Transcripts For CNBC Squawk On The Street 20240712

Live this hour. Plus records watch, the plus ive got it, carl the dow aiming to erase 2020 losses and the s p heading for the best august since 1986, kelly. Wow and cocacolas restructuring strategies amid plans to streamline the drink portfolio they are setting voluntary job cuts for thousands of its workers. David, it is friday, and kelly, friday and you just sort of think back to what this week has brought us, guys alltime highs, obviously news in sports in the nba, hurricane laura, the rnc and we will hear from what the president said last night tiktok, microsoft, walmart, oracle, you name it, david, but large discussion this morning about how the thing thats going to probably stick with us for the weeks and quarters to come is going to be that historic powell speech and we will have to decide whether this long end is bringing us noise or something more yeah, i mean, im glad kelly is here because im sure she was home studying every word after it took place, as you know, not my area necessarily of expertise, but within the confines of the well, actually, within the confines of the broader market, carl, in terms of the fed and whether or not it really has been fueling this level of some of us call it speculation that weve seen that has sent so many of the certainly Large Technology stocks to heights that we really do not have imagined even a few months ago, i think thats an important part of it and the fact that, well, inflation not going to necessarily play a role as much in what the fed is thinking about at least and that rates may stay even lower for longer, kelly. When i look back at this week that move in sales force is the one that stands out to me. Yes yes. As reflective of great numbers, no doubt about it and certainly also reflective of the changes taking place in the u. S. Economy in this very short amount of time and the digitization that has been accelerated for so Many Companies who without it would not have a business, but, man, adding 25 to your market value in one day on an earnings number was incredible. Incredible. So here is the interesting question, it was also the day before the big fed, you know, decision, the move, the change in tone. So we had salesforce up 26 , david, we had workday, we had adobe up 10 that day, netflix up 12 , facebook up 6 despite saying that amazon was going to take half of its mobile the apple was going to take half of its mobile advertising business. Thats where we put this question to the fed president we have spoken with on this channel over the past 24 hours the request he to everybody and the answer has been fairly consistent we say are you worried into these markets are acting a little frothy. Pretty much all of them acknowledge, yeah, i mean, i forget exactly, carl, remind me how they put it, but they said, yeah, valuations are high, no one wants to call it a bubble yet but theyre watching it. The interesting thing we talked about yesterday, too, is this is not a fed telling you theyre going to lean against it, david, theyre basically saying, yeah, with he see whats going on in electric vehicle prices, with he saw that chinese ipo yesterday, we see it all and our priority and our prerogative for the next several years is not going to be worrying about it, you know, it is going to be making sure that that Unemployment Rate for everybody comes down yeah, and, carl, of course, we have seen it reflected in the bond market, we have hit on it on a few occasions, just the prices that junk yields are at our jeelds in the junk market are at right now is extraordinary. It goes back to this idea that where can you actually go to get any sort of a return as we do take a look at the ten year which did manage to gallup ahead at least breaking out from that below 7. 7 yield, carl, but nonetheless very few places one can look for for genuine return in any asset class thats through. Maybe the two things we are talking about, guys, are sort of dove tailing, the impact of technology and the argument from the fed this week that its not going to be wages that drives inflation from here on out kelly mentions mester on squawk this morning and she said the behavior of the market is essentially a vote by investors who believe the economy is headed for a certain place, but she was asked whether or not she thought the fed was feeding a bubble here is what she said. I dont feel right now that we are engendering an a bubble, i feel we are supporting the economy and doing what we can to make sure Financial Markets continue to function and credit continues to flow to households and businesses we will be looking at Financial Stability issues as we do Monetary Policy Going Forward. Yes, stock prices are elevated and you are right to point that out. So, david, we have a couple conflicting signals. Income and spending this morning nice upside surprise, but you see capital one cutting their card limits, they are not saying for how many people, but people are reporting, hey, my card limit got cut by a third in the absence of jobless aid maybe thats what some of these financials are going to have to start hedging against. Yeah, kelly, we talk about it all the time, this tale of two markets, tale of two economies in many ways, of course, the Large Technology Companies Just benefitting enormously from these changes that have been accelerated about you at the same time we still have, what, 30 million people. Yeah. We have concerns about people who are going to be evicted. We do not have any legislation out of congress and the white house at this point that would indicate aid is on the way or another round of aid and as we get closer and closer to beginning september, perhaps the prospect for that even dims more and its hard to imagine the idea, kelly, that we are not going to have something coming along to help people who have lost their job who continue not to find a job. Help people pay their rent and on and on down the list. And we will talk about this again, i guess, in a minute about the skinny deal that may be coming, but first to your point about whats going on in the economy, what carl said about capital one, its not showing up everywhere yet. If you look at the credit card delinquency data from i think july is the latest, the figures actually ticked generally in a good direction jpmorgan thats what i was looking for yesterday put out their spending tracker, which has been great, theyre basically using the jpm economists use the chase card data to figure out whats going on with the economy in realtime and Consumer Spending and even after the cliff from those expiring jobless benefits they are not finding a turn lower in spending overall again, with he sort of saw that in some of the macro data earlier today. So remains the big question, david, but ng its why we havent seen this urgency out of washington they are at an impasse, the market is not insisting for another big deal, maybe the Airline Stocks have a lot of hopes pinned on this, we will probably get something around the edges but so far the macro has held up surprisingly well. There were showing the Airline Stocks, american up another 2 call it percent, carl, today. Yeah. Of course, that was the other big story of the week, some of the pilot furloughs that are going to be coming in the absence of further government aid, kelly, starting october 1 largest pilot furlough it would be for united and american with a separate announcement. Then you have coke today can you get the number of organizational units in half, offering voluntary separation to 4,000 workers in the u. S. , canada, puerto rico, which they said would limit the number of involuntary separations down the road of course, coke is a good example of a company, guys, that had its business basically shut by the virus and it does sort of bring us to what the president said last night as he accepted the nomination for the party, talking about the vaccine and the hope that we would, in fact, get one before the end of the year here is what he said we are delivering lifesaving therapies and we will produce a vaccine before the end of the year