Transcripts For CNBC Squawk Box 20240712

It is the 32nd time this year the nasdaq has set a record close again. This morning, we are looking at a negative picture this morning, you are looking at red ar owes. S p indicated down by about 16 points everybody is waiting to see. At least right now, 10year looks like it is narrowing to 2. 5 jobs friday today. Forecasters will expect payroll to climb 1. 48 million after june gains shattered expectations a huge number this time around unemployment is expected to drop 10. 6 from 11. 1 from june well take you through 8 30 a. M. When those numbers actually hit. News breaking this morning for those of us in new york city who woke up and thought what just happened. Con edison investigating widespread outages. As an upper westsider, no power there. You lost power . A true black out. We are in 2020, what could go wrong . I looked around and thought, it is so dark what is going on is the nasdaq going to have power. What am i going to do . Here we are middown. You left connecticut to come to the city where you have no power. Relative to so many of our friends up and down the east coast who continue to bewithou power. With the timing and put it all together it looks messed up we are glad you made it we have a developing story. Executive oshds banning transactions with tencent and bytedance. Tencent owns wechat and bytedance owns tiktok. Saying the app accesses info from users that could be used by the Chinese Communist party. The tiktok ban is similar. Effectively banning the app in the United States taking effect in 45 days wilber ross will identify items subject to prohibition microsoft is in talks to acquire the tiktok business in the u. S. Within the next three weeks. The big news here is that the crack down against tencent and wechat does not impact the video game Platform League of legends. A bunch of 11yearolds playing video games so rest. Does this mean americans arent allowed to down lood tiktok this doesnt appear to be what it is but it does cast over the huge negative impact getting to tricky issues saw facebook through the product come out with reels which is a copy cat of it you you are seeing a lot of tiktok videos being republic li republic li republ republished. Wechat doesnt have an audience outside of china or in the u. S so it is unclear how that would happen as a result of that what does this mean in terms of how you put a valuation on any of it . You are trying to figure out how valuable that would be 45 days from now looking at the numbers and how many people maybe you hold on to those customers. It is going to be fascinating to watch. Some of what they had been reporting about how microsoft would be the only one to pick up and get all of the coding and get it over here in 45 days or a year from now if that transaction goes through if you take a company like google out of the picture, microsoft is about the last one standing. It is undeniable we have this ramp up of tensions with china i wonder if the market cares about anything we have the tech stocks and these added tensions between United States and china, whether this action or people within this administration futures are not down you have to figure it is going to come at some time go ahead. We are like on a bad zoom call today. Go for it. Go ahead. I was going to say, i think there is a bet going on in the market between investors and Retail Investors about whether you think there is a vaccine coming o always feel complete complete completely rational. There is logic too. Tiktok does come after the issue that the u. S. Does not comply with u. S. Accounting rules that would prevent them from listing. Forcing u. S. Listed Chinese Companies to delist unless regulators can get access to internal audits. To your point, that ratchets up the tensions that have been continuing to flair up. The president certainly knows you have an audience increasing tensions between the two countries. Youll have some trade meetings coming up. You have this trade deal that was so much talked about and the virusout break in the pandemic the tensions have been rising since that these actions it in to increase and increase if you are an investor in the stock market, do youcare you may very well have a move away from technology and growth areas. Even cramer has been saying with his socalled go index that they will rif, the minute you get news of a vaccine. The question is, when do you get into those, before or after that happens. Always a timing game meantime, i want to talk about some stocks to watch today with unthat h one that has been hurt badly uber shares under pressure lost a dollar. Revenue of 2. 4 billion. The company hurt by limits on travel gross bookings down 73 . Demand for uber food delivery soaring. This graphic showing the shift from last year mobility ride sharing and here is more from the call. It has become clear we have hugely valuable and critical advantage. When travel restrictions lift, and when those continue, our Delivery Business will compensate as a scaled global player, well see recovery wherever, whenever it are happens even if some cities lag behind others food not making up a piece of that right now dara will join us a little later today. Uber eats is still not profitable, right . Right how do you make it work later . People are afraid to ride in cars with other people weve heard it has changed the mentality. That could change quickly on all of these things. This is a play oo make it last how long can you continue to burn they dont have enough cars to sell to people these people who are setting cars, theyll sell anybody a car that they can get their hands on because people are moving out of the cities and into the suburbs have incredible numbers. People are afraid to get in an uber mask or no mask. Not calling out uber but in a car with another person as you put it when we come back, we have the latest on the stalled talks on the stimulus and how President Trump may try to cut lawmakers out of the equation completely look at gold prices hitting another record high. On track for the ninth positive week in a row. This morning, trading at 2,068 an ounce 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. To turning your new inspiration lookentertainmentour experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Welcome back an update now on expired relief benefits President Trump expects to sign an executive order extending payroll benefits and impose a taxpayer holiday the president also said he expects to sign orders on eviction protection and student loan repayments. Chief of staff mark meadows says both sides are considerable amount apart consider is an understatement when you have reports of 3. 5 trillion from democrats and 1 trillion from republicans neither side willing to budge all that much. Hard to strike a deal. The question of is he allowed to order and do these things. Others would come following hard to imagine. Congress has the power of the purse. This is something well talk more about later today Airline Stocks have been rallying this week as Political Support has been building in washington for another bailout if you check it out, those stocks are looking to give back some of those gains. Down 1 to 2 for most of those stocks the u. S. State department lifted its advisory that had warned u. S. Citizens against travel abroad the previous system of country warnings joining us now, from the International Association of Flight Attendant union we are looking at travel down roughly 75 . What is the situation right now . How has it been going . I know youve been involved with trying to calm members of congress thats right. We need to have this jobs program continue i would challenge that this is an idea of an airline bailout. We are talking the support program that has kept Airline Workers in our jobs connected to our employment and Health Insurance benefits as the cases of coronavirus have risen again, demand is falling off. There was some report about the Airline Industry recovering. The fact is demand is not back and is not going to be back until we have this virus c contained. We need this to keep people in their jobs and keep this industry together. I understand what a huge concern this is. The question arises, why this industry over, say, the Restaurant Industry where theyve been told they cant even open. It is not a question of whether people show up, they cant even open just because we have a Successful Program we were able to get to keep people in their jobs and cut down on unemployment and so people could take care of themselves. This should be applied to other Industries Like restaurants and retail we need to keep the programs that are in place. It is working and thats why there is so much support for continuing this. We all want to keep people employed and planes flying what i dont understand is why the taxpayer should be subsidizing the share holder in any way whatsoever it baffles my mind specifically a share holder of an airline as opposed to a share holder of a private restaurant or company or what have you. This is not propping up the Share Holders. In fact our program bans stock buy backs and dividends. This is a payroll pass through that keeps people connected to their jobs you have to keep people in their jobs to keep them connected to their health care. It is 100 return to the taxpayers. You have people continuing to pay into the system and contribute to the economy. We keep service to all of our communities. This is a piece that is really important in terms of fighting the virus right now. You you will kaed ita pass through. If money were not to come, airlines would be forced to file bankruptcy or private capital. When you said it is a pass through, i dont understand. Some of it will go to the employees. Ultimately the whole thing doesnt work the Share Holders get injured. Correct . No. This is what we are doing. This money is allocated to payroll and benefits this is a jobs program and why it is a direct return to the taxpayers. Keeps the airlines in tact weve been through that before public has been through that share olders thats why we want to avoid that from happening here. This keeps in place all of the Share Holders. There is a beneficiary of this the idea that Share Holders is not a beneficiary of this is crazy. Is that a bad thing the point is it is an unfair thing if we are deciding we are effectively going to advantage certain Share Holders over others. That would be a bad thing. Do i want Share Holders to lose their money, no. A lot of people are happy to help people with Unemployment Insurance so people can get by the fact that im going to subsidies basically a hedge fund manager. Thats not something most people will think is fair if you live in the world of Hedge Fund Managers that one thing, i live in the world of real people counting on this to stay in their jobs and connected to their health care we need to keep this vital industry in place. With everyone in place who are kr credentialed employees if Hedge Fund Managers are betting on this, thats one thing. Well have mass layoffs october 1. Weeks before the election if this is not continued. It has been successful keeping their jobs in place. Paychecks going and health care continued in the pandemic. They are essential workers it is not for the airlines it is for the workers who deserve to have that protection. We have talked about the fact that we should be giving essential workers more pay at this time. We have not done that. We need to shore up from the ground up. We have to have the ability for people to buy tickets on the other side of this im hearing from fiscal conservatives across congress right now, now is the time to spend. The longer we go on without spending and without shoring people up and keeping people in their jobs and doing everything we can do and using the safety nets where that doesnt exist then we are going to have extended hurt this is more Cost Effective because it is less before i let you go, id like to ask you what is happening in the skies right now. I want to ask what are tensions like right now ive heard stories of Flight Attendants having to be a bouncer essentially. Let me be clear, most people are planning on a safe, uneventful flight. They want to follow the rules, wear a mask and keep safe. We have seen an increase of people challenging this. It is a problem because people are led to believe this is a political issue rather than a Public Health issue. This is all wrapped up into an issue Flight Attendants have to face and deal with on the front lines. It is increasingly difficult i appreciate you recognizing that i want to spread the word that everyone come to the door of the plane that we are all in this together thats the only way it works i appreciate your time. More coming up this morning, a break down of the Bernie Sanders new billionaire tax. Well tell you how much jeff bezos and elon musk would have to pay and a wild day for the governor of ohio. The latest on the covid testing saga youve got to hear this to believe it take a look at the biggest p emarket decliners of the s 500. Well be back after this or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. 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 [ engines revving ] its amazing to see them in the wild like th shhh. For those who were born to ride, theres progressive. Welcome back we told you yesterday about a proposal by Bernie Sanders to tax the wealth the senator released that yesterday. It would impose a one time 60 tax on billionaire gains between march 182020 and january 1 of 2021 used to pay out of pocket Health Care Insurance for all americans for a year right now, here is what some would pay. Jeff bezos on the line for nearly 43 billion elon musk 27. 