves 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. I hope my insurance pays for it. Can you tell me how much this will be . [cashier] 67. Sorry. Wait, have you heard about goodrx . Goodrx finds free coupons to help you save up to 80 on your prescriptions. Wow, i had no idea. [announcer] goodrx, stop paying too much for your prescriptions. August of 2018 elon musk and the 420 tweet. Look at the stock now. Its closed above 1500 on friday morn doubled in the last three months up 260 for the year and earnings are coming on wednesday. Steve joins us, a former board member at tesla on what has been an insane run for the stock. Welcome back good to see you. Good to see you cramer this morning pointed out the company could print whatever they want on wednesday. Its unlikely to dampen that much enthusiasm. Would you go that far. Look, at 1500 tesla shares are nosebleedy if you step back, there are two stories that are interesting first, the part that everybody knows, and that is tesla is beating analyst expectations just a month ago analysts predicted less cars than they delivered. Global Auto Industry down 30 . Tesla down 5 and theyre moving faster than all the others expanding new car plants into china, germany, now austin, texas, a second one on the board in china thats impressive. I think thats driving a lot of this the part people are just starting to get their arms around the probably more important. And that is tesla was the first auto company to connect every vehicle. This enavailabble us to do onli maintenance to help develop the first selfhealing car the first to provide over the air ota. Tesla can begin to charge reduring revenue models. All the options dropped 99 mash margins to the bottom line this is making tesla in the minds of many investors a good longterm buy. Theyre figuring out how to make a Profitable Car Company in the future most are making boxes on wheels. One could say tesla is making the first perpetually upgradable machine. Many people think its exciting. Well see if they can maintain that share price yeah. It sounds like you give them more credit for supply than maybe the ongoing consumer demand or interest theyve been able to deliver on capacity well, theyre not only delivering on capacity, but theyre the clear innovation leaders, the brand everybody wants to have even in places like china where theres comod diization, they have brought the brand people want to have. Theyre the innovators the world is going electric. There will be a lot of kpeati competition, but theyre in the drivers seat right now. Because theres demand for the shares, that gives them the ability to raise more capital at the time other Auto Companies are stuck in the middle of recession, declining revenues and they have to spend a lot of money to retool their plants to make the electric vehicles, millennial buyers want old guys are stretched tesla is sitting on dough. Its not a bad place to be to that point you mentioned the potential of raising capital. All the big picture opportunities that you cite there, they were there a month ago when the stock was 500 a share lower. So obviously the market has rushed to this position of giving the company the lot of credit for what it might do down the road do they raise equity look, i dont know if i could defend a 1500 share price. If you were on the board today, i think i would be thinking about that secondary raising a little more capital when the going is good and the markets may be in nosebleedy territory already. This is probably a pretty good time to stash some extra cash away phil calls it the tesla effect with other ev companies in light of teslas recent move. How would you assess teslas mote amid some of the more startup ev Companies Say that again, please . How would you assess teslas competitive mote i think its threefold first, theyve built plants all over the world they have a cost advantage, especially in china. They dont have to pay tariffs while others do. Second, theyve got an ip mode they have technology that others havent figured out yet. The third part is they have taken the cost of batteries down fut than anybody else. Theyre one of the first to bring batteries inhouse for production theyre playing one battery provider off another they have battery partnerships with panasonic in the u. S. , and one in china the key to electric vehicles, about a third of the cost of the entire vehicles are the batteries, not the engine. Tesla has been the leader in taking the costs down. And steve, mike alluded to this a little while ago, but if tesla reports a profitable quarter on wednesday, it will have checked all the boxes for entrance into the s p 500. How much of the recent runup in the stock price do you think is in anticipation of being included in the index versus the fundamentals you were mentioning earlier . It doesnt seem to be died to the fundamentals, but i think its tied to the potential of going on the New York Stock Exchange and some of it is the frothiness of the market there are seven or eightstory stocks like amazon and microsoft and Facebook Tesla is clearly in that spot. People love to follow them you may love elon or hate him. By god, its an exciting story so its certainly not based on the