or maybe even sooner. We will defeat the virus, end the pandemic and emerge stronger than ever before and that ties right back, kelly, to what mester also said and that is the virus, whether its relating to household activity or business spending, the virus is still driving everything yeah, absolutely. So i found that jpmorgan note that i was just referencing. This is as of wednesday, again, looking through the weekly data they say only subtle effects of the benefit expiration of Unemployment Compensation that 600 a week that went away, they say only subtle effects in their High Frequency data. Again, david, maybe people are turning to some hopes like carl said on the vaccine front, obviously better news from abbott and others this week, thats what was pushing the reopening trade, the financials yesterday were extremely strong. I mean, david, when is the last time the financials were the market leadership. Its rare and it has been rare given the rate environment not to mention of course some of the challenges that we are talking about in terms of the ability of people to repay, although as you point out at this point it does not appear to be suffering that greatly. But, yeah, we havent seen it very often and we are still looking at a group of stocks that are down other than Morgan Stanley which has benefited from the etrade, this new cohort thats entered the market, we talk about the robin hood traders but etrade has benefited, opening accounts at record numbers Morgan Stanley stock it up almost 3 . They do pursue a bit of a different Business Model as we know than the traditional Investment Bank that might be Goldman Sachs which is down 8 but jpmorgan has still lost 26 over the course of the year but as you point out, kelly, they rallied. I just dont know how long that continues. Their rallies typically have lasted about 12 hours. Exactly the Bank Investors have seen this before. Its probably the biggest question for the whole sector. Are they entering a decade of financial repression because the fed is never going to raise rates again or are they going to be fine because the 30 year is moving up, the fed will get it right, they will have better Growth Prospects and so forth. The dow this morning looking to open about 144 points higher in about 20 minutes time we will keep an eye on all of it. Up next, michael dl on his companys better than expected trends look forward to speaking with him. Squawk on the strtilbe ghbackee wl introducing stocks by the slice from fidelity. Now you can trade stocks and etfs for any amount you choose instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. Stocks by the slice from fidelity. 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 we know that traditions matter more if theyre celebrated with the ones you love. Thats why were proud to partner with the kentucky derby. You say that customers make thelets talk data. Rby. 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 buy the new Samsung Galaxy note20 ultra 5g. Shares of dell getting a boost this morning ahead of the opening bell, better than expected results an increase in demand for notebooks, the obvious story there. Joining us this morning is Dell Technologies founder and Ceo Michael Dell michael, always great to have you. Good morning welcome. Good morning, carl. Great to be with you i mean, operating income 2 x, you have certain product lines order growth in the triple digits you point out government, you point out schools. I many, basically anyone who is working from home or getting ready to send their kids to school certainly can identify with some of the fundamentals that are driving the quarter at least. Thats right. I mean, our Online Consumer business was up 79 so, you know, that was very nice to see. Our revenues grew 4 sequentially, but as you said, our earnings were up very strong, eps up 43 sequentially we had double digit growth in our vx rail, hyper converged and Data Protection products, we had actually triple digit growth in our flagship high end storage product the power macs so really pleased with the way weve been able to respond flexibly and help our customers through this time. We had super strong originations with dell financial services, that was up 31 , we put in place a Payment Flexibility Program that has been really wellreceived. Our deferred revenues were up 14 , driven by maintenance and subscription and Saas Services you know, software as a service at vmware and subscription was up 44 so some very encouraging results in a challenging and uncertain environment for sure we will talk to patrick later on this morning. You know, the argument, michael, that this is all some kind of giant pull forward is losing a lot of credence, but what do you say to those who still believe we are borrowing against the future in terms of demand . First of all, i think the whole work from home, learn from home, is clearly not a pull forward, its just a new requirement that has emerged rather unexpectedly. I think, you know, looking at the enterprise there has been some delays as customers have been slow to get into data centers and deploy equipment, you know, thats led to an acceleration in some of the cloud migrations and certainly were helping customers as they work through that. But, you know, pretty encouraged with what i see in the pipelines for the second half and i wouldnt really characterize the demand as a pull forward. Michael, its david faber id love to get you to reflect a little bit more on the current moment we find ourselves in, particularly as to whether or not it is something, as you seem to have indicated, were going to be living with even after the pandemic passes. Your coo on the call said of work, work is something you do, an outcome not a place or a time is that something you agree with yeah, absolutely. I mean, we have for almost a decade now had this Flexible Work environment where we have allowed people to work from home and before the pandemic, you know, got up to about a quarter of our workforce i would expect, you know, even, you know, past this pandemic it could be 50 or more of our workforce. So we believe work is something you do, its not a place certainly the office will change into a place for collaboration and hubs for training and learning, but, look, i think we and all organizations have learned that you can actually be quite productive working remotely and it turn out that thats also pretty good for our business so, yeah, i also think that if you reflect back on what is going to be different relative to the virus and the environment were in in three months or six months or nine months, i think we are in for a bit of a long haul here and so weve all got to tap into our grit and resilience to be prepared for that and, you know, this is not going to resume exactly the way it was anytime soon, and also i think we kind of got a glimpse of the future and we have accelerated a lot of technology trends, Digital Products and services and the secure remote workforce. On that note or on that subject, michael, i think it was your competitor or ceo of hp antonio neri said he could see as many as 50 of people working remotely, i think you just mentioned that statistic potentially for dell is that really something you see as a possible future in this country, that we could have half of any workforce at any one time not being in an office i think it will vary, you know, david, obviously by organization and what we see is kind of a hybrid structure where people would and we already had this, you know, for years, where people would come into the office, not all the time, and work from home with hoteling and hot desking and those kind of things yeah, i think with he see more of that as weve all lrchd that this actually works very well, but, again, as i said, it will be up to an individual organization and, you know, to figure out what is best for them, but, yeah, we see it working quite well weve gone through a pretty thorough analysis of which jobs are more productive, which jobs are less productive and how do we create the tools anden viermt for people to succeed in a remote distributed workforce