Transcripts For CNBC Squawk Box 20240712

Half hour, joining us for questions. If you had to pick one, would you rather buy gold or bitcoin a lot going on this morning on squauchl thats actually a game we play on fast money would you rather that answer, the day after bitcoin crosses, particularly saling at the section. What i like best when they move in the opposite direction with pops and drops. Was that not a fast money that is like classic fast money circa 2007 classics are the best that is peered the way they are moving together. The way of the digital gold story. Weve got all of this money printing the depth of the crisis getting down to 4,500 . I think lower like 3,500. I wanted to ask you i dont know where you are i dont want to know what type of lease arrangements have you seen. When are they coming back to work at google summer 2021 what is it now . Summer of 2020 it is a year from now google, alphabet is the most out there. Facebook is june 30, 2021. I wonder if all the Big Tech Companies follow suit. Microsoft was originally going to be back this fall i wonder if theyll get pushed out. So it is me and mack. Hes all i have here they dont have a shot of him. Are you in the shot . He looks good today. Hes got his knight jersey on. You are not going to be here becky is not going to be here . Until we dont know it is google i dont know. I dont know what our policy should be is maybe it is a round of vaccine maybe well get the vaccine and everyone will feel better. Im leading into the discussion with bill gates we talked about that. I havent seen the interview but just looking at the sound, he loves the prospect for science solving a lot of our problems we are miles ahead of when we were trying to do this with polio. We know a lot about the mechanism of this stuff. Maybe it will help maybe it wont this is what gets him excited. This is the ultimate version of innovation and humanity. It affects both. Look forward to that interview. Well get part of that this hour it takes your mind all these places always an interesting ride with you. Getting to the back drop of earnings onethird of the s p 500 will report the flood of names today. 3 m, pfizer raytheon set to report before the bell visa, amgen and starbucks among the names to watch after the bell of course, dont forget the fed, the central bank holding a meeting this morning a policy announcement getting started. Investors watching for includes about what they might do next. Getting a jump here indicated lower across the board the first time all three major averages were higher about three days it looks like we will get higher across the board nasdaq looking to be down about 35 at the open taking a check on treasury yields higher from where we were 24 hours ago. The 10year yield. And the dollar hitting a twoyear low as the dow is now down triple digits this morning, the latest package leader Mitch Mcconnell unveiled it. The relief plan includes enhanced federal Unemployment Insurance as was told us last week, 70 of a workers previous wages which would replace the 600 which will stop paying out this week. Direct payments of 1,200 to 2,400 to individuals or couples and also shielding entities like businesses, schools and doctors for lawsuits 190 billion for paycheck protection loans 105 billion to help schools reopen in the fall and 16 billion to states Testing Capacity on paper now and ready to argue about it it matters to the markets. We snapped a win streak last week doing days are specifically the last days of august. I think it is the last two weeks of august. I dont know in this day and age if that is because everybody is at home what if you decide to take a vacation, what would you decide what you are doing now hes working, joe hes home but hes working. You are on 50 acres somewhere. After you get off here, you are out fox hunting on a horse what are you doing when you quit im on this thing all day, joe, typing, typing. This is how i look all day you might be outside looking around occasionally outside. Occasionally a jog or playing with the kids. Of course, playing with the kids has been the best part of it im so jealous of them now they are living their best life. Im so close to it in a way i wasnt before which is great but i want to be them. I dont want to put this idea in your head what do you think you pay in state taxes . Think about that number and think about if florida ever gets its act together is there any reason why we shouldnt be i know. We should talk about this maybe not on air we are not on air i thought this whole conversation we are on air. I hear music joe, we are going to show the bill gates interview later well show you a piece of that interview where he talks about the flight from cities we should talk about that. Maybe thats when we should do that you are right. Is he like in the ml central . On the other side of this break, joe well show you that conversation and maybe that clip about the cities as well bill gates a tndhe fight against the coronavirus and the race to a vaccine. Stay tuned 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. But inside every etf. There are untold hours of careful construction. Infinite what ifs . And contingency plans. Creating funds that help target gaps in client portfolios. Tap untapped potential. And strengthen confidence in you. Flexshares. 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Bill gates has donated 300 million towards the global effort to combat the virus i sat down with bill gates and asked him about the vaccine studies and which efforts he thinks show the most promise im enthused about all the vaccines the u. S. Has funded there is the first wave, which is about five. Then the second wave, which are cheaper, could be more effective. But they have to wait. Various stages will start. Johnson johnson is a good lowcost vaccine moderna and astrazeneca are the first to get out there we live ever day talking about these. How we put the worlds resources behind these isnt driven by a normal market thing. This is cooperation to figure out within a country and across countries where this vaccine should go. On the therapeutic side, do you see any drugs out there youll be able to get a prescription and go to cvs or walgreens or that it is not and in person or hospital event . The antiviral that is approved, remdesivir, is right now once you have serious symptoms it is possible to move that to a form we would move early and make it easier to administer there are two other antivirals that would be oral by the end of the year, those other two antivirals, that could be figured out also antibodies are another class. They are doing pretty strong work those trials are much faster you can see the benefit much faster i think there is a good chance well have substantial death rate reduction by the end of the year with the combination of those new tools. Several of which when you start to have serious symptoms, you would be treated before youhav to go to intensive care. Guys, we got into the issue of the potential profits some of these may or may not make well show you that in the 8 00 but more on what we were talking about about leaving a city and more about how we might live in the future versus working from home it is something bill gates road about in 1985 in a book called the road ahead. Here is what he said about what it could mean for the economics of cities. Overcrowding in cities does have some negatives in terms of the real estate costs and traffic problems you get into. The fact that only a few cities have gotten a lot of these highpaying jobs thats a little problem for the cities and areas that get left out of that. I see this flexibility that has been accelerated where you can do telemedicine. We invest in Distance Learning to make it far better. I see that as basically positive, giving people options. I know some tech employees are living in different places and asking, hey, when do we need to go back so they can plan it was interesting that google went out to mid2021 before they can resume normal office work. I think others will follow that. There will be less travel. There will be more flexibility about these jobs i think that is a really great thing. Do you think these businesses will thrive . Not just beieconomically but to be able to grow and be creative you are living a distanced life yourself how much do you crave getting back in a room with them do you feel like creativity has been lost . Im amazed at how productive we are as a new employee comes in, its tough. The kind of conversations they would have after the meeting or running into people. The on line experience today isnt as good as the casual thing before and after the meeting or just hanging out. Some of that is improved i think well do less Long Distance travel. There is room for creativity on which benefits you get from what type of get together we are thinking about school this fall and what it means for kids i asked bill gates whether he would send his own children to school this fall he had an interesting answer im a big believer for young children, the benefits in almost every location, particularly if you can protect the teachers well, the benefits outweigh the costs. As you get up to like age 13 or higher, you have to look at the local to decide what theyll do with high schools. If they are not in, you have to put in massive efforts to continued learning on line our system has revamped education to get in and get out and ramp those up and make sure minority and lowincome students arent suffering the most. It is a very tough set of tradeoffs everyone is going through. We got through a lot there. There is more coming up. He made some fascinating comments about elon musk and his view conspiracy theories out there. The role of social media we also got into big tech. We talked about the stock sales and the drug makers involved in these vaccines well show you all of that in the 7 00 a. M. Or 8 00 a. M. Manner if you asked us what would be the big trends it would be urban living it is 180 degrees. If we are all distributed and doing everything, im scared the internet goes down there is a big concern that internet is a target of hackers. Think about it the next virus we get is going to be a Network Virus which shuts down our entire that would be worse. Well not worse if i wanted to shut us down in the future we are relying on. When my wifi goes down now in my house, they look at me like, you cant let this happen. Things are going off there are sounds i have learned to turn it off and turn it back on. Thats the extent with everything think about it. If we had this pandemic without the internet it is amazing it is. There is something just like kids need the experience do Companies Need the collaboration of inperson contact . I still think they do. I think they probably do. I think they do. I think it is the issue he mentioned. I think you can maintain a business how many new people have you met over zoom or one of these services and either created a relationship very hard to do. Right i havent met anyone on zoom look forward to the rest of that interview, andrew coming up, a new survey on how parents and students feel about returning to college and whether it is still worth the cost wetures now are pointed to a lor open you are watching squawk box on cnbc pandemic has changed when it means to attend college. What parents and students feel about it and is it worth the cost joining us now i wasnt on the phone. You could have called me i have some thoughts on this here is the headlines. No plans for a gap year. Many students are concerned but few are taking the year completely off those are the latest findings from the how america pays for college survey 70 perts of families say theyll attend the same school as last year 13 are uncertain about what theyll do 5 will enroll in a Different School but only 2 plan to take time off, take a gap year and not attend at all. A survey found that two third of parents think college is worth it even if classes are only online more than half worry about how they are going to pay for it completing the fafsa is really important the free application for federal student aid. It is critical to unlocking about 150 billion in federal aid, loans, grants, work Study Programs last year, more than a quarter of families didnt even fill out the application, joe peoples financial situations right now, currently, could be a lot different. The key is getting one of these fafsa loans. Here is the issue that form is based on your tax return from two years prior. So there is no ones financial situation anywhere near two years ago. This is when you need to call Financial Aid office directly to negotiate for a different package. Ive thought about it, sharon, a lot. The College Experience a lot of people say it is the greatest time of your life greatest six years, including graduate school. It is not the same, is it worth it you do need that diploma and degree and what happens if you are not in college a lot of universities and students are asking about it that way when you do a gap year and take time off, you might travel or do an internship. That probably wont happen many are saying well just stick with the school we know and take some online classes there. Given a challenging year for Colleges Research found the top private schools are stanford, harvard and university of chicago. Top Public Schools are university of washington, university of new york for the full list head to cnbc. Com make it coming up, the Corporate Party begins well hear from 3 m and pfizer in minutes analysis are straight ahead. Woo el be right back as business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. Yeah, everything is runningis smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. 