Transcripts For CNBC Squawk Box 20240712

Surged as lead by amazon well have more on that in a minute jim cramer said it feels insane. Im wrong to say that at the moment u. S. Equity futures at this hour show you how it stands. Well have another day in the green. Dow up 230 points. S p 500 up we should show you treasury yields now at. 0617. All i do is think about my 10year mortgage i dont have a 10year you have a 30year, which you regret i wish i had a fiveyear arm. You could still have a fiveyear arm. You are giving it to the man you are. Giving it to the suits. We are seeing a bit for bonds and equity even higher a reach for safety even though we have a risk on. The eu has reached a breakthrough deal agreeing to 857 billion Recovery Fund it will raise money by selling bonds collectively disbursed to the maybe countries hit the hardest that do not have to be repaid many countries including germany had long opposed also agreed to eu budget of 1 trillion beginning next year brining the total spending agreement upwards of 2 trillion we see across the board, german dax up 2 . The euro reached a fourmonth high mainly because this issue of common debt, there were some thoughts if a stimulus deal did not pass, that would throw into question the eu. Baby steps. How long have we heard there are a lot of problems and if you try to keep everyone together, if you dont have the fiscal authority, you try to keep everyone together. It is kind of a juryrigged system there if they could eventually get to the point where there is more unity. I dont know how you do that we have 50 states here we dont speak the same language in some of those states. Thats what i was going to say. We are starting to look like that. Fragmented. Im not going to mention any names. Im not saying like down south how do they speak up there in minnesota . And the dakotas you hear it too. There are some local ldialects here that we love. Lets talk amazon. Amazon is going to postpone prime day the twoday summer sales event told Third Party Sellers to hold the date analysts hiked the price target to 3,800. Bringing the market cap to 1. 59 trillion Ceo Jeff Bezos added an estimated 13 billion to his fortune. I think he gets 6. 5 but hes not happy. I dont think. Money does not make you happy. We know this do we not . We are happy and we dont have a not. We have plenty makes you happier not compared to bezos we are like a little flea. Everybody is except maybe musk do you remember maybe nine years ago. Early on, we used to always talk to analysts and investors about the law of big numbers and we asked if we could ever get to a trillion you talked about it. Here we are. We look around and it is not just one or two. Weve got a bunch. We had to look up whats next do you remember . Quadrillion. I think. Yes this next company, we are watching shares of tesla that stock rising 9. 5 elon musks personal wealth jumping. Prompting this tweet saying, quote, moves like we are seeing in microsoft, tesla and amazon are truly insane and unlike any i have ever seen in my life. Up 4 . Insane, guys what do you think . Pretty frothy s p could be around the corner 4. 5 trillion, maybe this is not frothy maybe this is the chase in advance of inclusion the underlying business i understand the technical dynamics it may be a great business is that great of business . Everybody . You start doing price to sales then you are like, look, it is different this time. Youve got low Interest Rates, right melissa, you are going to talk ibm i dont know if tesla will get to a trillion. One company will not ever get to a trillion ever. That is damning do you think. Unless a country does a reverse dollar split, there is no way. Probably not. We could get one for ten. You are probably going to be right. For now, ibm shares are reportedly higher. Earnings and revenue beat expectations the ceo said likely to be longer recover ray than anticipated in march the bright spot here is things in which ibm showed in the turn around in the cloud. That part of the business that did see the drag from the pandemic is services those revenues down. Overall up. 6 for a good start from this ceo who took the helm in april ive got issues putting on a laptop and all this stuff here, guys i was going to look up a market cap. That is like 100 billion plus can you do that for me im getting it for you right now. We are at 112 billion 112. More than ge. Coming up, President Trump shifting his message on masks and planning a more hands on approach to pandemic messaging the task force is back stock futures. People here urged me to say they are basically flat unless we are down 200 then wed be crashing a look at the biggest gainers on the s p 500. Well be right back. 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. An update now, reporting the smallest increase in coronavirus cases and deaths in a week monitoring to see if the trend begins to show up in the sevenday averages President Trump planning a more hands on approach. He said yesterday, hell get involved and resume doing briefings. The once daily Task Force Briefings had been scrapped. Reporting that decision came that internal polling that the white house response and messaging were not breaking through. President trump tweeted a picture of him selfwearing a mask yesterday with a message that said many people said it is patriotic to wear a face mask when you cant social zant nobody is more patriotic than me, your favorite president. Quest die nagnostics is warg that this fall, it has to cope with the demand of the flu season a resurgence in the flu season would be a problem the companys executiveVice President said no way capacity will double in the next few months and other solutions need to be found to detect the condition other than the nasal swap lets welcome the senior director of systems wide pathogens at new york City Hospital the lead for new york test and trace and featured in the netflix docu series pandemic it is madad. Correct how are you doing . Ive got some issues i would not have messed it up. Lets start with the news that came yesterday i guess there were developments on the vaccine front from three different data points. Phaser, oxford and one being developed in china all positive but none conclusivelinessly something we can say is going to work for sure thats correct. Right now, they are showing promising results and that the highest response is being shown with a booster shot showing we need even two shots to get an immune response. It is positive news and something to be expected on trials that are being heavily scrutinized. The issue we are having is the whole manufacturing of the vaccines and distributions and on top of that, so many other challenges they may require a booster shot and original shot, what is going to be the whole supply chain aspect these are some aspects that need to be looked at. Some of the leaders are beginning to pool rele agents and start manufacturing in lue of even late staged Clinical Trials it would be like to know whether your immunity a year from now would be demonstrated. There is still a lot you dont know we dont know necessarily the side effects for older patients and whether their immune system response is the same as people being tested right now that is right so if you are looking at volunteers and part of the studies, they are under the age of 54 and have no Underlying Health conditions. As you mention, there is a lot we dont know. We dont know the overall effect in hes highrisk areas. We dont know how long the immunity will last for if we look at sars that immunity lasted for a couple of years. We dont know that for the virus we are currently seeing. There is still a lot of science we dont know. This is something where time will tell as the months or years progress that is probably not going to cause whole sterl immunity we dont know whether it is 50, 70, 80 . Still working on a cure we dont have any updates on that you are an expert in this field. Are there things moving on that will tackle the virus head on . Yes, we are making strides. I think well probably have some better and more effective treatments made available sometime later this year perhaps even before a vaccine being made available, there are different types of interventions and different stages of trials but certainly seems very promising right now. You are as a doctor and we know what a doctors mindset is in terms of Opening Schools. Health as a priority others say the economy, there are effects of having things closed down for people as well i understand you are going to er on the side of being safe. At this point, you are not sure of Opening Schools in hot spots even though it is something we have to do because parents have to go to work . Yes Opening School is very important. Not just academic but socialization and things schools provide and for working parents, sending children to school and be productive is important to the economy. You have to look at the safety of our children and teachers even though there is a lot we still dont know about covid19, we have learned a lot since january. While children are less likely to become ill, they can still spread the disease to teachers and elderly and parents. The name of the game is not opening up but to safely keep schools open you can open up but if you have an outbreak, what will happen. And looking to quarantine individuals that may have been exposed and need to have backup plans in place it is more complicated than just opening up schools we need to have a good process in place for the academic institutions time is of the essence if we want to open up schools in august and september, the time to prepare is now. When i say prepare, we need to make sure we have a lot of virus circulating in that community. You need to have cases come down and overall infections come down right now is the time to do it this is all going to take time by the time the Academic School year does roll out you need to have cases at low enough levels you will do Contract Tracing we need to make sure we are focusing on that right now in order to open up schools doctor, thank you well see you soon to fill us in on all of these developments thank you great conversation, joe when we come back, the nfl releasing pandemic protocols for the restart. How often the league will be testing players. When we come back, take a look at the bgeigst premarket gainers when we come back. After this usaa is made for whats next no matter what challenges life throws at you, were always here to help with Fast Response and Great Service and it doesnt stop there were also here to help look ahead thats why were helping members catch up by spreading any missed usaa insurance payments over the next twelve months so you can keep more cash in your pockets for when it matters most and thats just one of the many ways were here to help the military Community Find out more at usaa. Com as pro football camps are set to begin, players have agreed to pandemic protocols just a day after some highprofile players called out the legion twitter calling for players, coaches and staffers to register two negative tests before they can be admitted to facili facilities and then tested daily. If the leaguewide testing data stays low, that frequency will belowered. A lot of what was said yesterday was that these players Russell Wilson and others said we have to play. Just for the Mental Health of the country. We all want to do things quickly and be able to get back to something normal you dont want to rush into something rashly. I want it to happen. I dont mind those cardboard fans they look cool better than empty seats. And i dont think id mind preseason. Would you watch a preseason game it is like what are we doing this should be permanent to get rid of the stupid preseason. The testing itself is supposed to cost 75 million joe, you are doing that story about Quest Diagnostics being overrun by the back log. You got to think all of these unions and sport associations. Colleges the demand for testing in the fall will be off the charts. All of that with flu season and the need to test people in general getting those test results back when the nfl has under 24 hours 75 million is a lot. Patrick mahones contract was 400 so keep it in perspective are these tests taking away tests that would otherwise available to the public . People doing millions and millions of tests, so i dont know is it an essential business . No but when you talk about College Sports think about the monetary hit more than just everybody wants to go out and play games and have fun you can see why people want to get back to it youve got more stuff going on. It is tuesday, ive been working on a column. Weve been talking on this show they are speaking out in the nfl, it is either black lives matter or lgbtq or companies that are doing it more and more. I looked back to see what kind of political donations this is share holder money interestingly, corporate money the largest giver of others at the state level throughout the country not the largest givers but corporations uniquely, they give as you might imagine, more to republicans and uniquely to this circumstance, they