and do it securely. Mr. Dell, its kelly hoar we have heard a lot of stories about shortages of computers and computer equipment what do you guys having the most trouble with in terms of the supply chain where do you see the biggest shortages . What is that doing for price and how do you expect it all to be kind of worked out and get back to, quote unquote, normal . What point might we see that happen well, you know, the education demand has been very strong and thats been the place where theres been some shortages in, you know, what we would characterize as kind of the low end notebook were ramping up to meet the demand we did have more backlog than we would have liked, you know, both in the First Quarter and the Second Quarter i suspect there will still be some spla challenges i mean, just think about it, youve got 13,500 School Districts in the United States all coming up with a slightly different strategy for how to deal with this, but lots of kids needing and wanting to be able to learn from home and thats just the United States, right . Multiply that by the entire world and there is a lot of learn from home and work from home demand and we are still ramping up to deal with it, but lead times are in pretty good shape with some exceptions. Michael, your stock got quite a move when you guys acknowledged and said that you were at least looking at the possibility of separating your roughly 80 stake in vmware. I know its got to be at least a year away given tax considerations, but are you still sort of focused on that . Is this process that moving a lot going to continue or pick up perhaps as this year comes to a close . Yeah, absolutely, david look, we believe that the spinoff could benefit both the Dell Technologies and the vmware shareholders simplifying the capital structure, creating additional strategic flexibility while we maintain the strong Strategic Partnership that we have had for many years and has been quite beneficial so were quite focused on this and, you know, its part of our continued focus on longterm Value Creation for all of our shareholders michael, its great talking the quarter with you i look forward to maybe a discussion in the coming weeks and months about some of these broader themes in technology which as youve pointed out we have just gotten a glimpse of this year. Thanks so much good to see you again. Awesome great to be with you all there it was a yall reminding us the man who helped create austin texas and what that is today. Coming up, lots of buzz surrounding tiokkt we are going to bring you the latest stay with us so youre a small business, or a big one. You were thriving, flourishing, but then. Oh. Ah. Okay. Time to think, plan, pivot. How do you bounce back . You dont, you bounce forward, with powerful connectivity. Serious and reliable internet that lets you go bigger and better, with more sharing, more making. Whoa. More that. More talking. The entire time, you got this okay, less talking and more doing. All driven by the largest gig Speed Network in america. And even if the power goes down, your connection doesnt. But what if no ones in the office . Bring the office to them. But is it secure . Sure its secure. Okay, sounds great. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Welcome back a final look at futures as we count down to the opening bell the dell is implied to open higher 140 points, the s p by 14, the s p on track for its best august since 1986, up 6 , up five straight months. We will see how the rally continues in just a bit. Im hector. Im a delivery Operations Manager in san diego, california. We were one of the first stations to pilot a fleet of electric vehicles. Were striving to deliver a package with zero emissions into the air. I feel really proud of the impact that has on the environment. We have two daughters and i want to do everything i can to protect the environment so hopefully they can have a great future. Announcer the opening bell is brought to you by nuveen. A leader in income, alternatives and responsible investing. Stocks are going to aim for a fresh all time high today, s p needs about 17 points, futures indicate its going to get somewhat in the ballpark retail is the name of the game once again this morning, guys. Gap is down just a touch remarket, smaller than expected loss, revenue ahead. Interesting contribution from masks and they sell about 130 million worth in the quarter. Yeah. Ulta will be the real winner as 73 cents beats a dime expected as that business after a couple tough quarters is appearing to bounce back. Ulta is back which is a fascinating story on its own, but this gap story they made 130 million selling face masks and we are not talking about to the general public, they sold them to the city of new york, california, kaiser permanente. They say we are the number one result if you search facemask style guide on google. Is that a Sustainable Business practice for them to get in . They say its an example of how they want to operate as a company, as a culture but this is a unique oneto have type of thing. Selling masks one would think and certainly one would hope i think mask wearing will be with us far long after, i mean, look at a lot of asian sun trees as you know where it is something that is part of society and it may become part of the way people behave here to some extent. I cant think you can count on mask sales as being a key component of gaps earnings in the future. There is the opening bell, final trading session of the week guys, when we come in on monday apple will split, tesla will split, today is the last day that we will have pfizer, exxon, raytheon in the dow. On monday we will wake up to honeywell, a. M. Squlmgen and sa. I mention that the s p is up 6 this month, best august since i think 1986 apple is up 18 and, david, apple is up like 70 this year this is not each necessarily a company that benefits from the pandemic this isnt amazon, this isnt salesforce, this isnt dell, this isnt work from home. If anything their iphone sales were hurt by people not buying as many because of the shut doups as they might have and the delay of the iphone 12 launch. Talk about sustainable, i mean, i dont know, what do you do with apple from here it is an unbelievable run. We talk about it a lot in the morning and we talk about it a lot with jim cramer who i think its fair to say has become a bit more cautious on the name, though still positive. In part because of the multiple which has moved up appreciably as you point out, kelly, as have all of the price targets from so many of the analysts, at least most of the analysts who follow the company. Talking about, as you said, the prospect of 5g now is potentially a tailwind for the company when in fact those phones do get out there and what may be significant demand for them about you it has been it has been nothing short of amazing to watch that Company Cross the 2 trillion barrier and now 2,151,000,000 in market value. Berkshire 126 billion worth of apple, maybe even more now, roughly around that with its 250 million shares i think it was or Something Like that and a then i also wondered, man, carl icahn, if you are out there, carl, did you great but you could have held on to this thing. If they make these changes apple could go to 200 a share. Was that it was it 200 i would have to go back and look it was two years ago already that he was having those fight with tim cook or so to speak and we were talking, are they going to have dinner together, where did they have dinner together. Obviously he did quite well and left the stock as he did netflix, but it goes to the value of a longterm holding to a certain extent, carl, as we continue to watch apple surge higher and we will see. I mean, i dont know if all of these stock split move is in it or whether or not it will pick up more adherence perhaps when it is a lower priced stock and, again, just to point it out it Means Nothing to the overall value of the company. Just to be clear, right yes. And we will Pay Attention to how the rhetoric back and forth between china continues to affect the name, if at all, which of course it hasnt lately, but i will point out a spokesman for the Chinese Foreign Ministry Said overnight if wechat is banned there will be no reason why the chinese shall keep iphone and apple products i mean, for now its just words, kelly, and empty words if you look at the market cap. I wondered all along who are the American Companies that have the biggest presence in china, most visible presence in china probably apple and starbucks and both i mean, starbucks calls china its second home market they continue to have a Good Relationship there they feel like their futures are tied together because the chinese would be shooting themselves in the foot, they employ thousands and thousands of workers i was looking at shares of walmart this morning up another 1. 