fundamentals, but you got to hand it to him for doing a lot right. Now would be the time to raise capital. Steve, if you had to bik a bigger competitive to tesla these days, would it be Something Like a nikola or say this new partnership between intel and ford on next gen driving . The latter. I hope nikola does well. Theyre not putting cars on the road for the next two years and quite possibly three years i dont think people of tesla are losing too much sleep on that one you have to think about volkswagen theyre an International Brand with lowcost manufacturing. Today theyre introducing the i. D. 3, a lower cost car with a wider audience and then you also need to worry a bit about the chinese. Because they have firms like expen that are already producing lowcost tesla knockoffs in china and to quote ghost busters, if you see someone copying your car in china and selling at half the price, who you gonna call, the Chinese Government i dont think so we cant wait for wednesday night, steve thank you for that its going to be an interesting setup. Well talk to you later. All right thank you so much. All right as we head to break, shares of chipolte hitting an alltime high the stock has been an relative outperformer and has rallied 180 from the march lows thanks in large part to the online ordering platform the company also plans to expand the drive through concept at most future locations. Turn on my tv and boom, its got all my favorite shows right there. I wish my Trading Platform worked like that. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. Two traders share their top market dos and donts on tdirang nation more squawk on the street coming up. Ices. 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. In a highly capable lexus suv. At the golden opportunity sales event. Get zero percent financing on all 2020 lexus models. Experience amazing at your lexus dealer. The extra Unemployment Benefits the federal government is covering are set to expire this week. Steve liesman is taking a look at what that will main for the economy if it happens. Steve . Thanks, mike. Two opposing forecasts coming from the ending this week of the special 600 weekly benefit known as the federal pandemic unemployment compensation. Goldman sachs warns of lower gdp if its not extended, the Heritage Foundation said we could haver unemployment if it is they said the fact that some Small Businesses are competing with excessive Unemployment Benefits to get workers to come back is making it harder for them to stay afloat and recover. Thats leslie ford from the Heritage Foundation. Estimates are twothirds of workers receive more on unemployment than they do now working but 17. 5 Million People have come back to work while the benefit has been in place. Get rid of it . Not so fast. I was told over the weekend it would be a disaster not to continue the extra Unemployment Benefits we know people are spending the money and its prevented a larger collapse in the economy its a Public Health benefit that lets people stay home and healthy. Using spending of income data from Bank Accounts the Jpmorganchase Institute found higher unemployment than before the pandemic hit of the benefits they wrote our estimates suggest that expiration will result in large spending cuts with potentially negative effects on both households and Macro Economic activity negotiations beginning this week on the next bill and republicans seem against extending it. The house, its already passed a bill continuing the payment to january. Steve, if they extend that payroll tax cut, how would that impact the economy versus extending that 600 weekly check that americans would receive how does that kind of impact the rebound . So the payroll tax cut is controversial. It does put more money in the povkts of people working and those in favor of it say people work at home for somebody. Somebody works and somebody doesnt. That would help out a household. The knock against it is what i said people who arent working wont get it it has been remarkable how welltimed that benefit was, the 600 benefit and how it got into peoples pockets and people spent. And the retail numbers have been pretty good. And then theres fear if it goes well, were going to be back and start to have the regular lousy numbers we have during a recession when it comes to consumer spending. Steve, fund strat has a report out today one idea circulating they say in recent days is to lower the payment to 400 orless, but combine it with a second round of checks for those making less than 40 to 60. Theres a bunch of ways they can carve this yeah. There is if i might quote bob dylan from all along the watch tower, the hour is getting late its kind of weird that theyve waited until this point to some of the benefits mostly expire on saturday theres that idea and another idea which is in a schumer widen bill which i think deserves quite of scrutiny, the idea you could taylor the amount of benefit to the Unemployment Rate in the state it would come down by 100 with each point it comes down therefore, if there were jobs and people could find them, the benefit would come down and people would go take the jobs. Its like youre indexing the benefits, steve. Exactly all