are often times at odds with the positions they are now taking on publicly there are a lot of questions they are taking on from public stances. When you go back and look at a walmart and talk about employees as heroes when their employees are putting their health at risk and talking about at t which has lots of policies about lbgt rights and trying to foster a more better environment was giving plan to the Republican Governors Association which elected the bathroom bill which was overturned the center for public accountability delved into these numbers. They are all public and you have to go to look at the 527 to the different politicians. The company can say we didnt take a policy position all we did was give to these groups and they gave the money out. I think there is a question in this world whether that is a tenable position they do it because they want to have a relationship with these people your whole perspective. What are these Companies Giving to these nasty republicans you told me bays do better with higher taxes why are they giving to the gop in the first place i would make the argument if you are a corporate leader that if you are a facebook for example and you have 47 attorney generals, giving to the attorney general Association Republican and democrat it may make sense all im saying, when you give money to these, in this day and age, it is hard to stand back and say, i dont know what they are doing over here. I havent needled you in a while. We are not going to talk about tenant getting delayed its a spy thriller or about george tenant or health care well never know. I dont think it is about either of course it is not. Christopher nolan liked that name my son found out instantly that it was delayed hes been planning to see it the big reopening of the movie industry is not going to happen. Well mulan is still on the schedule well talk about Political Risk we are just 105 day as way from the november election. S p is positive on the year and looking to open by about a percent on the board looking at yesterdays s p 500 winners and losers experience the adventure of a bigger world 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. On all 2020 lexus models. 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. Good morning u. S. Equity futures sharply higher big moves yesterday. Really big sort of a flat dow up another 100 this morning. Big gains. S p indicated up about 25. A tax proposal on billionaires getting some attention why not . Not going to hurt me this is part of a campaign called make billionaires pay proposing a marktomark tax state billionaires with assets would pay any gain in asset values during the year even if they did not sell. For instance, Mike Bloombergs stake increased by 5 billion, he would pay a tax over 400 million. The tax would raise 5. 5 billion for a new Unemployment Insurance fund aoc told Governor Cuomo, stop protecting billionaires with a state with a total network of 600 billion new york state has a budget deficit of about 13 billion Governor Cuomo saying the tax would cause them to move to lower tax states the partnership for new york city said at least 5 of new yorks wealthy have already left new york and if this pattern holds, the tax losses facing the state and city will be extended. Somebody at some point is going to have to pay for this. They are going to look to the wealthy at the federal or now the state level. What happens in years when billionaires wealth goes down do they get a tax loss that is a question. This is a proposal similar to tht forward last year they would allow the loss to be carried forward indefinitely for years and years until you used it up. It does work both ways the valuation for Companies Like bloomberg, they all have private companies. If your wealth is tied up in a private company, you dont have 400, 500 million in cash to pay. Thank you less than four months left to the election investors are looking at the possible risks to the market economist on the policy Research Team and head of policy research and managing director at research partners. Don, ill start with you you say the most likely scenario not only most likely but the most damaging for the markets would be a biden win and democratic sweep thats right. That is the best casein investors should expect. Now that bidens agenda is growing. Hes looking at about 4 trillion in new taxes. The question is does he double down and be more aggressive. What parts will he put on the back burner. Hes been up front seeking a bold recovery package which will include tax increases and his, quote, made in america agenda with a mix of a policy to help booey the recovery dohow did this outlook chang over the past few weeks or month, a lot can change. When did that scenario become the most likely . In the midst of the handling of the coronavirus and the protests, i think trumps Approval Rating has sharply dropped, so have his reelection odds that was the turning point on this election. Goldman sachs has a note out. Because of all of the mail inns, the actual results are on hold for a while. I would argue there are a couple of risks. First, not so much who wins but just the outcome not being known on the election day. The possibility of mail in voting could make bush v gore look like childs play. There is going to be that risk then you have the policy risk, which i think we are hearing about on the tax increases this being proposed is about 1. 5 gdp for 2021. Thats about the highest since 1968 which was about 1. 7 gdp. Most of those increases were relatively small it directly impacts profits and the return on stocks one idea is this unrealized Capital Gains tax. There is a lot of work being done behind the scenes and that would overall reduce equity values and then third, youll have Wealth Managers saying you should is sell your stocks ahead of the 2021. Any time we see an election, well figure out the opportunity. The market saying biden will be better on international relations. You are seeing the dollar fall and nonu. S. Stocks and technology filling up because those are effected by the trade policy that would be reversed. The s p 500 moved into positive territory for the year. Factoring in the shortterm risk of the unknown or slightly longer term risk of the policy changes that could enysue with the democratic sweep Market Participants are not convinced that joe biden would raise taxes with a soft economy. He came on this show and told them they would do it. Second is that 90 days before the election is when the market starts to focus on this election youll have the Vice President pick and two elections when theyll put book ends around the outcome. The s p 500 goes up generally when the incumbent is going to win and sells off when the option party wins. It looks like you are going to get a biden win or a democratic sweep, youll start to see an increased focus on taxes these Tech Companies are going up but the companies that have moved up the tax reform, theyve been significantly underperforming. It is starting to price in, just not fully at that point yet. Thank you we appreciate it coming up, companies and employees are navigating their new normal well talk the adjustments being made and the big changes thats straight ahead. Waiting Second Quarter results from cocacola well have those numbers you can watch or listen live any time from the cnbc app welcome back to squawk box. When we return, dealing with the change in the covid era. Our next guest has some tips for companies and employees dealing with massive upheaval. And tesla to market perform. The same analyst raised the target 0 t50inhe span of one week well talk about it when we return welcome back to squawk box. In this covid19 era companies, executives and employees are trying to navigate a lot of change from the economic crisis this has become to the Health Crisis of remote work and everything in between. Our next guest is author of life is in the transitions. Its a fascinating book. I dont know if you were anticipating covid, but life is in the transitions there are so many transitions taking place, bruce, right now, between remote work, figuring out what the future holds, people losing their jobs and having to make the transitions im curious what the biggest lesson you discovered in your journey looking at transitions. Well, thank you for inviting me, andrew, and everyone else. We are in what i call a life quake, which is a massive period of change which has aftershocks. I went through a life quake. I had cancer my familys real estate business was hit hard. My dad tried to take his own life there wasnt in one place, i couldnt find a book that helped you when you get hit by life in all of these Different Directions i went out seeking wisdom from others i crisscrossed the country collecting hundreds of stories from all 50 states and with a team of 12 people i spent a year combing through the stories looking for patterns that could help all of us what i learned is the linear life of predictable stages that we were promised is gone its been replaced by linear life with many more transitions in it. Ive been working on this. It arrives in this moment when all of us, every ceo, every executive, every employee is dealing with the transition. The answer to your question is the most important thing is learning to navigate these periods, learning to master transitions is the most essential skill that each of us needs right now. Right but none of us know whether we have this skill or not i think im doing okay but maybe im not. Give us tips and tricks for those of us trying to navigate this. So what i would say to executives from the c suite all the way down is that your bottom line is going to depend not just on how you navigate the transition this summer but the one coming next fall and next year and after that. Since we dont know what they are, the most essential thing we can do is make sure all of your employees have the skill set to master transitions whatever they are. Heres the thing, andrew there hasnt been a major book on transition in 40 years. My life likes to know i have hard knowledge about soft skills were here in this moment where soft skills are a lot more important. For example, when you look at enough transitions as i have done, they turn out to have a structure. There are three phases to transition theres the long goodbye when you sort of say goodbye to the way things used to be. Theres a messy middle where you shed certain habits and experiment with new ones and theres the new beginning. Within that there are seven tools that we can use to make sure this goes more effectively. So what i would say to executives, to anybody listening out there is you study leadership, you study decision making, you study communication. How much time are you thinking about transitions . What ive tried to do here is gather in one place not just a history of transitions and why the old model has become outdated but really lay out a new model based on data that can help all of us navigate the situation right now. So but theres a lot of us who are stuck in our ways and maybe were all living in the messy middle, i dont know yeah. You know, how do for someone whos stuck in their ways, how do you become how do you learn to be more adaptable . Is that a skill, a talent that you can actually learn absolutely. I mean, we study productivity, we study how to make meetings more efficiently you can learn about change a lot of this i watch a lot of cnbc and weve been talking in the last six months about a v reco recovery versus a u recovery weve become attached to an oldfashioned way for change we dont have a language for it. Thats why people are not issuing guidances. For many years we talked about changes are cyclical because thats what farming was. Then we talked about linear because thats what the industrial model was we are in a post Industrial Age and we need a post Industrial Way of talking about change. That begins by saying that this is the change is going to happen when we least expect it and push us in ways that we dont anticipate so what can you do is that you can learn the skills we can make sure that each of us understands that there is a method here. There are habits and take aways and tools that you can learn and we all need to be masters of transitions. Id like to see it like a resume item i have an mba, im good at marketing, im good at transitions. Thats how we have to think about the skill. Bruce, the book is called life in transitions. Its a good read wish you lots of luck with it. Thank you so very, very muchfo joining us again thanks andrew, cocacola results just crossing the tape technical earnings coming in, adjusted 42 cents a share. Thats 2 cents above estimates revenue in line with wall street forecasts. 7. 2 billion well get full details of the quarter coming up at the top of the hour they lost share in the nonalcoholic ready to drink category more details coke shares down by 1 4 percent now. Coming up, the details on coke and shark tanks one and only kevin oleary with us check out the retail stocks, amazon announcing prime day has been delayed but did not set a new date that stock is up 1. 