3m results. Reaction is down because adjusted earnings of 1. 78 is just shy of expectations below the 7. 322 billion expected i wish people would think about how they write it. The headline, organic local currency sales growth decline 13. 1 . It is not growth it shrunk by 13. 1 talking about how difficult it has been to operate during the pandemic at the same time expressing giving kudos to their employees and others for managing costs better than they normally would but dealing with the same time of environment the guidance remains withdrawn it will continue to provide Monthly Sales updates. Thats not helping the dow at this point down a little bit they do note july month to date sales were up that is an improvement versus what they saw in the prior months seeing 3m shares down 1. 4 the fed are expected to kick off a meeting where they are expected to keep rates the same. Talking to our guests. Kathy and jeffery, great to speak with you kathy, what are you expecting. A lot of talks that the fed will talk or walk towards a more telegraphed targeting message such as yield curve controls what do you think about that i think theyll wait until the fall to do anything meaningful they may take a half step towards the inflation targeting. They will do that by adjusting indicating they are certainly in no way in a hurry. The inflation is at 2 or even higher the other thing they could indicate the easing not just at sustained market stability and also to provide additional stimulus to the economy. Jeffery, what are you expecting . The timing is interesting given that the stimulus package in congress is continuing to be hammered out as we speak, hopefully. Theyve been very vocal in saying they cant do it alone. They might be on hold but do you think theyll do more jaw boning here thats a good point. The focus is not really on the fed but much more on the competing proposal well hear from the fed what weve heard from continued policy support it is not a major attorney here. Maybe something in terms of developing on Forward Guidance the major policy changes are still to come. Theyll be deliberated in this meeting. We are not going to know that until we get the minutes i think the focus of the market will be past the fed meeting and focus on the fiscal policy issues weve seen the 10year yield hit its lowest weekly close ever on friday. Im wondering where you think the 10year will go and what that yield curve could look like that issuance will continue to go lower and lower here what you are seeing is the secular trend where Interest Rates will stay low. Concerns the economy is stalling or reversing gears the idea as jeffery said the fed is not going to do anything dramatic now there is speculation that will be something later that also helps to put downward pressure we are not looking for any large increase that this would be very gradual and slow Going Forward great to speak with you thank you. We appreciate it coming up. When we return, a lot more we have Quarterly Results from pfizer and Goldman Sachs ceo by day, dj by night David Solomon in the hamptons this weekend why Governor Cuomo is not happy about it in fact, hes investigating. Well talk about it next apps are used everywhere. Except work. Why is that . Is it because people love filling out forms . Maybe they like checking with their supervisor to see how much Vacation Time they have. Or sending corporate their expense reports. Ill let you in on a little secret. They dont. By empowering employees to manage their own tasks, paycom frees you to focus on the business of business. To learn more, visit paycom. Com welcome back a little bounce here the dow still looking to lose. Looking to be down by eight. Nasdaq off by 19 looking at some of the leaders we did just get results from 3m with a miss on the bottom line in terms of the gainers, we have pfizer with shares up 2 well take a look at the lagardes that loss would look like a 14point weight on the dow more at this point clearly the biggest lagarde on the dow so far to a story grabbing the attention of wall street this morning. My inbox was lighting up overnight. Governor cuomo furious about a concert in southampton on saturday saying hes appalled by the social distancing violations this is what he treated. The department of health will conduct an investigation we have no tolerance of the illegal endangerment of Public Health the concert by the chain smoker and featured Goldman Sachs dave solomon. It was a Charity Concert planned originally as a drivein the idea that you would sit in or around your car you can see what happened. Thats not what happened people clearly not just got out of their car but got together. A lot of eyebrows being raised on wall street and in corporate america. I got emails from ceos saying this guy is supposed to be a risk manager im sure he was the talent to some degree. Im not sure he was in charge of exactly how this concert was supposed to play out unclear whether he was calling for social distancing or not involved in this now and the governor calling for investigation. We should also note we have reached out to Goldman Sachs for comment. They have not commented to us or others who have reported on this just part of the weirdness of him being a skilled disc jockey. A dj. It is weird you wouldnt think, yeah, a big concert and the dj there is the ceo of goldman sach. Thats where the whole disconnect comes in . In the past, we thought it was an interesting thing in this case, it is coming around and not being that positive do you think it is a negative for goldman sach do you think it is actually a negative you know, these days. I feel social distance, i feel it now dont you. Fur within two feet of a person. Is it always going to be like that from now on if i have a mask on, i feel it it is very strange i dont think i would have been there. Would you . I dont know. Your question, to the degree people are upset about it. There is a shout for that kind of thing not just from rivals but from people. There is a little bit of a gossip, he didnt organize this. He cant take full responsibility at the same time, hes engaged in it. It is complicated. Look at that pop in pfizer. Lets get to meg with the headlines. Good morning. Pfizer reporting a beat for the Second Quarter on earnings and revenue. Adjusted earnings per share coming in at 78 cents versus estimate of 66 cents revenue was 11. 8 billion in the quarter. More than the 11. 5 billion they were looking for the company raising revenue to 100 million for the year. The company saying in the Second Quarter they did see an impact from covid19 of about 500 million negatively about 4 of total revenues they said primarily because of unfavorable disruption to wellness visits. Also lower demand for some products in china. They said this was partally offset by the sterl demand such as ventilators they said they had more demand for the prevnar for adults we should also note of course, last night, pfizer announced it had started the late stage Clinical Trial of the covid19 vaccine along with its german 35 german partner in the United States along with moderna, that race is on back to you. So the same amount of time for the two different vaccines, the Clinical Trials or it is up in the air how quickly does it look like something wed have an answer on pfizer is saying it is still on track to seek approval by october. It depends on how fast they enroll these studies okay. You probably saw this kodak deal it is fascinating. So interesting. They are getting 765 million loan a hint it has to do with a medical supply chain and bringing it back here. Making film, making making pharmaceuticals. Eastman kodak winning a 765 million loan under the defense production act it will support the launch of kodak pharmaceuticals. Adam, in looking at this, the beauty of the whole idea just sort of is apparent but i didnt understand it initially. Kodak not put out of business but whos using film with these smart phones now so they have this huge manufacturing footprint, 1200 acres, 1600, Wastewater Treatment facility, ready to go with Specialty Chemicals which arent for film which arent that different than the key starting materials, ksns, that we get from china for pharmaceuticals. Do it here thats what this is about. You got it. Thats exactly what its about we did until two months ago i was in air force one with the president. He signed an executive order to allow my agency, dfc, to invest in the United States to invest in the United States to reshore critical industries, things that we need. If theres ever going to be another pandemic so that were not caught in the same place one of those areas that was clear to us is the pharmaceutical supply chain. If you look at drugs, 90 of the drugs we take today are generics and they are almost all made over seas, the dominant manufacturer of ingredients for generics is china and number two is india if were going to reshore, bring things back, we need to change that so kodak was referred to us. We found somebody that wanted to place a big advance order for pharmaceuticals. Kodak had been considering creating a division focused on pharmaceuticals, kodak pharmaceuticals. Like you said in your beginning, they have all of these factories that are there producing chemicals. What are you doing when you produce film youre producing chemicals they have a massive campus not used theyre going to reconvert it and by the time were done, theyll make 25 of the countrys ingredients for Generic Pharmaceuticals. We will not be dependent on anybody else for those key Generic Pharmaceuticals. If you accept all of this at face value, adam, its too good to be true so these arent being used utilized fully, i guess, these manufacturing facilities so you will need people to work there and youll have to actually this is going to create jobs in this country as well absolutely. Rochester, new york. Upstate new york, blue collar jobs one of the advantages when you think of manufacturing capability, where does it sit . It sits in blue collar america where jobs are needed. So our ability here right now, the first one is in rochester, creating 360 jobs in rochester, 1200 jobs to build all of the facilities and build them out. Youll see a revitalization in a place like rochester i think that will move on to other cities as well. Not like where were getting them now we should be real proud of the kind of places theyre being made either. So youve got key starting materials which is where it begins then you have to do active pharmaceutical ingredients, then you finally get finished dosage form tablets yes. What do we need here . All three . Were focusing on the first two. The ksn, active pharmaceutical ingredients. They have an advance purchase order, thats how were financing it we are financing it based on equipment, based on advance purchase orders and then it will move onto the third stage into capsule forms. This isnt the first time its been done, fuji, bayer. Right. You have the facilities we dont make buggy whips anymore. They can be retrofitted . Thats right. You get jobs and what you need to not be so dependent on countries that dont like us so much. Thats right. Its a win all the way around. We need to bring jobs back to the United States and, two, in the midst of a pandemic, how can we ensure that this never happens again . This was a major focus i spoke to the secretary of health and human services, alex, what is the industry we should look at first . He said, adam, you have to look at Generic Pharmaceuticals thats 90 of the medications americans take every day if that turns off for whatever reason, we have a problem. This is going to ensure that it cant turn off because we own it. Amazing whats happening to kodak. I dont know, last time i looked at kodak stock its been a while. I didnt recognize the symbol. Dow component. Its amazing unfortunately whats happened but this is a step back, i think, adam appreciate it. Thanks for having me on. Thanks. Andrew a lot more on squawk ahead. Quarterly results from dow component Mcdonalds Well bring you the numbers and instant market reaction. Well do it straight ahead 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. 