Transcripts For CNBC Squawk On The Street 20240712

That. Right i think that the shock value of that is maybe more, lets say, the bark versus the bite i think that theres a belief that we could get a lot a much better picture of what the Health Situation is going to be like in november so its a little premature to be able to say what the president is saying and its certainly contrary to what he was saying about the idea that we do have a vaccine very soon. If we have a vaccine very soon why do we have to delay the election and why does it have to be crooked i think you cant have it both ways you can have the vaccine come out and have a gd election or you must know that the vaccine is not going to come out and you will have what he just tweeted but whatever it sows chaos and chaos is bad for the stock market. We did get some promising vaccine news out of j j as they move to human trials in the u. S. And belgium the earnings which we will talk a lot about this morning are basically shaming the analysts, virtually surpassing the entire range of estimates that have been drawn for q2. Im so glad you mention that because theres two things that are happening, the numbers are much better and also a lot of companies are reinstituting guidance a, that was something a lot of the analysts didnt expect its pretty much across the board that you find that things are better the market would be up if it werent for germany was down 3 and then the president in a very counterintuitive method which i think you should not take away because he doesnt like to immediately contradict themself but realized we could have a good day on the market, could have gone to all time highs, it was definitely poorly timed in terms of how the stock market is doing. David, you know, he cares tremendously about how the stock market is going to do. Yeah, it has been a report card for him from the very beginning of his presidency and he refers to it all the time far more than think president that certainly we can remember in our memory in terms of almost on a daily basis as a reflection of whether he is succeeding or not. Guys, you know, regardless of whether there is any substance whatsoever to the claim that mail in voting could be fraudulent, which most people, in fact, i think it is universally said is not the case, this does raise the prospect at least in some minds or continues to raise concerns that are already there about a contested election, about what will be a very difficult election day and perhaps even days after that. I think that is sort of one of the keys here as well, what we may be seeing in terms of some of the reaction of the market, jim, is just, you know, youve already heard it will the outcome be accepted and in that interview that the president did with Chris Wallace, he didnt say that he necessarily would accept the outcome of the election if it went against him so this plays into those continued fears that are already in place. Look, we do remember the contested with gore and as that went on the market was very unsure of itself, but obviously if the president decides he doesnt want to leave the white house there will be constitutional challenges, the Supreme Court is actually pretty honest about this stuff, they have a good Supreme Court, it should go there rather quickly i dont think it should just be up to the president with a tweet to decide when the election is going to happen. Its not exactly a Broad Based Coalition that he is bringing about. The one thing, carl, that i find interesting is that the president seems to thrive no, seems to enjoy the notion of no stability and then he likes to bring stability to the situation after he has sown chaos. Its a constant theme of this presidency and its always amazing to me because, you know, you create this level of uncertainty and then you solve the uncertainty. It usually takes a full day to solve the uncertainty and then the market goes down that day. Sure. Create a fire or at least the illusion of a fire, jim, and then play the fireman. Which sort of brings us to covid 5 stimulus mcconnell yesterday on fox saying i have 20 members who already feel like weve added enough to the national debt, he has his own caucus to satisfy along with the democrats and getting a compromise do you still believe a skinny deal is possible absolutely. These benefits run out tomorrow. One of the reasons why the president better start fighting about staying in the white house is that the democrats are going to say we were going to give you 600 but the president only give you 200 no matter what way you shake that thats a very positive message for the democrats. I have to believe that trump may want to camp out in the white house. I want the guy who gave me 600, not the guy who gave me 200. David, pretty simple, right . 600 is more than 200. Yeah, it is theres no doubt there is a need for it i know there are plenty of people who say that it is a disincentive to work, its unclear where the evidence is although we anecdotally hear that from Business Owners including yourself, jim. Right. Where we are going to end up is the more important question i dont know where you get to on a compromise and then perhaps you move to the 70 of what your wage was prior to being unemployed at some point, although the unemployment offices or systems at so many states will have to do a lot of adjusting and were talking about unfortunately antiquated Computer Systems i dont know where we end up and neither does the market in terms of what people are actually going to be getting. I think if secretary mnuchin were sitting next to us he might say there was a moment where we didnt want people to go to work, it was safer to shelter in place. We probably prevented even more illness by doing that. I dont know where you think we are, but yesterdays death total was a terrible any death total is bad, but yesterday i thought we were in the going of sweden, i thought things were starting to get better and it was not a good number. Theres definitely a lot of fear out there. The two numbers we got this morning were not positive and i think that anybody who thinks that its time to stop this is someone who must genuinely live in a bubble, not the nba bubble, but a bubble of their own. Carl, things are going to get very tough if you suddenly cut out that amount of money where its going to get it you have is on the landlords who basically are going to be getting nothing. If they have a mortgage they could be in trouble and that ripples to the banks maybe thats why the bank stocks trade horribly even though we thought they were a safe place to go. Yeah. Action yesterday wasnt too bad, jim, for a while. For a while. Which threw some for a loop some thought it might be buffett on b of a, but after powell i guess maybe not as much. Yeah, i mean, look, i think yesterday the market robin hood has taken over this market and in a day when we had the titans of tech in front of Congress People were focused on kodak. Kodak is a very Small Company but this kind of thing, the government gives kodak a contract which is completely out from left field because kodak then the robin hood guys swoop in and they take kodak up to a level that reminds me very much of 1999. This stuff has got to stop the whole robin hood coopting of the market seems silly to me. I know everybody is going to end up losing money, but then again obviously kodak if theyre watching, hi, how are you guys doing, they should issue 15 million shares right now right now. This he do a spot secondary if they know how to do that and that would put an end to this. You take advantage of it as all the Cruise Companies did. They looked at what robin hood was doing, they said were goings to hit you right between the eyes with stock. Thats what kodak has to do. David, you know when a stock is up like this you call your banker if they have one, you say, hey, listen, guys, 15 million shares right now i want it by the opening and, boom, don done and hour right not a spot secondary which i would bet their primary offering. Director mr. Garfunkel or scoot tough chairman would love to do with their stock i would imagine giving the incredible paper gains that those two gentlemen have right now potentially in the hundreds of millions of dollars. Incredible. Youre right, a primary offering on the spot right now, get it done, raise the money, why not. Right. Ala in some ways if the audience is there, i mean, remember hertz a bankrupt company was thinking about doing the same thing carl, these guys, i mean, when you look at these stocks, you say to yourself, all right, are they going to play this game were not going to modernaize them but you go in there and you just say, do you know what, these robin hood guys, do you know what, so long, sucker. Kind of what theyre saying. Another theres another form today of insider sail at moderna which maybe we will talk about in a bit as for the president s tweet, guys, we might be hearing from some members of Congress Today since moving the election would require an act by them and for that we will it your honor to eamon javers. Thats right, you guys saw the tweet from the president and of course you are making the absolute right point about this which is that the president doesnt have the power to delay the election which may be why he puts three question marks after the idea of delay the election until people can properly, securely and safely vote this is an idea that hasnt been floated in modern American History and of course remember that during world war ii and during the civil war the United States held elections in very, very difficult circumstances far more difficult than this the president here could be sending a signal that hes seeing some of the poll results out there and obviously doesnt like what hes seeing and of course one of the effects of this tweet will be to suggest to his base politically that this is an idea that they ought to consider