35 yesterday amazon added an entire boeing to the market cap take a look at shares of alibaba getting a boost from the monster ipo. A positive gains with the s p 500 positive for the year. Youre watching quk xn bcsawbo o 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. You should be mad they gave this guy a promotion. You should be mad at forced camaraderie. 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. Hey frank, our workers comp insurance is expiring, should we just renew it . Yeah, sure. Hey there, Small Business owner. Pie insurance here with some sweet advice to stop you from overpaying on workers comp. Try pie instead and save up to 30 . Thirty percent . Really . Get a quote in 3 minutes at easyaspie. Com. Wow, that is easy. So, need another reminder . No, no no, im good. Uh, yes please. Oh. Ho ho ho, yeah need workers comp insurance . Get a quote in 3 minutes at easyaspie. Com. Big tech booming amazon dumping 8 billion and the names you should be watching straight ahead. Congress is back to debating the next round of stimulus we speak to shark tanks kevin oleary about getting america back to work a break down of broader markets and where you should be putting money to work right now. The second hour of squawk box begins right now. Good morning and welcome back to squawk box right here on cnbc. Im Andrew Ross Sorkin along with joe kernen and melissa lee. Becky is off today take a look at u. S. Equity futures after a big green day. Looks like were going to have another one. Nasdaq 86 points higher, dow up 224 points and s p up 22 points. Breaking news in the past few minutes. Melissa had it coke results are out company reporting a quarterly profit of 42 Cents Per Share beating estimates by 2 cents revenue in line. Want to get over to sara eisen who spoke to the companys ceo and joins us with the highlights sara reporter good morning, andrew just to put some perspective on the numbers you just read. The 7. 22 billion in sales was a 28 drop we went back to records at least since 1990 coke has never seen a revenue drop like that the earnings drop down 32 organic revenues which is a key metric, down more than 20 26 . Clearly the market had the expectations low and analysts were pretty much ballpark correct in expecting it as the share price is higher. What drove the quarter i just talked to ceo james quincey. Two key factors and theyre related which drove weakness pretty much across the board number one, countries in lockdown indicated which countries did worse than others. Europe was particularly hard hit. And their away from Home Business remember, 50 of cocacolas business happens outside the home restaurants, stadiums, concerts. Coke is way more exposed than its rival pepsi and that is reflected in the sales weakness. Volume trends according to quincy have sequentially improved across the quarter as countries started opening up in july, for instance, the sales were down only mid Single Digits relative to double digits earlier in the quarter clearly he said its Getting Better they are seeing the Second Quarter as the most challenging part of the year plenty of uncertainty ahead. What else can i tell you as far as quincy . As far as the stockup goes, people going to the grocery and buying, once people figured out the supply chains werent going to be strained and there werent going to be shortages, those softened a lot and came back to normal as far as china, theyve got the International Picture here he said chinese businesses has that bounce back he said we grew in china, however, its not growing as fast as it was growing before the crisis he attributes that to the fact that only 85 of their eating and drinking establishments are actually open. Is that a litmus test for other countries around the world he said cant tell whether thats for sure. As far as the u. S. Business, it was down everything was down. But was not as down as some of the other countries. Thats because partially the u. S. Didnt fully lock down. The fast food businesses stayed open for drive through and take away and that certainly helped their beverages. Theyre very exposed there in terms of the strategy and how hes thinking about the business given all of this weakness making some adjustments. Quincey is going to pull out of brands that arent working he called them the zombie skus and refocus, reallocate people did not tell me whether specifically there would be layoffs but did say it would be realistic to expect that he would be shifting people around as they focused on the brands that are working they see a lot of these trends from the consumer, guys, accelerating buying online is an obvious one. Coke zero, which had been doing really well, zero sugar, still growing year to date though everything is affected by lockdowns. Diet coke had a decent quarter because of its prevalence in the grocery store. Sara overall a rough patch hey, sara, one of the questions i had. I dont know if you spoke to this if things started to look better in the United States this past month or two now, is he anticipating that things are still going to look better august, september, october given that we have had obviously the reopenings and now were having some reclosings, seeing the experience in hong kong and elsewhere . How hes gauging that . Reporter well, when i ask anything about the future he said, i wish i knew because its impossible to know it follows the virus trajectories and it follows the pace of lockdown the u. S. Is looking better and he is in the release clearly saying the Second Quarter is going to be the most challenging. So i would think you would expect it to get better, but that is assuming we continue the pace of the reopening. Its a question of whats happening in places like texas, florida, arizona and whether theres any meaningful shift and whether things are locking down again in terms of the restaurants. Have not seen that widespread lockdown that we saw in this country in april ill get to ask him all of this. We have mr. Quincey at 10 a. M. Squawk on the street. Be there well get a lot more granular in terms of what the consumer is doing, what hes seeing and how hes adjusting the business. The soda business, we forget how important that is in restaurants. Is that coming back . Mcdonalds has drive through that must have bounced a little bit. Did he mention that . Well, he mentioned that the u. S. Was a relative outperformer because of that, because a lot of the Fast Food Stores like mcdonalds, which is their biggest, were able to stay open in other ways. They didnt fully lock down like we saw in other parts of the world. Like china, stark difference completely shut down u. S. Didnt do that. That was a relative bright spot, i guess, but overall the lockdowns were pretty pervasive and it led to double digit sales declines until you see wide reopening and people coming back, its impossible this is reopening stock. Its half the business. Sarah, i have a lot of ground beef in the freezer, you know, because i didnt think about the supply chain the supply chain was fine. How long does the ground beef last frozen . Can you use that in a year a long time. Really . Its not like huh reporter im not an expert, but i, too, have a lot of ground beef in the freezer. Frozen. Reporter i keep it for a very long time until it starts getting icicles, i think. Weve never not been able to get ground beef. I have so much and its you know, so i regret and im going to eat it. I dont care what it tastes like because i paid for it. Reporter although were paying a lot more foreground beef its probably not a bad trade. Thats right. Reporter if you look at the c i data, food prices are growing double digits and beef is the most impacted as a cincinnati person you know what else i have a lot of. Reporter skyline chili. Montgomery. Montgomery and ribs. Bij gee. Reporter thats the difference between you and i i have graders ice cream. You can get both in the same care package online. Thank you, sara. Well always have cincinnati just like bogey, theyll always have paris earnings and revenue beat expectations but revenue declined for the Second Straight Quarter as the pandemic took a toll ibm said many clients continued to delay projects and purchases. Its likely the economic recovery will be longer. Ibm did not update. Ground beef, dubovitskiy t de halflife . If its vacuum sealed, the freezer life is longer than if its cling wrap sealed. Straight from the do you have to reduce the air exposure because the air exposure is what causes the freezer burn. I knew youd know something about it. You suck the air out, it lasts longer. I knew youd know something about this. I think were going to talk to someone from harvard later today. Did you see that in the guest list yes yes. School of Public Health, michelle williams. Yes. Good catch. Good catch all right. What . I remembered. No, for a i read the rundown, joe i thought i blindsided you. I was worried. You got up early at 4 a. M. And you were saying its nice because its not hot i read your tweet. Thats right. 69 degrees at 4 a. M. Coolest part of the day. Perfect best part of the day youve got something, joe. I mean, its a maidsing. It is lets talk about earnings season, the impact on the markets. Joining us now sarat sethi and cnbc contributor and dan suzuki. Deputy chief advisor gentlemen, welcome to you both sarat, ill start with you, though youre not a deputy jim cramer commented on the run in tesla yesterday saying that it was insane, that the run in tech in general has been really unbelievable i mean, tesla yesterday added the market cap equivalent of a ford amazon added the market cap equivalent of a boeing, sarat. Im wondering if you think the run weve seen of the big tech cap stocks is, in fact, insane i would i would use that word i mean, i think its getting a little out of control here when you look every day yeah, we had a pull back last week, but you take the faangs, they make up 24 of the s p. They trade at over 45 earnings. Capital coming to the market seems to flow in that one area its not like the other areas, industrial cyclicals are doing well they trade at discounts. Cyclicals like honey well trading below the market pe. What youre seeing is such a bifurcation of the market. What makes us scared is that when the bubble does pop, the capital might flow directly out of the market for a while. We are still staying invested in our ali cases and when you haefr from companies talking, that will given us what we think are good opportunities to high quality companies. Carter worth had a column out. He said the s p 500 finished half a percent higher and 8 finished lower thats only happened one time in history. February 23rd, 2000. Within a month of that the s p 500 lost hundreds of points. The point that sarats making in terms of that bubble collapsing, do you think that we are at that point now given the characteristics of the market . I think its really hard to say. I honestly dont think anybody knows that were at that point i think sarat is right, all of the points are pretty accurate whats happening is the sentiment with these types of stock, anything to do with growth and disruption is rising. Theres not necessarily an issue with that on a stockbystock basis. If you take the right company, some are growing into winters. What happens when sentiment builds and becomes widespread is they all get priced to become widespread one in every ten of those high flying expensive growth stock turns out to be a winner the others dont boost their multiple or they go away altogether thats the problem when we get to this point in the cycle where sentiment gets frothy, that causes eventually a lot of pain. Is this the right time for that to happen . I think ultimately it will come down to profits and i think the profits for these Companies Still continues to do well that argues that there may be some more momentum, more move for the profitability. I wouldnt be buying into that trend. You Like Health Care . You like some of the more cyclical areas, dan . Yeah. Weve been talking for a while we try to have an extreme balance in the portfolio, more balance than weve ever had. Thats to represent the huge range in uncertainty in the outcomes that will happen in the next six months or so. We do like the cyclical numbers that are well positioned which is global, small caps, energy materials, transports and we have 8 of our portfolios in gold and we have an overlay of quality. I think having that bar bell, that makes a lot of sense. Sarat, i cant talk individual stocks with the deputy over there so ill talk them with you. Amazon yesterday, we had two wall street firms come out with 3800 price targets. 