right steve, thank you on that note, congress and the white house working a new fiscal package this week as stimulus talks kick off we have the latest developments. Hey, kayla hi. At the white house today just moments ago kicked off a meeting between Republican Leaders from capitol hill, president trump, his treasury secretary, and the chief of staff they are plotting what the gops response to this next stimulus package will be so far the first public event on the president s schedule today doesnt happen until later this evening. Its unlikely well see any public lnlt of this meeting. Behind closed doors theyre hashing out what the republican response to what the democrats passed in may will be. The gop set out a couple of markers for its priorities so far. They want a trillion dollar package. They want less generous benefits for expanded unemployment. As you were discussing, they want a stricter means test for americans receiving stimulus checks so a lower income threshold for the checks they want any Business Aid Program to target hospitality, retail, restaurants, those hardhit businesses that are still seeing traffic well below prepandemic levels they want a payroll tax cut for companies and workers. Thats been a cant ask of president trump, and a liability shield that makes it difficult for businesses, schools, frontline workers to get sued for the spread of covid a draft of the liability proposel by leader mcconnells office says this it says defendants are only liable if they fail to make reasonable efforts to follow Public Health guidelines and committed an act of gross intelligence or intentional misconduct so very strict language. On fox news sunday, the president was asked if that shield and that payroll tax cut were deal breakers heres his response. Were going to see. But we do need protections businesses are going to get sued just because somebody walked in. Theyll sue a restaurant the guy is out of business both ends of pennsylvania avenue are racing against the clock. The Senate Begins its august work period on august 10th the last day that both chambers are in session is july 31st. Guys, back to you. Kayla, well watch it. Thin window. Take a break here. Dow is off session lows which was down 167 nasdaq is trading above the july 10th record close but still about 200 points shy of the intraday high, july 13th. Back in a moment experience the joy of a bigger world 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. 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. As coronavirus cases continue to rise, demand for air travel is at low levels. It comes at the worst time for the airlines phil is here to explain. Hey, phil. Take a look at the Airline Stocks today theyre down between 2, 2. 5 . These are lackluster numbers in terms of passenger travel. As we look at the numbers for last week, its a little hard to tell, but if you look to the right side of the chart, you can see its starting to plateau a bit. 4. 65 Million People were flying last week. Why does that matter its the first weekly passenger level drop since april this is not the time of year when passenger levels should be going down they should be going up. Air travel level down 73 on sunday compared to last year a couple stocks were watching this morning delta a little over 2200 of the delta pilots have opted to take early retirement this is part of the move that the airline has been making to become much smaller october 1st. Theyre not going to have the demand or fly as many planes and a similarsituation at southwes where 24 of the pilots have said they will either take an early retirement or a they will retirement or leave of absence so 1 out of every 4 pilots at southwest will not be plying come october 1st southwest reports earnings on thursday morning well be watching closely not only on staffing but where they stand in terms of cash flow there. Theyre in best position in terms of all the airlines when it comes to cash burn through the month of june. Bookings down and maybe some tough decisions here a miamibased Restaurant Owner will join us next on the challenges of keeping its doors open thats next. Now is the time to support the places you love. Spend 10 dollars or more at a participating Small Business and get 5 dollars back, up to 10 times with american express. Enroll now at shopsmall. Com. Florida covid numbers have been at least 10,000 a day, Indoor Dining was ordered to be closed and then was shortly rolled back. Nick sharp is the owner of threefold cafe in coral gables and miami. He joins us now on the path forward. This guidance left you confused. What has it done to the patrons at your restaurant have you seen a shift in demand for eating at restaurants . Definitely. Were lucky enough we have outdoor seating. So the original ordinance from the mayor closed indoor and Outdoor Dining he may have rolled that back to exclude Indoor Dining, and were lucky enough to have Outdoor Dining but when those statements come out and single out one or two industries, when he put the announcement out, it was rent and gym restaurants and gyms, and we saw almost an immediate drop in sales. What would it mean for restaurants to shut down entirely again, no outdoor seating, et