this could be the president very much testing the waters here in terms of putting this idea out there. But of course if the president doesnt have the power to do it, theres not a whole lot of reason for people to take this very seriously at this point because congress is extraordinarily unlikely to take this under consideration, carl eamon, its david yeah sorry. Eamon, just real quickly, i raised this, but you would have a better insight into it doesnt it, though, exacerbate the fears that he wont accept the results of the election should it go against him absolutely. It was raised by Chris Wallace in that interview they did. We just have a helicopter passing right overhead yes, exactly i mean, the president has suggested that he might not accept the results of the election and the request he is what does that mean . Does it matter if the president accepts the results . Remember the president doesnt have to issue a concession to be defeated, in i president doesnt have to issue a concession to be defeated, he is defeated when the Electoral College says hes defeated and congress certificates those results if the president doesnt accept it doesnt matter because he will be evicted from the white house one way or the other the question is whether or not this election goes into sort of a bush v. Gore gray area where its not a question of accepting results its a question of whether we have results at all due to confusion or chaos or legal action or Something Like that i think thats the danger area for american democracy going into this election and the president is clearly primed to say there was fraud and its an illegitimate election. If he ends up with a result that is in some sort of gray area there, this is a president who has said that he will say there is fraud in the election hes saying it now and said it back in 2016 in an election that he actually won the presidency i think the danger area is that. If the president is overwhelmingly elected or defeated, i think that will be clear and the Legal Process will be clear the request he is if you get that gray area result and thats why this tweet speaks into that vein of thinking david. Thanks, eamon. With less than 100 days to go, eamon javers, thank you for that is correct we will watch it closely today along with all the earnings news on this the single busiest earnings day of the season you have 13 of the s p reporting, almost a third of the market cap were going to talk to the ceos of service now, yum, carrier, imax, kellogg and we will get to qualcomm, coasmct, ups, kraft, heinz and more when we continue. Car and motorcycle policies . Ok . 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Welcome back shares of service now moving down as you see a bit this morning despite what were numbers reported after the bell that were better than many of the analysts at least the commentary i have seen who follow the company had anticipated. Lets bring in Bill Mcdermott the companys ceo to discuss it in more detail bill, always good to have you. I want to start off on something that might be pressuring the stock and its not related to your numbers, but to your head of sales and a planted departure. It was noted in the call sort of halfway through the call, but it did seem to take some investors by surprise. I wondered if you could discuss it in light of the fact that it may be pressuring your shares. Right as you know any change to the Capital Markets raises questions, right so David Schneider is a 35year sales veteran, has been with the company for nine years, had a great career, the first day i met him last year he said he was going to retire at the end of 2020 so kevin hafferty has been running the number and leading sales for us for six years so there really is no change and david is staying with me until the end of the year and we have an outstanding management team, theres no fundamental change to the coverage model, who is running the number and the execution with customers so they need not worry were good. All right so youre good and theres nothing more to say about it at this point, then, bill, is that right . Absolutely not, other than congratulations to dave for having a great career and hes going to spend some time with his family and after 35 years hes earned that but servicenow pipeline, performance, outperformance, we are ed to roll. Bill, jim cramer, good to see you, partner how have you been . How are you, jim . I miss you. I miss you in the east i miss yours conference. Thank you we will be back. Full disclose i know its not about friends its about money but i know bill outside the office bill, im going to give you a choice, you can talk about what you did for Goldman Sachs or you can talk about what you did for disney and dis me plus some people understand how you have a great return on investment when somebody brings you in yeah, jim, thank you for the question so if weve learned anything, especially from this covid environment, every ceo wants to give their employees a great experience and if you think about that experience we have to make work work better for people people deserve in the enterprise to have the same consumergrade experience as they enjoy in their living room couch on a saturday afternoon so if you think about what weve done for the Employee Experience, take a jpmorgan, take a Goldman Sachs, take an uber were stream lining the Employee Experience, everything is mobile, everything is webbased, everything is connected to conversational tools like teams and zoom. So that experience has to be world class. Also we now have a return to workplace application suite where we keep people safe. Are they ready to come back . Is testing in place . Is social distancing in place . Ppe, inventory management. We took uber and brought them live in less than two weeks on our whole return to workplace suite of applications. So Employee Experience really key. Now, you mentioned another paradigm which is disney and this is the Customer Service management paradigm, jim how do we take Business Models and completely reinvent them, right . So disney no theme park, no cinema, not much on espn, lets go for disney plus we got them with 55 million users now signing up for subscriptions, using virtual agents and ai to make sure the experience is great, and if its not, a human is automatically issued a work flow to make sure the customer is happy. Zoom 300 million users can you imagine this volume and we are managing that for zoom to make sure the customers for zoom are happy. Thats what were doing, making work work better for people. So the streets thinking some people feel that the billing your guidance was a little bit light. I dont know i mean, to me this is a tough environment, you did so many million plus 1 million sales. I just want to hear your view about whether you think things are going to get worse or its difficult to predict because the stock is down, im trying to get my arms around that. Yeah, so, first of all, think about this, jim, you are in a situation where you have a beat on revenue, on margin, on Free Cash Flow. So everything in the and also on the billings. Everything in the company is a beat so in q3 we have seasonality, we are in the Third Quarter, more deals are starting to happen and this is a year over year paradigm with servicenow in q2 and q4 so seasonally q3 has a little bit less bookings from q2 and q4 so we raised the full year guidance, we reiterated that the billings are fine and you will get back into the 20s in billing for the full year and thats the way we guided the company. So youre solid on revenue, solid on billing, solid on Free Cash Flow margin and operating margin in the company. This company is ready to outperform yet again in the second half. Thats why we raised the full year guidance with total confidence bill, you talk about, of course, the Digital Transformation that has been accelerated in so many ways as a result of the pandemic how far along are we in that its been rushed now and your business is certainly reflecting to some extent what companies are finding they have to do, but how much more do we have to go well, you have a 7. 4 trillion total Addressable Market in the next 3. 5 years for Digital Transformation so the tailwind for growth for a pure play born in the Cloud Company like servicenow cannot be overstated in its impact. So we see rising pipelines, we see very happy customers with the highest loyalty rates in the industry and we see people investing in Digital Transformation if you talk to ceo,nine out of ten have a Digital First strategy but only four out of ten feel that theyre ready to compete if they are disrupted. Everybody is going to servicenow and companies that can do what servicenow can do, a real platform that says, hey, how can you make i. Te not just support the business but be the business, reinvent my Business Model, give me employees and my customers a great experience, and develop edge applications, for example, Companies Like lowes with 323,000 employees had to in 96 hours deploy new applications to the whole workforce when covid hit we did that for them nobody can move with that speed and that agility so its all about productivity, protect my revenue and give me Business Resilience. I will give you an example on Business Resilience and this is going to be big. We have to make sure people are secure so if you look at the u. S. State department, the state of montana, all the companies we work with now including jpmorgan and others, they want security built into the work flow so they can see where any vulnerability might exist in the work flow so they can remediate it quickly and keep their business safe. U. S. Department of state, for example, you know, state department, theyre flying people all over the world in a covid environment. They want to make sure theyre safe wherever they are state of montana has to make sure that the citizens get the service and they have to get