5 billion. Mark zuckerberg about 23 billion and the walmart family nearly 13 billion probably a nonstarter but an exercise that has people running through where billions could be made jeff bezos would have to sell his shares to pay the tax bill which means there would be an overhang on the stock and the value of their stock would go down because he has to sell his shares how much control in the company. People like to keep their company to continue to do it othe others will do it through the voting share set up. That is true. Very true. Didnt bezos sell shares . He does it regularly to fund the other endeavor i dont think i saw this story. If this happened to me, i dont know what i would do Ohio Governor had a roller co t coaster of a day he took a covid test as standard protocol at the time, he tested positive. He cancels the appearance with the president of course and returns to columbus where he then takes another test and it comes back negative. The first test was a rapid antigen test the second a pcr test. The governor and his wife will be tested again on saturday. What a ride. It raises bigger questions. If you are getting false positives, what does that tell you. Meaning somebody with covid could come up. This has been the issue with other fast tests i dont know if we can ever get it that level it is the whole testing thing. Not just tests, unreliable results. Thats exactly where we are. Coming up, it is jobs friday well we watching closely. 8 30 a. M. After last months report shattered expectations. As we head to break. Look at yesterdays s p 500 winners and losers 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. Good morning ahead of the big jobs number where the market goes at 8 30, nobody knows the nasdaq off 51 points the s p 500 off about 15 points. Some news breaking con edison investigating the problem that caused widespread Power Outages in new york city it now says the supply has been restored to those networks my personal blackout is over you woke up to darkness this morning . Not true i woke up to darkness i woke up and then it went dark. Trust me, i was up. I can show you my ring data. Im teasing we are always having our debates. Becky gets less sleep than i do and she thinks i get too much sleep. Imjealous. Good morning on this friday good morning anita, begin with you. Expecting 1. 5 million. What do you think is going to happen i see quite a bit of down side into these numbers. Im expecting no growth essentially. Service is looking shaky pointing to a sharp slow down, if not, a contractions i think state and local government is where you will see renewed weakness a lot of people blame it on the covid resurgence but also the fiscal clip and the fact that ppp loans which did allow companiesto rehire a lot of workers that money has ee sent ylly played out and youll see a shift in that well below the expectations number. How do you think that will come in today we have a job gain of just 200,000. A stall in the recovery. I agree with everything you just said i think even just stepping back, that was always going to be the case when you go from a near shut down in activity to a reopening, you you are going to see a snap back. I was concerned as anybody about the strength of recovery in may and june always cautioning in the first rebound in recovery of jobs that is pretty easy getting all the way back was going to be pretty easy. In general, to extrapolate those bounds, i think it was a little over optimistic. Andrew talked earlier when we were having a conversation about market reactions how much was it a bionary reaction and withoutthat you wont be able to come close to a full recovery. Absolutely. Even post vaccine, we shouldnt be hoping to the level of employment we saw pre covid. We have already lost Small Businesses those are jobs not coming back youll have to rebuild them organically. That is not just something that happens overnight. Hard to look at the numbers and think there was a 3. 5 Unemployment Rate and that we added 7 million jobs in may and june but we lost 22 million. It tells you how far we have to go and the challenges that still exist. That is what i was alluding to you can recoup a good portion of those job losses there has even been a stall in that because of the rise in infections and growing worries of a socalled w recovery that risk here, when you see disappointment it will race concerns as uncertainty increases, it can feed on it self. Looking at those willing to spend whether out of savings or current income unfortunately, there is a reality check here about this idea and how long because of economic scarring it would take to get back to pre covid levels. Thank you thanks when we come back, the nasdaq closing above 11,000 the First Time Ever yesterday. Well talk about what keeps driving technologies move higher and if there is any stop in sight. Well be right back. When you walk into an amazon fulfillment center, its like walking into the Chocolate Factory and you won a golden ticket. All of these are face masks. This looks like a bottle of vodka. But when we first got these, we were like whoa [laughing] my threeyearold, when we get a box delivered, screams mommys work mommys work. With this pandemic, safety is even more important to make sure we go home safe every single day. Coming up, President Trump taking aim at two chinese Tech Companies. Well have the latest details on when t bhean is set to take place. Well talk about it next developing story for you President Trump signing two executive orders late last night banning tiktok and wechat from the u. S. The ban is taking effect in 45 days unless something happens. Good morning to you guys help us try to understand what we think is going to happen here one is the Value Proposition do you think they are going to run away from tiktok and make a transaction with microsoft that much less valuable. Good question, andrew we know a lot of tiktok users is younger. Its not clear if they would leave if the deal doesnt go through. To be clear, there is a lot of concern about data and that is why President Trump issued the executive order. There is concern that chinese could use american tiktok data users information and use data services, their browsing history but we dont really know what would happen if the tiktok users would leave or not cecelia, the other question on this whole piece of it, the role that microsoft could or could not play in that transaction and whether we think that the government will ultimately approve it. Theres also news that potentially microsoft may want to try to buy everything will the Chinese Government approve that this is just not a business story, its geopolitical. Yeah, absolutely. There are so many variables around the talks between microsoft and tiktok and it should be known that microsofts not the only suitor, there are other companies and combination of investors that have been in talks to buy it. Its very uncertain as to whether microsoft or a different suitor will buy it President Trump has been all over the map about microsofts purchase microsoft does look like the most palatable suitor. Cecelia, just explain this. You mentioned there were three other potential suitors. My understanding is they need to port over all of this data and quickly. Who has the capability to do that microsoft clearly could or would be in a better position. You cant sell it to a google or an amazon or somebody else, right . I think it would be really difficult for multiple reasons to sell to google or amazon. Lets not forget that google, amazon, facebook, apple were all broadcasting into a hearing about the question of their size and dominance and microsoft was not. Microsoft not only has the capability, but its not under the scrutiny the same way as other Tech Companies in terms of their size and their power and potential antitrust violations emily, its scott good morning to you. Im wondering how much you think we should worry about or American Companies like apple and others who are operating in china should worry about any sort of blowback from the chinese or retaliation as our tensions get ratcheted up specifically as it relates to technology, how much those companies should be concerned today. Im he guessing theyre very concerned when they saw that executive order go through last night. Theres no doubt about it. When one thing happens to a Major Company in a sector, the other ones are naturally going to react you know theyve probably got their different teams on the phone, lawyers on the phone. Apple does a lot of production in china that came up in that hearing that cecelia mentioned the big tech antitrust hearing and theyre scrambling how would we defend ourselves. Theres nothing imminent at hand this is a Chinese Owned Company that has a massive number of users in the u. S tiktok has 100 million u. S. Users and the fact that President Trump has continued to kind of wedge himself in between these talks between microsof and tiktok and more broadly spoken out about tiktok as a whole. Lets not forget its due to escalate more when secretary of state mike pompeo said in early july and even introduced the possibility of an idea of banning tiktok in the u. S. Okay. Emily, thank you cecelia, thank you great to see both of you appreciate it. Im sure well be talking over the next 45 days there will be a lot of news. Thanks, guys scott . Andrew, coming up. Well take you live to washington on the president s plans to extend benefits and crack down on Chinese Companies. Jobs report at 8 30. We open negative across the d. Ar dow would open down by 137 well be right back. 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. The july jobs report in focus. A breakdown of what to watch coming up. Tiktok tensions rising new action from President Trump over the app weve got the details straight ahead. Plus, investors are betting on Penn National gaming. That stock popping after beating revenue estimates. The ceo jay snowden will join us to talk about business amid the pandemic the second hour of squawk box begins right now good morning welcome back to squawk box right here on cnbc im Andrew Ross Sorkin along with becky quick and scott wapner is in for joe kernen. Good to see you as always. All of this can change after 8 30 because we have, of course, the jobs number. We will see where that lands right now the dow looks like it will open down 123 points off. S p off 11 points and nasdaq open down about 39 points. Andrew, thank you. Big market stories were watching this morning. The jobs report from july and stimulus in washington mike santoli telling us what it all means for investors. We kick things off in washington and the president s executive order banning actions with chinese apps Kayla Tausche. Reporter good morning, scott. It was a pair of executive orders late last night in which President Trump said that he would ban u. S. Transactions with the Parent Company tiktok and wechat beginning on september 20th or about 45 days from yesterday. The orders, one for each company, say that the apps automatically capture vast swaths of user information and track chinese nationals outside the country. Those echo Warnings Issued by secretary of state mike pompeo earlier this week. Using his emergency powers, the president has authorized the secretary of commerce to identify the transactions and enforce the ban. It remanins unclear whether this will be commercial transactions or usage tencent earnings tumbling this morning. They were down as much as 10 . They have recovered slightly we chats Parent Company is an internet giant with a market cap nearing 700 billion in a statement tiktok said it was shocked by the decision and says we will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly, if not by the administration, then by the u. S. Courts trump has given microsoft until september 15th to consummate a deal to acquire tiktok and it is perhaps unsurprising that china opposes this ban and is expected to retaliate scott . Yeah. Well see how that all sorts out. Kayla, give us an update, if you will, on the latest from the stimulus front any progress at all . Reporter well, the odds of a comprehensive deal, scott, are getting slimmer by the minute. After a three plus hour meeting the treasury secretary and chief of staff and their counterparts emerged from the meeting saying what they have all along, that they remain significantly distant on several key policies. The treasury secretary said there are a few areas areas of compromise but theyre not that many on some key areas they remain far apart on the financial aspect and the policy area the chief of staff mark meadows said they might go back to the president to see if they can get a narrower deal. Heres what he said. If that does not work, the president is instructed secretary mnuchin and myself to be willing to enter into a narrower deal that addresses some of the most pressing needs that are before us as a nation and if those two things do not work, then hes prepared to take executive action on his own. Reporter so what are the most pressing needs . The president has said hes focused on unemployment, eviction protections and a suspension of the payroll tax. Senate Majority Leader Mitch Mcconnell said he is focused on unemployment and the Payroll Protection Program for Small Businesses so there are some significant differences even within the Republican Party scott . All right, kayla. Thats Kayla Tausche reporting for us, an update from washington d. C it is jobs friday, of course forecasters expect pay rolls in july to climb by 1. 48 million after june gains of 4. 8 million shattered expectations the unemployment expected to drop to 10. 6 from 11. 