7 what a twist and turn this tiktok thing has taken over the last couple of days, wondering whether it would be microsoft or oracle to rethinking walmarts strategy and whether this makes sense ownershipwise for them to say okay maybe they can leave tiktok operating the way and get investors thinking of them more like amazon but a twoday pop in walmart as investors salivate over this possibility. Its really interesting, what unexpected certainly you can imagine that microsoft does not need a partner wherever the price would end up and so they would only take on a partner as in walmart if they thought it would be in some way additive to the overall business once they own it. Again, just to refresh on tiktok, kevin mayer obviously has already exited the company, was there for about three months with he did this morning on squawk box Julie Boorstin brought us the acting ceo of the company. We will have sound from her in a moment as well, but, you know, they are entering this weekend with the idea of from what i have heard from people familiar with the situation that they will go exclusive with one of what appears to be the two main parties, theres always been sort of speculation that perhaps theres somebody else out there, not twitter which did have some interest for a while, but youve got oracle aligned with some financial partners, some of which are owners of the bytedance, microsoft which apparently we know because the walmart put a statement out which was also odd for walmart, maybe they just want us to think about it in a different way but it partnered with walmart and we will see, but it is going to be a significant challenge for whatever company does decide to step up in terms of the code, in terms of the time that is going to be needed to take that huge code base, you know, you take a snapshot of the code, you do get the updates for a year from the engineering in china, but then you are on your own. Youve got to build an Engineering Base and there is only a couple companies that are in the position to do that to begin with, you have to build an Engineering Base and then, carl, you are just a u. S. Company. You dont you arent able to amortize that Engineering Base over a Global Platform even though tiktok is extraordinarily successful at least at this point in terms of daus and maus and time spent, you are not going to have a global audience for it when you are the u. S. Owner of it. As for the fundamental business, jim david, walmart is doing pretty well given that General Mills and conagra and some of these Consumer Product brands are lower today, maybe on this journal story, kelly, that Grocery Stores are seeing consumers cut back in the face of uncertainty regarding enhanced benefits being extended. Yeah. Although i did see the study out of up work that americans by not driving to work anymore are saving 758 million a day, 91 billion in aggregate simply by not having to commute. Theres cross currents in there as well. I mentioned earlier the jpmorgan card spinning data has held up despite the benefits expiring thats right now weve got to watch the Grocery Stores, we have to watch all of these data points to see where its weakening and for whom and so if the Grocery Stores are saying its getting a little softer out there, you have to stand up and Pay Attention so, yeah, theyre saving a little maybe not driving to work, i think people wish they were in some cases driving to school in year i want to quickly mention bond yields as well which have moved big this month for the first time in a while we are not seeing gains in both the stock market and on the longer term end of the bond market. There is the 30 year its just below 1. 5 but we started the month under 1. 2 the ten year this morning is. 72 and, again, it has climbed up a little bit the question is how much of this is the market saying, do you know what, we listened to the fed, we understand what theyre saying, theyre going to kind of stay on the back foot and make sure that Consumer Spending is fine, make sure the Unemployment Rate comes down, but, david, if you are an investi, the tlt you would have gone from 172 to 160 this month you can lose money in the bond market. Yes, as prices come down and yields go up that has not been the case more or less for the last 30 years. Exactly and there are those who think were going to get even lower. Kelly, there is still talk about the possibility of negative rates, although, you know, powell did seem to indicate yesterday that thats something he wants to stay clear away from and would be certainly a very negative thing. Im just glad we are not hearing about it every day right now thats probably the most hopeful sign these moves are for the most part a hopeful thing, you want the 30 to go up, you want the 10 year to go up people think there will be better Growth Prospects. Lets circle back to you will at that you will lta we have seen some retail names come out and pop and theyre figuring out a way to the pandemic the shares up about 10 . Yeah, sort of flying in the face of some of the quarters we got out of estee lauder, for example, if jim were here he would go off on his thesis about beauty being challenged and skin care having to make up for lipstick and makeup that you dont wear because youre wearing a mask. But you are on zoom theres no mask on zoom. It doesnt count. People are figuring out how to do the tv thing they say now i see you have the big lights, its really bright out here, you have to get the right effect, the makeup, david, the whole thick. I wouldnt know, necessarily, thankfully im not zooming too much but i guess i am on television. Thats my point. I guess that counts a little bit. Although you do speak to people, many of whom i speak to who are on zoom for 12 to 14 hours day. Exhausting. I would think that gets very exhausting. Old, yeah. I guess you can put a different image up if you need to. If thats all you can do to refresh it. But your point on ulta is an interesting one, were watching the stock rebound. Still down for the year, but there was one point at which they had all of their Stores Closed as you know at least temporarily. They had outside pickup for a while, but its still the question of whether you can go to a counter and try on lipstick and makeup, theyre trying to figure it out and obviously they managed to they managed to have a Strong Quarter in the face of that sales still down dramatically i guess is what you would have to say, 26. 3 , carl, but thats, you know, they will take t theyll take it. Shares still down about 3 year to date, so theyre trying to turn positive, so are the broader markets as we head to break, take a look at the s p 500s best performers this week. Salesforce up 32 after its strong results and guidance, among three companies being added to the dow on monday, gap and ulta up there as well for the week back in two. These days, businesses are adapting to new ways of working. And innovation is at the heart of it. Verizon 5g ultra wideband is the fastest 5g in the world, with speeds up to 25 times todays 4g networks. Its massive capacity and ultralow lag time is already available in parts of select cities around the country. Which means businesses both large and small can innovate like never before. Did you know Liberty Mutual customizes your Car Insurance tada so you only pay for what you need . Given my unique lifestyle, thatd be perfect let me grab a pen and some paper. Know what . Im gonna switch now. Just need my desk. My chair. And my phone. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Tools, cattle, grain, traded goods. Even shells represented value. Then currency came along. They made it out of copper, gold, silver, wampum. Soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. Thats why its time for Digital Currency and your investment in the grayscale funds. Go digital. Go grayscale. As kelly said were watching bond yields today in the wake of powell, abe stepping down and fresh data lets get to Rick Santelli. Hi, carl. Indeed, if we look at a two day of tens it pretty much says it all, we zoomed up to around the 75, 76 level, three quarters of 1 in english. The yield curve has remained steeper than it has been getting closer to 60 basis points which in part has fueled some of the banking sector, you know, the financials seem to be leading the way, maybe the aftermath of this is just a steeper curve, maybe less front running with regard to fed policy, thats what many are talking about, although i dont see it. They basically enacted as if this was codified for over a year, a year plus in terms of 2 not being a huge trigger open this chart up for tens to march you can clearly see we have had three spikes, the one to 7 5rks the one to 90 in june and the one up to 120 in march the fact we cant get to the other two, 30year bonds are the state your name, really kind of settles back this nogs that rates will run up in any aggressive fashion at least for the moment the particular index taking it hard the last couple of days, also a bit of a uturn but not to the same size as the Interest Rate complex look a two day of the dollar, doing better yesterday, giving up a lot of ground today although its had a lot of bounce open the chart up to april of 2018 and you can see that the dollar index is flirting with those levels that we saw about a week ago in the 8 18 where the dollar index had its lowest close in 28 weeks. Even with the japanese Government Bonds on the ten year sector up to almost. 06 that alone still represents some of the highest yields we have seen in quite a while because they really have stomped out all volatility, their Government Bond market trades by appointment only and here we go, our august read on chicago pmi expected at 52. 6 comes in a smidge light at 51. 2. 51. 2 in the Rearview Mirror is 51. 9, so there is where youre comping to, but i will say that after the low was established three months ago at 32. 3 in may, these would have been levels that seemed to be unheard of and all of a sudden we are back over 50 which we hadnt been since june of last year as we deteriorated long before the coronavirus affects on the economy david faber, back to you. Thank you, rick while congressional Coronavirus Relief talks remain at a standstill the state of the Housing Market like so many other sectors of the economy continues to be uncertain. Joining us now to discuss the retail and urban Housing Market is Willie Walker night to have you, mr. Walker. Let me start off with this prospect of eviction that we hear a great deal about, particularly in light of the lack or fr of or reduction in Unemployment Benefits. Is it real are you worried about it are you seeing signs of it in your own portfolio we are not, david what weve seen so far is rent rolls holding up extremely well across the country there has been plenty of talk about the eviction tsunami, but landlords arent looking to evict people right now, they are look to go work with their ten in a nts to keep them in their homes. You saw yesterday that the federal Housing Finance administration extended the forbearance and Eviction Moratorium in singlefamily homes, they did not do it on multifamily homes, i think one of the main reasons they didnt is because it has not been an issue across the country so far. If we dont get congressional action, a bill out of congress and signed by the white house in terms of new relief, are you concerned . I am. I heard you speaking earlier with carl about the fact that it seems like leaders in congress are looking at the stock market and things are good and they dont have pressure. I would say i think they are very concerned about the numbers, i think the issue is the distance between the republicans and democrats is so wide right now but i cant imagine either side wants to try to campaign in november off of what we want to hold at a trillion 5 and the democrats wanted to be at 3. 5 so we couldnt find Mutual Ground in between. Both would like to get some type of deal done and there is no doubt with 14 million americans filing for Unemployment Benefits this past week that there is a real need for it. Weve talked about so many of the different trends that have either been accelerated or created as a result of the pandemic, one seems to be this move from urban centers to suburban areas certainly we get anecdotal evidence of it, we see it in some of the housing numbers. Do you expect that is going to continue or is that something that we will look back on as sort of a onetime phenomenon . Look, it really does depend on how long the pandemic lasts for. I would also say that you have to take into account the trillions of dollars of stimulus that were put into the economy with the c. A. R. E. S. Act. But people are focused on home if you think about the great financial crisis, during that period of time people were looking for jobs, they were meeting friends at starbucks, still go out at night, wanted to pay for their cellphone. Housing as a focus of your money has moved up in the pecking order, if you will so people are buying food, buying medicine and theyre focused on housing whether thats Single Family or whether thats multifamily they are investing in their homes right now and you have clearly seen that in home depot earnings i think the other piece to it farce how sustainable this growth in Single Family both starts as well as sales is that most people that are refinancing their Single Family mortgage so theyre going to lock in historically low Interest Rates and also investing in their homes. My question is all of these Single Family Home Builders building new inventory is there going to be a market on that in a year or two if everyone has gone and refied their home and also investing in i want to get back to sort of the creditworthiness of tenants at this point. You have a Loan Servicing portfolio as well. I think 2 million apartments what are you seeing in terms of peoples ability to pay . Is it continuing to be fairly strong yeah, so we have 100 billion Loan Services portfolio segmented between 85 of that, so 85 billion is multifamily loans and the other 15 billion is on office and hospitality. On the 85 billion of multifamily loans weve had very few requests for forbearance and those rent roles have held up well collections have been north of 95 since the beginning of the pandemic by the end of the month. Rents are coming in slower but by tend of the month were about 95 . As you look at the others asset classes. Hospitality, retail, about 40 of the loans in forbearance. Office, youre in the teens. Industrial is the one other asset class along with multithats held up the strongest this cycle to the point about urban flight, there was a harris poll, granted one poll, but did ask people how likely are you to move out of the city because of the pandemic the numbers have come down i wonder if you think that general notion of exiting hyper urban areas was a knee jerk of the pandemic earlier in the year you know, carl, you all have had guest after guest who have been at their summer homes at the hamptons those people have the ability to move around and have been moving around those people who have the ability to move out of a Downtown Manhattan apartment and potentially buy a home that hasnt moved the last three or four years, there are a lot of people doing that, but thats not Middle America and driving markets. The economic reality of people a being in a rental situation or Home Ownership situation, i dont see that changing materially if you