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Plus, steve bannon on the growing tensions between the United States and china. As the second hour of squawk box begins right now. Good morning and welcome back to squawk box. Im Andrew Ross Sorkin with joe kernen and Melissa Lee Becky is off today the dow is off 65 points right now. Nasdaq looking to open down close to 10 points s p 500 off four points but weve got an enks parade, joe. We do we do. I think its hard for us to live up to that music. The buildup is so great and they hit us its hard. We have it today rate rogers with mcdonalds numbers. Mcdonalds out with a mixed Second Quarter eps coming in at 66 cents adjusted, that is an 8 cent miss on revenues of 3. 76 million same store sales declined 24 overall. Down 41 in International Operating markets and down 8. 7 which was better than expected monthly comp sales its down 5 in may, 2. 3 in june average same store sales along with guest counts remain negative, particularly at breakfast. In the u. S. 99 of restaurants are open some with limited operations the company just paused its reopenings for another 30 days as covid cases continue to climb around the country some 2,000 dining rooms are open in the u. S they joined others in mandating face coverings in a Statement Chris kempczinski said our strong drive through presence and the investments weve made in delivery have served us well back over to you meantime, thank you for that, earnings just out from dow component raytheon earning an adjusted 40 cents per share. Well above the 12 cent consensus estimate revenue also beating wall street forecasts. Look at that stock right now to see whether its moving. Also want to talk to dom doms coming back. Melissa, are you there sorry. Yeah, im here. Im here no, no problem were watching raytheon shares up by 2 well talk to dom later on for more of todays earnings, lets bring in greg branch a partner at 1847 financial and mike santoli, cnbc Senior Market commentator. Mike, we have a smattering of earnings so far. Its been quite a mixed bag. No surprise. Many companies are still withholding guidance for the rest of the year really this is all sort of no surprise here for the markets. Nothing new. Not much new. The market has essentially written off this quarter in terms of being any progress towards the longer term earnings targets. For an example, mcdonalds missing slightly 66 cents was it going to be 71 cents . In february it was 2. 17 the market has said, mcdonalds, its retaining Employee Shares however, mcdonalds is an instrument where you can get 2 1 2 percent dividend the big Growth Stocks are beneficiaries of this environment. I think its pretty much a steady state during this earnings season where the 12month forward estimates in aggregate are starting to curl higher thats getting a little bit of reassurance that this has hunkered down and things are turning for the better down the road. With all of that said, greg, how do you go through earnings season what sorts of questions do you want answered if you know the company is going to stay away from giving guidance for the rest of the year and things, as mike had mentioned, are fairly status quo at this point in the recovery off the bottoms yeah, lets talk about two of the names you just mentioned for mcdonalds, what we want to see is rea firm the financial strength and assure investors that the dividend is safe throughout the back of the year. We expected weakness in europe where closures have been more significant, where traffic is down, where reopenings have been less widespread than theyve been here. Thats no surprise in addition, the participants in the sector are given a mid quarter update we generally have a directional feel for where those same store sales are going to be. Hearing them said they are going to invest more in digital and delivery is a plus generally those are the names that have been rewarded in this sector, particularly pizza names. That provided support as people have shifted to stay at home. You like mcdonalds it sounds like, greg. I think there are others in the group that are more attractive its hard to argue with their financial strength, resiliency or a second wave. Right which other names do you like better i think the pizza names are still the place to really look here again, theyre among the strongest in terms of those two areas where investors have really rewarded, thats in the delivery and in the digital sales. Chipotle is a strong name in those two areas as well. Weve seen in this market that investors are flocking to an area of strength those in this sector are by far two of the main things investors have concentrated on. They are the ones also poised to best deal with this pandemic environment for longer, mike santoli. That could be the theme we see emerge in the earnings season in terms of trends and the companies willing to go out on a limb and give some guidance or comment on positive trends could be the ones benefitting from the stay at home sort of mentality. I think it is a little bit of a tension between people realizing the trends are selfreinforcing the obvious names like amazon are benefitting. Once youre in the system, theyre going to keep doing that to you perhaps better reopening trends. If people gain kwf dent that the peak in case counts is going to be sustainable, you wonder if well see another rotation like the one in june that peaked. Thats the back and forth even as the Overall Index has stayed reasonably well supported at the top of the range. Were watching sherwinwilliams results crossing the tape beating both the top and bottom lines handily. This is one of the names that has been a monster stock, greg, benefitting from this sort of trend of restoring your home you notice that you need a coat of paint in your study, you buy some paint and you paint it. Were seeing that time and time again. Right do you like this sort of trade . Well, im going to harken back to the stayathome more generally and if you dont mind shift a little bit back to tech. Not all tech is create the equal. There are particular subsectors that have benefitted when you look at the internet retailers the relative outperformance has been about 58 . This is probably well deserved the internet retail space is expecting Earnings Growth of around 300 next year but as we start to look at calendar year 2021, its going to be a really tricky situation consensus is expecting many tech names outside of the internet retailers to be about 15 but the Broader Market is expected to be around 35 as we see some of these depressed sectors start their recovery what youll have is very expensive names. In some cases 30 relative outperformance in valuation and Margin Expansion its very expensive names trading at a Super Premium but without the relative earnings outgrowth. Its key to look at tech and those positioned for the stay at home sector, i expect them to benefit in an out sourced way. Thursday should be interesting, alphabet, amazon and apple all in one evening greg, nice to see you. Thank you. Mike santoli as always, good to see you. Joe. Thank you, melissa. Sorkin, go out and get a can of paint and paint a room on the list of activities to do during quarantine, where is that for you . I think were more alike than people think is that sort of down did you think of that, maybe ill go get a can of paint and paint one of the rooms . I havent done painting. Its like get a ladder and clean the gutters. Melissa, i dont know who your friends are. Weve been doing a lot of work around the house. You have . We built a garden. Built a garden. I built a whole i whole home for cooper the bunny. Did you have it built or did you actually build it . Youre pointing. No, i built it, i built it with my own bare hands your bare hands pointed over there. No, no, no. It took all day. My hands to be honest with you, these baby hands were swollen. Baby soft hands. Baby hands. You might have a callous perhaps . A blister . I had callouss, i had blisters. From a hammer. I was a mess. All right im sorry. But cooper now lives in his own little mansion. Im sure cooper appreciates it. Cooper, keep glenn close away from fatal attraction. Do i dare go to dom again . Do we chance it, sorkin . We cant depend on this guy. Go for it. All right im going to try i dont know what you were doing, dom a number of other earnings out this morning dom chu there he is you made it. Im here. Dom chu joins it for more. Duty calls. Using my soft and supple hands to build some rabbit coops and whatever else is going on these days its been such a long time i had no idea you guys were building things in your backyard. I will admit that i can only do certain things around the house and then i will direct other people to do things like clean gutters, fix my roof, do some painting, all of which is happening around my house and has been for the past few months anyway, like you said, joe, i dont want to get too off base lets talk about earnings components shares of 3 dlgs m lower to the tune of 3 1 4 percent. Well call it a premarket volume yes, everything from personal protective equipment for medical professionals to industrial filters and scotch tape reporting profits that fell below consensus estimates. 3m said it couldnt give a forecast for its businesses and economic effects those shares ones to watch big dow component. Shares of pfizer down 3 to 4 at last check now up 2 , 2. 5 . Roughly 125 shares of volume dow component as well, reporting better than expected results raced that they said they would begin to vaj the foeblgttiveness of covid19 candidate. Shares of harleydavidson, down 2 the motorcycle maker reporting the surprise loss as well as revenues that fell shy of analyst estimates. It is feeling the economic effects of covid19 on its businesses it announced plans to refine the product lineup andrew, joe, melissa, all of those ones to focus on and i, too, am doing stuff around the house but mostly i have other people do it for me. Back over to me. I like your style, dom. I like your style. Im going to try to do more of the handson stuff with you when we come back by the way, my kids desperately want think, joe, you need to see the bunny. They want the audience to see the bunny. We might have to have a cooper appearance. Do that do that. Is it one with the weird ears . Desperate for an appearance by the bunny or really they want to come on well see. When we come back though the ears. The one with the weird ears . The bunny yeah. You know the bunnys got ears hes listening. Does it matter . It matters to me. Im trying to visualize what cooper looks like. Well see cooper in real life. Cooper may make a cameo later. Well call that a tease. We have billionaire what a segue, from billionaire philanthropist bill gates. Hell be joining us after the break. Well show you an interview where we talk about his role in the fight against covid19 also, we talked about the role of big tech, his comments. Youve got to hear what he has to say about all of it later, steve bannon will join us with more coronavirus stimulus and so much move were looking at t dheow down 87 points right now squawk returns right after this. 