1 we want to find out what all of this means for investors mike santoli and Steve Liesman joining us now gentlemen, good to see you mike, what do you think the markets willing to accept today . I dont know. Scott, i dont think the market is pinned too much on the specific consensus theres a massive range around that in general the market craves confirmation that were going to be making up ground that was lost in five or ten weeks back in the spring. So whether its a million and a half, whether its, you know, something less than a million even, i do think the direction of change matters a lot. How many of those jobs are going to be class final as permanent job loss right now also, as you know, scott, the way the markets been coping with a lot of the foggy outlook on the fundamental domestic economy front is to hide in stocks that arent particularly dependent on a very rapid comeback the dollar has been down if we get a strong number, does the dollar rally and kind of up end a little bit of that growth stock trade thats been going on right now. Those are the questions i think right now. I think the markets pretty light in terms of not getting too cute about expecting a particular number at the moment. And, steve, im wondering whether you think that the further we get away now from the initial outbreak and the declaration of the pandemic, the market is going to be able to take these jobs reports more seriously, right at the beginning you would expect you have a huge dropoff and then with the reopenings you would expect we would have had a big snap back and we did get that now you may get a more real view, if you will, of where we are in terms of the recovery so the market itself will have a better view inside the economy itself i would just amend that a little bit, scott. Were starting to get the real view, but theres still an awful lot of volatility in the job market mike kind of pointed towards a couple of those areas here ill be looking for how much of all of this is permanent and how many people dropped out of the work force this issue of the market has been able to really look through an awful lot of things theres a lot of stuff sort of if you were at the craps table thats on the comfort market lets talk about it. Youve got the idea that, hey, were going to get a new relief bill its not done yet, but its coming the idea that a lot of people left the work force, theyve come back and were we had a problem in july with the resurgence of the virus but thats going to go away. The idea that a vaccine is on the way. The markets been sort of in immunity with the recent developments the new numbers, how many people left the market and how many of the job losses are permanent this idea of how much lasting damage is being done to the economy . This idea of scarring. And how much of that would be a surprise to the market. But even at the same time, mike, as steve says, the market and investors know that more stimulus is coming of some kind and with the fed at the markets back, you have to wonder whether any of this matters at all to the market at a certain level of the market it absolutely matters, scott. It cant be you know, if we go up 20 from here, a lot more has to go right to substantiate that than we have right now. The fed what the feds really doing is trying to cushion against the absolute down side scenario, not necessarily continue to foster increasingly easy financial conditions along the way as the market marches out. So it does all matter at some point. The fiscal end of things, i think the market is pretty im not going to say complacent, but the market is pretty confident that something happens, that all the incentives point towards some kind of extension of some of the support right there. But we keep saying this, that, you know, the Market Solution to all of this is to bid up the stocks that can withstand all of this also, investors are very much keying off of you know, steve kind of alluded to this, this rolling over of the 7 day or 14 day covid case count growth in the hardest hit states, really taking heart in the fact we observed this. Maybe theres going to be another one. We know we dont shut things down fully to get through it better or worse, that seems to be how were navigating things of course, were in this window where pretty much everybody is cognizant of the up side risk of vaccine development. Thats the push pull markets getting stretched because of this buying pact and things like apple and the other Growth Stocks. Hard to say its gotten it fully wrong. Scott, just one more thing, and i think you kind of keyed on this in the beginning in your intro remarks. The range of forecast is like down half a million to up 3 million or more than 3 million and i think, you know, you come in in that range and given the misses in the past several months, the markets got to be priced for a huge, huge range. Whats interesting to me is this news that kayla brought us this morning, wake up in the morning and you see new tariffs on canada thats actual news to the market down side news in this case has always reacted that way, negatively, to new tariffs, but the idea that the job market is going to be in some incredible range and its probably going to slow from the prior month, not a whole lot of news for the market there. Yeah, look. The market has i think it was you, steve, using the word immunity at some point does the market start to get a little bit queasy with the fact that you have all of these issues that remain unresolved, rachetting up with tensions of china, well see we have a little less than an hour and a half. Steve, mike, thanks very much. Becky . When we come back, thanks, scott, penn gaming hitting a sixmonth high in yesterdays trading session after reporting revenue that topped the streets expectations were going to speak to the ceo, jay snowden, about the quarter opening and the upcoming launch of the sports book later, bill rude din on big tech asg he big apple squawk box will be right back. Free access to every platform. Mhm, yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. Now offering zero commissions on online trades. We charge you less so you have more to invest. Lookentertainmentour experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Short falls are getting worse during the pandemic. Look at Sports Betting to shore up the finances. Contessa brewer has more on that story. Contessa, good morning. Reporter hi there, andrew. Even before the pandemic slowed down things, if a new york city player wanted to close down you had to drive to new jersey, pull out your mobile phone, make a bet here last year that happened to the tune of 800 million with new jersey getting all of that tax revenue. Plummeting tax revenue and the pandemic may lead to more permissive gambling across the nation ohio, nebraska, vermont, hawaii have bills pending massachusetts added mobile and retail Sports Betting with Economic Development bill in the house. That senate stripped it out but you could see that as a standalone bill in massachusetts this fall. All states except hawaii and utah have some form of gambling including lottery here here are the states that have legalized Sports Betting some its legal and less active. Igames are slower. The American Gaming Association shows its available in six states michigan has legalized it but its not yet active. The casinos in michigan are still closed and its missing out on a projected 93 million in firstyear tax revenue from sports and mobile. New York Lawmakers have now drafted a bill toallow mobile Sports Betting here but Governor Cuomo has been opposed legt tifs are watching to see if hell change his mind. That may have been, of course, aid is not coming. Andrew contessa, before you go, how much revenue does it mean for the states what are we talking about . Reporter in new jersey where its been legal for seven years or so you have a tax rate between 8 and 13 depending where you make your wager, whether its land based or mobile phones. They brought in about a little less than 40 million last year in taxes pennsylvania where Online Gaming has been legal a year, taxes are somewhere around 35 they made almost 100 million in taxes in one year from mobile gaming okay. Thanks appreciate it, contessa. Thank you so much. Sure. Were going to continue a little bit of this conversation now. Becky . Andrew, thats such a weird thing, right normally the states are always talking about how they have to be competitive because they have other states around them if new jersey is surrounded by pennsylvania where theyre charging 35 and new york, while its illegal, its kind of surprising they dont raise the taxes on it just to be competitive with whats around them, especially if pennsylvania is making that much money on it. Its a very peculiar time, 2020 yeah. Yeah Penn National gaming facing whats that, scott i said it should be legal everywhere, especially given the circumstances. You and sorkin. With all of the budget short falls. Right what an easy way to draw revenue if youre a state thats struggling right now whats the big deal . I dont get it. Yeah. Yeah, i think i probably agree with that. Penn National Gaming facing unprecedented challenges, reporting better than expected Second Quarter revenue earlier this week. This quarter marked both covid shutdowns and reopenings the stock has soared over the last three months. Joining us is jay snowden, the ceo of Penn National gaming. Great to see you this morning. Good morning, becky how are you doing . Good. Lets talk a little bit about what happened in the quarter because the loss you still reported a loss. I think it was 1. 63 and that comes after the loss of 1. 69 after the loss of 5. 26 in the quarter before that, but your revenue numbers were better than the street was expecting and youve also talked about how you are really improving the margins that youre seeing because youve managed to really change the way youre operating the entire place lets talk a little bit about that how are you operating . What are you seeing in terms of whos coming in . Well, lets remember that last quarter earnings when we reported, all 41 of our Properties Across the country had been shut down due to the pandemic, and now we have all but two of our 41 properties have reopened. So a lot has changed from First Quarter earnings to Second Quarter earnings and what were seeing across the properties is that the vast majority of our properties in all of the different states were able to reopen at about 50 , 50 capacity youll recall that in the gaming industry its very rare that we get beyond 50 capacity other than those peak hours on weekends, holiday weekends like the fourth of july so day in and day out even having 50 capacity, we can get pretty close to prior year revenue levels were offering a very fun viefrpmeviefr environment. Something fun to do. Form of entertainment. There arent many of those available now. What were seeing is a lot of new customers are coming through our facilities a lot of younger customers are coming through our facilities, signing up for our loyalty program. So were really excited about being able to market to a new set of customers during these challenging times and were also seeing that there is a desire not just to play in the brick and mortar casinos but we also offer Online Casino in pennsylvania and we had 108 growth from q1 to q2 with our online offer i think what youre seeing in the marketplace is theres not a lot of Entertainment Options people are bored at home and looking for something safe and fun to do and we offer both of those. You said that you usually only get about 50 occupancy anyway except for the peak hours. Have traffic patterns been normal as to what they would have been a year ago even though it may have been a different customer mix. What were seeing, becky, is visitation has not fully rebounded to where it was precovid were getting to about 70 precovid level or prior year visitation levels. What were seeing is when people do come to the casinos, when they do engage with us online, theyre spending more time than they historically have were seeing spend per visit increases at 45 year over year. Wow i would guess its pretty exciting to be able to get some of these younger people in though you think that thats something that will stick, that these are behaviors that will continue post covid i think it can. I think that our strategy as a company is to be the omni channel leader in terms of gaming and Sports Offerings in the country. We operate in 19 states, which is more than any other company in the u. S. , and as contessa showed earlier, sports is legalized in over 20 states, Online Casinos legalized in six states theres pending legislation and ballot measures in maryland, louisiana and the way we look at it is whether youre 25 years old, 45 years old, 70 years old and you like to bet on sports, which so Many Americans do, its fun, its engaging, makes watching a game so much more fun or you like to go into a brick and mortar facility, play on a mobile device. Whatever you like to do, however you like to engage in sports and casino offerings, were going to be able to offer that to you as long as the legalization process continues to proliferate over the past couple of years im shocked that you went through this whole thing, you havent even mentioned barstool yet. Thats a big part of your platform thats a plan, right it is were launching it in pennsylvania in time for the nfl association. We announced our partnership with barstool in january we were ringing the bell at the nasdaq and then covid hit, all the properties were shut down. Share price drops to 4 or 5 we reopened our properties weve been working on that App Development with our product and Engineering Team in philadelphia for the last year and a half and were finally ready to launch in pennsylvania in september. Really excited about it. I think youre going to hear a lot more about this from e el pres, dave port knnoy and th brand. Have you been following portnoy on twitter and his day trading . Im curious. Yeah, he got in at a good time in march he loaded up. Hes done quite well as a day trader. Yeah, which he makes sure Everybody Knows about, too no question who would have thought he would be talking about dave portnoy interviewing the president of the United States maybe six or nine months ago and im just ive been blown away at how creative and theyre really marketing geniuses dave portnoy is an unbelievable entertainer. With no live sports, its a sports brand, he and barstool are morell will he vent than ever were thrilled to partner with them and launch in pennsylvania next month and the other states in q4 and q1 next year. Jay, im sure you heard our earlier conversation talking about states looking for additional forms of revenue. How big of a risk factor is that, that states look around and say, we need to come up with more money we go where the money is and try and raise taxes on what they charge the casinos for any of the gambling revenue that comes in. Fair question, becky. I will tell you that were not hearing that whispers, conversations. What we are hearing is you saw the map. There are still over 20 states that have not legalized Sports Betting and that is a new pool of tax dollars to go pursue, and Online Casino is only in six states those are going to conversations right now. Sports betting has not been legalized. Does it make stones legalize Sports Betting brick and mortar as well as mobile you can see the maps here. There is a big opportunity new jersey, as an example, one of the first states to legalize or was the first state to legalize Online Casino their run rating to be a billion dollar business. Pennsylvania in a full year in 2020 run rating to be about half a billion dollar business. These are large pools of dollars to tax that are incremental as opposed to raising taxes forexisting businesses which i dont think is good at the end of the day yeah. Jay, its a pleasure to have you on the stock is up by 1. 