that service now virtually so Digital Transformation is driving completely different behaviors in the new economy and its something were going to watch very closely. Bill, always appreciate your taking some time with us, thank you. Its a pleasure being with you and thank you very much and lets go get them, servicenow. All right Bill Mcdermott, ceo of servicenow. Thank you man can sell anything. When we come backup brands ceo david gibbs is going to join us on his companys quarter and the strategy dow futures are down 300 dont go away. Experience the joy of a bigger world in a highlyconnected lexus vehicle at the golden opportunity sales event. Lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. Futures are weak here, dow looks to open down 300 as we watch covid cases, progress on stimulus, gdp claims and of course all of faang earnings after the bell tonight squawk on the street is back dot aomt. Ngo away. Announcer the opening bell is brought to you by nuveen. A leader in income, alternatives and responsible investing. There you hear the applause for the opening bell this morning. Of course, as we count down to there we go ten seconds, there it is back to our headquarters, i will get back there one day soon to see you in person, jim we start off with more red on the board. Softness in germanys market perhaps adding over here, despite what have been better than expected, from a number of companies. Jim, we are waiting for some of the biggest guys after the bell tonight. The most important night of the year we have everybody who was who is down there well, virtually. Facebook, amazon, weve got alphabet and we have apple thats why i am concerned that when you have that level, when you have that Many Companies there will be a lot of trading and the trading will be done without a lot of knowledge and this is something thats been happening endlessly, but tonight will be the worst of the year. The wild west will be alive, people will be trading at 6 00, 6 30, losing their shirts, getting the wrong direction. I hate it, david its just stupid. Yeah. And you always say to wait for the call, which is important, and really just to wait in general oftentimes is the right move, jim, given you can get commentary on the call that certainly will move these stock prices even then you want to understand the context of which that took place. Your advice there is always important to take. As for whats moving this morning, jim, i mean, you know, p g, kellogg, kraft heinz, pantry loading continued to be quite strong p g numbers they havent seen growth like that in a long time. They have everything except for grooming because people dont care, people arent shaving as much, Everything Else is on fire weaker dollar will make things even better next quarter the one i want to emphasize is United Parcel, ups, when you look at that, you say to yourself, okay, well, why hasnt that been the case for a long time business is so good, why arent they making money . Well, they have a ceo, carol tamay who retired, cfo of home depot, always thought as a genius, a quiet genius, look what they did. Thats why that stock it up, not down, because one person can make a great deal of difference. Carl, shes a leader, a quiet leader, one that will never promote herself so i have to promote her. Look at that chart look at what shes done. I mean, its amazing what shes done over there. Jim. The thesis on ups was that business to business was going to suffer but maybe the analysts didnt take into account a 65 increase in deliveries to homes and that takes parcel volume up 21 amazing. How do they not have recognized that there will be breakout residential when people dont want to go to the store . Look, i think that this is something thats not going to change i think that there are places that are that are obviously are safe to buy places, safe to go, but why not just order online that was when i was listening to the Congress People yesterday the undercurrent that was so wrong with amazon was the reason why they are so powerful is because its so dangerous. People dont want to get sick. People want to order from home and United Parcel plays a role fedex is too much foreign i guess versus ups but now they have carol toe may and she knows how to make money. Knows how to save money, too amazon up. I dont know, its subjective, carl, but i thought the executives handled themselves very well, good decorum, lets got mad and had a thesis this is a larry kudlow view america is great these companies chose to be great, the ceos all work really hard this was probably a major break from their work. These guys work 24 7 i know everyone is jealous that they make so much money, but, carl, they earned it oh, my, all those people work so hard. We knew it was going to be a catch all, jim, for a bunch of different concerns, not just antitrust, but it was it was a contest of endurance to some degree here is an exchange between bezos and the Committee Chair about thirdparty sellers. Why should a thirdparty seller list their product on amazon if they are just going to be undercut by amazonowned product as a result of data you take from them i think what i want you to understand and i think is important to understand is that we have a policy against using individual seller data to compete with our private label products. But you couldnt assure ms. Jayapal that that policy isnt rye separated routinely. We are investigating that i do not want to sit here and i do not want to go beyond what i know right now, but we are as a result of that wall street journal article we are looking at that very carefully i mean, thats one way to answer it. I would have answered it and it was good. Im not against what he said, but theres another way to answer it, its a little bit beyond what you could do in front of congress which is to say if we are so powerful then why are all these retailers going to google cloud and why are they going to azure . There are opportunities they dont have to go with us i would have thought that was a better answer. What they would have said then im sure, they would say, listen, im not talking about azure, im talking about your company. But just from the point of view of stock market, we had shopify on yesterday and to me i would be worried about shopify or amazon why . Because shopify may be another way to get the job done. David, you know, i know that amazon is was monopoly at one time and was leveraging Amazon Web Services, but this is the most vulnerable that amazon has ever been and i thought they were a little late with their criticism. Maybe, but, you know, you keep mentioning shopify and i understand it to a certain extent, but isnt what really allows amazon to dominate in the way that it does is its Logistics Network . Yes. Which is unparalleled shopify doesnt have that. No, shopify does not, youre absolutely right, but, look, and you can you know, game, set, match, youre absolutely right, the logistics for amazon are terrific there was one time when only amazon did this stuff and thats not the case anymore were going to hear from alphabet tonight and thomas curry will put a google cloud number in front of us that is going to astonish us i just think that the goliath that is amazon had an amazing quarter in part because of covid. Im the most worried about amazon of all the stocks that report tonight because it is easy for them to say it didnt be this good because this is a shelter in place number and thats look, thats what im most worried about shopify is 125 billion. People think its a little Canadian Company 125 billion company thats really kicking butt. Its become a very large Market Cap Company, the largest in canada or canadianbased. Carl, i mean, the question with amazon always also comes down to spending are they in a spending mode or not. Right. And i believe that they very well may be right now and, of course, as we always point out Amazon Web Services the Profit Margins there are enormous, as is the advertising business which we had wondered about as well given weakness in small and medium sized businesses and their wherewithal to spend money in ads but it maybe that they have to on the facebook platform or amazon as well. Theres been more than 40 price cuts by Amazon Web Services theyve put can the price every year you could say, therefore, its predatory but i just think its great. Carl, i dont know. It does bring to mind, guys, target today with its first and only sell rating, jim, out of mkm. They go to 105 on tgt as they say the online monetization is offset by concerns they have about physical stores. They point out that a lot of competitors are ramping up spending and historically they argue that means decelerating comps for target. Look, i think target has upped its games in terms of going to the store, where its stores are i used shipt two days ago, shipt and got my product within an hour and a half. Uno, the most popular game in america, by the way. Thats an odd call people are upgrading limited, l brands, theyre upgrading gap and down grading target . I dont know i h id rather buy target than those. Speaking of the consumer as you know we will check in with yum brands, better than expected results on good numbers out of kfc and pizza hut on a morning when duncan floating the idea of closing over 1,000 restaurants back in a minute how does the world reopen for business . To return to the workplace, safely, companies will need the right tools. Thats why salesforce created work. Com its an allnew suite of apps, expertise, and services. To manage this crisis today, and thrive tomorrow. Everything Companies Need to return to the workplace. Lets reopen. Safely. In a highly capable lexus suv at the golden opportunity sales event. Lease the 2020 nx 300 for 339 a month for 36 months. Experience amazing at your lexus dealer. One of the things i try to explain to people swen you see the headline numbers and you start selling because the headline