think about the money that came out of the cares act, theres not enough money there to materially influence ones ability to make a down payment to buy a home which is typically the largest purchase one makes in their life. Willie, always appreciate you taking time with us. Thank you. Thank you, david. Coming up later this morning, basketball halloffamer Isaiah Thomas on the nba players protesting Racial Injustice as the league looks to resume the playoffs the s p is up. Were back after a break be sure to tune in tonight for summer school. Woo taking questions on high flying stocks and public planning we want to help you with your homework this season profit from it tonight much more squawk on the street when we return traded goods. Tools, cattle, grain, even shells represented value. Then currency came along. They made it out of copper, gold, silver, wampum. Soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. Thats why its time for Digital Currency and your investment in the grayscale funds. Go digital. Go grayscale. Come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. Were exploring multiple paths. I think we all feel confident about the future success of tiktok and because we want to be responsible and make sure were looking after our employees in any scenario, but we think were going to have a positive resolution and hopefully that will come soon that was the head of tiktok earlier on squawk box. Theyd better hope so. The prospect is if they dont get this done, and the dates are hard they think september 15th. There was an executive order that followed the september 15th date that might have had the effect of extending it regardless, theyre going to get shut down if they dont find a buyer. If youre the owner of tiktok, you want to get as much as you can. You want to have an auction where theres at least two potential buyers so you can come closer to realizing what the value of this asset may be but youre facing on the other hand with nothing, or with the prospect of closing down, suing and hoping you can reemerge. 20 to 30 billion. Thats the figure being floated. Who is determining that value . Is it up to tiktok to pick who it is selling to its the Parent Company choice the man who founded the company is only 36 years old hes going to make the decision along with some of the owners. Along with the oracle bid. It gets complex rolling into a tiktok usa decision. He will make the decision. Whats fascinating is and rarely have we seen anything like this if ever. Youre faced with the prospect of your business not existing any longer or selling. Clearly, youre going to want to sell one would think but is there a number that is too low . You know what . Ill take my chances in the hopes we can come pack at some point . I dont think so but you have to see. Thats why originally i put the range as low as 10 billion to as high as 30 billion thats something they would hope to get the asset in there might be undervalued in some way if this was a traditional auction with the prospect of it being an individual company and carl, it does emerge with walmart. Could be a major turning point for them and maybe it explains some of the reporting that suggests theyre trying to build in some contingencies for an outright ban if it happens. Fascinating look at not only the thinking behind tiktok even though we didnt get many answers from the interim ceo on squawk, but also the belief within walmart there are fly wheels within social media for what is obviously a retail power house and the largest employer of americans in this country in the meantime, happy friday. Good morning welcome to squawk on the street. Market is up s p is riding its 11th sixday win streak of the last five years and now our second big look at consumer confidence. Lets get to Rick Santelli our final august read on consumer confidence. Which means that the current read, the mid month at 7 2. 8 is replaced with a much stronger 74. 1 74. 1, the best read since june coming off the eightyear low accomplished in april that was 71. 8 thats the headline. Lets look at the other areas. Current conditions about a lateral move from mid month 82. 5 to 82. 9 and mid month on the expectations was 66. 5 it moved up to 68. 5. After the policy change by the federal reserve, if you look at the oneyear inflation theyre using with regard to the people on the survey, it moved from 3 to 3. 1 theres nervousness in the here and now when we get past coronavirus on what pricing will do as nademand and supply issues meet each other head on. Kelly, back to you rick, thank you very much our road map this hour starts with a record run for stocks looking to close out the week strong the dow wiping out the 2020 losses unbelievable and the s p enjoying its best august since 1986. Plus pro sports boycotts for social justice Isaiah Thomas will join us on the roles players and Corporate Leaders can play in helping heal a divided nation and ceo joe asher joins us this hour to does the companys new deal with caesars. Lets get to bob this morning and get a closer look at whats moving on this friday morning. Good morning. Happy friday, everybody. Sort of a mixed open its been a great week s p up almost 3 and an amazing month, frankly mixed open energy up a bit nicely tech doing well. Banks. Health care lagging a little bit here but i think the imp sis is on closing out the week in an amazing month. Up about 6. 5 . Thats important august is traditionally a nothing month. It doesnt usually do anything theres more down augusts than up this is rather remarkable. Not only is august remarkable but april, may, june and july has been good as well. Look at this five straight up months. Rather unusual but just the strength of it, particularly april and august so far considering whats going on. Why is it happening . I know everybody wants to talk about apple. But im sorry. Apple is up 18 yes, its an important part but theres more going on. If there was an apple this month and the s p would still be up more than 4 its up 6 apple contributed a lot. Theres more going on. The market seems to be betting on an economic rebound just look at the sectors that are moving this month. And they tell you what the market is thinking look at the transports up 12 . The s p is up 6 . The russell is up essentially the same as the s p. Small caps are doing just as well and high yield is the best performing part of the bond Fund Universe none of this would happen if everybody thought there was a downturn doing on. Some kind of economic rebound is being bet upon and its bigger it has to do with an earnings rebound. Theres a lot of people betting the estimates are wrong here heres the essential bull argument about why the market has been holding up. The analysts are underestimating not just the economic recovery just like they underestimated in the Second Quarter, theyre underestimating it into 2021 reducing variable costs like travel and employees laying off employees and when you reduce the variable costs and you combine it with increased use of technology, it leads to outsized earnings when you get an economic recovery that is what operating leverage is and a lot of the bulls are betting thats going to happen how much are they underestimating earnings it depends the numbers are about 165 there are people out there who think its much higher potentially. Jim paulson, one of the bulls thinks it could be 200. Thats a significant underestimate administration and one of the reasons the bulls are dominating the discussion right now. Youre going to hear more about this people getting laid off. About operating leverage cocacola was one this morning that announced a reorganization. They also talked about voluntary and involuntary job cuts youre going to hear more about this Going Forward if you want more on the amazing rally, tradertalk. Cnbc. Com the nba playoffs may continue today after two days of postponement as players in the bubble sat out in protests over jacob blake. Isaiah thomas joins us this morning to talk more about whats been a remarkable week. Appreciate the time. Good to see you again. Good to see you also. Its been a remarkable