1 today and again it has risen sharply over the last few months thanks for your time yeah, thanks, becky great to be with you scott beck, coming up, facebook is taking up office space in mid town manhattan the Company Announcing it will lease the 730,000 square feet at the farleigh post Office Building essentially doubling down on people going back to the office were going to talk this morning to commercial real estate guru bill rudin and that deal and commercial real estate in the big apple. Futures ahead of the jobs report a big friday on wall street. Right now we would open negative nasdaq closing above 11,000 for the First Time Ever. A day ago it would open negatively as well well be right back with squawk. [ engine rumbling ] [ beeping ] [ engine revs ] uh, you know theres a 30minute limit, right . Tell that to the rain. [ beeping ] for those who were born to ride, theres progressive. 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. Possible Election Outcomes and what it means for your portfolio. Dont forget, it is jobs friday. Numbers set to be released at 8 30 a. M. Eastern time we will bring them to you with instant reaction in the meantime, check out futures ahead of those numbers they can swing in all sorts of Different Directions the dow down 28 points s p off 11 points. We are back right after this vo since our beginning, our business has been people. And their financial wellbeing. Its evident in good times, with decisions focused on the longterm. And crucial when circumstances become difficult. That continued emphasis on people our advisors, associates, clients and communities gives us purpose, strength and a way forward. Today. And always. Welcome back to squawk box this morning west side becoming a destination. Facebook inking a deal in the farleigh building. Bill rudin, cochairman of Rudin Management Company and chairman of real estate board for new york bill, its great to see you. Im in the city. I think you may be in the city i dont know where you are right now. We love our beloved new york, but ill tell you, theres a lot of theres some good data, the facebook deal would be one data point, but theres a lot of other data, especially on residential, that would make you think, and i know weve had this conversation, that people are going to leave the city. What are you thinking these days first of all, namastay. Scott, thank you for calling me a guru i think thats the first time. The facebook deal as you mentioned, andrew, was very, very key, and thats on top of other deals that have been done since i was last on the show we were talking about tiktok and thats obviously a question mark now, but im told that the microsoft deal goes through, theyre still going to take their space in the building that you guys are in. We have aig, bnp, nbc universal, Proctor Goodwin in the New York Times building signing up and many other deals that are occurring on the commercial side, which are obviously indicative we had the best month in six months in july, 2. 3 million square feet of leases signed in july so that was a very, very positive sign. On the residential side, yes, there are obviously in the condo market, which was weak before going into the pandemic, its still struggling. The residential market, were seeing some signs of pickup. Were making deals and theres definitely an ebb and flow people are concerned about schools. I think new york went from the worst in terms of the virus to the best and we were starting to reopen in june and then i think people got a little spooked because of the rest of the country. So i think its still to be determined but, again, the signs in terms of commercial space, the people who are filling up that space, facebook has taken nearly 3 million square feet of space in the last year so Mark Zuckerberg a few months ago talked about remote, working from home. This is going against that sort of grain because its in new york city and there are people who want to live here and work here and so were optimistic that with these type of deals and more deals coming, were seeing an increase in activity in our commercial space. Bill, one of the concerns though, and im looking at the commercial space on one end and im looking at residential on the other end. It could very well be that youre still able to succeed commercially insofar as people have offices frankly, theyll have more space than they used to on a per person basis and the people use the office in a very different way. Having said that, if you have people leaving the state of new york and effectively moving their residences to other states, were going to have a tax base problem you know this problem. How are you thinking about that right now . Well, you know, it is definitely a concern well, first of all, we definitely need help from washington, not just new york city, not just new york state but the rest of the country. So its frustrating to see the deadlock thats going on in washington and hopefully because the stakes are so high, the unemployment youre going to have your numbers in an hour. You know, my guess is that its going to be off the numbers from, you know, the last time and these are peoples lives that are at stake and their livelihood right. We need to get that stimulus plan done, help the city and states also with their budget gaps and try to find ways to reduce costs in the like all of our businesses. Everybodys looking at costs and i think city and states need to review their budgets. The governors been very, very clear that increasing taxes on the wealthy would not be a very good idea. Bill, but that may be true of Andrew Cuomos position. Its unclear whether thats going to be the position of the mayor in this city and some of the other politicians around this city who have very different views, frankly, on this issue how concerned are you in terms of being in new york city that taxes on the wealthiest are going to go up and do you consider that to be a challenge to your business any increase in taxes is a challenge to businesses. We are seeing these type of conversations not just in new york but in california and other regions. So it is incumbent upon i think the Business Community and others to, you know, continue to discuss the negative impact of what a tax increase would do and i think the financial control board would for the first time in ten years met yesterday, talked about on the budget side. Talked about ways to reduce costs without laying people off by going through attrition there are things we can do and Technology Wise to make our city and our state and, frankly, all across the country more efficient and i think thats what businesses are doing now in terms of looking at their operating costs and running their business so i think its important for cities and states and municipalities to look at that without impacting services and without impacting peoples lives so there are ways to reduce expenses that hopefully will mitigate the need for increasing taxes. Scotts got a question for you. Scott. Judge, how are you. Andrew, thank you bill, good morning nice to see you. Im wondering if you can speak to the retail landscape and whether you think the landscape has changed it permanently there was a guest on our 5 00 show who said we were so over stored going into the pandemic, that now were under demolished, that we simply have too much retail space. Well, youre 100 correct we were over stored before going in and obviously with significant bankruptcies and lack of demand and people coming back, again, not just in new york, all over the country, youre going to see continued hits on retail the good news in new york and, andrew, im sure youve partaken, is the outdoor dining. That has been a huge success our city, the mayors office, turned got permits approved in 24 hours and youre seeing, you know, hundreds and thousands of restaurants reopening, providing service and its, i think, been a big boost to the restaurant and Retail Market but theres no question that Going Forward there are going to be issues. And owners, landlords like myself and other companies, were going to have to be creative we need those services were going to have to adjust pricing and be flexible in trying attract new retailers my daughterinlaw is opening up a Health Food Restaurant in the west village next year so people like that who want to who are entrepreneurial hopefully will start filling in some of the gaps because the pricing will come down but, yes, there is definitely a Huge National problem on retail. Bill, are there any good examples im sure youve been called by all sorts of tenants of yours around testing at buildings or other steps that are a little bit unique, a little different than what weve been hearing about elsewhere . Im curious if theres some best practice that youve heard of recently, oh, wow, youve got to do that, thats interesting . First of all, weve put all the protocols in place mask wearing, limitation of elevation. Weve created our own app that allows tenants to monitor air quality and population in the lobby and the elevators so they can time their way into the building we are studying and looking at how to provide testing to our commercial tenants in an efficient be way to give them confidence and their employees confidence i think testing is one of the key metrics that will be used to help regain confidence and get people coming back into the workplace. So were looking at all of these Different Things and we are hopefully were starting seeing people come back into the workplace. Everybody has their social distancing, masks, sneeze guards we will keep looking were always our Company Created an operating system for our buildings five years ago, which has been very helpful during the pandemic seeing, you know, how many people are in the building, electric consumption, things like that hey, bill, two quick followups on things you just said. Becky. First off, you said hi, bill good to see you. Youre allowing customers to kind of get a view on air quality in the lobbies so they can decide when to come in how do you measure air quality does it tell you how many people are there . How often its being recirculated how much new air is coming in. I dont understand the term air quality and how you can measure that well, we have a as i mentioned, this building operating system, and we its electrical consumption, c o2 level, water consumption, how many people are in the building and so that those are the metrics that we use. And as most other owners, we have filtered air into our spaces weve increased our filters. Weve gone from mer 13 to mer 15 in most of our buildings we think were following the standards and then some to ensure our tenants have the safest environment and we also created a handbook, an online handbook that weve distributed to all of our tenants. We are constantly updating it. To give them the information that they need so they feel comfortable coming back to work. And the second thing you mentioned just a moment ago, that you are trying to think creative creatively things like price reductions, which i assume means rent reductions for customers to come in, lure them into open businesses in spots that may have been shut down. Does that also include rent reductions forexisting customers who are having a tough time . As most other owners where there is a specific need and its verified that a tenant has gone through some difficult times, we work with them weve given them, you know, some deferrals. Weve used security deposits weve done different techniques to help them bridge through the pandemic and hopefully very soon, as i mentioned before, new york is open people will start, i think, in more numbers coming in after labor day. So that hopefully will you know, their businesses will start turning around and we you know, they would be able to start paying back these bridge loans, where there are legitimate issues, weve worked with our tenants. Bill rudin, one of the great champions of new york city thank you for joining us this morning. Thank you so very much namstay thank you. Scott the guru. The guru of new York Real Estate all right, andrew. Coming up, we run through ubers results and much more take a look again at futures this hour. Weve been negative throughout the morning for that jobs number Dow Jones Industrial would open lower by almost 150 points nasdaq lower by 40 points. Ov1100orheerfit time on the now platform, somethings gotten into the office. I hear you. Feels like theres no barriers between departments now. Do you think everyone appreciates it . I do. Huh. Forgot my glasses. Serivcenow. The smarter way to workflow. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. Welcome back to squawk box. Jobs numbers at 8 30 hopefully getting down into the 10 range. We will see where we are in terms of the unemployment number in just a bit or the employment number. Dow jones off by 140 points. Nasdaq 39 points off and the s p 500 off 32 points. Uber losing 1. 02. Revenue 2. 24 billion. That beat expectations the company was hurt by continued limits as you might imagine with travel and commuting from the pandemic. Gross bookings down a whopping 73 . The food Delivery Business on the other end soaring with bookings in that business up 113 the graphic showing ride sharing to food delivery maybe call it a hedge. Thats what derek is calling it. Heres what he had to say. Its become clear that there is a critical advantage in any recovery we know that mobility had restrictions if it continues, our Delivery Business will compensate as a scaled global company, wherever, whenever it happens even if some cities and countries rely. You dont want to miss this because dara is going to exclusively hang out with the gang on squawk on the street. Coming up when we return, this mornings corporate headlines. The july jobs report payroll in july is expected to climb by 1. 48 million after the june gains of 4. 8 million ouawers less than an hr ay were right back after this. At cdw we get youre always looking to modernize. Yeah. Im just not sure Office Drones were the way to do it. [ laughing ] drone voice lol. Our market share looks good, but. Drone voice where are the bagels . Well, cdw can help you modernize your company the right way, with a scalable infrastructure from hpe, making you more efficient and secure. Great. Oh. [ drones buzz angrily ] lets find a different room. For transformation that works, you need Hewlett Packard enterprise and it orchestration by cdw. People who get it. You say the customers maklets talk data. S. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g, everybodys 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. Just have to make more corners in this building. Chad. Your wireless. Your rules. Only with Xfinity Mobile. Now thats simple, easy, awesome. Switch and save up to 400 a year on your wireless bill. Plus, get 400 off when you preorder the new Samsung Galaxy note20 ultra 5g. All right everybody, we have stocks to watch this morning tmobile says it has overtaken at t to become the nations second largest carrier verizon remains number one tmobile added 1. 2 million new customers in the latest quarter. Posted better than expected revenue during the period and shares of that stock are up by about 4. 8 on the news then check out shares of quicken loans parent rocket companies. They jumped in the New York Stock Exchange debut Retail Investors were the biggest buyers this was the most actively traded name on robinhood that stock up by 10 closed at 23. 58 after pricing the ipo at 18 which was below the 20 to 22 that they had initially been hoping for. You can see it closed above the window of the 20 to 22 that they initially hoped for, too. Take a look at shares of drop box down this morning despite better than expected earnings the cfo is stepping down and will be replaced by the current accounting head. Drop box shares, scott, down by 4. 8 we told you yesterday that nintendo reported a blowout quarter with sales of the switch console soared during lockdowns. That earnings came after the stock market closed. It jumped more than 2. 5 the company benefitted from the unexpected explosion in popularity of its social simulation game animal crossing new horizons Gilead Sciences said it would be able to make enough of its antiviral drug remdesivir in october. It has increased supply more than 50 fold since january and expects to produce more than 2 million courses of that treatment by the end of the year andrew. Meantime, watching shares of zillow the stock soaring in the premarket after recording 0 in the Second Quarter earnings. That Beat Estimates for an expected loss of 48 cents a share. Revenue beating. Thats back up to over 13 right now. Check out shares of groupon. Company says cost cutting during the first half of the year allowed it to deliver more than 70 million in Free Cash Flow groupon beat on the top and bottom lines with loss of 93 cents a share on sales, i should say 392 million becky . Andrew, thanks when we come back, senator Amy Klobuchar is going to join us with the latest on the washington stimulus talks and whats happening there obviously everybody waiting and wondering. Then also wondering what the president might do in response if there is no agreement thats reached. By the way, just in case you forgot, it is jobs friday today. Well be bringing you instant reaction from our jobs panel as soon as the july numbers hit at 8 30 again, the street is anticipating, at least this is what congress is looking for, a gain of 1. 48 million jobs for the month of july. That compares to 4. 8 million that were created in june. Unemployment is seen ticking down to 10. 6 from the 11. 1 in june dow futures down by 150 points s p futures down by 13 and the nasdaq, which has been up for the last seven sessions in a rojas set new highs 32 times this year. Its now indicated down by about 41 points. Stick around squawk box will be right back. Good morning it is jobs friday in america we are about to find out if the coronavirus resurgence is taking a new toll on hiring in this country. Ahead of that well speak with democratic senator Amy Klobuchar on the state of stimulus talks in washington. Well bring you up to speed on the trump administrations new move on chinas two most Prominent Technology companies the final hour of squawk box begins right now. Good morning everybody. Im becky quick. We have been watching the u. S. Equity futures this hour youre going to take a look right now after an up week, i think youve seen the dow and s p up for five sessions in a row. The nasdaq up by 7 sessions in a row. You are looking at red arrows. S p futures down by 13 dow futures off by 150 nasdaq down by 39 or 40 points again, scott, well be watching to see what happens a little later this morning and if that changes the market reaction. Yeah, sure will, becky. Thank you. Another big story we are following closely this morning President Trump preparing bans on the companies behind tiktok and wechat u. S. Data security and possible chinese disinformation campaigns could effectively remove the two apps from u. S. Distribution in 45 days. At that Point Commerce secretary wilbur ross would decide what app transactions are no longer allowed. Shares of wechat parent tencent fell 5 in hong kong on that news and have u. S. Listed shares of other prominent chinese Technology Companies as well Chinas Foreign Ministry expressed opposition to the moves and this morning tiktok said it was shocked by the executive order. The company said it has never shared user data with the Chinese Government or sense sort content. It will pursue all legal remedies in response the back drop, microsoft trying to acquire tiktoks u. S. Operations within the next few weeks. Andrew the other big story out of washington, congressional leaders with no economic stimulus package one is needed urgeurgently President Trump is looking to help with Unemployment Benefits and prevent evictions. Its unclear what he could realistically do without a law from congress. Joining us is senator Amy Klobuchar. Thanks for joining us. Well, thank you what is your sense of the state of play . And what do you think the president means and what do you think he could do . Well, first of all, the negotiations are going on strong they have been, as you know, for a week, and we want to get something done we have to 20 weeks of over a Million People filing unemployment claims the president himself, let me quote him, saying its going to get worse before it gets better. Jerome powell at the Federal Reserve talking about the fact that there just arent going to be enough jobs in the short term for people its one, why i want to get joe biden elected president , because i think hes going to put in a team and policies that are going to put us on the right course, but its also why i believe we need to do something immediately. We just cant put our heads in the sand i think. We can talk about the election in a minute on this specific issue, why dont the democrats, maybe im wrong here, try to do a skinnier deal, if you will, get something across the finish line now i know that theres a larger effort at play and i understand the reasons for wanting that, but i also recognize the hardship thats out there across the country. I think we agree on those facts, but when you look at the numbers, we did one big package at the beginning that was important but, remember, we were in an emergency. We know a lot more about whats happening with the economy right now and what we know is that the annualized gdp reduction, you know this, andrew, going to be 33 below what it was . That is not something where you say, lets get a little skinny band aid and put it on it. Theres no way thats what we need to do what we need to do is make sure were focused on some of the areas where employees dont have jobs and where businesses are going completely under we need to make sure testing is actually testing so people dont wait seven days in their basement to try to get the results and theyre not working and then they find out, in fact, they dont have covid. We need to help our hospitals and we need to make sure that weve got unemployment, rental, mortgage assistance, those things were in a crisis. I want to focus on the day after tomorrow, which is next year, and i know thats what well do with joe biden, but for now we must passion a deal that is some little skinny thing that you think you can put a band aid on for a month. Again, quoting the president it will get worse before it gets better it will get better let us respond appropriately instead of doing something and going home. Let us ask you about the 600 number because thats obviously been a big point of contention throughout this. There are places where 600 is not enough we can debate whether everybody, frankly, deserves to be paid more than 600 in this country a week thats a larger philosophical debate and i know there are democrats having that debate, but i think the question is there are also markets or areas of the country where there are people who are not necessarily going back to work because the 600 is more than they would otherwise make what do you do about that conundrum . Well, as weve done before, when we had the last downturn which, by the way, barack obama and joe biden got us out of, we tapered down the federal assistance and we looked at different areas in what was happening. I think our point that right now were not at that moment as were seeing spikes in rural areas, as were seeing spikes in the south and in the west and in states that before we hadnt seen them in, but there will be a time of course that happens. I understand exactly what youre talking about. Thats part of the discussions that theyre having right now that i think overall, andrew, the point is that we just cant do something small right now weve got a big, gigantic crisis and we need to respond in a way that makes sense as i said, we know more now. We know that theres areas like tourism of something im working on, the music venues that have been hit harder. We also know that we have to make some changes and adjust to the Business Program we also know weve got elections that are coming up and republican and democratic voters have been voting in record numbers by mail and the republican governors and democratic governors are asking us to respond to that in a system, in a cataclysmic change to how people vote thats why this cant be just a little skinny band aid. One related question, weve been having debate on this program for the past couple of days about it, about this new effort for second bailout for the airlines where do you stand on that well, again, were looking at the numbers to figure out whats happening. I am really concerned if we just put all the money on the business side, as much as i came out of private sector background, i believe in a strong economy, but weve got to make sure that when we look at how that moneys being spent, that its being spent right and that we do this in a way that we dont let the people who are being kicked out of their homes right now or dont have electricity just sit there hanging. Do you think taxpayers should either get shares in the company or warrants . And i know there were warrants involved in the last airline bailout, but more meaningfully rather than as a quote, unquote, gift i think that is something that we should be looking at weve got to look at how we have accountability how we start getting money paid back from companies that are successful and the like but, again, i am someone that has stepped back and said, were in a crisis we cant have the political fight right now. Donald trump has put us in a bad place with all of his divisiveness and all of his lack of planning for this the minute he heard about this before anyone else back last fall and did not get a testing regime underway and did not get National Testing standards that would help our businesses reopen right now and also did not plan like he should have with the rest of the world in how we handle a vaccine we know all of that happened and so there is a direct connection between how he has handled this crisis and where we are economically and i think everyone in america that has someone that lost a job, someone got sick like my husband did, really, really sick, someone whos tragically lost a loved one to this disease knows who should be held accountable and who can better fix it. Senator, its scott wapner. Good morning to you. Hi, how are you you need to go big. Nice to see you. There are those im sure who agree with you that say we do need to go big the question still can be, do you need to go that big . Is it 3. 