numbers are bad and others start selling its an uninformed mob and i want to keep that in mind with our next guest. Yum brands which is kfc or taco bell or pizza hut reported a beat, in other words, their top and bottom lines were good and most importantly their Comp Store Sales were down less than expected of course they were down everybodys were down. So keep those in mind when you listen to this interview with ceo david gibbs. Thank you for joining us. Great to be here, jim thanks for having me. David, lets start with the concept of cadence because we have a lot of younger viewers now watching, im trying to explain, its entirely possible when you see a net number, say, for kfc which was a blowout that it may be in the beginning of the quarter was not so good but you finished strong at the end, correct . You got that exactly right, jim. The momentum that we had this quarter was really impressive. We started from obviously some depths coming out of the initial impact of the virus, but our teams around the world pivoted very quickly, embraced consumers new needs and really strengthened the business as the quarter went on. You think about, you know, what happened in april which was included in the quarter, that feels like 2018 to me thats so far in the Rearview Mirror what matters right now is momentum in the business and where were headed were really confident we are headed to a good place. Pizza hut in the United States which i have been quite worried about because its been a laggard you had 1 same store sales. I want people to understand how many actual physical restaurants could you go into in pizza hut and sit down and eat with that number yeah, actually pizza hut in the u. S. I think was up 5, but if you pull apart the pizza hut number back to our point about understanding the details, the pizza hut delivery and carryout business was up 21 in the United States when you exclude closed stores, closed express units, so thats really the relevant number, obviously, you know, thats a great number, stacks up well against the competition. And thats all done, as you point out, with dining rooms closed all around the United States we essentially dont have any of them we very few pizza hut dining rooms open today. The model is better than i thought for this the one that im confused about, why did you not break out taco bell United States taco bell u. S. Always very closely mirrors the global numbers since the prpop drans o our stores are in the u. S. That number was down 7 . If you look at what taco bell was lapped, they lapped a huge quarter. They are slightly positive on the twoyear basis and they are a great example of what i was talking about and what you mentioned early on, the cadence of the quarter they got hit harder than any of our businesses in the u. S. Just because they had a higher dine in percentage and the breakfast and late light business, those parts of the business have gone away as people are mostly staying home so they had a lot to overcome, they got hit the hardest at the beginning of the pandemic and theyve actually made the most progress during the quarter and as we pointed out on the call the business stabilized in june and july, actually, all three of our u. S. Brands are positive right now. I was reading this morning the taco cut 18 seconds from drive through time i mean, wherer we in making drivethrus operationally perfect . Yeah, the taco bell team, marketing, mike brand our chief operating officer and the entire team with the Franchise Partners have done an amazing job embracing the need for speed in this environment they are below 4 minutes on total time for customers and with the ability to order taco bell on the digital app with just one click and then pull into the drivethru and pick up your food, theres no better way to get an amazing deal in an incredibly easy way. You know, weve seen in retail weve seen some mall operators try to lend a helping hand to individual tenants it doesnt sound like youre that interested in doing the same for franchisees oh, actually, to the contrary you know, early on when this pandemic hit, you know, we stepped up, we reached out to our Franchise Partners, we provided grace periods on royalties for those that needed it, weve been partnering with them all around the world, delaying capital obligations, remodels, new unit development, anything we could do to help the franchisees. Sure. I guess i was referring more explicitly to investments in troubled franchisees. Yeah, look, we have 2,000 franchisees around the world and at any one point in time theres always going to be a few that are, you know, in need of restructure. We have a few, one large one that you are referring to right now that is going through that process. But that was anticipated thats been going on for quite a while, no the really a result of the pandemic as i mentioned, the pizza hut u. S. Business is very strong right now. Were always there for our Franchise Partners we recognize the Important Role that they play in our business they bring the business to life. Without them we do not have a business and for the most part i do believe our relationship with our franchisees during this difficult time have only strengthened as weve partnered together to pivot the business to the way Consumers Want to interact with us. David, this morning chipotle rang the opening bell, one of the things we know brian nickel used to run taco bell, one of the things he was always great at was trying to figure out the one thing that people really want to eat right now. Looks like your team is still doing that you have something at taco bell that is resonating with america, right . We have the Grilled Cheese burrito that launched earlier this month you know your products, jim. Thats great its one of my personal favorites and my son, my teenage son drags me all around everywhere wherever we are we have to get to a taco bell to get a Grilled Cheese burrito its an example of the kind of food that really work in this environme environment. Its somewhat indulgent, but a familiar product, obviously our burritos are well known to people but with a twist of a Grilled Cheese burrito where you have cheese bemelted on the outside makes it all that more special. Similarly at pizza hut they leaned in on stuffed crust pizza, a product we invented at pizza hut, obviously a great familiar favorite, this he leaned in on that during the quarter and that was the big factor. When my kids were younger i would be pick up kfc, i always felt it was the ideal dinner, what my job was to get dinner. I imagine kfc numbers are comfort food dinner because they are doing quite well in the pandemic. Look, the kfc bucket was built for this environment and as you surmised the business was really taken off the 20 fill up is a great value for a family meal, an easy way to feed your family, a great wholesome fresh made food and its really been a big driver of the success for the kfc u. S. Business. I want to thank you, david gibbs, again, the stock market is down so people may say wait a second, yum is doing badly but it does not work like that there are companies that report good numbers but it just happens to be a down day thank you. Carl, back to you. Guys, as weve been talking the president is active on twitter again, says drug prices will soon be lowered massively, big pharma are advertising against me like crazy because lower prices mean less profit. When you watch a fake ad just think lower drug prices. Jim, pfizer this week did say that the eo on pricing could force them to rethink expanding in the United States yeah. The president is really on a tear today i find that when i read that i tend to think about how there are Drug Companies all over the world who are losing billions trying to solve the pandemic i actually want them to make some money away from away from o they continue to spend billions on the pandemic. I was surprised the president took a negative tone given the fact that he isnt going to be reelected unless we get a vaccine. Its kind of like that fabled interview portnoi interview where he said do you regret some of your tweets i may have to tweet after this the president doesnt seem to realize his presidency is in the hands of pharma and they are spending billions to do this im going to get the president to take that one back. Hell regret that. Ill work on it after this got time watch transports upss influence and news from delta. Lets get to phil. Delta ceo with a weekly memo. We saw it a few minutes ago. 17,000 is the total number of employees who have opted to take some type of a retirement, buyout to leave the airline. Thats in line with what the company said they expected when they reported earnings just a couple weeks ago you take that 17,000 along with more than 40,000 who have said well take some type of voluntary leave of absence and you have more than half of this company that in some manner will not be working come october 1st or are not working right now and this is not a surprise this is what people are expecting all the airlines to do they have to become dramatically smaller unless there is a second cares act that is passed in washington, there is growing chatter about that being discussed among people in congress and some of the industry leaders. But at this point, unless theres a second cares act passed, youll see dramatically Smaller Airlines come october 1st. Phil, and news out of the casinos. Las vegas sands making comments ant staffing yesterday obviously a tough open dow down, worst day in about three weeks. Were back in a minute you say the customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept. 5g, everybody is talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item, corner offices for everyone. We just have to make more corners in this building. Chad . Your wireless, your rules. Only with Xfinity Mobile. Now thats simple, easy, awesome. Switch to Xfinity Mobile and save up to