show of unity from not just the players but the leagues outside of basketball. An amazing moment at mets and marlins last night what do you think this week has meant to sports and to social justice in this country . Well, i think its been a historical moment for social justice and also in sport. When you have all of the leagues coming together organically, speaking to systemic racism, and truly calling for a stop not only to police brutality, but also the Racial Injustice that all families are now seeing play out on television, not only see play out on television, but most of the sports personalities in different plays fields, their families are affected by this systemic racism, this police brutality. So the league is coming together and calling out and having what i would call a work stoppage similar to what we saw in the montgomery work stoppage in the 60s with Martin Luther king and in terms of us trying to get americas attention to say hey, what is happening is wrong here. Its true and long history of arthur ashe and bill russell this week remembering when he was young. And yet, you listen to chris webber, an emotional statement he gave i think to espn in which he said these are large actions but we you cant expect things to change right away. What do you think expectations are right now . 57 years ago today mlk and there was a march on washington. What they were asking for then 57 years ago was that we end systemic racism and the oppressiveness of the black community by not only the legal system, the educational system, the Health Care System and also our government was asking 57 years ago to let us have an equal opportunity in terms of the American Dream when you look at the numbers 60 of the black populous right now is below, living below poverty line, not even at the poverty line but below i grew up living below the poverty line so i speak from my experiences i also speak from my observation now. And what i see thats happening in our country is eerily very similar to what we were marching and fighting against back in the 60s, the 50s, the 70s, the 80s, the 90s, now were in the 2000s. So when the question is said well, why dont you wait weve been waiting for centuries now for us to have this conversation about the oppressive systemic system that blacks are forced to live under in this country. Specific to the nba players, yesterday we had the president s soninlaw and special adviser Jared Kushner on our show. He said the nba players are very fortunate they have the financial position where theyre able to take a night off from work without having to have the consequences to themselves financially. Whats your response to that you know, i would say this. The nba players are fortunate. The nfl players are fortunate economically because they can afford to lose money but to bring voice to the voiceless. So and thats what this is all about in terms of sports and entertainment, and when you talk about the classified blacks in this country, we are allowed to have what we call a platform now through sports and entertainment, but historically the use of that platform was to give voice to the voiceless. So what has been termed a night off was really a work stoppage and a boycott to bring attention to whats happening in our america, and when i say our america, im talking black and white. This is america, and first we are all americans, and then we are put down into these racial categories of black and white. But first we are americans were looking at pictures of course of many of the nba players taking a knee. Something that began in the nfl. Collin p Collin Kaepernick to try to raise awareness. Anywhere expectations in terms out nfl and what they may be given how many stars they have as well who are African American well, im going to say the americans are protesting so when you look at a sport, and this is the great thing about sports when we walk into a locker room and go on the playing field, we dont see each other in these racial categories. We see each other as equals. So the star players who have platforms now to speak for the voiceless, they are now doing that and they are speaking loudly and theyre speaking collectively, but theyre also speaking organically. Thats the beauty of this. This is an organic uprising of all different classified races and colors out in the streets marching, protesting saying we want a better america for all, not just for one classified class of people. Isaiah, what do you see to owners or even Media Companies who argue look, were with you we agree with you. We want to join in this fight with you but the work stoppage is costing someone money is that just Collateral Damage in this fight . Theres been Collateral Damage in both sides in terms of Human Capital and financial capital. The Human Capital in terms of what we classify as Collateral Damage, right, is lack of health, lack of education, the lack of job employment, the lack of Financial Resources where youre being locked out from access to capital to be an entrepreneur those things are happening and those things have been written out and those things have been not only written about but taught in all schools where the government and the Banking Institutions have come together and red lined certain Communities Just because your skin color just because of your skin color, and we have to move past this racism, these classifications, and cast system of skin color of white, black, red, people of color. We all are fighting to be americans. Im curious to know how you think the effort to fight Voter Suppression and drive the vote, really, on the part of lebron to a large degree and yourself, what thats going to look like over the next 66 days. The fact that we have to even invoke the term Voter Suppression here in america when we go and fight when weve gone and fight across the world for freedom and for people to have the right to vote and live like we live in america, but we have a term here in america called Voter Suppression where we have seen it playing out, played out and certain different communities. Now, we understand everybody wants to win politically and no one understands that more than athletes. We game plan and strategize and have goals and go out and compete. Then the best team wins. What we dont do is try to suppress each others talents or skills because we want a level playing field. So when you talk about Voter Suppression and what were trying to do is level the playing field, have everyone come out and vote, and not only come out and vote, but have your vote count and have your vote be counted. And at the end of the day, the best man wins. Thats where we are. David mentioned the comments from Jared Kushner on our air yesterday. The president also weighed in on the nba action or i think when he was at a fema briefing yesterday. Heres what he said. Take a listen. Your reaction to the nba protests yesterday against another shooting of a black man by police . I dont know much about the nba protest. I know their ratings have been bad because i think people are tired to the nba, frankly, but i dont know too much about the protests but i know their ratings have been very bad and thats unfortunate theyve become like a Political Organization and thats not a good thing i dont think thats a good thing for sports or for the country. There was some speculation perhaps kushner would reach out to lebron. Do you think theres any white space between the athletes and the league and the white house to drive equality in Voting Rights is there any room for agreement or compromise there . Absolutely. What ive done and what were doing now is organizing a group of athletes, entertainers from all different spectrums, and Kareem Abduljabbar and rick wade who sits in the u. S. Chambers, we are trying to fill that middle space where we can talk about policy. How do you make changes in the United States after protests after protests now becomes policy and we want to talk to some of the top policy makers about how we move into this white space that you just called and how do we bring people together because at the end of the day, again, once we get past