5 trillion or close to it or bust for democrats would you be willing to vote for a package of say 2 trillion meeting somewhere close what the middle would be . I think you know, scott, youve been in government, there are compromises going on and thats whats happening right now. Yes. It doesnt have to be that exact same number, but i think and also could i add getting the input from people in the senate can be a good thing and i will say roy blunt and i have spoken several times every day to talk about how were going to manage this election funding and how much money we should have, what rules should attach to it. Thats been good i talked to senator rubio yesterday. Theres a lot of negotiation going on in the senate at the same time that theres the meetings that you read about in the news. Hey, senator, while we have you, did want to get your thoughts on the administrations take on tiktok and recent bely wechat just in the past 24 hours. Some concern whether there will be reverberations or backlash in china about American Companies are you supportive of the way the administration has approached this . Ive been very clear when it comes to china that we know they steal our intellectual property, we know theres privacy issues but to me this feels once again, im looking forward to hearing more, getting briefed by the administration on this, but he suddenly issues an executive order right when there is a sale potentially pending and, you know, i dont think its the worst thing in the world to have an American Company buy this company so we have more control over the data, but i just want to know where was donald trump when weve been trying to pass privacy legislation . I dont see them pushing for some of the great bills that ive seen out there, including bipartisan ones and the leadership wed like to see so we can actually do something to protect the privacy of americans and we havent had any major privacy bill or overhaul passed. Thats one thing im excited about to have joe biden come in to help lead that effort lets see what happens here, but i have serious concerns about china and privacy and National Security but i dont quite understand, to me it feels like just another donald trump executive order to try to play politics with something instead of getting the actual result senator klobuchar, we appreciate your time, your perspective as always. Who do you think biden is going to pick for his vp you think im going to predict this on that show. No no. Come on i think hell pick someone who is excellent, who will bring competence and compassion to the white house. Youve got to give us a name. Come on back. He was a good vice president. Hes going to know how to pick one. Yes, we will give you guys the scoop. Talk to you soon. Appreciate it. See you, bye. Quick programming note we have a programming note related to the conversation that we just had. Cnbc is doing a Small Business playbook Virtual Summit gathering the most trusted and inspirational voices in business and you can be a part of it. Sharyl sandberg, kevin oleary and many others part of it to provide Small Business owners the resources to survive in todays crisis and provide a path forward takes place on august 12th you can check it out on cnbc. Com Small Business playbook to learn more. Becky . Andrew, thanks. When we come back, the july jobs report. All of wall streets going to be watching for the number and the market reaction. First, gms new play to take on tesla with the cadillac of electric vehicles, and we mean that literally that story is next right now as we head into a break, check out shares of uber off the Second Quarter results revenue beat the streets forecast but because of the pandemic it fell 29 from a year ago. Ride gross bookings were down a whopping 73 but virus lockdowns helped uber eats rise. That stock is down by 2. 5 you can catch an oaks inclusive interview with Dara Khosrowshahi stay tuned well be right back. But, we have aunts. Youre slouching again, ted. Expired, expired. Expired. Thanks, aunt bonnie. Its a lot of house. I hope you can keep it clean. At least geico makes bundling our home and Car Insurance easy. Which helps us save a lot of money oh, teddy. Did you get my friend request . Uh, ill have to check. doorbell ringing aunt jonis here for bundling made easy, go to geico. Com. Hello . Flookentertainmentoury, experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Change with its all new, all electric offering. Phil lebeau is here with the details. Good morning. Reporter becky, were talking about the caddie lick lyriq. This is pretty darn close to what they expect it to look like when they unveil it and actually start deliveries of this by the end of 2022. Well talk about why its taking so long to come to market. The range will be at least 300 miles although theyre not getting specifics in terms of how long it will take for you to charge up the vehicle. They will have fast dc charging for up to 150 kilowatts but theyre not saying, look, thats how many miles youll get in 20 minutes, 30 minutes. The delivery is starting in late 2022 the head of or the president of gm north america says this is all about making sure theyve got the infrastructure in place so people who buy this will have the places to charge up and to drive it we have a lot of work to do in the next two years in terms of communicating, creating the conditions so that electric vehicles will be successful. For instance, building out charging infrastructure and so i dont i think its a matter of waiting its a matter of creating conditions so that evs will be successful remember, just last week General Motors said its going to be teaming with ev go to triple the number of charging stations california is the number one market for electric vehicles you want to make a mark in california before you go anywhere else. Tesla makes a mark there its where they build their vehicles and where theyre most popular. No comparison tweens the sales of tesla and the cadillac brand in 2019. Theres no comparison in terms of market cap. Tesla versus General Motors. More than seven times the market cap of General Motors. Thats what tesla is sitting on now. A market cap of 278 billion guys, dont forget General Motors is using this electric Battery Technology this is the base for the lyriq and the new hummer coming. This is the future it will take a couple of years though before we actually see this out on the road phil, i saw on twitter today, somebody was pointing out that its the twoYear Anniversary, speaking of tesla, of elon musks 420 tweet is that really possible . Yeah. Two years already it is possible. I was on vacation when it happened and i got a call from the desk and they said, hey, elon musk said hes taking the Company Private at 420 usually you hear that and you go, not really within a matter of minutes, yeah, two Year Anniversary of that at the time people say hes stepped in t. Look at the stock in the company two years later. Yeah, no kidding. Its stunning. Phil, thanks. Coming up, were about to learn what the renewed business shutdowns last month did to this countrys job picture. The july employment report is on the way. Just minutes away. Stay tuned youre watching squawk box right here on cnbc tmobile, we have more towers, more engineers, and more coverage than ever before. And now you can get an Awesome Network at an amazing price. Get four lines of unlimited for just 25 bucks a line with 5g access included. Thats right. Unlimited and nationwide 5g for just 25 dollars per line only at tmobile. [ engines revving ] its amazing to see them in the wild like th shhh. 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Welcome back to squawk box here on cnbc we are just a few minutes away from the big report of the week, and that would be the july jobs report ahead of that number we want to welcome our jobs panel jason furman who is former cea chairman and professor at Harvards Kennedy school kate moore who is the head of thematic strategy at blackrock and our very own Steve Liesman, Rick Santelli and mike santoli welcome to everybody steve, how about you set us up a little bit in terms of what were looking for, how this fits in historically over the last several months and the massive number of losses and then gains that weve seen in the market. I think the only thing people agree on, becky is job gains have slowed. We have estimates from minus 500 to flat to the consensus of 1. 4 million to as high as 3 million. Neither wall street nor the abp number has done a particularly good job of forecasting this number some of the High Frequency data has shown that it has slowed some suggest its negative adp kept coming in at around 160,000. Thats a warning sign, too there are some seasonal adjustment issues that could put some workers back that will have to be looking through to find out what the true state of the job market is. Hey, jason. What are you watching as an economist, somebody working through the numbers. What are the most important metrics to you now the reason the numbers are so hard to predict is the gross lows are so large. We know a huge number of people lost jobs in the month of july we know a huge number of people gained jobs in the month of july and the difference between those will be the headline number thats reported. Thats why its hard to predict. Ill be looking at how much of the job gains were coming from people on temporary layoff returning to work. Thats an easy form of job gain. Im not as excited about that as i am if we see job gains, you know, above and beyond people returning from temporary layoff. Ill be looking at number of people that transitioned who are employed to unemployed that remain very high the last two months even with the job gains that was a concerning sign that theres sort of another recession brewing underneath the one were at thats another data point ill be looking at carefully in a few moments. Okay. We have someone to welcome to the jobs panel nada eissa former deputy assistant. We were having problems with your feed. Im sorry for the technical difficulties one number people are trying to figure out is how many job losses have gone from temporary to permanent how are you focused on that . Well, i think its a little bit hard at this stage to figure out whats temporary and whats permanent. I think we are still in the middle of this jagged what i would call jagged recovery were going to go up and down for a while. I dont think yet we know how many of the losses are permanent. We should be looking for business bankruptcies and, you know, business closings for some of that, but at this stage im not sure that i think we know very well whats going to happen on that margin mike, kate, rick, the three of you are kind of watching the markets reaction to whats going to happen with that. Mike, ill start with you. What the market has been anticipating what could be a good number. What could surprise even the up side or down side . The quick background the june and july for jobs, both did have nice rallies, a carry through to monday the market, i believe, is craving better than expected numbers or at least on target for showing progress on the labor market i dont think the markets are priced in any fine tuned way the general sense that things are Getting Better were ahead of the game for the Unemployment Rate versus what we thought months ago people were saying 10 towards the end of the year. Any progress below that is a positive its at a treatment high up 50 . You have to imagine theres room for disappointment just for that number alone even though its a sell on the news number. I also think the dollar and treasury yields will give the lead in terms of what the interpretation of this number is kate, weve done a lot of these jobs reports with the caveat that these are backwards looking numbers, that its not the Real Time Data for whats happening. I would argue this months number is important. Maybe were getting down to a point where you need to be looking at this. We know every week is the most important number, the next day, the next week. This one feels like its a little more important in terms of trying to get a real snapshot right weve already had this enormous snap back. You were asking an important question earlier how much of the temporary layoff gets averted back into the fulltime employees. One of the things ive been focused on as we were going through Second Quarter earnings season was how companies are talking about labor force and what their expectations are for the future i have to tell you a lot of what i was hearing across many sectors and industries, companies are going to really focus and really manage their work force in a way that they havent perhaps in many years. That makes me a little concerned about what forward looking job gains are going to be. I think that, you know, in an environment of Economic Uncertainty where growth and shutdowns are impossible to forecast, companies are going to use the labor tool in order to manage their cost structure. Thats an excellent point were going to come back and talk about that after we get the jobs number. Rick, i want to check in with you about whats happening with the market what do you think traders are looking for out of this number how do you anticipate it might change things there . You know, when we have a Rearview Mirror glimpse of something, whether itsthe credit crisis, coronavirus, all of the negative effects in the economy, it really changes the jobs number. Jobs, jobs, jobs becomes the healing salve that investors want to apply to the economy better jobs means 24i7things are going to improve real negative rates have changed the landscape of investing for all investors. Its fueled gold its defueled the dollar and it puts us in a club, whether its europe or japan, where negative rates really make Everything Else look better we under estimate how much better they make stocks look in the valuation process so looking at jobs in an improving landscape really will go a long way into altering this notion that we need to continue to make the negative Rate Adjustments in our longterm investment portfolios. Rick, im going to come back to that point again after we get this number. There was an interview earlier this morning on cnbc with the Deputy Governor of the bank of england. He was making the case that negative rates are a better tool to have in the toolbox than the idea of buying lets say equities as some have gone out. Yeah. Horrible comment i completely disagree with. Yeah. I was stunned hearing some of this well come back to that. Lets take a look quickly at where the market stands. Dow future down by 128 nasdaq off by 33 lets get right to Steve Liesman. It is time for the july jobs numbers. Steve, take it away. We are waiting for it to show up there it is. Up by 1. 