3800 price targets on amazon. We had ibms earnings after the bell which indicate the start of a recovery perhaps it started the turn around over at ibm would you be more inclined to invest today in an ibm or an amazon so i own both of those and i would tell you my next dollar would go to ibm. Look, ibms a restructuring story. You have a new ceo in there. You have the Cloud Business that grew 30 we are looking for a transformation of the software Cloud Business to overtake the hardware business. Thats where youll get the multiple expang. The multiple expansion that microsoft and cisco saw. Im not saying youre going to see that but you have a Company Restructuring and looking at totally different areas. Amazon i own if its at a big position in declines, i will cut it back i still think that has room to grow the other side is when you look at where you want to be invested, if you barbell it, you get cyclicals, you get industrials, you get growth. You Want Companies that are not going to be sensitive to the economy. Companies that will grow because things happen naturally kind of like a blackstone where assets under management keep on increasing if you want to play longer term, infrastructure both parties are going to spend money on infrastructure. There are areas there that are not necessarily amazon microsofts of the world you want to be in other areas as well. All right thank you, sarat and dan we appreciate it. Thank you coming up, the afore mentioned dean of harvards p. H. Chens school of Public Health on the reopening of college cam puts in the face of the pandemic check out the shares of tapestry the Company Chair has resigned for personal reasons the company has launched a search for a permanent replacement right away well be right back. Its easy to get lost in the economic uncertainty. The volatility. The ambiguity. This moment calls for more. And Northern Trust delivers more. With specialized expertise. Proven strategies rooted in data and analytics. And insights borne from over 130 years of successfully navigating economic turbulence. Giving you new clarity. Inspiring confidence. And helping you uncover new paths forward. Northern trust. Wealth management. Welcome to camp tonsafun on xfinity its summer camp, but in your living room. Learn how to draw with a minions expert. How to build an indoor Obstacle Course plus. Whatever shes doing. And me, jade cattapreta. The host of es the soup camp tonsafun. Its like summer camp, but minus the poison ivy. Unless you own poison ivy. In which case, why . Just say summer camp into your xfinity voice remote to join. By participating in the 2020 census, you can make sure that federal funding reaches your community for schools, hospitals, libraries, and other Public Services and that your district is represented in congress. The census is safe and confidential, and its critical that you participate. When youre counted, your community is accounted for. For more information, visit getcounted. Com, and to participate, go to census. Gov. Welcome back to squawk box this morning floridas Largest Teachers Union suing to keep schools closed this fall welcome michelle williams, dean of harvards t. H. Chens school of Public Health good morning, thank you for joining us this morning. Good morning. Thank you. So were all trying to figure out how to reopen and how to get back to school let me ask you this. I think the Biggest Issue on the schools front, which obviously has a huge economic impact, is how people feel not necessarily about the odds of children necessarily getting sick themselves but to the extent that theyre spreaders we saw this study over the weekend and we talked to dr. Scott gottleib about it in south korea. 65,000 people they studied that showed kids over the age of 10 could spread it. It seemed to be inconclusive or maybe, i dont know, you might have a different view about under 10 whats your personal position on this issue now that youve been studying it and looking at it so far . Thank you so much for that question you know, the thing about covid19 is that it has really made it very clear that we are in the situation where science is important and skins were learning about this virus every single day heres the deal. We are learning that transmission is very likely to be about the same for children between the ages of 10 and 19 as transmission from adults to adults were dealing with an Infectious Disease and here we have to be considering the basic factors of how do we break humantohuman transition Opening Schools is going to require us to do the very best possible to protect children, students, students and adults, family members and teachers. And its going to require our following the science and updating what we do in practicing safe measures as we open schools and keep them open based on science just to be clear though, you would open schools you cant have one basic answer across the country because we have so much variability in Community Spread. You know, in new york state where transmission has been broken because of the implementation of Public Health practices, you could safely open schools. In places where the Positivity Rate for covid is less than 5 , there are protocols that we could put into place that could safely open schools with the right social distancing, mask wearing and the proper hygiene in places where the population, the Community Spread is upwards of 25 , i would basically say do everything necessary to bring the Community Spread down. Allow that spread to go down and start to safely position students for reengaging in learning with unlined learning until the Positivity Rate comes down to 5 this isnt rocket science. Michelle, this is the governor of missouri, mike parsons. This is what he said just yesterday to st. Louis post dispatch. He said these kids have to get back to school if they do get covid19, which they will, he says, they will when they go to school, that theyre going to get it, theyre not going to go to hospitals, he says theyre going to go home and theyre going to get over it is that the right position to take no, its not the right position, and i think the issue here, and we all have to understand this, is the science tells us that the likelihood of transmission from person to person begins with individuals not having social distancing kids do transmit the disease this is not the kind of disease where its only about the individual thats positive it is about breaking the cycle of transmission to vulnerable individuals. So i think the governor is missing the point, that theres a shared responsibility here for us to practice Public Health measures that would break the transmission of the disease to the more Vulnerable People we have 141,000 people who have died from this disease the transmission rates are high in certain places where we have to protect the vulnerable, those with preexisting conditions and those who are at high risk, older, the elderly right so, michellmichelle, i think th question, were on cnbc, we should talk about Business Reopening businesses. Yes. What businesses should be reopened and what shouldnt, but trying to recognize or understand to the extent theres a light at the end of the tunnel, are we talking about 12 months from now . Are we talking about longer . Are we talking about less time in terms of either vaccines or therapeutics that are going to be Game Changers so we wont be having the same conversation then thank you for that. You know, this is really important, and one of the things that we at the Harvard School of Public Health is doing is trying to position ceos and leaders to have access to the best Public Health knowledge that is available so that they can integrate the Public Health framing and Public Health principles in designing a reopening plan and ensuring that when those plans are implemented, were not going through a cycle of opening and closing again because of surges. Its important that we practice the best possible Public Health response to encourage the consumers but also employees, that the state of the art Public Health protocols are in place to protect them in the workplace and in the commercial space. We cant again afford to have a complete lockdown of our Economic Activities and system it is a threat to the health of our society, our Economic Health the carnage that we saw happen at the outset of this pandemic, the economic and clinical carnage can be prevented and so what we want to do and what we are doing at the Harvard Chan School of Public Health is to make available the best Public Health practices how to do exposure and risk assessment, how to mitigate Healthy Workplaces and spaces, and how to prepare and position to prevent another crisis like this that brings us down to our knees in the space of our Economic Health and wellness we cant afford to have our bottom lines hit again. Michelle, we very much appreciate your perspective and your insight on all of these issues and we hope you come on back as we monitor the progress hopefully of the situation that were living through thank you so very much thank you pleasure to be with you. You bet joe, over to you. Coming up, shark tank investor kevin oleary on the importance of the nations shawl businesses in getting americans back to work and then later tech stocks on a tear with apple, microsoft, amazon, google, facebook all leading the way but are there other areas in tech that could be ready to see a move maybe they havent moved quite as much. We get some ideas. Squawk box is coming right back w anyin the s p 500,panies 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. Still to come on squawk box, shark tank investor kevin oleary joins us after this break tech investors adding after a strong day from amazon, microsoft, facebook and tesla. Well find out if there are names flying under the radar that you should be investing in right now. Check out futures at this hour nasdaq looking to advance even more beyond the record close yesterday up 104 and s p indicated to add 27 at the on. Pe youre watching squawk box. Be right back. D a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Im good at my condo. Well planned, well invested, well protected. Voya. Be confident to and through retirement. Welcome back to squawk box the 600 jobless benefit is going to expire and its used by more than 25 million americans Steve Liesman joins us now with a look at what the studies say about getting back to work steve . Reporter andrew, there are numerous anecdotes from business owners, that theyve had trouble getting employees to return to work because of that current 600 added federal unemployment benefit. Even the feds recent beige book noted, quote, contacts in nearly every district noted difficulty in bringing back workers because of health and safety concerns, Child Care Needs and, wait for it, generous Unemployment Insurance benefits indeed, a paper from the National Bureau of economic researched, quote, it may hamper Efficient Labor reallocation both now and especially during an eventual recovery the paper found 2 3 receiving benefits equal to or greater than their working wages, but theres no evidence to date that the 600 has kept a large number of americans on the sidelines. Indeed historic 7. 5 million americans have come back to work over the past two months we took a look at this the five states with the biggest drops in the Unemployment Rate may through june led by nevada, hawaii,michigan where massive numbers of people got unemployment benefits. A lot came back to work including kentucky and oklahoma where the extra benefit is way above the average salary in the state. The only actual study i know of to date of Actual Experience finds that the benefit is not keeping people on the sidelines. Ernie tedeschi said we find no relationship between the federal public Unemployment Compensation generosity and job finding or leaving in may or june and congress should be cautious about letting fears of over supply labor support distort or dominate the return in the near term businesses are having trouble getting workers to come back, but theres so much going on in the economy, openings, closings, reopenings, closings, fear of the virus and troubles that the extra benefit is only a small driver in the job market, at least right now, joe. Steve, stick around joining us now, kevin oleary, shark tank cohost o shares etf you heard steves report who knows better than you about trying to accomplish this as quickly as we can, as effectively as we can. What do you think . You know, i think people are going to read some pretty negative aspects to the job numbers over the next few quarters, but it doesnt really reflect whats occurring in the real economy i will a give you an example theres an industry, the Wine Industry im involved in that im an investor. Think of the restaurants, bars, cruise ships, airlines the majority of wine was consumed in the Tourism Industry peoples propensity to drink wine hasnt changed at all the entire industry had to pivot to figure out how to sell it directly to customers. Youre allowed to do that in 41 states in america. We have hired thousands of people now to create new digital warehousing, pick and pack weve gone online. Weve bought licenses from all of these Tech Companies that people are wondering why are they valued so highly. Ill tell you why, theyre empowering a new america 2. 