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. Communities of color have always been underrepresented in the u. S. Census. That means less federal funding for schools, hospitals, libraries, and other Public Services for Diverse Communities and less representation in congress. This year, its critical that you participate in the 2020 census. Its safe and confidential. Lets make sure everyone is counted in our community. For more information, visit getcounted. Com, and to participate, go to census. Gov. Save without even leaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. His advice to the president. Well, the simplest thing, which has to do with such insanity, is you should not reimburse somebody for getting a test that it takes more than 48 hours to get the result back that test is a complete waste. All these numbers about how much we test, the majority is just complete waste you need to get it back as soon as possible so that somebody can change their behavior so theyre not infecting other people our case levels are too high for Contact Tracing to work. Those numbers come down, they will come down at some point, then that will kick in, but right now this thing where you wait more than three days, sometimes seven days to get a test, nobody should pay 1 for that thats insane. You need to prioritize you need to make sure that low income communities that are most at risk, that theyre getting those results back within 24 hours. Thats nearterm thing and thin enabling the therapeutics and vaccines appropriately test to get out, that would be the next thing get the whole world the benefits of those things so we can go back to normal and then, guys, we got into the conspiracy theories because according to a pew research poll, 1 in 4 think covid19 was definitely or probably planned by, quote, powerful people i asked bill gates about this and whether people will take a vaccine when it does become available. We can go a lot further by inventing more vaccines. So the idea that, you know, our foundation is connected up in that, were trying to help, those are the values that melinda and i have to flip it around and say somehow, you know, the creation of the virus or profiting from vaccine, thats unfortunate, but the it really starts to herd if it means people arent willing to take the vaccine and once it goes through that safety process, that the fda is the best in the world at a professional level of being able to review that so i am worried. Its not surprising that people are looking for simple explanations in a very uncertain time, but hopefully theyll look to the facts, understand the values of the people that theyre thinking about and understand that, you know, were in this together and, you know, we need to protect each other with masks and eventually probably with herd immunity through a vaccine. Of course then theres the highly anticipated hearing thats taking place on capitol hill on wednesday amongst the big tech ceos at the helm of the nations Largest Companies they will be addressing the house antitrust committee. What do you make of the role of the platforms in spreading conspiracies definitely when you let people communicate you have to deal with the fact that certain incorrect things that are very titillating can spread the facts that it does cause autism, that travels very slowly by comparison. And social media can make that even worse the degree to which the Media Companies can see whats being said on their platform and take things that are absolutely wrong and get rid of those things or slow them down, thats very tough because as you move over into political speech or a valid discussion about safety issues, how do you draw that line . Do you have that visibility . These are complex issues and it has been a spreader of lots of negative things and, you know, how do you strike a balance there . The pandemic do you think its say that again. Do you think you would take a harder line . The reason i ask is Mark Zuckerberg has been very firm about covid news hes actually all over covid news, tries to keep it tries, i think, to deliver the right news and tries to filter out news that isnt, but when it comes to news news hes more if i said liberal or progressive with it people would think that was a political statement but its not. Well, some of the messages on the platform they dont even see because of the encryption in whatsapp so they in order to not have any responsibility, theyve made that opaque so whatever the issue is, antivaccine, child pornography, they have made sure they cant intervene on those things. Different countries are debating is that appropriate. Is this idea that you cant when you have criminal activities or different things, the government is blind to whats going on there. I dont know that that will come up this week i think this week is more of an antitrust related thing certainly reminds me of when i went in front of the congress i wished them well. Let me briefly ask you about that though because weve talked about how important competition has been in trying to find a vaccine in this time is there enough competition in the tech world today, do you think . I think over time the tech world is naturally very, very competitive. Im not saying the authorities have to be totally lassezfaire, but i do think that people under estimate that natural Competitive Forces do come into this space and we saw as mobile phones came in, that was hyper competitive. And, you know, the prices keep coming down, products improve. There are some things like branded merchandise or controlled marketplaces that it will be interesting to see how that could trigger it. I think of tech even without massive regulation, that there will be a lot of innovation. We have a lot more from that interview coming up in the 8 00 hour including some interesting words about elon musks view on the coronavirus as well as some work that bill gates is doing behind the scenes in washington, d. C. , as well as the conversations we have on this show oftentimes about insider trade i shouldnt say Insider Trading but Insider Selling, if you will, among some of the managements of the fa pharmaceuticals. Hes got views on all of it. Well share it with you in a little bit. Meanwhile, well go from bates to bannon. Coming up, former white house chief strategist steve bannon. Hell discuss the pandemic, the economy and of course the president ial election. Plus, if the cars on the road look older, thats because they are. The average age of vehicles hitting an alltime high and dealers going to cash in eventually you figure. Tas rahthead im pro athlete stylist Calyann Barnett and im here with nicole and miles and were out to find the top looks for day one back to school at Dicks Sporting Goods and so we want to find something thats going to grab everyones attention the variety and selection is crazy bucket hat bucket hat this would be a fire first day fit. Definitely making a statement with that. Go dicks. Whether youre going back to School Online or inperson, get the brands that make a statement. Day one starts here. Welcome back to squawk box. We talked about the somewhat Troubling Party out in south hampton. It turns out three people, meanwhile, were ticketed for violating state covid19 limits in new jersey after hosting a party that attracted more than 700 people to the jersey shore to an airbnb rental in the Whispering Hills section of Jackson Township it was sunday night. Party was held and included free food, alcohol and a twerking contest it says here it took about five hours for state troopers and police from jackson and six other townships to break up the massive gathering. The person who rented the airbnb home and Party Organizers were arrested in violation of the covid19 rules these are not helpful. Not helpful. I mean, twerking contest sounds awesome but it just but melissa . Apparently it was a celebration of liberian Independence Day im not sure if twerking is traditionally done to celebrate the independence of liberia, but im sure that had a role. It was called a mansion party. 700 people there arent that many mansions. That had to still out. Im glad i wasnt there luckily. All right the only good news, i was going to say, now that you have youre seeing lots of examples where authorities though are trying to do things about this and i wonder whether it ends up acting as a deterrent or not there was that example of the gym in new jersey the other day as well in terms of closing down gyms did you see that i feel bad for gyms. Maybe it brings more awareness. Feel bad. Still to come on squawk box, we will discuss u. S. China we will. We will. Promise. We will talk u. S. China relations with former white house strategist steve bannon. A big week in tech testimony on the hill from names like Mark Zuckerberg and jeff bezos. Well break down what it could mean for shareholders. Youre watching squawk netivepea ga on across the board. Well be right back. Some see a Grilled Cheese sandwich and ask, why . 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. China and the u. S. Tensions have heated up with consulates on both sides shuttering doors and shrinking the footprint. Lets discuss with steve bannon. In a recent speech by the secretary of state, mike pompeo, seems like hes moved or maybe the administration has moved closer to your viewpoint, steve, on what relationships with china should look like given some of whats happened in recent history with china is that fair to say . I think its even deeper than that i think if you look at the series of four speeches starting with National Security advisor obrien in phoenix back in earlier, i think earlier in july, you look at him, fbi director ray, the seminole speech by bill barr culminated at the Nixon Library on the 51st anniversary of kissingers secret trip to china, i think shows the United States has a coherent and comprehensive strategy with taking on not just containing but taking on the Chinese Communist party. Its breathtaking. Its bringing in the united kingdom, india, japan. The ccp is running a technological warfare, Economic Warfare and hopefully to avoid kinetic warfare in the future. I think from the South China Sea to continue btibet, london, was, people are standing up to the Chinese Communist party. It will be the greatest legacy of president trumps eight years in the white house. Just for the markets, because that is what we cover, when we were in negotiations on phase one for china and trying to figure out how to reset our trading relationships, the markets would move up or down based on prospects for arriving at a deal, what the deal included, prospects for a phase 2. None of this sounds good for a phase 2. I dont even know how it sounds for whether they follow through on phase one why is this a positive why arent the markets more concerned . Obviously covid took precedence in the meantime, but it used to be really important for the Global Economy how we dealt with china as a trading partner. This is important for the Global Economy youll see Better Things once the Chinese Communist party is out of the way the cheerleaders on wall street, bill bars speech, he said they were collaborators and guilty of apiecement the administration has had a very tough policy saying the Chinese Communist party this is not covid19, this is the ccp virus. The ccp lied and americans died. The ccp lied and the Chinese People died. The ccp lied and we must focus on this. How can we talk about a trade deal what theyve done in hong kong when theyve