8 million. Unemployment rate falling. Declined to 11. 1 . Got the right hold on one second here. Let me check and make sure i have the right release sorry. Unemployment rate falling to 10. 2 here sorry. The pdf is wrong ill go to the html version. Unemployment rate, payrolls rising 1. 8 unemployment 10. 2 improvement reflected the continued resumption of economic recovery it is a slowing down in july the Unemployment Rate declined by 0. 9 to 10. 2. The number of unemployment defaulting by 1. 4 to 16. 3. That looks like pretty good news among the major worker news, Unemployment Rates decline in july by men, 9. 4 teenagers, whites 9. 2. It looks like it was down for all major groups by races and by gender and then if you give me just a second here, becky, i will find the lets see here, the misclassification here since march no, well pass on that well go to the b1 table that will tell us by industry where the jobs occurred here okay it looks like mining and logging down 7,000 construction up 20 thats a good number manufacturing up 26. Another good number there. Nondurables up 11. Private sector up 1. 4 million. The bulk of the jobs were there. The retail trade coming back 6100 right there and lets see what else . Transportation warehousing, 38,000 government was going to be a big number i want to take a look at what that is there. Education and health up 215,000. Thats pay good number Leisure Hospitality coming back as well. Government up 300. Wow, thats a big number for government looks like federal, 27 local government up a big number looks like they had a big return to work in the education sector. Pretty much in line. Im kind of impressed with the consensus here, becky, that it did come in at least close this was the closest theyve been in the months that weve had during the pandemic. The Unemployment Rate falling. We still have momentum in the job market not as fast as it was before i guess we have to get through this latest surge in the virus we can do better in august steve, you get the award of the morning for trying to dig through a complicated report on the fly without getting any advanced look or being in the lockup room or anything. Better you than me again, as steve reported not much, its part of the job. Unemployment at 10. 2 versus the 10. 6 level mike, lets take you through this because the markets reacting pretty positively down by 125 points before it hit. It hit the flat line seeing green arrows. What do you think . It makes sense. As i said, the market is definitely craving reassurance that things are getting wettbetr Goldman Sachs saying some of the Real Time Data was indicating maybe there was down side risk to the numbers the data did not bear that out i think theres a little bit of a relief one thing to keep an eye on. The way the market has digested these things is sometimes it means this is good news for more of the kind of cyclical stocks, the value names, industrials, financials that have lagged and not necessarily directly as good news for the huge Growth Stocks that have driven things. Maybe in the Overall Index level it can offset things i think its a little bit of a relief in terms of how traders are reflexively dealing with it. Rick, quickly, whats the reaction of the treasury market right now . We are pretty much exactly where we were 20 minutes before the number 54 basis points in a 10year note dipping below that slightly basically in the range you want to pay attention, of course, if we get only 52 basis points were only splitting basis points thats the alltime low yield flows. 11, 12 basis points at the short end. Youre not going to see huge differences. Heres the point, 2 year, 3 year, 5 year, 10 year, all of them are within 1 to 3 basis points of fresh all time low yields and that really is the point. That even when we get good data and we see bounces of improvement in equities, we really see very little lift in treasuries mostly for fed policy. Quantitative easing and as we discussed earlier, the contamination of the Financial System of negative rates, whether theyre real or totally embedded yes, i think thats a horrible issue that continues to make investors appetites move in different areas. Hey, jason, its much better numbers than have been anticipated. Much better numbers than weve seen in previous months. Were still talking about an Unemployment Rate of 10. 2 this is better than anticipated though does that change your outlook about where we might be towards the end of the year when it comes to unemployment . This report was definitely a relief but i wouldnt celebrate too much you look at the number of people on temporary layoff. That fell by 1. 3 million most of the people who got jobs in july were called back to their old jobs what were worried about is even if everyone went back to their jobs the Unemployment Rate would still be about 7 . It would still be a mild recession. You saw thenumber of people transitioning from employed to unemployed was 3. 5 million in the month of july. Thats a record for any month prior to the pandemic and the other thing on that Unemployment Rate, in part its lowbecause so many people have left the labor force. I think about 5 Million People have left the labor force since this virus struck. So underneath this report theres just a lot, a lot more work and a lot of Economic Policy that will be needed to speed that work. Kate, what are your thoughts . Jason, real quick theres a little stability the Participation Rate was 61. 4. It kicked down a little bit. Jasons right, over the course of time you have had Something Like 4. 5, 5 Million People leave. The good news in that regard worth mentioning is it looks to have stabilized about 159 Million People, 160. It did stabilize. I was talking about that as bad news you think the Participation Rate should be improving as the Unemployment Rate falls. The fact that it got a little bit worse was i think a little bit of a negative for the month of july. Kate, the numbers better than anticipated. As you pointed out before we got that lort, you are starting to hear from a lot of companies that are taking this as a time to kind of reorganize and do layoffs not because of covid, because theyre reacting trying to make the business respond better does that worry you about whats to come down the road . Yeah. Look heres the thing the point is its making a lot of people who have jobs or temporarily laid off, were rehired by their previous employers. The big question i have for the second half of 2020 and in fact for the first half of 2021 is going to be, you know, what decisions are Companies Making about the structure of their labor force because, look, Remote Working environment is shedding some light on what is necessary, whos most efficient, where the greatest productivity lies and i think people are going to use this pandemic opportunity to streamline the cost structure again we get a little hint of that as companies are reporting Second Quarters im watching that very closely i think thats going to be a long tail. It will end up being strong for margins. Companies that manage their cost structures in the lower Economic Growth environment are going to reap better profits. Its not great from a People Perspective but certainly better from an investor perspective i wanted to react to the cyclical and value plays when you get slightly better than expected Economic Data youve seen these pops and short rotations, but i strongly believe were not going to get increased or leadership by value or cyclical stocks until we have more visibility in the path of economic recovery. In fact, id be really sort of doubling down on the stronger growth stories that have the ability to maintain the labor force and are putting up Revenue Growth numbers in this uncertain environment. Hey, steve, its scott. The good news here is that we no longer have to wait until a jobs friday to figure out what the reports going to be nobody should be surprised that the report was good today because on tuesday the president himself told you, us, that the job number was going to be big on friday. Here we go presumably i mean, must have had an inkling if it was going to be good owe wouldnt say that. Sure. It seems like it seems like 20 years ago we had rules that president s didnt talk whats that, jason. Im sorry i used to give these numbers to president obama there is no way President Trump had any information on tuesday he learned yesterday afternoon what this number was didnt know anything before that. How do you know how can you be so sure he said a big number was coming on friday. Presumably he wouldnt say Something Like that if it was going to be a dud today, would he he says all sorts of things that are a little bit unmoored im quite confident i know how the bls process works, how the numbers are transmitted to the white house to him he did not have them on tuesday. Is it something you just said about being in the market and how you think about cyclicals and the others that have not been technology, which is clearly led the way. Bring us back to a conversation were having in the 6 00 hour which is, you know, i dont know if you saw Goldman Sachss report yesterday or in the last 48 hours talking about how if youre going to be in the market, you may want to get into cyclicals because it will be binary when and if we get a vaccine. It becomes a timing game how do you think about that . Kate, did we lose you . Sorry, andrew is that for me no, im here i wasnt sure if it was for me look, i read the same report i understand the analysis. You know, there has been a structural under weight to a lot of cyclicals and value oriented plays. From a technical perspective you have a vaccine, people are more confident and have Economic Growth you can see a rotation the only thing i would say is, you know, its going to take a long time for that vaccine to roll out and its going to take some time for people to change their pandemic behaviors, both on the consumer side and corporate side what i worry about is you have this fast and fewer rouse rotation into names that cant sustain that type of growth and a big reversal we prefer to be in more what we call wimpy cyclicals, companies that can grow in this economic environment. Were not positioning for a huge environment in the second half of 2020. Its been 12 minutes since we got this number and we havent discussed whats happening in washington, what the stimulus bill will or wont contain, if it will get passed that may have the biggest impact on any of this what do you think needs to happen in the stimulus bill and what kind of impact will that have in the months to come sure. Let me say one thing, actually, about the numbers. I think the numbers are better than expected. Im surprised, pleasantly so, but i would say one thing for the rest of the year, weve already had a series of reopenings and closings. I think one of the potential consequences of that is the next time around when we do get control of the second spread is that businesses and consumers arent going to be as willing to jump back in as quickly. The concern is the extended separations between workers and employers, you extend the duration of the recovery so my concern is this becomes that we move from what is a purely Health Crisis and an economic consequences to which even in which we saw the Health Crisis we still had an economic problem at the other end i think we have to get this right now, but i do i am encouraged by the numbers. I think we need to begin in the right direction. On the policy side, im more concerned about whats in the bill rather than the size of it. I think the ui, Unemployment Insurance number is important. I think an extension of the not necessarily 600 bonus but maybe something around 400 would be acceptable i also think we need to see some kind of state and local government relief. I would not support i dont think we need another onetime payment at this point. I dont think thats a necessary eleme element. So i think ui, state and local would be important piece of that probably makes a lot of sense but, jason, that onetime payment of 1200 that we saw before that went to everybody making under a certain amount of money, that by far is the most popular item on any poll that weve seen in terms of what the voters want and we are less than 90 days away from an election so what do you think happens in washington i think theyre going to get it together. I think the democrats have quite a lot of leverage because President Trump actually understands i think understands better than a number of republicans in congress how much it has gotten over the last several months supported the v shaped recovery. Thats helped drive it thats needed going. I think theres room to go down from 600 to 400 a week would be extending it. 100 billion and democrats had 1. 