0, digitized america. We are now shipping 39 cases of wine in a way that weve never done before. Prepandemic the entire industry was 6 direct to consumer. Now it is 24 . We have found a way around the problem. We are hiring thousands of people doing this. These are high paying jobs, designers, web designers, individual okay gra 49ers, editors. Photographers, we have to tell it online. You can watch it being poured into a glass, et cetera, et cetera, but the industry is figuring out a way to survive and its a digital pivot its happening in all of my businesses and yes there will be permanent impairment to restaurants and entertainment and travel industries, but at the same time theres a new digital America Emerging and thats why the markets are so buoya buoyant. Im much more optimistic than i was in march i have 20 of my portfolio thats really hurting and i dont want the government to prop up Zombie Companies anymore. Stop doing that. Let the market be the market figure it out. A new america will emerge in 36 months its going to be more profitable what were about to do with this next round of stimulus in my view could be a mistake. If a company has to die because the world has changed permanently, let it die. And let Something Else replace it those good employees will do something as they are in the industry look at the watch industry they cant sell watches in botiques theyve gone online. Theyre completely around the globe selling online thats what i think now. It becomes more and more in focus to me each week. Theres a lot of money were talking about spending in addition to what weve spent, kevin. In your view when weve had Creative Destruction the governments role has been to try to bridge the human pain for the people that are being disrupted to the to where they can make it to the next new age whatever it is buggy whips went to cars, whatever you want to talk about. So should we be rethinking some of these Government Programs and the way were spending the money . Yes ive come to the conclusion we should, and ive been a major proponent of those initially made sure almost 80 of my Companies Went through the process of getting those loans, but i now know its a reality theyre not all going to make it this is a very darwinian thing the government is trying to reduce volatility. This is a differ recession we turned off our economy, and as a result of the pandemic and peoples change in purchase behavior, there is a new America Emerging the only way to do that is to have the market do it. I dont want another 2 trillion poured into the economy and having politicians decide who the winners and losers are look at the Airline Industry after the fed got behind buying bonds, it became liquid and they started raising cash i realize we gave them money i remember when i used to sit beside you, id fly to new york, get to the set, get a driver, spend a lot of money do i send my kid to college or have breakfast in new york i dont do any of that anymore as a result, maybe we get back to that, but thats changed forever. So why do i want to pour government money, my money as a taxpayer, into businesses that are not going to survive the only way to do that is let mr. Market do the work im such a proponent if anybody is listening in congress, not so fast on the next 2 trillion. Let the market do its thing. Well talk to Kevin Mccarthy. Steve liesman has a question is it about the state of nevada or Something Else . Im never going to get it right and i apologize to all of those people in the state of nevada i appreciate your sending the pronouncer along to me that was fast, isnt it . It was with my report, oh, yes. No, i saw it out of the corner of my eye while i was reading that brilliant report that i did. Kevin, i dont want to have i disagree with you on the timing a little bit i think that theres still a need for a bridge for the government to get there before the market can make those choices because were still shut down, but i want to ask you this question you said, and i quote, were hiring thousands of workers. Are you having trouble hiring those workers . Is the unemployment benefit, that extra 600 bucks getting in the way . And if so, how are you dealing with it . Yes, it is a problem. Im having a hard time getting them back, particularly in the Food Services businesses ill tell you the mistake we made look, we can only learn from our mistake. When you lets go to restaurants, florida where i was gaur an teend for months and months and months. When we reopened those restaurants, we called those people back to work and then we also bought supplies for 14 to 21 days. Then we closed them again 11 days later the restauranteur is now left with employees he sent back home, which now understand theres risk in a huge way to ever going back to that job because it might open, might close, but also hundreds of thousands of dollars per restaurant chain, the things that went rotten we couldnt sell it. We bought it because we were told we could open was that frustrating for me . Oh, yes it was now i realize maybe that business, the bar business is impaired permanently those employees were getting such a fantastic deal that i had a hard time getting them back. Yes, thats true we need to modify that part. We cant incentive advise people to get more doing nothing than coming back in the economy that is a problem, steve on the ground its definitely a problem, and i think mnuchin addressed it and said he was going to fix it in the next round. Im far more concerned about getting billions of dollars to zombie businesses that are not going to survive theyre just not going to make it i think the a the end of the day, the darwinian nature of capital which can be ugly and violent, you have to let that play out or were not what we were before. Im such a believer in capitalism 1. 0, we dont need a new one. We have to let the existing one happen and were not i say nono to the next 2 trillion. Steve, even if you couldnt see the effects of that 600, i mean, its obviously a flaw in the way it was written, dont you think . Even if you didnt see people using it it has to be fixed. I dont think it was a flaw in the way it was written. The reason they came up with 600 was the average was 400, add 600 you get 1,000 and thats the average wage what they didnt know or didnt expect was mostly low income workers would lose their jobs so the average wage of the person receiving the benefit is lower than they expected than the average wage nationally but i think it was the right move to keep people home and which, remember, it was a Public Health benefit. Its helped retail sales, helped kevin sell wine. Thats one thing for the prior period now i think they need to transmission can you link it to a states Unemployment Rate . You know, kevin, capitalism is tough, just is. Thats why w came up with the whole idea of compassionate capitalism because theres times where you say, hey, ps, you know what i mean . Suck it up this is Creative Destruction youre part of the destruction youre one of the people getting destroyed. Its tough theres times that, you know, we need to i guess think about that and you dont want Zombie Companies running around but then again, you know, just it pout them out of their misery immediately will have consequences for the people there . How do you do it thats why youre called mr. Nice guy thats like calling you curly for your hair, you know what i mean not because youre nice. Joe, theres nothing compassionate about capitalism it has no feeling. Its a return on capital it follows the path of least resistance. I get it. Theres times to look at some of the adverse consequences or unintended consequences. Just put 5 trillion of coombaya in the market we did it. We were compassionate. All im saying thats it. Thank you. I never thought id be lecturing you from this perspective. Anyway, thank you. Kevin oleary. Youre right youre probably right. And down the road, you know, its tough medicine but it will be good for people eventually. Its tough when youre going through it thank you. Thanks, Steve Liesman. Join kevin for a live chab during the all new webisode. Webisode of got a money dispute . Ask kevin live at 2 p. M. Go to cnbc. Com youtubelive melissa . Coming up, a check on what is moving the rkmaets and names that are moving technology squawk box will be right back. 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. Welcome back to squawk box. The nasdaq is bupy 100 building on the close well have much more on technology right after this. 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. 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. To turning your new inspiration welcome to camp tonsafun on xfinity its summer camp, but in your living room. Learn how to draw with a minions expert. How to build an indoor Obstacle Course plus. Whatever shes doing. And me, jade cattapreta. The host of es the soup camp tonsafun. Its like summer camp, but minus the poison ivy. Unless you own poison ivy. In which case, why . Just say summer camp into your xfinity voice remote to join. Welcome back to squawk box this morning the nasdaq kicking off a week with a strong tick higher led by big tech tesla. Amazon took the lead pulling other tech stocks with them. The index finishing up over 2. 5 jim cramer tweeting yesterday afternoon moves like we are seeing in microsoft, and tesla and amazon are truly insane and unlike any i have ever seen in my life. Michael graham, senior he cequiy analyst. Good morning to you. We are in a moment where it feels like things are getting a little untethered from reality, michael. Does it make sense to you . You know, its definitely been a sharp rally for a long period of time we segmented out the sector a while ago into buckets that included those that had a positive impact from this pandemic like your amazon, peloton, all the way down to a third bucket, those that had a meaningful negative impact, like lyft and uber. What were seeing is that positive bucket has since the precovid peak in february, the positive bucket is up around 60 and the negative bucket is down about 15 and the nasdaq is up 10 in that time frame weve definitely seen a very big bifurcation in performance its probably going to continue into this q2 Earnings Period mostly because like this is the quarter when you actually are going to see the fundamental impact from the pandemic show up in results and we think that all the stocks that have been, you know, rallying are going to have very big numbers here as we head into the quarter. We are clearly looking sort of past q2 earnings at this point and starting to think about rotating into some of those names within internet and tech that maybe have been left behind by the rally a little bit and a couple of those are lyft and uber did you definitely, you know, its been a sharp rally. We havent seen Something Like this in a long time. Michael, but how much are we talking about . I mean, so far you think this is multiple expansion story . You think theres underlying numbers in the results that are going to be suggestive of the stock prices that were seeing im talking about amazon on one end or tesla with a market cap over 300 billion on the other its a little bit of both i think some of the moves are a little more rational than others if you look at amazon, for example, estimates came up quite a bit coming out of last quarter. It was more on the revenue side than the earnings side because to fulfill all that accelerated demand it did take a big investment in new Logistics Infrastructure and things like that for amazon, but youve definitely seen estimates come up theres been multiple expansions as well. Were looking at the internet Sector Training 30 times earnings in aggregate back a peakish level. We have seen it higher over the last couple of decades but that is getting close to a peakish level which is why we think, you know, weve got another move here as we get into the q2 Earnings Period and then its possible that we might see less big increases in estimates youre going to hopefully michael yeah. Let me ask you this though. For those in the jim cramer camp of this is insanity, what do you see as the down side and what would be the trigger that would cause the fever to break, if you will well, i think that as long as the market stays strong, youre going to see this tech sector stay strong. We do advocate, you know, starting to rotate into some of the names that have strong longterm fundamentals but have not really participated in the rally to the same extent as some of the others. Im thinking about some of the transportationrelated names, lyft and uber and some of the travelrelated names. Right. That could benefit from a return to activity real quick because weve got to go. On the travelrelated names, when would you buy a travelrelated name . You have to try to buy it before a vaccine but the question is when, right . Thats the bet i would start to move some exposure intothose names after q2 earnings. As we get into the fall, i think theyre going to be set up for some improving fundamentals after that. Michael, great to see you always appreciate your perspective. Thank you so much. Thanks. Joe House Minority leader Kevin Mccarthy joins us over the debate on the next stimulus plan, whether its needed, what it should include. Futures higher after the big rally yesterday in the nasdaq when it added 2. 