taken away the freedoms of the hong kong people at the same time the chain of custody on the decisions, whether it came from a Bioweapons Program or whether it came from a gain of function experiment in a wuhan lab gone awry, we know from chain of title and chain of custody back in december to lie to everybody, including at the chain deal to come over here, shake the president of the United States hand, have a huge gathering of what they knew back this december and we knew secretary xi talked to senior kadri the first week of january. They need to be held accountable. I think what you saw in the four speeches and what were waiting for is the same level of speech from the secretary of treasury and ultimately i know the president of the United States is going to cap it with a major address, i assume, to take this on im going to tell you. New york times had a brilliant article the other day. Whats been put in place by this whole of government approach now is not going to be it will be unwinded by beijing and biden. Tony blinken, Jake Sullivan and his crowd have been noticeably quiet. Theyre out there with their pompoms on they lied about the virus, it exacerbated and they need to be held accountable break the hong kong dollar cut them off from all u. S. Dollars. Use hong kong as the anvil and the u. S. Dollar as the hammer. Its time to take the fight directly financially to the Chinese Communist party. Where does your relationship stand with the chinese businessman, hes an exile the fbi apparently examining some of this gentleman, the money being used to fund some media relationships . Yes hes head of the Whistleblower Movement hes one of the founders and drivers of the new federal movement of china. Chinese expatriots, you saw in houston they were there heckling the Chinese Communist party people the story in the wall street journal is complete total nonsense by the way, hes been the biggest whistleblower, whether its h a, all of these scandals that he continues to lay out the truth bill bar, theyre collaborators. The people that are appeasing them are legion in this country. They have to understand not only are they going to be held accountable for the virus, they will be accountable for the what theyre doing for the yantze river with the contamination but all of the collaboratorcollabor, appeasers, every dollar stolen from the Chinese People that came to the United States in real estate stocks and bonds, that will all be reviewed in the future this is why its time to back off your support for the Chinese Communist party. Theyre in the gun sites and secretary xi is in the gun sites. He should be sanctioned personally we should start to seize all of their assets. Andrew has a question. Im not going to try to dissuade you my question relates to the election, which is to say theres some strategists, if you will, that suggest it would be beneficial for the president to escalate the tensions with china ahead of november. Do you think thats true my position from day one, andrew, is that the path of victory goes right through beijing. Its not racing the tensions, not doing it thats the other side of the coin of how we have to conduct ourselves with the pandemic. We started the show back in jap because of my knowledge of china because i knew it was going on in Hubei Province and wuhan. Its eviscerated the American Society and culture. We need to point the finger and hold accountable those who did this if you look at economic nationalism, populism, it all ties in. Only in breaking the Business Model of the party in daf vos, to free the slave line of then essentially, the surfs, working class. Mighting class and to break that is the end of populism i have said to the beginning the path to victory lies through beijing. Joe biden is absolutely the weakest candidate. This is where he wont be able to gather the bernie economic nationalists the president , hes the senator, hes the concierge of wilmington, delaware. Thats a post office box and a friendly federal court for global corporations. Thats who joe biden represents. Thats why he was put on the obama ticket because obama was a fire breathing antiwar populist joe biden was put in charge of the pivot to asia and he completely blew that what did it deal with, andrew . Cyber intrusions and the militarization of the South China Sea. His record of his relationship, buddy buddy with second general chi. It ties back to the phoney populism the president should get very focused on china, very focused on the ccp you can drive to a major victory in november if you just get focused. Steve bannon, we appreciate your being with us this morning and we will see you as we do every so often and get updated on all of these things thank you. We appreciate it. Thanks, guys. Andrew. A lot more on squawk ahead. If you are seeing older cars on the road, well, youre not alone. The average age of an automobile on the road is at an alltime high phil lebeau joins us with a new report and what it means for the economy. Take a look at futures looking to open down 12 points, naaqffsd o 40 points dow down 127 points. Back in just a moment. Welcome back to squawk corning shares up by 1 1 4 shares tech effect on jetblue, revenues also missing the mark. The Airline Warning it expects demand to be volatile so it will remain conservative in adding flights back to neutral. Sherwinwilliams better than expected on earnings that stock is up by more than 3 centene shares coming under pressure earnings fell short. The company is the biggest provider of managed medicaid and aca plans. Benefitted from fewer people visiting the doctor for care amid the pandemic. That is down 3. 4 . Shares of polaris with the company benefitting for a surge in demand for Outdoor Recreation harleydavidson, sales dropped 27 . If the cars on the road look older, thats because they are the average age of vehicles in the u. S. Is at an alltime high and auto dealers are cashing in. Phil lebeau has more. Reporter the auto dealers dont make the money on the new ones they sell, they make it on the service. Heres the latest data from ihs market they have been tracking all of the vehicle registrations at state dmvs, 280 million vehicles in the u. S average age of the vehicle is now at a record high ticking up 1 10 of a percent to 11. 9 years. That is a record high. Get this, one out of every four vehicles on the road in the u. St at least 16 years old. Why do we have this aging fleet of vehicles out there . Three things happening one, better reliability. Starting around 2004, 2005, you started to see better quality going into these vehicles. Theyre lasting longer thats why people are owning their cars longer. Unemployment is higher, people are uncertain about their job status and covid19 has an impact, too. Its limited the number of miles people can drive their vehicles so they can hang on to them longer this is good news for two auto parts retailers. Were talking about autozone and oreilly automotive. When you look at them, those stocks are taking 0off. Used car dealer sales, no question why theyre doing well. That market continues to be very strong people are going in with an eightyearold vehicle and getting a decent amount for it and turning around and buying another used ehicle. Guys, not a surprise we see this, especially when the economy slows down expect this age to go up over the next couple of years hey, phil just want to understand pricing. Feels like theres no discount on used vehicles in part because theres no discounts on new vehicles because theres so few of them . How long does that last . At least for a while. The used market, the average used Vehicle Price costs 21,000 right now. Thats a record high its 37,000 and change for a new vehicle. Thats also a record high. Theres no slowdown in demand, andrew thats going to continue for some time. The used market has been red hot. Theyre going to sell 40 or 41 million used vehicles in this country this year. I expect that to continue for several years. All right, phil thanks coming up, big tech still in the spotlight this week. Not only on the earnings front but also in front of congress. Well discuss at the break billionaire philanthropist bill gates on the promises of a Covid Vaccine and thstks oe ocn elon musk stay with squawk box. Coming right back. Welcome back to squawk box. Ceos of amazon, apple, alphabet, facebook will be talking to congress joining us to break down what to expect, joanne lipman, distinguished fellow for advanced study at princeton and cnbc contributor alex cantroid, a cnbc contributor. Good morning to both of you. In terms of whos going to be in the hot seat, there are four of them who do you think will get the most attention and who is the most at risk joanne clearly jeff bezos will get the most attention because hes not testified before congress before this. Because we have all four of them though sitting before congress, its unlikely were going to get a lot of any kind of break through from any one of them they all have talking points weve heard that before. The onus will be on the lawmakers to try to push them to try to get new information out there. Alex, this is ostensibly an antitrust hearing but when you think about facebook and some of the others, its not clear its all about antitrust. To some it may be about free speech and the like and censorship who do you think is the most at risk right now i agree with joanne jeff bezos is going to get the first attention. Amazon has 798,000 employees it does have the opportunity to do real harm to americans due to the market power it has. There are so many suppliers that depend on it when you ask the question about real risk, thats something i think we should seize on to. I dont see any risk for the tech giants in this hearing. Theyre setting their own policies they are nonfunctional they cant walk by each other without calling each other names. We have covid, election coming up, the outcome that i see happening here is that the tech giants will continue to dominate the economy and operate at will and they wont see much deterrent from congress at all joanne, you know, people say that right now theres bipartisan interest in this issue, republicans and democrats seem to have a problem with big tech yet alex on the other side of this i dont know if hes on the other side of it, at the same time the other conventional wisdom is nothing happens. Yeah. You know, we really need to actually take a step back here for a second and look at are these hearings too little too late particularly in the last five months since weve had covid, they have amassed an unprecedented concentration of power. So these hearings are really much more urgent but i do think theres a really good point here that you actually were talking about, andrew, with bill gates earlier which is, yes, theyre going to be looking at the antitrust issues but what about this epidemic of mall information. We saw yesterday on facebook one of the very top most shared posts on facebook was misinformation shared by breitbart about covid. So, you know, these are the issues that white supremacy, all of the other issues are the ones that i think are so urgent right now that we really need to look at. Joanne, alex, want to thank you. Its an interesting issue and we will see how it all plays out because, as you said, these issues with covid are huge at the same time, its unclear i think whether antitrust unto itself applies to these issues on their own but there is an argument that the antitrust laws need to be updated, changed, looked at through a different prism. Absolutely. Wed love to have you back to talk about what happens after all of it. Thanks, guys melissa, over to you coming up, another big hour of squawk box still ahead. We will talk to senator pat toomey for the latest out of washington on the next round of stimulus and later Michael Novogratz. Well ask him, would you rather, gold or bitcoin. Good morning a monster week of earnings kicking into high gear results coming in this morning from dow components like 3m, mcdonalds and pfizer. Well break down the numbers you need to know the gop makes its offer for the next round of economic stimulus worth 1 trillion. It was unveiled four days before millions of americans are set to lose government benefits well ask pat toomey if theres still time to get it done. A very special interview with bill gates about the coronavirus, the spread of misinformation online and the need not just for faster testing but much faster testing. All these numbers about how much we test, the majority is just complete waste. You need to get it back as soon as possible so that somebody can change their behavior. Highlights from an eye opening interview with bill gates as the final hour of squawk box begins right now. Good morning and welcome back to squawk box on cnbc im joe kernen along with Andrew Ross Sorkin and melissa lee. Becky is off today shell be back tomorrow. Part of the pull back is mcdonalds that stock is off a little bit pfizer offsetting some of the losses treasury yields have moved back above at least earlier had moved back above. 