four hundred dollars a year on your wireless bill. Plus, get two hundred dollars off when you buy an eligible phone. Dow is trying to hang onto 26,000 and the s p breadth is not good all sectors down energy down 4. Banks down 3 there are multiple tape bombs this morning kellogg, stocks close to the highest levels since october as people buy more cereal for home. Well talk to the ceo coming up. Lets get to jim and stop trading. Times Companies Report on just a wrong day and one of them is brunswick, bc, a remarkable quarter. Better than people ever thought. The analysts got it wrong. Initially they got it wrong. They thought theyd be in trouble. The opposite this is a health recession people buy boats because its something to do. Monster, good quarter. Its your opportunity after the market settles down or even now. It was the best ive ever seen from brunswick jim, you did say this week would be tough sledding. And thats coming into view. Yeah. I know i didnt want it to be, but i had a bad feel about it. And tonight i think its going to be very hard, but well be here late and get it will said the only place to get the results are on his show, but i also reminded him i have a show after his show and i can play a role. Its a supporting role, but i want to tell him anything he can do, i can do better. Well, ethel mermen, as you know. Yes Potato Chip Company you need two . Its that important to have two guests from arts almost. Everybody is you might as well do two from utz you did it with bar stool i knew he had to come up again. Do you think he comes to sports . Does he stick with stocks once every single sports is ramping does he like it that much . And they started. I mean credit suisto me its. A day trade thing . Robin hood it was william tell i was referencing. Robin hood is the people who like kodak know what kodak is i havent looked at it in the last five minutes. Its a spak yes for who peter innavarro. I know its like billy bean listen, we kid we kid the sentiment about pharmaceutical Companies One would think is going to be positive thinking theyre going to save our economy if they find a vaccine. Yeah. See you tonight mad money 6 00 p. M good morning welcome to squat on the street im Carl Quintanilla tough morning for the bulls obviously. Multiple head winds to face. Covid cases 1400 deaths gdp at historic low. Claims up for a second consecutive week its the busiest day in earnings season it shows the winners in sharper relief ups and qualcomm, two examples of that. For sure. Ups wasnt taken initially up with the kind of stay at Home Delivery economy trade, but its accelerated here its well above the june 8th highs. June 8th, it was the peak for the standard version of the reopening rally, and ups is outperforming that they have more than just kind of the shelter in type trade and qualcomm obviously not just with the results but also getting this new Licensing Agreement with huawei and really all of semis acting as leadership for the market i think has been something thats insulated it against broader weakness for a while now. Although, intel clearly the odd company out in that story. Mike, are you heartened at all by the Companies Offering at least some kind of guidance, proctor, dupont . Its better than nothing it is i mean, i think the general message that remember, companies have had four to five months to try to reckon with this and try to come up with a sense of what the budgeting story is going to be and what top line is running at and the rest of it its the kinds of companies that can do it that are doing it. Not all of them do i dont think the market as a whole is hung up on the lack of formal explicit guidance from companies, because its no real no different than what everybody else is trying to contend with which are the unpredictable variables. What we have today is interesting in that you often have a little bit of a giveback after a fed day rally. That seems oh set things up coming into the day and the unemployment claims was the thing i think incrementally that reinforced the idea that were in this soft patch of the recovery, and then very related, treasury yields, perhaps plumbing record lows again theyre flirting with the levels and that shows a market thats trying to come to terms with the fact that were banking on fiscal help and not necessarily seeing it come immediately havent talked about our Parent Company which we do need to talk about as a 200 billion Market Cap Company the stock is down. The numbers look to be fairly good from comcast. It is down, though, a look to be up prior to the market open. Now down as you see ever so slightly listen, on the residential loss of video customers, 474,000 we know cord cutting has accelerated with so many people home and found themselves looking for places to cut expenses as well and the lack of sports being another reason to cut the court. Comcast with a Strong Quarter on broad band and the additions in. That number is strong as was precash flow 5. 966 billion. There were things added in there. Whats interesting is even our part of the company, nbc universal, as you might expect, advertising revenues down sharply. Ratings to come extent but adjusted ebita up because companies arent spending money. It also goes back to the lack of t and e spending the lack of travel overall for so Many Companies that have seen their margins increase despite a decrease in sales. Yeah. Theres builtin buffers with a lot of Big Companies i think that is something youre seeing kind of the resilience what are Profit Margins if not something that can absorb shocks down the road . I think thats one of the lessons. There is some offsets that is going on i think s p wide and yes, were going to see were seeing a 30 , 35 annualized rate of decline in terms of Second Quarter year over year results. But everybody is now fixated on the pace of the recovery because thats the trough. I do think thats one of the things coming through here and one of the explanations for why the market didnt spend a lot of time near the march lows because its not just a static story of this is a big hit to top line, and companies are at the mercy of it. Yeah. Paid a billion in dividends and it reminds me of the dif devided hikes. Picture or the, hersheys, mondelez, i think it was mo and rio as well. Yield is there depending on whether or not you want to chase it its more selective and its a sign of strength and confidence when companies are raising dividends. I know that we came into this earnings season with Something Like 75 of S P Companies having a dividend yield above the tenyear treasury. Almost says everything about how low treasury yields are, but it is reinforcing this idea that there is some bid in equities just because of the income i looked recently, cokes premium in terms of dividend yield over the treasury is at a decade high. So its not as if they have to send the dividends much higher in terms of percentage of payout its just theyre relatively attractive thats one of the sub themes going on right now i think it more explains why the market has not gotten Downside Momentum on these pullbacks and has stayed in a range more than an excuse for why it goes much up from here, i think. David and i have been talking about kodak, and quick, mike, you did share a piece you wrote for barrons about kodak years ago that was bullish do you think the action is indicative of anything other than the mania were seeing . This was good for a couple months before it was clearly a value chapter. Obviously theres been this current of speculative activity thats kind of inexplicable that seems to be detached from economic reality and they have become fad stocks overnight, but i think the fact that we can name almost all of those tells you its not a pervasive mania. Its just kind of a little bit of a side show thats been getting a little crazy and is going on for a while was probably on a net basis, nobody is going to come out looking great on it. But its something that to reflect on the fact that you had the massive account openings and all the rest of it on the Online Broker side. Its manifesting itself in fringes of the market. Mike will be with us for the hour we mentioned the plunge in gdp the first reaction from the white house, a familiar face, chief economist at the National Economic council joe, welcome good to see you and congratulations on the gig thank you very much thank you. Its a heck of a time to come in given the data today. How does the white house want investors to think about this gdp number first, carl, the figures are annualized its fine when you have a growing economy. Which happens about 95 of the time so if you look at it, its really more like a 9 drop 9. 