5 dow was nd okif flat yesterday its up this morning squawk box will be right back. Of the greatest game shows in history. During that time, we handed out millions of dollars to thousands of contestants. And i thought, what if we paid the contestants their winnings in gold instead of cash and prizes . Back in 1976, we had a wonderful contestant named lee whose threeday winnings were valued at 12,850, and you know what . That was a pretty big haul back in 1976. So i wondered, what would have happened if lee had put 12,850 in cash and then put 12,850 in gold in a safe, just sitting there sidebyside from 1976 until now . Well, i went back and i ran the numbers, and what i found was amazing. We all know that 12,850 in cash would still be sitting there, but it would be worth a whole lot less than it was in 1976. But that 12,850 in gold, safely stored away, its worth 135,000 as of the taping of this commercial. Now, thats more than 10 times the original amount. And thats why ive been putting my money in Precious Metals for years, and i dont see any reason to stop now. 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And deadline in dc time growing short for congress to pass another economic stimulus bill. House minority leader Kevin Mccarthy will join us to talk about what it will take to reach a deal with democrats. The final hour of squawk box begins right now good morning and welcome back to squawk box. 8 00 now on the east coast im joe kernen along with Andrew Ross Sorkin. Melissa lees been up did you even go to bed why bother . Becky is off today. Were here the market is dow is pretty solid this morning, up 250 it barely was up the nasdaq had a huge day and its continuing this morning nasdaq at a record high and treasury is also in sync weird that youd see its nod weird, bonds and stocks rise 10year down. 10 melissa, this morning, what have you got going . Yeah, cocacola posting pretty in in line quarter in terms of revenue of the there was a beat profit did fall 33 year over year revenues down 28 . Our own sara eisen spoke with james quincey. He told her two factors drove the weakness, countries in lockdown and cokes away from Home Business as restaurants and stadiums remain closed quincey says the Second Quarter will be the most challenging part of the year things are improving as countrys reopen their economies. Coke is still not providing any guidance you can watch the first on cnbc interview with quincey at 10 30 a. M. Eastern on squawk on the street. The ceo of tapestry has resigned for personal reasons. The cfo has been tapped as interim ceo. Tap ptapestry is the Parent Company of names such as kate spade, coach a little bit up only 70 cents when you look at it because its a 13 stock. Andrew meantime, the debate over the next stimulus plan out of washington is heating up republicans leaders sitting down with President Trump to talk priorities ylan mui to talk about it. Reporter theyre still not on the same page when it comes to the relief package. Lawmakers are pushing back against several key factors both at the white house and on capitol hill as late as yesterday evening. Among the points of contention, the payroll tax holiday. Both treasury secretary Steve Mnuchin saying they were pushing back theyre skeptical it will make it in the bill and staying in the bill also up in the air is money for more testing President Trump said more testing can create more trouble. Senate republicans looking to add money for testing, not cut it also on the issue of schools, mnuchin said they are targeting Education Aid at more than 70 billion but its still unclear if that will be tied to schools reopening as President Trump has called for now Administration Officials will be back on capitol hill today. Theyre meeting at 11 a. M. With several of the Key Committee chairman then they will be briefing them over lunch we are still in the phase of republicans trying to reach consensus among themselves which means a compromise with democrats is still a ways off. Back over to you. Thanks. Great summary, ylan. I think the minority lead jer hs it so we dont need conjecture lets bring in minority leader Kevin Mccarthy you heard good morning. Yeah. You heard so definitively. Tell us whats what. What about the payroll tax holiday, is it in there . Will it stay in . What are its chances i believe it will stay in as one of the elements that we need there are lots of parts. Liability protection people going back to work. A bonus to work. People are unemployed. How do we continue to deal with that we look at the question not if but how do we go back to school. We need help for the teachers and other areas. Are there tax incentives to help people survive we have a lot of positives sitting out there. We have money already appropriated, more than 100 billion for states can we change that and make it more flexible . Can we use more . We have 100 billion left in the ppe program that was so successful were watching other states having to shut down again. Can we assist in those Small Businesses as well this is just part of the process so there will be debate. Healthy debate people having different ideas. Then make the very best ideas going into the bill that will become a law. I would say what does the gop want but the gop you can see that theres some divergence from what some people in congress want, what the administration wants what do you think the bargaining chips are on both sides, leader mccarthy what does the gop want most . What do you have to give them for you to get what you want the most does it ever work that way theres a process the way government is designed you have a house, a senate both will debate and move forward. The challenge is the nation united around police reform, the democrats in the senate stopped it simply because they have a rule they need to go up and debate the bill. They denied the right to debate it in the house we dont have that. We know what the democrats passed in the house, more than 3 trillion. Much of that, one example is they talk about cannabis more than they talk about jobs in the bill a lot of that were things all they wanted prior to covid even existing, election reform and others so i dont think that will survive inside any bill. The real focus with what helps th safer. What helps the nation to get back and what helps students in schools and what helps schools with Liability Protection to move forward i think in that limited scope we can find the things that republicans and democrats can unite around that would be what america is asking for. Youll get to Liability Protection from democrats . Well, i dont know remember, it is not an easy things our very first bill, 3m could have provided us millions more masks but they wouldnt go through with it because the trial lawyers had a problem with it it wasnt until the second bill we could get them there. Weve watched nancy pelosi time and again hold up when we were going for Small Business, ppp. She held up the cares bill, renewing of funding for it i envision this bill doesnt get done by the end of july. Were probably in the first week of august before we make this happen andrew . Leader, can you just because i think its worth the audience understanding it, what you just said about the 3m, the masking issue related about liability. Why do we need more Liability Protection if you get a flu, a company isnt responsible for liability in that case can you walk the audience through it ill walk through directly through it there are already more than a now lawsuits claiming you got covid there if they were able to get it from a place. You have a number of Small Businesses saying here i am in a challenge, im not going to open back up. You have School Districts saying im not going to open back up for fear i be sued why dont we give a profession its more important for the Education Association so theyre not bogged down by thousands of trial lawyers to bring suit and thinking this is a place to get money. Go ahead. 3m makes different types of masks. One was from surgical. One could protect you not in surgery but they wanted to give out in the public, theyre very good masks, it took us not until the second bill until the democrats would release that when i talk about liability protecti protection, i think across the board its a no brainer. The trial lawyers have a very good place to put it in. Leader, would you ever consider tying money thats going to go to states to their ability or willingness to comply with cdc rules or at least guidelines one of the things we dont want to have happen here is throw good money after bad theres an issue where people say we are involved in financial socialism on one end that is effectively subsidizing those not to comply with the rules. I think states should comply with cdc rules remember theyre recommendations. Most are doing that. Not every state is doing that. California is four states in one. One size does not fit all. Same thing with schools when i was listening to an earlier guest from harvard the question should not be if, it should be how we want to make sure its safe for the parent for the student, the teacher thats why they provide guidelines its not the same for every place in the country remember, the difference we learned throughout this, i remember being in the situation room in february and dr. Fauci telling me you shouldnt wear a mask at that time dr. Fauci said it probably would go away in the summertime. The chinese government, communist government lied to us, lied to the world. This is why the ingenuity of the people will save us. People will write books about the investments we made and how were going to do this earlier than anybody else. Now we have hackers coming in trying to hack these companies thats going to slow the process down i introduced the new bill that put sanctions on individuals why wouldnt they want to work with us to solve a problem they created . Leader, early on you might recall we wanted almost to help everyone in terms of corporate america. Were not going to question whether it is going in the right places it couldnt have been foreseen if you point if you were watching, you saw kevin oleary, hes worried that the new economy coming out of this, a lot of the Old Companies just arent suited for this the way business is going to be done were just propping so much up and were throwing so much at the problem. There are a lot of republicans worried about the size of what were spending right now is there something to that do we need to be more discerning about who gets money through this so we dont prop up countries that shouldnt be surviving anyway i think we having the need and care when we first did it, going was telling you to shut down i thought we had the responsibility to put the capital bridge Going Forward but in going through covid something has also changed telemedicine will never go away again. There are things when it comes to how we purchase over the internet, things that we do. We have sped up this economy to where the future would have looked ten years from now. Are those companies able to keep up what we were looking at, the money we were providing wasnt to the company, it was to the employee to keep paying the Employee Salary because its better for those individuals to keep working thats what this bill should focus on how do we focus on safety . How do we focus on getting people back to work . That should be the foundation. Leader, i want to ask you one question going back to dr. Fauci. A lot of people in the administration are trying to knock fauci. Im not knocking dr. Fauci at all. Well, no, no, but you were making the example that you were you were using the example that he said no masks at one point and changed. Heres the thing that i want to ask you. Its clear as day, i think, that at the time it was the science that i think hes been trying to be genuine about this throughout at the same time when i think its pretty clear that the president and other governors around this country have not followed the cdc guidelines, have actually openly flouted the science so unless youre suggesting dr. Fauci was disinagaindisi disingenuo disingenuous. No, not at all. What are you saying let me clarify. I probably could have stated that better. Maybe you didnt understand it correctly. What i was referring to is the communist country of china lying to this country. Had they opened up, we would have known more about it the point i was trying to make is every day we learned it would survive on a mask but now we learned its more airborne its a blood disease i have such high respect for dr. Fauci, it was dr. Fauci because the information he was not being given by china and the best information that he knew at the time because i have such high respect for him, this is why im using it, even he did not think at that moment in time but that is so different. Its more of an example showing were learning more every day. If we would spend a little more talking about what has happened to these therapeutics and these vaccines, it is so promising out there whats happening today and its so smart what government has done on this warp speed that were making 100 million doses for every one of those vaccines, we can provide it to the entire world. Now we have countries