6 of a percent as you can see on the 10year. Joe, we have a big final hour of squawk box ahead for everybody, including more on the special interview from bill gates. He has interesting comments about elon musk. In a few moments well be talking to Pennsylvania Republican senator pat toomey about the stimulus proposal the gop rolled out and then well ask investor Michael Novogratz why gold and bitcoin are surging. Negotiations for another round of Coronavirus Relief are ramping up in washington unveiling major parts of their plan and Democratic Leaders met with white house officials eamon javers has all of the news. Reporter these details that the republicans released are a starting point for the negotiations with the democrats ahead of the deadline at the end of the week for the bonus unemployment checks to run out thats the headline. They want to scale that back it was 600 a week they want to scale it back all the way down to 200 a week through september. The concern there on the republicans part is theyre paying people too much to stay at home and it disincentive advises them from looking for a job. They say by october they want to replace that plan with another one that would give you 70 of your previous salary on unemployment direct payments, those are definitely going to be part of this republican plan 1200 and 2400 for individuals and couples under the 75,000 a year annual income threshold theres a second round for the ppp and companies with fewer than 300 employees and revenue that has fallen by more than 50 can go back and get another bite of the ppp apple theres 100 billion in loans. Theres 105 billion for schools with an emphasis on schools that are physically reopening and theres 16 billion in there for states for testing so thats the republican proposal democrats said the 600 a week bonus scaled back to 200, thats simply not workable heres what Chuck Schumer said chaos chaos. You change the unemployment benefit, it will take weeks if not months for most people to get it the economy crashes, people are hurt, they get kicked out of their homes, they cant feed their kids what are you doing so schumer and Speaker Pelosi met with the white house and Administration Officials yesterday at the capitol thats where the real meat of this negotiation is going to happen behind closed doors between those leaders. At this point we have no idea where this is going to end up or where people will get that and they cant act this week. Pat toomey, good morning to you, senator where do you think we are . How quickly can Something Like this really get passed i imagine its another week or two. This one will be different from the previous bills in that the republicans will be divided on this one. This will be a different kind of negotiation. And in terms though lets talk about it. Theres the republicans and democrats. Youre talking about two factions even with the Republican Party how do you see that breaking down what are the implications for whatever we see ultimately in this bill . Yeah. Its a good question i think there will be conservatives. 3 trillion in spending. Another 3 trillion at least in authorization for the fed. Thats 30 of the entire gdp some look and see price signals that are starting to get a little bit worrisome sustained economy, gold setting records, silver on a rocketship. At what point do we say theres a red light flashing there the idea that were going to pile on after the trillion thats already on the table another, what, trillion . Thats going to be really, really problematic i think Speaker Pelosi is going to be adamant about spending more money to the state governments. They have taxing authority they have the power to get funds. She will insist on more. My guess is some of that probably gets in fortunately we do have the Liability Protection thats absolutely essential. Thats in our bill but im really worried about where this ends up. Senator, let me ask you though in terms of the economy and what you think is at risk if more money is not spent. I will say the conventional wisdom, at least in the markets, had been going into the election i think the view was between the administration and frankly many republicans and also democrats, that people were planning or expecting the government would spend, spend, spend. No there is a high expectation look, i think this is going to pass in the end. Probably another trillion, 2 trillion were monetizing 60 of this, we borrowed the other 40 how does this end well if you keep doing it in increments of trillions. At some point we get to a point where it doesnt end well. Some of these things discourage the reopening of the economy direct payments. The vast majority of direct payments went to people who didnt have any lost income. Were going to do that again except on a bigger scale theres a lot of this thats worrisome. How concerned are you about cities and municipalities . We had a conversation with bill gates that we ran earlier this morning about the exodus that people may make from big cities and municipalities i know theres a big debate about whether they should be supported, so many of them that are going to be probably hurt the most are frankly in big states yeah. And lets be honest. This is like the final straw in many cases for these cities where theyve been very, very badly managed for an extended period of time lets also keep in mind we have stood up a Lending Facility to provide liquidity. That has not been drawn significantly but that is available. We also sent a lot of money to states that is finding its way to municipalities. In my state of pennsylvania theres over 1 billion of the c. A. R. E. S. Act that has been set aside, not yet been allocated. Thats going to cities some that has been allocated have gone to counties. They can allocate that to cities within their boundaries. So theres a lot thats already been done. What do you think the implications are on the election if a bill like this doesnt get passed and whats your expectation on the economy in the next several months i think the most important thing for the president , for republicans is clear evidence that the economy is strengthening. It certainly was, right, in may and june we need to see that continue for people to have confidence that were heading in the right direction here i think thats the single most important thing. I think thats a reasonable expectation. Look, again, in my state of pennsylvania, a big state, biggest state in the country, the economy is recovering. Weve had only a very modest increase in the number of positive tests its mostly concentrated in one county, and we have not seen a corresponding increase in deaths or hospitalizations. Thats actually true and there are important exceptions we should be all about getting back to work, reopening, ensuring that people have the confidence to know that, you know, with reasonable precautions you can proceed safely theres a narrow subset of our population thats very vulnerable we need toprotect them the rest of americans are not terribly vulnerable. Senator, before we let you go, its your team the fillies. Do y phillies, do you think they should play after they played the marlins . Yeah, id like to see them play this is a tough spot, boy. I sure hope were going to be able to continue with the baseball season that has begun. We can all hope we can all hope. Senator toomey, thank you for joining me appreciate it very much. Thanks for having me. Coming up, Interest Rate y maven jim grant. Theyre kicking off their latest twoday meeting. The last time he was on we talked about what do you do in an environment like this buy gold and silver. Gold and silver. That was a month ago. Plus, bill gates on getting a Coronavirus Vaccine across the finish line. Check out shares of mcdonald the dow component reporting mixed sector mixed results comp fell 24 . A little worse than analysts had expected u. S. Samestore sales fell less than predicted they saw comp sales improve sequentially as the quarter went on u w tuned yoreatching squawk box on cnbc stock slices. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. Schwab. Right now, switch to tmobile and get four lines of unlimited for just 25 bucks a line. With access to americas largest 5g included. Thats right. Unlimited and nationwide 5g for the whole family for just 25 bucks a line. Only at tmobile. Fed reserve officials heading to capitol hill. Theres a debate in washington over additional stimulus Steve Liesman joins us with the latest cnbc fed survey steve . Good morning, melissa our panel of 41 financial strategists, economists and Fund Managers see quite a bit more stimulus coming from both congress and the Federal Reserve and they cee lo rates for a very, very long time take a look at the fedspectations. No change from the july meeting. The next move now seen as a hike but not until august 2022. Thats two years from now and eight months longer than our prior survey so the fed has convinced markets it is on hold at just about zero for two more years 9. 2 trillion on the fed balance sheet. 6. 92 trillion now. 66 say more is indeed coming from the Federal Reserve we asked what more is coming from the Federal Reserve you see there, 56 say some form of what they call database or economic database Forward Guidance 39 say more qe. 39 say bond yield caps. Thats grown in support from the last survey. 15 say take no new actions. 10 say date based Forward Guidance moving on to congress, 1 point be point 4 trillion is the average size of the expected phase 4 package. 1 to 1 1 2 to 2 trillion answer we got there now taking a look at the best way to extend the Unemployment Insurance in washington, they like the republican idea of tying it to a percent of the prepandemic wage. At the time we asked the question, we didnt have the percentage they like less the idea of a fixed amount 5 say just let it go. Lynn reiser say the feds tools are ill equipped to fight the ongoing covid19 the various monetary instruments has widened the gap between Financial Markets and the real economy. Joe, we asked about kevin olea oleary. 