5 drop because we annualize it assuming its going to continue for the full year its not going to happen because this is a pandemic contraction, and weve seen it in the data with march and april being extraordinarily weak and then seeing record growth in many series in may and june. Retail sales, industrial production, employment, the pmi. So were looking at this as really being a shock almost something akin to a natural disaster, and the road to recovery, the Building Blocks are there, and we expect a much stronger Third Quarter and second half of the year. In terms of the high frequently numbers, gasoline demand, card spending, open table. Mobility, all these numbers. And even powell yesterday suggested maybe the pace of recovery turns more from a v to a y, lets say is that fair in your view . No. Because the thing is you have to put the context of the may and june, even july data you talk about some of the figures of ability numbers they are hedged to a new high the pmi, the regional philadelphia richmond and new york fed surveys had great july results with expectations. This is important. Expectations of future order flow, and employment reaching new highs. So some of the data is more mixed. Were looking at the more as being a factor after record growth in may and june i mean, youre going to be a pullback and that needs to be put in context of the expectations of what people thought that data was going to look like. Were on the right path. Were going to see some weakness here and there nothing moves in a straight line, even in vshaped recoveries the numbers look really good joe, its david this is a typical question i might ask you when were at the New York Stock Exchange in your old gig, but ill ask it it seems counterintuitive given what were talking about in the economy, but do you have concern about inflation and what do you make of the move in gold and the debasing in terms of dollar weakening given that money were printing . Sure. I mean, i love looking at Commodity Prices i prefer more the Industrial Metals the move in copper has been incredible that suggests that theres a real surge in industrial demand. One of the things, over a 300 billion drawdown in inventories. That alone took 4 Percentage Points off the gdp were seeing Commodity Prices accelerate in part because of the industrial demand. Related to gold and the dollar, that reflects the fact that the fed needs to keep monetary accommodations still in place. The dollar is still strong i dont worry about inflation. Were not worried about inflation in the shortterm. Central banks around the world arent worried about inflation shortterm the treasury market is pricing it a little bit more inflation but well below the feds target. I dont look at what were seeing in the fx and Commodity Markets as being anything different than what were bro jekting for the broader u. S. Economy. You have the monetary inputs. Look like theyre where you want them to be a weak dollar. A lot of the ingredients, a lot of sfixating on the fiscal side. What are your expectations whats the state of play in terms of white house priorities in things like enhanced Unemployment Benefits . Right now were at a standstill the president wants a quick and temporary extension to the federal Unemployment Insurance also we want to extend the moratorium on evictions and give credits to businesses that retain workers and also give some sort of credit to people who are incentivize to go back to work. Were hopeful things will get done and well see what happens. Finally, on the tape this morning, a headline about china. Biggest import deal ever for corn 1. 9 million tons how are we processing the relationship when we need them to catch up on their phase one commitments but the secretary of state is calling kind of communism a veer lent stream im focussed right now on the data and for what its worth in the gdp figures, the one series that didnt move a lot was the trade deficit. Ill leave it there. Joe, part of your job is going to involve paying attention and reacting somehow to the president tweeting about wlornd we should delay the election how drug prices and drug Companies Need to be looked at with suspicion how are you going to do that im looking at the Financial Markets and the markets are telling me when i look at equities and we talked about whats happening with Commodity Prices i mean, the market is telling you the outlook for growth is very good, and if were talking about a 20 second half recovery, and then a 5 type of growth rate early next year, well recoup the lost output thats what matters most are the policies, and it seems pro growth deregulatory backdrop. Thats what investors are focussed on and thats what matters. My role is to focus on the economy and tell people what the markets are saying and to me what i see looks really good thats where my focus is and will continue to be. As you know, joe, communication to the market has never been more important than now given the uncertainties. We look forward to talking to you as often as possible thanks thank you, guys good talking to you. You too just getting used to that one. All right. Lets tell you whats coming up. The ceo of carrier is going to be coming up next. That company reporting its earnings, and seeing an up tick in terms of residential hvac. The stock is weaker this morning. [narrator] at Southern New Hampshire university, were committed to making college more accessible by making it more affordable, thats why were keeping our tuition the same through the year 2021. I knew snhu was the place for me when i saw how affordable it was. I ran to my husband with my computer and i said, look, we can do this. [narrator] take advantage of some of the lowest online tuition rates in the nation. Find your degree at snhu. Edu. An earnings beat and a 40 increase in u. S. Orders year over year. Of course, the other two months of the quarter were lower. The ceo dave gitlin has more for us on the quarter. Lets talk hvac and residential. Because you did see things starting to move in a positive direction. People what . Theyre upgrading, stays at home theyre too hot . Whats going on . Good morning. Its really all the above. If you look at the month of june our orders in our residential hvac business were up 100 over last year. Its the best number of orders in our companys history and that goes back to 1902 clear clearly there was pent up demand there were lower inventory levels coming into the quarter because there was anxiety in the Dealer Network about not ordering too much. And then i think youre right. People are prioritizing spend on their homes. People are eating home, working from home. And thats become i think a real priority item for the Consumer Base that said, overall sales were down sharply not unexpected for the company you did start to see things come back what are your expectations now for the second half of the year . Terms of both consumer send and what youre seeing on the enterprise side . Yeah. You know, we saw sales down 20 in the quarter thats the bad news. The good news is we thought it was going to be down closer to 30 . We saw positive momentum not only in residential hvac but even at commercial construction pieces china stayed strong. Coming back to life. That momentum has continued into july where orders in the United States have remained extremely strong including the Residential Business china has been strong in the month of july. Europe is almost at even par with where we were last year down a couple percent. And our expectation is even though there will be some continued momentum, it will be spotty and uneven. Were seeing it state to state, county to county and country to country our whole plan of attack was to pivot hard, cut costs hard and loosen the reins as we go knowing this is an uneven environment. We had you join us mid quarter to talk about purifying air in big buildings something many people have been focussed on. Is that going to result in a significant business for you an up tick, i should say in sales no question i mean, were seeing demand realtime weve seen it for the new cleaning solution we introduced and weve seen it for many customers reaching out, whether its universities or k through 12 or commercial office buildings, really trying to give people confidence as they come back and you think back to 9 11, and there was a real question. Are people going to come back into highrises or go back to planes the last two decades have been defined by giving people the confidence through security systems. You look at the next 20 years and what gives people confidence as they get into public indoor environments, its the health and safety of the indoor environments customers reaching out to us for filtration ventilation and also fire and security. We Just Announced a partnership for thermal imaging. Were doing more contact tracing. Healthy and safe indoor. That reminds me we always ask about commercial real estate and new construction for existing residential are we seeing upgrades because of the promise . We are. Its a bit at the margin we have for our Residential Business electrostatic filters which i have in my home and many of the higher end units in the infinity system. Customers are starting to ask the question about what to do to make their homes healthier and safer. Id say its early stages of that, but theres a tremendous opportunity going forward, especially when you look at replacing filters with more they wont go to full hepa filters, but more fine filters throughout the home. Appreciate you taking time for us had to cut it short today given the news thank you. Thank you, david. And now for our etf spotlight this morning taking a look at the Vanguard Communication Services etf vox is up double digits over three months positive year to date. Imax among the green this morning after yesterdays losses when it missed on quarterly hef views with movie houses shut down that stock up 4 after being down 10 yesterday the imax ceo believes the comeback is underway well speak to him right after the break. Stay with businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. In a highly capable lexus suv. At the golden opportunity sales event. Get zero percent financing on all 2020 lexus models. Experience amazing at your lexus dealer. On all 2020 lexus models. Pampers the 1 pediatrician recommended brand, helps keep baby skin dry healthy so every touch is as comforting as the first pampers. The 1 pediatrician recommended brand imax reporting a 92 drop in revenue for the Second Quarter the stock rebounding after yesterdays losses we are joined by the ceo of imax good to see you. Almost complete shutdown in the Second Quarter we recognize that. Youre now focussed on i guess stage global reopenings of theaters where does that stand . I know most of your screens in china may have reopened last weekend. What was attendance like and what are you expecting for the north america . Attendance was very encouraging, in china last week. The Overall Box Office was 12 million, and imax did close to a Million Dollars in china theyre playing old movies, movies that have been seen before, and i think we were pleasantly