trying to hack in so it will slow the process. Here we are as america, the beauty of our nation as a whole, not only to solve this virus but to share it with the rest of the world to have people trying to hack us . That is what is wrong. Leader mccarthy, it seems that the champ between democrats and republicans in passing a stimulus seems pretty wide at this point in time how confident are you that it will actually get done if it doesnt get done, would you be in favor of congressional leaders, of members of Congress Taking a pay cut or withholding their pay until a stimulus bill is passed . The first thing members of congress should have to do is come to work if you watched, we had a Committee Meeting last week where a democrat was on a boat on an internet calling in his vote you dont have to if youre a democrat, you dont have to come to congress. You mail in your vote. Its shadow voting and you still get paid what is 9 incentive. I think this is harder than the other covid bills we passed before just as i stated earlier i watched them and they wouldnt allow a bill by tim scott to come up for debate if we have a senate that wont allow it to come up because the minority wont allow it to be debated, the answer is thats pure politics. Yes, people should be punished for playing politics with peoples safety and health. Minority leader votes aside, back to the question, would you take a pay cut yeah. Or forego your pay i think any member that does not show up for work should take a pay cut. I dont think you should be paid for not working. I dont believe thats the american way i dont believe anybody in the private sector gets paid for not showing up to work thats why congress is essential. Congress should work you get paid for not coming to work. Thanks for all of your time we appreciate it, nice shot. Thank you very much appreciate it. Beautiful day melissa. An interview with prologis you might know this, but as we take a look at the premarket trading, they beat wall street expectations the stock is up 5. 5 thoughibm didnt provide any guidance for the full yr. Ea youre watching squawk box here on cnbc 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. Welcome back to squawk box. Take a look at futures we are in the green after a big day yesterday. Dow 250 points nasdaq 100 points higher s p 500 looking to open 26 points higher. We should show you the big u. S. Banks because they are moving this morning as well right now you have green arrows across the board with basically every bank with the exception of bank of america and everything over 1 up on the market this morning. Melissa . Global Logistics Company pro lodge giks coming in at 1. 11 versus 99 cents expectation. The stock is surging market cap stands at 70 billion. By the way, its integral to Companies Like amazon, ups, pepsi and fed ex joining us is hamead malgadon. Great to have you with us. Good morning, melissa talk to us about trends because you did provide full year guidance of 370 to 375. In the press release there was commentary that based on proprietary data youre more optimistic about the back half what specifically are you looking at well, melissa, we started the year with a very optimistic outlook. All of that was before covid when we got to the first Quarter Results they were strong but our outlook, we softened it a bit because nobody really knew what we were facing as the business has progressed in the Second Quarter, were finding demand is growing much more rapidly than before we probably got three, four, five years of growth in a quarter or two ecommerce is a big tailwind. Its a pretty big business but ecommerce super charges it. What are the trends youre seeing in rent deferrals i understand rent collections were 97 in april, down in may and what are you seeing in june and early july especially as the coronavirus has weve seen cases spike across the country yeah. Actually, we were running a global business. If you look at our collections globally, the u. S. Is actually stronger than the global numbers. If you look at the overall numbers, they are actually running better than last year, which was a record year. Now you might ask why in an environment like this collections are running ahead of last year. The reason is pretty simple. Our business is vital to the supply chain and even people whose businesses are not doing well have to keep their inventory somewhere. And thats usually in one of our buildings. You know, kind of an interesting statistic is that 2. 5 of global gdp goes through our billion square feet around the world weve got pretty good visibility as to whats going on in the Global Economy both on the good end and the soft end people need inventory and the place to start are goods. Speaking of the softer areas, im wondering if youre seeing in any submarkets increased pressure im thinking of a market like a houston or places in texas where they might be hit by the pandemic but also by Falling Oil Prices you hit the nail on the head. Houston is probably the softest market in the u. S. And if you sort of expand the discussion globally, i would have to say france is probably one of the weaker markets but generally through this cycle weve held up pretty well around the world and i think the primary reason is that unlike other cycles, supplier space was very tight going into the downturn. Vacancies and utilization were in the mid 80s both of those are records. Ive been doing this for about 37 years and those are numbers that are unprecedented in our business, unprecedented good are you looking to apply space and take advantage of others trouble by acquiring real estate and building up the supply chain parts that are necessary like ecommerce, for instance yeah, we would like to, but unfortunately the industrial real estate, the logistic real estate business is a very favored asset class. If anything, pricing for our properties have strengthened in this downturn because as i mentioned, occupancies are high. Other property types are suffering from this downturn and most of the capital that would have otherwise gone into these other sectors is coming into our sector so unfortunately there havent been tremendous bargains around. Our Balance Sheet and our various funds have a capacity of almost 13 billion so its not for a lack of resources, its lack of opportunities to buy things at attractive pricing we have a very active Development Pipeline and we continue to develop product for our customers. All right hamid, great speaking to you thanks for your time. Thank you. Shares premarket session highs up 7. 7 . Were going to look for wall streets next big deal yesterday chevron pulled the trigger on buying noble but what else is brewing out there perhaps in the second half of the year well ask robert kindler, Morgan Stanleys global head of m a the rich get richer. How much did elon musk and jeff bezos add yesterday . Well bring you the eye popping numbers as the stocks continue to add to gains even today in the premarket. Squawk box wl rhtacilbeig bk. 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 to squawk box. S p with a 25 point open nasdaq up with 92 points big tech stocks doing well premarket. Amazon up almost 2 and tesla shares look to add about 2. 3 at the open andrew well have to talk to jim cramer and see whether he continues to think its insane, but there is some real question about that when we come back, a lot more to talk about top sectors to watch for deals in the second half of the year we have a deal maker on the other side of the break. Plus, whats it going to take for gold to crack 2,000 an ounce . Already up 20 silver soaring as well much more on the precious tamel trade. Still ahead, squawk returns after this welcome back to squawk box. Global deal bargain is down. Yesterday chevron decided to buy noble energy for 5 billion. Joining us to talk about whats happening in the deal market and what may come in the second half is robert kindler. Morgan stanley has advised on some of this years biggest deals so far including Dominion Energy to Berkshire Hathaway good morning to you, rob good morning. Great to see you virtually. Hope we get to do this in person at some point. You look at obviously what happened at the first half how do you even begin to project out what the second half looks like if you look at the first half, really no surprise its down dramatically, but thats because m a couldnt have been a priority for ceos the first half, right . Ceos were all about running their businesses during the pandemic there were a lot of liquidity issues theyre trying to sort out what this means for the longer term thats really been the focus i think we all recognize that the pandemic has changed the way business is going to be done in the future we dont know exactly how. Its probably accelerated a lot of things. No surprise at all that in the midst of all of this uncertainty, in the midst of everyone focusing on just how to continue operating, that m a hasnt been there. Now we kind of look forward. I actually think m a of course is going to come back at some point. I think its going to be a fairly slow return i dont think the recent deals are an indication that somehow m as come back the reason that it will certainly come back at some point is if you just look at the world were living in right. Its very hard to get Earnings Growth other than through m a. All of the cost cutting to increase margins has kind of played out i think importantly rob yeah. What i was going to ask though is one of the big trends were seeing is spacs and so many of these special purpose acquisition corporations considered blank check corporations as you know are out there hunting for deals. Theres going to be deals to be had or they need to do deals let me ask you straight up, some people think that spacs are basically lucrative, you know, compensation schemes for managers masquerading as investment strategies. Are you a fan of this spac trend . Whats going on with spacs to begin with, spacs are a very small part of the market and they will continue to be a very, very small part of the market. And what theyre driven by is the ideal market its a very, very open ido market this is basically another way for companies to go public i certainly think it can in unique circumstances be a unique tool and its totally dependent on the ipo market. So, yeah, i think its out there. I dont think its that significant. You dont think its that significant . No. In terms of pipeline that youre looking at, you know, we saw the Bank Earnings this last quarter. Im trying to understand what the future really looks like in terms of Investment Banking revenue, therefore, coming off of advisory revenue. You have a pipeline, i imagine, in sight as to what you can what kind of visibility do you have you know, are there big transactions coming . Small transactions coming . Things not getting off the ground floor whats happening whatever happens, you know, now for the rest of the year are going to be deals that are going to likely close next year. I mean, the deal we just did last week, analog, is expected to close early next year theres definitely more activity out there, andrew, but i think its going to be a very slow reopening and theres really two main reasons for that. You know, one of the reasons is that valuations are pretty high in the market now. So doing deals is challenging. Certainly cash deals its interesting that chevrons deal was a stock deal even though they could have afforded cash the other issue is regulatory. There is a lot of regulatory scrutiny and it doesnt matter how the election comes out both parties are viewing themselves as populus so trying to get a deal done in this regulatory environment, which has been difficult, is challenging. So i think when we come out of this, which of course we will, its not going to be any time soon that we have a very high level of m a theres just too many valuation issues and regulatory issues. If youre right, whats going to happen to the deal ecosystem . Im talking about jobs for bankers, lawyers, proxy advisers, accountants . I mean, the entire machine that supports this industry right now, you know, is it going to exist in the same form six months from now . Oh, theres still, as you saw from all the banks earnings, reasonable amount of activity. Obviously there will be a pull back i think these peaks that rely on m a, i think theres a tremendous challenge for them. Deals are going to be smaller. I dont think were going to see there will be some but there will not be a lot of transformational deals because of all of the regulatory concerns as deals get so much smaller the boutiques get pushed out because youd muchrather have Morgan Stanley on the cover of something youre selling than a small boutique but i think for the larger, you know, first tier firms, weve been through cycles before this is at mdmittedly differentu this definitely will come back another factor, andrew, people no longer look for repurchases of stock to drive any kind of value, whether it ever worked to begin with, who knows . Its not that it doesnt have a place, but investors want people to do m a. So its going to be driven m a is