cetera it would be diabolical very few restaurants can survive on takeout and delivery. Were also in a different situation than the first shutdown back at the end of march and april, there was a lot of support and positive sentiment and most restaurants had a lot of regulars coming out, purchasing takeout, delivery, tipping heavily to support the staff. A couple months later a lot of things have happened the sentiment now and the ability of people to support restaurants is nowhere near where it was back in march and april. So takeout and delivery, it will be unfortunately the deathna na for a lot of the Restaurant Industry your staff, are they concerned . Have they all come back to work . Not just the states orders but the drum beat of new cases and people who may those who have been tested or tested positive yeah. You have these balancing issues. The Public Health crisis and the economic crisis. Both have large elements of uncertainty. In florida, theres a few other issues with testing problems, large numbers of organizations that are all participating and quickly put together data systems and, you know, i think all of that uncertainty from the health side is causing anxiety for the general public, but also staff. Then from an economic side, its really tricky to navigate. The way communication is coming out makes it difficult were learning about ordinances that shut down our business by twitter, local city commissioners down here were not aware. None of the local city mayors were aware, it was a county order that came out before anybody knew about it. Thats one of the challenges, just the way people are finding out about information with such a very short lead time it makes it really difficult nick, i read you received ppp loans for all of your locations. How have you used that money and do you need more of it yeah. The Paycheck Protection Program was fantastic in terms of, you know, your two main overheads are rent and staff when those loans came out, they ordered us to keep all of our staff, keep them at normal pay rates and give people pretty much most hours, we were a little different than most restaurants in that during the shutdown we continued working. We pivoted to groceries, affordable family meals, set up a food bank, did a lot of charity drives, so we sort of got all of our staff together and kept them working. So the ppp was useful for us for that most of the restaurants i know, when the ppp loans came out, most restaurants got them in the second wave. Most brought all of their staff back and a lot of restaurants reopened once they got their ppp. That helped a lot covering everybodys labor, overhead for those couple of months the challenges with that is just the changing of rules. It kept changing and unfortunately for most restaurants your business, when we reopened down here, we only got to phase one, but we had 50 Indoor Dining for most restaurants. There wasnt the volume to warrant you having full staff back working unfortunately most restaurants used their ppp in the original eightweek guidance before it was extended to 24 weeks youre part of the reopening task force for coral gables, whats the debate like amidst Industry Leaders down there with regard to how to reopen, how to reopen safely . What are some key issues under discussion now the county follows the cdcs guidelines for reopening they issued a substantial reopening guideline. In total its about 200 pages long the restaurant section of that is about 20 pages long the way it worked is the count put out the ordinance, then all the cities within the county, which down here maybe about 34 different cities, as far as i know, each of them has a reopening task force so with two or three members of staff focused on that, those guidelines then tailoring them to their specific city. In the case of coral gables it included members of the city, other Community Organizations like the chamber of commerce, the Business Improvement district, as well as medical professionals and a wide range of different people from Different Industries people in office buildings, retail, restaurant all different sectors. We would have a weekly or biweekly call to go through those recommendations on the reopening. And so we have been doing that now for a couple of months, getting ready for the reopening, and also trying to set the guidelines for when we get to phase two hopefully in the future and then from a city level they can be the way it works, you can be more strict than the county, but you cant be less strict you have to take the countys ordinances as a baseline, if Center Cities have different issues, they can be more strict. Seemingly lots of layers when it comes to reopening and doing so safely and effectively for the businesses down there. Thank you for joining us thanks to you for the help this hour and to mike santoli. Welcome to squawk alley. We got covid news, vaccine data, stimulus negotiations, but it seems like mega caps are making a stand here this morning. Microsofts leading the dow. Amazon is up 4 . Ibm tonight along with the busy calendar of earnings in the next four days. Absolutely right. Im trying to take a step back further and look at whats happening more broadly in tech i see this dig