1 trillion theres a lot of numbers between those two and thats where i think it would end up. Yes, i do think people will get those checks and somebody with light belt and suspenders policy approach to this im supportive of that because id rather err on the side of more than less and consumers has been key to what weve seen in the labor market, what weve seen in the economy and id like to continue to support them. Hey, rick, the spending is adding up at a pretty rapid pace we spoke with steve ballmer, maybe it was this week or last week the weeks run together he pointed out that its tough to get your head around these types of numbers because you throw a trillion around, its pretty easy. It rolls off your tongue what were talking about spending on the stimulus alone is already north of a quarter of what we would spend on the entire budget in any given year. We have a lot of senators coming on, republican senators who are not on board with what Mitch Mcconnell is saying or what President Trump and the administration are saying on this point, too. I wonder how that kind of plays out, particularly in the treasury market because thats the one that would be most sensitive to any of this yeah. I think it plays out in a very large way because i think you want to look at the currency first. See how the weakness in the dollar of course is gaining momentum and this notion of it being an Election Year makes all the difference in the world. I think the president does yuchb understand the dynamics of an Election Year. Nobody likes to turn down a 1200 check. In the end, the deficits and the fact that weve invested 15, 18 of the total size of our economy and deficits, these numbers are getting so large that the Federal Reserve and all the Central Banks of the world are going to be dealing with an environment where debt is going to be competing defined a place and a home it doesnt seem that way at this point but do remember even if the chinese now, their debt is becoming more popular. Were going to have to compete and the competition as time goes on as the Global Economy shrinks its global gdp because we all know less productivity rises and general growth suffers when you have more debt thats going to be the dynamic moving forward i think ultimately taxes have to go up. There will be no alternative despite all the debate, misgiving about how that issue affects the economy at large between independents, democrats, republicans. The markets understand that if businesses and individuals pay more in taxes, the economy is going to grow at a slower rate sniek. Well, whats interesting is that its a real world experiment right now were in the moment that people have been warning about saying if this really gets to a huge percentage of gdp, watch out whats going to happen what youre seeing in the experiment is treasury yields are not reacting, theyre absorbing a great expected new supply of treasuries reasonably well of course the fed is buying 80 million a month so that doesnt hurt i one be der how its going to color the fiscal debate if, in fact, people look at proposals and say does it really move the needle do we really need to do this didnt seem to knock everything off course im not saying thats the correct stance but its very interesting that thats where we are right now and markets are reacting most of all to this negative real rates which means longer term inflation, normalizing as we have not only yields staying steady. Like i say, real world ekts perfect iment underway. Jason, thats a real interesting point. Your thoughts on it . I would think i think a lot of room for borrowing. Real rates are negatives rates are going to be zero for many, many years to come about no Inflationary Pressure in the economy. I dont see how you get very much Inflationary Pressure with such a high Unemployment Rate with Commodity Prices falling. So i think theres a lot of scope for fiscal policy to act here i dont think Monetary Policy needs to do anything special, can do a whole lot more to enable that action. That action. Steve, youve had a few minutes to digest the report anything that you didnt see the first time around or things that you want to bring to our attention . Yeah, i just want to come back to the well, first of all, the temporary Health Number is interesting up 144,000 it makes me think that employers are going to a Halfway House before bringing back workers on a fulltime basis, unclear about whats going on. I like the analysis that i gave from Steven Stanley earlier in the day that part of what were seeing here might be the return to work that happened before the resurgence that was not counted in the june report so well see what happens if more of that whats picked up in august or maybe its missed entirely the other issue, though, that i think is worth talking about is an awful lot of local education jobs were added and that was because they were expected to have been lost but they werent because they were lost earlier its going to create some challenges for august. I think we might be settling down here, becky, into, you know, if we are lucky to do a million a month to work on the total count now, give me one second, i believe is 12. 8 million. Thats the number that yes, 12. 8 million is the number that we are down in payrolls from the february level weve come a long way, theres still a very long way to go. A lot of hard work to do yet if were lucky we can do a million a month over the next several months, still going to leave us challenged, but its at least progress in bringing people back to work. Folks, i want to thank everybody on the panel today for all the instant reaction and analysis and, again, just to say where the futures are right now, you are looking at the futures down by about 54 for the dow, we were down 128 before that number hit, that july jobs report, again, a gain of 1. 8 million jobs versus the 1. 48 million that was estimated and versus the gain of 4. 8 million in june, Unemployment Rate ticking down to 10. 2 versus an estimate of 10. 6 and a level of 11. 1 for the month of june. I will send it over to you. Thank you meantime, im going to zip over to headquarters where jim cramer joins us now to get his take on these jobs numbers and maybe how to trade it, jim you look at these numbers and its less about what the numbers say today and more about how you extrapolate what you think theyre going to mean mention month and the month after. Theres huge gains like leisure and hospitality 592,000. Lets say you start closing up america again. Ive been focused on the idea you should open up america with masks and social distancing but these numbers show you if we close it, if we do have too many hot spots were right back down. Im not as encouraged as other people about this because three of the states that matter the most in the country, florida, texas and california, are getting making me feel like, look out anything good could be erased. We have got to have masks in this country and we have to have social distancing and if we dont do it those numbers go back. Just so i understand, youre thinking about california and arizona and florida and the like i imagine. Absolutely. Do you think you august its going to be worse because you think theyre going to shut stuff down what moved up big in leisure and hospitality, big category, bars, food service, drinking places well, those are closed i mean, they tried drinking places all being shut i mean, thats that is just a huge part of the equation of that particular retail. So what happened they have the nonessentials come back how are those guys doing horribly, i expect we will see big layoffs there, health care only 126,000, thats the most stable area. I dont see anything here that makes me feel confident. What i see are people who are going to try to have restaurants, try to have small retail and try to have big retail and they are all going to fail against the larger guys. My other quick question was to get your thoughts on this wechat, tiktok view of the world from the administration what does it mean i think this is the first real shot across the bow thats larger than just a tiktok story now. I agree with you and i think the next stop is to ban their ipos if youre going to ban their apps, which is late, but still very meaningful, ban the ipos. It wouldnt shock me one bit im sure theyre considering that right now theyre playing tough. Extrapolate that out, though, to the larger piece which it may affect those companies, does it come back and boomerang in some other way . I think that look, the chinese have a lot of levers to be against us, but i think the chinese are shocked because they own the elites, i believe that, you can say, no, there are elites who disagree but the president is going directly against the elites in a way to be able to show that the democrats arent tough, i think hes trying to distance himself from biden biden has some toughness to china but this is this is, again, going from a trade war to a cold war and when you send people to taiwan, thats right in their face. I dont know what they can do to retaliate other than drop the trade agreement but they never fulfilled their end anyway. Jim, thank you. Have a great weekend. We will see you in just a couple minutes, also you have Dara Khosrowshahi and we will be looking forward to that conversation as well. Thats big. You bet scott . Andrew, thank you. Lets talk more about the markets and what this hours jobs report means for your money Going Forward. Joining us now omar aguilar the chief Investment Officer of passive equity and multiasset strategies at Charles Schwab investment management. Food to see you this morning what do you make of the report and what do you think it means for the markets . Good morning. Well, you know, its always good to see positive numbers and its always good to see that we are on the right path. Certainly the uncertainty going into this morning was quite remarkable where actually it was clear that nobody knew where we could have a chance of having negative numbers the report where it is i think the market has started to digest where were going. That being said were looking at that recovery of what it was a huge loss that we had at the beginning of this crisis so going from over 4 million to shy of 2 million it clearly just is slowing down the amount of jobs that get generated and get back i do think that the most important thing in the long run has to do the fact that while were recovering the temporary losses of jobs and thats what these numbers represent today, you know, we still need to figure out what goes ahead in the next few months to understand how many of those job losses, you know, are permanent versus the ones that are temporary. I think that will shape up more or less the duration of this crisis do you think its time to rotate away from high Growth Stocks into cyclical more high Growth Stocks . This report suggests we are at least heading in the right direction on the employment and economic front is it too early . You know, unfortunately the decision to rotate and the decision to get into the full phase of recovery for the economy it is going to be determined by the virus and the way that we contain the virus. You know, we started this crisis as a Health Crisis with the virus being the one that shocked everybody and until we have a more clear path on how were going to control and contain the virus it is going to be very difficult for themarket to rotate out into a very typical recovery from recession. If you think about it today the majority of the sectors that are leading the way, you know, they became, you know, defensive and they are continuing to drive a lot of their business on the virus situation. The market itself it has clearly taken the headwind the tail winds associated with working online to basically adapting to what those are and the growth rates and earnings are basically expected to be as long as we stay in this situation so it is kind of an interesting, you know, path where we are where were not ready to rotate into traditional recovery form mostly because, you know, we havent had the final answer on how were going to contain the virus. So literally youre saying you stay with this trade until you get a vaccine . I wouldnt necessarily say that the vaccine is the answer, i think if you think about what the market and typical markets that we have seen, you know, this is more typical of the recovery of a Natural Disaster when you actually have a Natural Disaster that affects markets, for the most part it takes some time to start recovering, if that generates a recession all of a sudden youre starting to see that rotation happening where cyclicals start to lead the way, you start to actually shift from growth to defensive into value we dont have a solution to that path even though we may get a vaccine and a treatment, its going to take some time for us to just be able to understand what the implications will be in the economic the longer we wait for a vaccine or treatment the worse we will be for a recovery. Just think about it, the disconnect between the market is today and where the Economic Data that is trying to catch up is really just what the market expects to be the duration for us to get an answer. So if you think about the vshaped recovery that the market seems to be having versus what the economy is, that is the length of the duration of what the potential length of a recovery for the Health Crisis might be. Omar, appreciate your time today. Enjoy the day. Have a good weekend. Thats omar aguilar from sharls schwab quick check on the markets, opening negative across the board even as the employment report better than expected. As you take a look nasdaq closes above 11,000 for the First Time Ever yesterday but we will see what happens today. You bet thanks for hanging out with us this week. Thanks for having me. Have a great weekend, everybody. Make sure you join us next week good friday morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer and david faber. Futures briefly erased some losses as july jobs come in 1. 76 million, not as strong as june but above expectations not much progress in Congress Stimulus talks and we are watching the white house order banning u. S. Companies from doing business with wechat and tiktok