a bigger strategic imperative than its ever been i think because of the reasons i said its going to take longer to play out. But it certainly will play out there will be some disruption, but its near term okay. Well, we hope you keep your job, rob. We appreciate you joining us as always look forward to having you back and seeing the progress in deal land hopefully well get back to those merger monday mornings who knows. Who knows. Anyway, thank you, again, rob. Okay, andrew. Take care. Coming up, is this a golden opportunity . Why one of the biggest wall street banks thinks that the precious metal is on its way to an all time high over 2,000 an ounce. Check out the shares of Lockheed Martin up in the premarket the defense contractor beat analyst estimates on the top and bottom line and raised its 2020 fullyear forecast stay tuned, youre watching squawk box on cnbc dont forget to subscribe to our podcast. Youll get interviews, original content and behind the scene access look for us on apple podcasts or on your favoriteodst pca app and subscribe to squawk pod today. Welcome back to squawk box. Futures with a higher open s p 500 by 25 points nasdaq up by 90 points interesting moves in the market this morning because while we see a bid higher for equities, were seeing a bid higher for gold and silver. Andrew even with risk on there is a bid for safety here there is. I dont know if there may be safety on one end. Lets talk about elon musk and jeff bezos on the other end. They had a better monday than most of us the pair added an estimated 19 billion to their personal fortunes about 6 billion for musk and a record 13 billion for bezos tesla up 300 this year. Set to report Second Quarter results tomorrow meanwhile, monday was the best day for amazon stock in a year and a half how many times a day do you think they look at the stock price. If youre an employee of the company, you might look every day, once, twice if it doesnt move around . If youre them or do you think you dont look at all because the numbers are so high it doesnt matter the numbers are so high and i think theyre both thinking about business and the money is never going to matter at this point probably elon, for any of us to try to think about what hes thinking at any given time right who thinks about solving l. A. s problems by the what was the incredibles, really boring underground . Who thinks of stuff like that . Then bezos, what can you say about you know, i thought they sold books. Theyve changed that, right . What are they . They now own the internet or something . Its amazing both of those guys is your credit card still stuck in your computer, joe . I have actually bought on amazon i heard it was the 30 year anniversary, the first time someone did something, im there. I did it it works well. Thats good they deliver it its awesome anyway, i dont like the way the guys park. They have so many deliveries to do lets get to frachnk heres Something Else on the rise gold precious metal Frank Holland with a look at some of the factors that could push it over the 2,000 level. It has nothing to do with People Printing money all over the world, does it, frank . It may have something to do with that, joe, according to citi bank. Gold could be heading to a new all time high. The precious metal on pace for the second week of gains theres a 30 chance gold reaches 2,000 per ounce topping its previous record of 1,924 set back in 2011 analysts say three things are driving this opportunity cost of gold has been reduced because of low and negative yields. Improving expectations that there could be a reopening of the economy but also the desire and the strong desire to hedge against the possibility of currency declines and a second wave of the virus as economies begin to reopen. Companies want to hedge against the covid shock. Commodities, theyve been surging during the pandemic. Citi cease the potential to continue it has the price up 20 . It has palladium prices increasing 20 over the next 6 to 12 months gold is reaching 2,000 by the end of the year. For more on this go to the pro section of cnbc. Com. Pippa stevens has a great article. Back over to you. Frank, it did sort of wall low around for a while and theres been a lot of you know, Interest Rates have been low since 2011 when it last hit that high above 1900 took a while to get went all the way down to 1200 even though we were printing a lot and came back. You know whos really happy now, frank . Bill devain. William devain is psyched because hes got a lot i dont know if you see all of those commercials. Maybe you havent. Most people have william devain is keyed because he has a lot of gold. Go up double digits over the last three months during the pandemic anybody a holder of one of those etfs is pretty happy, too. Thanks, frank. We have news out this morning from apple the company saying it will be Carbon Neutral by 2030 across the entire business, manufacturing, supply chain and Product Life Cycle the company says it will cut emissions by 75 by 2030 and develop Carbon Removal systems for the supply chain a u. S. China Green Fund will invest 100 million in accelerated efficiency and it has commitments from 70 suppliers to use 100 . The planet we share cant wait and we want to be a ripple in the pond that creates a much larger change. This is part of the change were seeing microsoft made similar pledges earlier this year and youre seeing it a lot of companies in the valley in california more than others, but nonetheless an interesting one. I should note given we had the conversation about the column before, unlike microsoft which has done what its done and donated to politicians trying to undo some of the sustainability issues, apple is give to 527s. All right we have news out on wells fargo that we want to bring to you, new chief Financial Officer over at wells it has hired mike sentimasimo, he replaces John Shrewsberry who is retiring after 22 years with wells fargo and six as the cfo stock is up 1. 3 under shrewsberry wells fargo has had a tough run at least for this year, we can say the stock is down by 54 or so and wells fargo is one of the few banks, maybe the only bank if memory serves me right, joe, maybe you can that had to cut its dividend under the most recent stress test. Wells fargo getting a new cfo, replacing long time cfo John Shrewsberry. Coming up, jim cramers first tame on the trading day ahead and what hes calling an insane rally in three well known stocks, at least two of those ksre higher premarket. Stay tuned well, truly insane, i put that in quotes, but thats what our good friend jim cramer is calling the recent pops in stocks like microsoft, tesla and amazon, that last one had its best day in more than a year and a half yesterday right now lets get to cnbc headquarters to talk to mr. Cramer himself there is a sense that we are getting a bit untethered from reality, jim, but the question i would ask is there is a lot of people out there who still think theres room to run and it may look insane now and may prove to be insane later but the question is always when. Insanity does not mean its over it just means can we please stop comparing it to 1999 because in 1999 a lot of Bad Companies gabd a lot of market cap, here a lot of unbelievably Great Companies are gaining market cap is the a pace you have to give them a speeding ticket amazon is a big company, up 73 . Tesla is a huge company, remember we used to bort to compare it to ford dont we feel lame we should play those tapes 304 billion. You look at a stock like nvidia up 78 , microsoft a trading like a small company. Andrew, we have to at least recognize this never happened before there is all these people who say this time its different is a biggest lie, those guys are completely made wrong by what numbers you have there we have never seen this before ever. Therefore the question becomes this is right now its a multiple expansion story, the request he is do you think that the underlying numbers are going to allow these companies to, quote unquote, and maybe sympathetic, grow into these valuations i think they can. I think thats really important. I also think its game, set match for some of these. The way wall street works, theres a note today about amazon, they are looking for reasons to say good things now its a private label amazon. I mean, microsoft said it always makes the numbers. Tesla is september 22nd battery day. This he keep giving us things to make it so analysts raise price targets and make you feel great. This is a market where there are many people now who believe that stocks only go up. I dont know if youve heard from that lets say really funny people, but it is just without a doubt a moment i have never seen this. I have never seen this. Right ive heard about it from mr. Portnoy, hes giving it to the suits, jim. I offered to burn my suit we will see you in just a couple minutes joe, we dont wear suits any more nobody is wearing a suit anymore. Lets get to paulson. I was going to start with you saying youve been so right. At this point you just need to just back up, back it off, you know, at this point like jim cramer just said, things are getting a little crazy i think you need to just rest on your laurels and say and take some profits and get the hell out. Ive been right. What do you have to lose from doing that but reading your note youre not doing that and a you make some interesting comments about election risk. You say weve spent so much money already that its going to be tough, a, for whoever wins to spend more money and, b, its going to be tough to raise taxes in a slow economy so maybe we dont worry about election risk. I think thats true for a while. If the economy is still really weak its going to be hard to recommend any tax hike even on the wealthy. You risk killing off animal spirits when you are already down i think the economy is going to have to improve before there is a tax hike and i think its going to do that but its probably going to take into next year before you are going to be able to do that. If you look at the fiscal the state of fiscal situation here in this country right now, joe, i think its going to be really hard when you have deficit to gdp ratios that are almost unprecedented and debt to gdp ratios rising dramatically to come out with large spending programs as well eventually if the economy recovers, i think it will, we will get a round of some tax hikes probably but im not sure thats going to be an instant thing coming next year, for example, even if the democrats win tripower. The other thing and you do this a lot, you look at like when unemployment might be high and you talk about, you know you go back 80 years and look at what the markets have done in this time you went and looked at sugar highs or at least perceived sugar guys and usually thats at the beginning of a bull move not at the end thats exactly right. Right now if i take the money supply growth rate less gdp growth thats at a postwar high and then you add to that fiscal deficit spending as a percent of gdp right now they add up to 36 that policy indicator. That policy indicator is 3. 5 times greater than the policy that we delivered during the double dip recessions of 80 and 82, its seven times greater than the policy stimulus we delivered after the dotcom bust and its twice as great as the policy stimulus we delivered in the 2008 financial crisis. If you look at that, if you look at almost every time that we have a spike in that policy indicator monetary and fiscal surge of policy, you get not only a recovery comes in the economy, but you get the beginning of a bull market and i still think thats where we are, joe. Im not saying this thing wont have pull backs along the way, might be due for one now, but i think that were in the early innings of a new expansion and a new bull market and so i wouldnt want to get too cute trying to time pull backs here this early in the recovery. You did it again. Okay this is not what i was expecting from you i gave you an out. I gave you a time that, you know, to rest on your laurels. Youve been right. You cant be right all the time. Dont get greedy, paulsen. I havent, ive proved that over the years, joe, im sure i will hit another bad streak but i still think its the right thing to lean more bullishly right now overall. Jim, thanks a lot weve got to go. Melissa, you should just stay in the stack, stay in the library and research for tomorrows show is what you should do. Im going to start doing that. Research for im research for thursdays show, actually. We will see you tomorrow. Andrew, let us know, write another column that we can talk about tomorrow i dont know thank you. Make sure you join us tomorrow. I wont be. Squawk on the street is next good tuesday morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer, david faber is back after a long weekend. Live from separate locations futures are solid after mondays record nasdaq close, s p green for the year as we enter the heart of earnings season with coke and lockheed, mnuchin and pelosi meet on an extension of benefits today and the eu gets its own historic package, euro four month high this morning