90 say the government should let the market choose the winners and losers at this time. Hopefully jim graham is listening in wall street journal lead editori editorial. Every time youre on, jim, we move further down the path it seems to sort of central bank control, if you will, of the economy. Last time you were on we didnt have much time left and i was asking you a long question about what the hell to do with the stock market, technology, bonds. You said buy gold and silver that was the simplest answer that you could have given me that was about a month ago its happening already yes well, you mentioned the road were traveling. It seems not much road left, joe. The fed is challenging a notion that theres scarcity in the world. The fed and the treasury together are challenging that notion supposedly according to a new regime, one can borrow indefinitely at Interest Rates of nothing or less than nothing. Its quite a show. Im still trying to acclimate myself i think the rest of the world is in the same boat very new and very different. Amazing here was my question, and, actually, technically if you look at gold since 2011 when it was challenging the 2,000 mark back then, it is a beautiful saucer bottom that looks like it is consolidated. It was confounding to me to try to understand why it didnt keep going higher because we never turned off the spigots, zero interest, emergency measures we never got back to normalizing anything globally. Why didnt gold move sooner based on all of the accommodation weve seen nonstop for the past nine years. Joe, i certainly tried encouraging it one of the nice things about gold is its both dumb and mute. Unlike the Central Banks who cant stop talking, gold never opens its mouth. You never know what its thinking and those who try to explain it are imputing largely their own hopes and wishes on that ever so quiet metal why didnt gold go higher . Gold is kind of a legacy monetary asset which has something in common with bonds today that yields nothing. In fact, 14 point something other trillion yield nothing thats a high yielder. Gold historically has competed with alternative forms of money. Using monetary assets, paper currency, competes with credit which is the promise to pay money. Ultimately it competes with interest, with real Interest Rates, of which we have very few. Almost nothing in the world is yielding more than a 2 rate of interest so it has the field almost to itself with regard to competition from interest. Thats a new thing gold also competes with the confidence of people in the institution of fiat currencies, with managed currencies. You could think of gold as kind of the reciprocal of the worlds faith in people left to their own power. Its one divided by confidence the Dollar Exchange rate is part of this mix. Gold and silver, very, very very, very necessarily speculative assets we dont have a price earnings ratio. Dont have a book value that are largely sentimental. In addition to being, of course, a rather arithmetic competition with the afore mentioned Interest Rates thats also not so pretty if you i assume that gold and silver, you cant talk them into allowing Central Banks to do this because of covid either you cant say, hey, look, were sorry, this is different, we need to pull out all the stops and you need to behave yourself because this is what we need to do this is unprecedented. Its been a long time since weve had a pandemic how does this i understand gold and silver probably have a bright future, but what about just in general the world now that were reaching, as you say, the end of the road in terms of even thinking a scarcity of anything what does that look like for economies and for growth rates around the world for gdp and for the prospects if we just you know, where money becomes basically, you know, like you need a wheelbarrow full of dollars to buy something if thats what were looking at its not quite clear what a rise in gold price might be discounting. You mentioned wheelbarrows, dollar bills, that is one possibility that is a van i shallingly remote possibility. Gold could also be discounting a form that would instigate still further central bank action. You mentioned earlier, the fed wisely with gold and silver not taking into account the wholesome main motives of the fed and other Central Banks in trying to prop up economies who will otherwise be sagging even more no, gold and silver take into account. Its all about outcomes. Not about motives. Its not about unique epidemiological difficulties this is very cold blooded business wondering where the future of gold and silver, seeing that future is less good than a while ago. Scary melissa . Jim, it seemed like the rally in gold really took off when really yields went negative back around the march equity low bottoms. I know it sounds like you think that the conditions that caused them to go to a new record will remain intact. When you look out on the radar, horizon will not keep this rally going, will not keep the price climb in gold and silver. Absolutely one can mention that as i mentioned a few minutes ago, i was one of the people who forgot to turn bearish on gold in 2011. Joe mentioned the gorgeous looking saucer bottom but that bottom which in counter terms only lasted nine years to some of us who were bullish lasted many more years than nine. Im here to tell you that gold and silver can be most treacherous friends. They are speculative assets and the positioning has a lot to do with it. The question is today what else do you do with 1920 in gold is that money well is it better placed in bonds well, i would say no i would say that a bond is a promise to pay money and that promise is being i would say debased. Central bankers tend to make the currencies lower in that respect i would say gold is not over valued my goodness, thats a subjective view. Insofar as one can see in the future, i feel the field of vision is rather short Central Banks could announce their intention to keep rates low or negligible, less than negligible for years to that extent i think that gold has a fairly bright future. We see remember ten years ago we had we had forecasts of 5,000, 10,000 an ounce. Maybe its on ive seen people say given the current environment and prospects for it, that a double from here is not like totally out of the question, jim. Time will tell we will have you who knows. We will have you on as we watch this i love listening to just the history of fiat currencies and Everything Else and the way this works. Coming up, investor michael know v novogratz will join us earnings due from all of the faangs minus netflix what a coincidence, the four ceos will be in front of congress tomorrow. They will weigh in on all of that including bitcoin, tesla all of it here on cnbc coming up, more from that rare interview with microsoft cofounder bill gates. Hear what he has to say on controversial comments elon musk made early in the Coronavirus Crisis as well as vaccine candidates that are currently in development. Also, the spread of siorti on minfmaonsocial media stay tuned, squawk box is coming right back. Welcome back to squawk box. Microsoft cofounder bill gates has deployed more than 300 million towards combatting the coronavirus. He said the coronavirus is dumb. Elons positioning is to maintain a high level of outrageous comments. Hes allowed to say these things i hope he doesnt confuse these areas hes not involved in too much and in that interview with bill gates theres a second wave which are cheaper, could be more effective. Johnson johnson has a particularly good vaccine. We live every day with our vaccine experts talking about this how we put the worlds resources isnt just driven by a normal market thing this is cooperation within countries and across countries. I asked bill about the profit motive for companies that are going to be producing these and what he thinks of that philanthropy and government money is supporting covid. Well, for the develop countries, its only companies that offer a very low price because raising money to help those poor countries, so far we havent been able to raise the money. Even if the vaccine is, say, less than 3, youd need over 10 billion to get two doses out to all the poorest there were more strict. Its the marginal costs the donors will be willing to pay. If you took money from barda, the u. S. , the question is did the u. S. Require a low price in return for that or what was the de deal the u. S. Is to be congratulated in funding more r d and that will help the world. That is the one category to get a positive grade on the Pandemic Response figuring out what the pricing is going to be, what the volume availability for the world at large is going to be, thats still very unclear were trying to create a dialogue and find out, we need companies to add to it and thats unprecedented our technical is advising on how that can be done. Related to that, we just had the ceo of moderna on. There was a story in the New York Times over the weekend, over 1 billion of insider stock sales have been happening from the participants or moving forward with a number of these vaccine efforts. How do you feel about that do you think the taxpayers and policy makers should be looking at that . Well, youd have to say was the barda deal done in a smart way . When those are opened up, well look at that my hope is that this whole innovation of the pandemic is that Pharma Companies want to help out some companies are doing better on that than others. That will be very important. And as we have been discussing all morning, ceos at the helm of the states Largest Companies will be addressing a house subcommittee and i asked bill what he makes about spreading conspiracies including his own involvement in all of the covid this covid pandemic definitely when you let people communicate, you have to deal with the fact that certain incorrect things that are very titillating can spread very rapidly compared to the truth. Weve always seen that with vaccines any negative thing gets out to people and the you know, the facts about, no, its safe, it doesnt cause autism, that travels very slowly by comparison and social media can make that even worse so the degree to which the Media Companies can see whats being said on their platform and take things that are absolutely wrong and get rid of those things or slow those things down, thats very tough because as you move over into political speech or a valid discussion about the safety issues, how you divide that line, that visibility, these are complex issues and, you know, it has been a spreader of lots of negative things. How do you strike the balance there. Say that again. Do you think you would take a harder line . The reason i ask is Mark Zuckerberg has been very firm about covid news hes actually all over covid news, tries to keep it tries, i think, to deliver the right news and tries to filter out news that isnt but when it comes to, quote, news news hes more if i said liberal or progressive with it people would think that was a political statement, but its not. Well, some of the messages on our platform they dont see because of the encryption in whatsapp and so they in order to not have any responsibility theyve made that opaque so whatever the issue is, antivaccine, child pornography, they have made sure they cant intervene on those things. Different countries are debating, you know, is that appropriate. Is this idea that you cant when you have, you know, criminal activities or different things, the government is blind to whats going on there i dont know that thatll come up this week i think this week is more of an antitrust related thing certainly reminds me of when i went in front of the congress, i wish them well let me briefly ask you about that though because we talked about how important competition has been in trying to find a vaccine in this time is there enough competition in the tech world today, do you think . I think over time the tech world is naturally very, very competitive. Now im not saying that the authorities have to be totally la lassezfaire, but i do think people under estimate that natural Competitive Forces do come into this space we saw that, you know, as mobile phones came in, that was hyper competitive. The prices keep coming down, products improve there are some things like branded merchandise, controlled marketplaces, it will be interesting to see how that gets regulated. Yes, i think of tech as even without massive regulation, that there will be a lot of innovation two quick notes, guys i dont know if you heard it, but implied at one moment when it comes to facebook, for example, that part of the encryption strategy is almost to escape responsibility for some of the things that go on on that platform, which i thought was an interesting comment. The other thing i wanted to mention is you can watch the entire interview with bill gates, you can do it on cnbc. Com he makes other news in the interview which is worth watching in part because hes been working behind the scenes in washington, both with democrats and republicans and members of the administration to try to add to the latest supplemental covid bill so that countries, especially emerging markets and others, get funding and subsidization for covid drugs in part because they couldnt have