surprised in korea the week before there was a local language film called peninsula. It was released not only korea but other markets. It did a box office of over 20 million. We knew it was going to be a slow comeback. Weve been encouraged by the early numbers. It was a Big Development last week when Warner Brothers decided to open tenant on a rolling global basis previously the studios thought if new york and l. A. Werent open, the world would stay shut, but they came to the correct realization that t never going to be a perfect time to reopen and where places are healthy and the rate of infection is low, theyre going to roll it around the world, open it on that kind of basis and thats going to start august 26th internationally, and in the u. S. A week later, and i think it looks encouraging at the moment now, thats a completed film. What has this whole period done for the backlog, the pipeline of films . Even if you get the places healthy and youre operating under restrictions, are there going to be enough movies for you to have a real comeback . There are, and theres a lot of schedule block busters for this year. They include black widow by marvel and the next bond movie wonder woman so theres a number of movies ready to go. Mulan is ready to go though disney hasnt decided on a release date there are enough completed movies even for next year, although production shut down a lot of movies are in the can, including ones postponed like fast and furious and like quiet place and top gun. Production started to open around the World Mission impossible is shooting right now. Jurassic park is back in production the reason is you basically have a years worth of movies that are squeezed in to a shorter period of time so i dont think that will be a problem, mike. Tenant is turning into an interesting case study its Christopher Nolans birthday today happy birthday to him. I wonder if it does well internationally and the u. S. Is having trouble putting a lid on covid, if were going to start to see lots of ten polls open xus . I think its not going to be binary in the u. S. I think in markets where its safe and people are able to go, theyll open in those markets. This is the obvious next question what about new york and california which is so big well have to wait and see i think the protocol theyve established is to open it in places that are safe, and we actually have done some studies. As the covid rate drops, the movie attendance goes up thats not surprising. I think you could be right in terms of openings happening outside the u. S. , but i think in the markets when they start to be safer, it will open in the u. S. Hey, its david you know, i know viewing on an imax screen is a unique experience, but what do you make of the real tightens of the window that universal negotiated with amc to 17 days . What does that mean for the overall exhibitor industry so david, just to be clear, they didnt really tighten the windows overall. They only tightened the pbod window the streaming window is the same this doesnt change anything for netflix. If they want to play day and day, it doesnt change anything for disney plus. Its just the pbod window and universal reiterated the other windows are going to stay the same so i think we have to wait and see, david i mean, you and i have done this for a very long time and ive said before, i think on this show, that the windows are going to evolve over time. Theres not a question about that i think universal and amc are involved in an experiment right now. And i think well see how it goes ive spoken to other studios, and i dont think they would do it quite the same way. Other exhibitors have said theyre not going to do it the same way i think an experiment is a good thing, giving consumers some more choice, and i think remember, the first big universal movie isnt for about six months also, until fast and furious this has a long way to play out before we conclude where its going to go. All right well, obviously well monitor this experiment and lets hope we get to a point where a lot of your theaters are reopened thank you thank you all. Carl . When we come back, a lot of buzz surrounding the grilling of the tech ceos at house judiciary yesterday. Were going to talk about google who reports tonight with a former google insider when we come back. Dow is down 450. Heres your cnbc news update at this hour. In just the last few minutes word that hermann cane has died. The 74yearold former president ial candidate was hospitalized with covid19 the perseverance mars rover is on its way to mars starting the 7 month journey this morning. Also along for the ride, quite a few gadgets including a small helicopter that nasa hopes will be the first aircraft to fly on another planet the casket carrying the body of john lewis has now arrived at atlanta for his funeral which starts in a half hour. Barack obama will give the eulogy bill clinton and george w. Bush are set to speak it was a night of conflict with protesters in portland. President trump tweeted federal forces wont be leaving until there is, quote, safety. You are up to date at tews update this hour squawk on the street will be right back Major League Baseball learning sports and the Global Pandemic dont mix find out what that could mean for the entire stock market on trading nation more squawk on the street coming up. 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. Tim cook, jeff bezos, Mark Zuckerberg taking heat in yesterdays landmark antitrust hearing. Whats next for the big tech companys joining us this morning, a former google, ceo and cofounder for the center for responsible technology tristan, thank you for your time today. Thank you for a hearing about antitrust, there were a lot of questions about doing business in china, alleged search bias. Did you learn anything i think what we saw yesterday was a clear recognition these are the infrastructure for the world. These are not products that we use. They become the fundamentally imbedded into our lives. Just like the 20th century was built on the backs of railroads, the 21st century infrastructure is facebook, google, amazon. Instead of the accountable institutions like the chamber of commerce for small or medium businesses or the fda, we have apple deciding what is a safe and healthy app. We have facebook deciding the infrastructure by which 8 million small to medium size businesses reach their consumers. These are not accountable infrastructures. Thats what we saw yesterday and the problem their Business Models are fundamentally at the root as representative said yesterday with facebook, showing that days before this viral video had just exploded about hydroxychloroquine and they had no way to clamp down on it because it goes against their Business Model it doesnt sound like you were impressed by the Opening Statements about Humble Beginnings or about duking it out among themselves and with other giants around the world . I think this is the start of the democracy reasserting itself as having power over Technology Companies. This might be the last moment for us to make these changes the power of these Technology Companies and the amount of resources they have to deploy and lobby and control the narrative and create press narratives and pressure institutions is really at the last straw, and i think this was the first step of well, second and third step of the trajectory of hearings that have reasserted democracy i think the challenge we have to look at is these infrastructures, especially when it comes to facebook and google, are not serving National Security interests in the 20th century when russia or china tried to fly a plane into the physical United States, theyre met by the department of defense that shoots it down. When its virtual from the physical infrastructure to the digital infrastructure, western china can fly a plane into the Virtual World of facebook and theyre met by an algorithm that says which zip code do you want to target . Its the dream of our adversaries to have this 21 st infrastructure be vulnerable for manipulation this is some of the major issues im concerned about. This is not serving national or western interests. Its highly vulnerable and were only getting accountability after the fact, not preemptivety those companies, specifically, i guess, facebook, Mark Zuckerberg, has repeatedly said essentially, tells us the rules. What protocols we should impose. Is that the step youre suggesting here, or what else . Because a lot of the discussion yesterday as you know was also about privileging their own kind of companies over competitive ones through their Business Models one concern is privilege over others im worried about the pox itty and the concerns they cant change it its the dna of their company. Facebook is built on the back of run away vir alty. Think about the cdc protecting against viruses. Facebook tries to maximize the viral viralty in Society Facebook doesnt have the incentives to stop it from happening. Those are the area were concerned. So it sounds like its going to be hard for them to not mention any of this, not just in tonights earnings print, but in quarters to come i wonder how you think theyre going to start to layer it in. I know youre not a stock analyst, but if there are some implications for Earnings Growth or Revenue Growth in the future. Yeah. Well, its interesting we were involved in advising the stop hate for profit campaign. It was the advertiser boycott. When it launched it dropped Facebook Stock price by 8 . If you notice that zuckerbergs response to it was dont worry, because the advertisers will be back they have no other place to go where else are they going to advertise . It empowers the argument of antitrust if im a small or medium sized business and i want to restart my business after the downturn, the best way to do that is to reach my customers through facebook microtargeting. But the problem is theres no other