the money to do it if they dont have access, it will come back to countries like the United States and rebound as well thats an interesting moment thats worth watching. Watch all of it. Well put it on the squawk pod for the podcast list eners. The world is all connected. Were in it together speaking of encryptions. I thought his answer to the moderna Insider Selling was encrypted. What did he say, andrew . You said, is it okay he said, if the barda deal was structured properly. I dont i think that hes i think that there are questions about the way the barda transactions have been structured, about what the requirements have been on companies and that some of thats been opaque and not public yet in terms of what companies can do, what they cant do, how much theyre supposed to be able to profit. We dont know that part yet. It still doesnt get to the point though, yes, we dont know what the government will pay for a Moderna Vaccine versus the pfizer which is 200 million in order to guarantee a certain number of doses. It sounds like hes saying if we know how much were going to pay and theres transparency, go ahead and let him sell the u. S. Government gave 1 billion to moderna to fund this vaccine. Thats the difference whenever we talk about a company thats in the business of saving lives its different than just a tech company wow, this entrepreneur had an idea, he put his money on the line, he hit it big. God, its the American Dream hes allowed to make a lot of money. We always wonder why pill companies, if a pill costs 4 cents, why can they charge 40,000 . We have to explain the innovation, but whats unique this time is the government is in the business of providing a lot of the risk capital to the companies. Then you have another thing thrown into whether the profit incentive is the same as with a private company doing it, right . So its we should have a discussion about it. Maybe another its only a threehour show and i dont think theyll give us an hour on squawk on the street. Probably we can ask well ask cramer, hes coming up. Coming up, investor Mike Novogratz joins us live with his read on gold and bitcoin stay tuned, squawk box will be right back 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 back to squawk. New York Governor Andrew Cuomo furious about a concert on long island last saturday hes appalled, he says, by egregious social distancing. The department of health will conduct an investigation we have no tolerance if youre saying to yourself, why is wall street all a twitter, its because of a unique twist the concert which featured Goldman Sachss ceo David Solomon in this case as d. J. Dsol it was planned as a drivein the whole idea, if you will, was that people were going to stay in their car or stand around their car and stay socially distanced. As you can see on the screen beings thats not what happened at all theres a bit of this taking place on wall street commotion inside and outside Goldman Sachs, emails whizzing around and the fact that the governor has gotten involved and pointing out this particular event and of course David Solomons involvement in it. Goldman sachs gave us this statement. David agreed to participate in an event for charity in which the organizers worked closely with the local government and put Strict Health protocols in place. He performed early and left before the show ended. The vast majority of the audience appeared to follow the rules, but hes troubled that some violated them and put themselves and others. To some degree hes just the talent but, you know, people question peoples judgment in this case. Meantime, when we come back, were going to get jim cramers first take on the day, the markets, earnings, so much more. Lots to talk to him about. Then investor Michael Novogratz will talk to us about tech and the surge in gold and bitcoin. Stay tuned, squawk continues after this headquarters, jim cramer joins us now i saw 3m and they said, wow, it was bad but its not as bad now, got better as the quarter went on similar comments from mcdonalds things seem to be improving. Is that a microcosm of the country, jim, or is that about whats happening absolutely. Micro man, michael will be talking about how the land four weeks have been terrific, mcdonalds is adjusting. Obviously we saw trough already so people want to buy these big cap stocks look, there is still a belief, i think, that youve got a trough and things are going to get better and better. I am a little more lets say circumspect given the fact that when you see how quickly this thing still spreads i dont want to necessarily say that things are done, particularly because of aero space. Raytheon is very adamant that we are not going to see a rebound in aero space until 2023, joe. 2023 is a long time from now so i think that raytheon is an honest broker, the stock is up, its greg hayes, he is a straight shooter we need to see aero space return. Does fed stop or does faith i dont know improve what comes first right. Thanks, jim. Great interview by andrew on gates. We will see you in a couple minutes. Thanks four of the biggest tech companies, the faangs minus netflix set to report earnings later on in the week Mike Novogratz, always good to see you. Good to see you guys as well. The shades are super cool youve said in the past that youve missed the tech run and that you think that its a bubble, a fedinduced liquidity bubble thats causing this akin to the bitcoin bubble in 2017. Does that make you want to short tech have you been short tech you know, ive taken some shots at it, but, listen, great bull markets dont die easily. It looked like tesla put in a high at 175, huge volume, huge option volume, came out, closed, earnings came out great, couldnt hold its bid. Yesterday it explodes 8 so, you know, this bull is not going to get put down with one arrow. Well see. I think, you know, this week will be really interesting i use tesla as a bellwether for all that energy in the story stocks, there are plenty of others you can use i do feel like people kept asking me why wasnt bitcoin rallying bitcoin still has a lot of retail interest in it and i think a lot of that retail interest shifted to the story stocks, the tech stocks because they were more fun, moving faster, you were making more money. Now that these things have rallied so far and might be at some pause i think yesterday you saw a lot of money shift back over to gold and bitcoin. Listen, we are in a speculative bubble this those stocks, call it whatever you will, its hard to call a top and so, you know, if you do, do so, you know, quickly and at your own peril. So i have taken a couple shots at it, you know, sometimes with some success, most times not with success my core positions have been in gold, bitcoin, silver and those are those are working great. Yeah, and i wanted to ask you, you know, i usually talk to you on fast money, we like to play the game would you rather so here is the question, would you rather gold, record high here, orbit coin over 11,000 at one point . Whats the best value . I think i would rather do bitcoin. Bitcoin is trading at an 80 vol and gold is probably at 20 vol so your positions have to be sized accordingly. We are early in the adoption of bitcoin, im seeing more Institutional Investors slowly moving into the space. They cant run into the space because it takes a while for them to learn how to buy t we just did a partnership with case which is going to allow the whole wealth channel to participate in a simple bitcoin fund its products like that that i think are bringing this new group of buyers into the space gold has been around for 3,000 years, its pretty easy to buy, you call your broker i think there is an adoption game in bitcoin that you dont have in gold, but i like them both we also just took out 10,400 in bitcoin so that opens up a much bigger move. Brian kelly was saying that he thought bitcoin could go to, i think it was 50,000 in 2021. It is time to come out to trot out some of the bold bitcoin forecasts, you know, in the days of 2017 they were a dime a dozen . Yeah, listen, 2017 was a wild speculative bubble and so, again, its like picking the top of tesla, you are just throwing a number out there and its going to run out when theres either just, you know, buyers exhaustion or some poll po si move great bubbles usually end with policy moves, fed raising rates. Doesnt look like the fed is going to raise rates this time it could be biden election and we have much higher taxes that could end this bull market, but the liquidity story is not going away i mean, nancy pelosi is already in for 3 trillion versus mnuchin, you know, 1 trillion in what theyre doing. Were going to get a big stimulus. You are not giving me a forecast, is that the bottom line i have give you a forecast. We will be at 14,000 in the next three months could we be at 20,000 at the end of the year . Easily i was saying the same thing with gold gold can go to 4,000 or 5 like once you take out old highs its something thats just valuable because we say it is, theres no real fundamental value where gold could go, its going to go as far as animal spirits take it and as long as this liquidity pump globally is turned on i think gold and bitcoin will go a lot higher. Can you give me an idea of the size of these positions in your portfolio i mean, gold, for instance, is a percent, bitcoin as a percent. Give us an idea of how youre thinking about these two well, im the ceo of a Public Crypto company and i have my Crypto Assets in that company so thats now, you know, the stock has rallied a lot and so, you know, its a higher percent of my net worth, its probably, you know, 35 of my net worth and you can think half of that company is bitcoin so i probably have, you know, 17 , 20 of my life in bitcoin. So i want it to go a lot higher. Gold is more of a 5 position. Gold would be higher, quite frankly, if i didnt have so much bitcoin. And equities because of the run a big i have very little in equities other than ive got big private investments, right we have a big stake in bojangles, a Fried Chicken company. Youve got to bait all that to the market i look at how the quick serve restaurants are doing and i feel good about, you know, you look at a company like wing stop which is now almost a 3. 5 billion market cap selling chicken wings out of strip malls, the market likes quick serve restaurants, people are going through drivethrus. Its hard for me but i dont have a lot of just long s p or long individual stocks right you mentioned the drivethru trade during one interview mike, im curious because you keep mentioning tesla, i dont have to ask you about it, you keep bringing it up in the context of a bubble. Is that one of the biggest bubbles you see in the equity markets right now . There is a reason why its on your mind. Partly because its the story that encapsulates this what i call story stocks. You can look at, you know, wing stop, wing stop is trading at, on, 80 times earnings for a Fried Chicken company. You know, there are anything that is showing growth right now the market is flooding to. Right. Some of these are great companies, they will be around for long periods of time, i just think theyre going to have to be perfect to even come close to the valuations that theyre getting tagged with. So that usually doesnt last mike, its always great to get your thoughts. We appreciate your time. Thank you guys. Mike novogratz of galaxy digital. Lets take a quick check on the markets. We have a flood of earnings across on the tape, dow looking to lose 73 points at the open, s p looking to be down by 7. Nasdaq looking to be down 17 thank you good tuesday morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer, david faber. Futures are a bit soft as earnings are mixed from a handful of very big players, 3m, mcdonalds, pfizer, raytheon, the gop proposal is out, twoday fed meeting begins, bernstein cuts tesla to sell watch gold as they were just saying hit 2 k overnight but has settled back jim, we do have some earnings to chew on, but theres still a lot on deck for later in the week. Look, i think that many people want to be able to say weve seen the