place to go. And that speaks to the amount of power they have. There has to be other ways for small and medium sized businesses to be successful than be given two choices, facebook and google to reach their customers. And the fact that theyre harmful and thats whats inhumane about the platforms theres to alternative place to go when you see its unsafe or toxic for society. You either use being toxic or we cant use it at all is unsafe about the platforms. To hear you talk about them like this, i mean, it makes you wonder why you worked there, why they had you on staff at an ethicist do people ask you that its a longer story there people can work out our website to learn more. We really specifically are concerned about the information environment, because if we cant see the same set of facts or truths and we are confused with chaos, we cant solve any problems because we need agreement in a democracy to be able to solve problems if the Business Model of facebook is to separate people in different filter bubbles where you get the information that gives you affirmation as opposed to information, thats actually existential for democracy. And so we look at this and say this is not just an issue of too much power or theres bad apples of harm. Were seeing structurally the dna of the Business Model of the run away model is existential for democracy. Thats why we have to change it and thats why the hearing was so important yeah. I mean, although some might be less than hopeful given the line of questioning among some lawmakers, but there will be more hearings to be sure thank you for that. Tristan harris, hope to talk to you again, thanks thank you very much when we come back, well get back to earnings the ceo of kellogg will join us. That stock is up as you see after the Company Reported strong results we have the details. Impossible foods Just Announced its launching the products at Walmart Stores its a huge step for the company into the u. S. Grocery space. Shares of the rival beyond meat underperforming the market at the moment now the move marks a 50 time expansion of impossibles retail footprint in the u. S in fewer than six months thats important because Grocery Sales of alt Protein Products have skyrocketed fresh Meat Alternatives are up more than 140 since march at the same time the Food Service Channel faces challenges in restaurant reopenings thats prompted both impossible foods and beyond meat to focus on u. S. Retail the products will be on shelves at more than 2000 Walmart Stores and that brings the total number of u. S. Retail Stores Carrying impossibles products to more than 8,000 thats well behind the 25,000 retail outlets for beyond meat impossible is catching up. It counts kroger and albertsons. Beyond meat has those chains and many more including target, costco and whole foods impossibles quick expansion begs the question how will the company meet that extra demand last year they signed a deal with osi, a long time supplier for mcdonalds and it says its developed the production process to make it turnkey for comanufacturing partners to produce the products its planning on adding new suppliers and new deals to come. And pat brown will be on closing bell at 3 00 p. M. Eastern today. Thank you very much and beyond meat shares down about 2 . Actually, firming up here on that news a little bit interesting. Lets get a check on the markets as we head to a quick break. The now s p off their lows s p down about o1. 25 . The nasdaq is outperforming by quite a bit. Down twothirds and 1 back in two minutes. Some Companies Still have hr stuck between employees and their data. Entering data. Changing data. More and more sensitive, personal data. And it doesnt just drag hr down. It drags the entire business down with inefficiency, errors and waste. Its ridiculous. So ridiculous. With paycom, employees enter and manage their own data in a single, easy to use software. Visit paycom. Com, and schedule your demo today. Taking a look at shares of kellogg here, close to a twoyear high today as the Company Comes in with the earnings beat. The consumption of cereal and other food steve, welcome back, good to see you. Great to see you, good to be with you i was going to mention cereal and frozen foods, but maybe there is another business youre getting into masks are great, but you cant see when people are smiling. This is our great tony the tiger mask we talk about the challenges of breakfast, but youre really the flip side of that. We are, it is a terrible thing what is happening in the United States. And for us it has been fortunate in that we can get our foods to people who need them it starts with keeping our people safe, continue to run our plant as efficiently and effectively as possible. Partnering with retail partners, getting food goo the marketplace, and people are enjoying our cereals, our eggo waffles in ways they have not in years. Were happy to gain share inside of that as well. So where are we on concerns about supply chain, food inflation, input costs are they as worse as they were getting worse or Getting Better . You know it has been remarkable what the supply chain at kellogg has been able to do it was not bielt for spikes in demand like we have seen and they have come through in such an amazing way its not getting easier, its getting more difficult keeping people safe is very important because you need Healthy People to man the plants they have been running 24 7 since the pandemic began we have elevated our standards, and Community Spread is more of a risk than spread in the plants if is getting more channllenging but our people are continuing to step up. Theyre managing through all of the challenges that exist, and theyre keeping food going to the shelves. It will continue to get harder but agility and commitment are two of the most port thiimporta things when it gets back to investors and their perspective on the company the question of course is how much is this increase sustainable you seem to be seeing or expecting, given your outlook, that things will moderate by the Fourth Quarter of this year, why is that . It is our planning. When we think about the fourth quart ter is trer it is truly u. We said were going to plan on things returning to a more normalized environment that may or may not happen were seeing nothing, really, that will stimulate a real change absent of a vaccine people have to be confident that it works, that theyre truly safe but from a planning standpoint we thought it was prudent to think about the world returning to a more normal environment we are connecting substantially to make sure that as much as the new trial is happening with our brands, our penetration and usage is up, we want that to stick as much as possible. We will do everything we can to come out a Stronger Company than how we went into it. But from a planning standpoint that is the best we can do assuming a normalized environment. Sure and everybody trying to do that. I wonder on the cost side given what you were talking about given the increased costs for sanitation and safety and things of that nature, does that go on beyond the Fourth Quarter or does it also normalize, in a sense, based on where we are with the virus we think quite a bit will continue to go on. You know were not getting into 2021 yet but as we look at the back half of this year increases in cost around safety, sanitation, we believe it will continue to stay elevated some of these things will continue well into the future and in perpetuity. You know were lucky in that our plants are highly automated. So social distancing is not a problem, but increased sanitation throughout the food chain i think will be something that continues well, you know, in perpetuity, really. You know, in the past couple of years we have talked innovation, r d, keeping the consumers interesting and eating at home. Maybe now it is how do you keep them interested who are already at home and might already be a Loyal Consumer does it change it is interesting we have seen strong brands that are well known by consumers are performing well in the environment. People are looking for things they are comfortable with. You mentioned eggo, frosted flakes, special k, so many of the brands have done well in this environment we know it is important to continue to innovate and bring new news to people in the second half of the year is our Morning Star Farms brand has done exceptionally well in this time. Up over 30 year to date were bringing out a new line called incognito, our refrigerated line of more meat analog types of products burgers, sausages, its a Clever Campaign its great food. We will put a lot of support behind it because people are looking for new, exciting things new flavors and extensions around some of our big brands so people can get excited and try new things steve, congratulations on the quarter as they say on calls and nice reminder with the mask. Hopefully well talk again soon, thanks thanks very much, appreciate it in the meantime, guys, david watching some of the action here the worst day of july for the dow and the s p. A fair degree of chop given the multiple curve balls of the first couple hours yes, a busy afternoon, mike, certainly for the likes of you potentially when i know youre on the closing bell, given those numbers coming in. Yeah, only a quarter of the s p market cap or so in that hour the market has been in its entire range in the last two weeks and two days were testing up and down and well see if the tie breaker is tonight. Thanks for the assist today, david, well talk to you later im carl with john and julia so much handed to us this morning. Covid cases, gdp claims, lack of stimulus progress on the hill. Out there tweets on the president , drug pricing, delaying the election, and we have not got to mega cap earnings tonight yeah, it will be a big night, but last night was a big night in particular for qualcomm take a look at that stoc