black, white, and im going to speak also to my jewish brothers and sisters under attack too and have been under attack lets not leave them out of the conversation we all have to rise to a level where we are one America Fighting for the American Dream and just like in business, hey, the team who has the best game plan and the team who operates best and manages their employees and have the best product, you win. Thats all everyone is looking for. We appreciate the time and hope youll come back and talk to us more as we get further into the election season thank you so much. Thank you for having me my fellow americans. Isaiah thomas when we return, reopening challenges facing colleges in the wake of the pandemic one of the big ten universities is ramping up its covid testing in a big way we speak with the schools president right after the break. Keep it here 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. What happens when switch to Xfinity Mobile . Well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with Xfinity Mobile. Call, click or visit a store today. Our next guests plan to take students safe is to test them twice a week it would account for 20 of the states testing. Joini its nice to have you. Lets talk testing here. You guys came up with your own test i think school began earlier this week. How is it going and tell me about how many people you are testing. Its going really well. Of course, its a very intense time but im proud of all the work people have been working like crazy over the summer. 7 00 a. M. Meetings weve had a Wonderful Team putting together an eco system to keep our students safe. Weve tested to date 121,000 individuals. Were testing everybody on our campus at illinois urbana champagne. Weve identified some positive carriers incoming students who got infected many of them asymptomatic and are in isolation we want to crush this virus. Thats what were doing it and doing it at massive scale. As you said, you developed your own test and youre confident in the accuracy of said test . Yeah. The test is fda approved its very accurate if you get positive results, youve got it. We know that for a fact. There may be a new negative cases but since were testing twice a week every week, we catch up theres no escape for this virus. Were going to find you and when we find you, were going to make sure you cant transfer it human to human there are a lot of colleges and universities watching you closely. There have been reports of universities that have opened only to have to go fully remote. What are your protocols when you find who has the virus and what are your expectations in terms of being able to maintain a hybrid approach on various campuss . We need to keep going were going to do the testing effort throughout the semester if anything crops up, well catch it early the key is time. If you give the virus no time to spread, you can stop the transmission when somebody gets tested positive, they go into i like to think of comfortable isolation theyre able to continue their studies. Food is made available all the medical Services Made available and we ensure they dont have the opportunity to spread the virus further and notably, everybody who has come in close contact, we have an app thats a blue tooth enabled app which conserves priva privacy. Anybody close to that infected individual also gets an automated exposure notification on their cell phone and they go into quarantine so should they have it, theyre not allow to spread it. The key is to starve the virus so it cant move around and while preserving our commitment to a world class education we will continue working toward degrees in programs and we do that with this hybrid mix of superb online capacities weve been in this for a long time the first chat room came out of u of i and the first browser, and so we do it really well and we will continue to do that. But we also want the on Campus Experience so students can interact in the ways we would like to see. And the students want this, and we want to continue our world class education and keep people safe and not just on campus but also the communities in which were embedded in the were involved in exporting this technology more broadly. Weve had hundreds of universities already contact us to say how can we do this too . Weve had many School Districts through their companies, we want to serve the public good broadly through this innovative capacity deployed as we can but obviously our first responsibility is to ourselves students, faculty, staff and the communities in which were embedded and its going well weve had to date, 284 unique positives that wouldnt have been caught with symptomatic testing, and theyre being isolated now in comfort and thats how you get rid of this virus from our setting we already have the lowest positivity of any region in illinois and our positivity right now the below 1 its looking really good im struck as i listen that finally this is what we want to hear from americas top tier educational institutions to say we were on 7 00 a. M. Meetings all summer. Were using technology and resources and testing people and finding cases and keeping people safe were able to have the school year as normal youre unfortunately the exception and not the rule and you deserve all the accolades youll get if you pull this off. Its interesting to me this discussion isnt happening with Ivy League Schools of the world. Harvard had 20 of the freshman class defer. Well face outbreaks. Theres no question. Actionable tests so we quickly squelch down the outbreak. We know its there once you know where the virus is, you can deal with it if you dont know where it is, its tricky. Many universities are looking at this but we think we have a unique family of an ecosystem of safety and containment that i think is very interesting for others to look at and were talking to hundreds of universities this is what i think we need to do to really attack this virus and not just watch it develop and later on so were happy to do that. Innovation is in our gnome at the university of illinois we innovate. And we dont brag as much about it as we perhaps should. I could give you the half hour on innovation, but thats what we decided to do because it didnt look like there was any travel ri on the hill that would help us. We had to figure it out ourselves and weve done it. Its not just the test its the whole computational wrapping around. Tim, just to put a point on it, though how many of your students have showed up this year . How many deferments did you have oh, our enrollments are holding up they grew over summer. We have close to 90,000 students our dorms are obviously where we have protocols in the dorms. The mask wearing and safety protocols, safety cleansing in the dorms. We diluted the density of people throughout i would say that weve got a normal looking but slightly before diluted number of people. Theyre looking after one another. Im proud. Thats what we need. Yep well, listen, we appreciate you taking time with us to inform us well watch closely. Thank you very much thank you for joining us. Fascinating i hope it works we wish them the best. Now for etf spotlight, retail, ticker xrt one name contributing to todays gains, ulta. They posted a better than expected quarterly profit despite revenue that was shy of forecasts. Sales rebounded throughout the quarter as stores reopened and ecommerce sales more than tripled from a year earlier. The stock is slightly negative by 6 . The gain today has been cut in half as we progress throughout the trading day. Up 6. 5 were back in two. vo elevate your senses. The audi a6. Get exceptional offers at your local audi dealer. Welcome back, everybody. Heres your cnbc news update at this hour. The remnants of hurricane laura tearing through arkansas its still Strong Enough to rip the roof off of a church and destroy other buildings. Japanese Prime Minister shinzo abe is stepping down due to Health Issues abe says it is, quote, gut wrenching to leave with so many plans unfinished including the upcoming olympics. Navalny is in a medically induced coma following a suspected poisoning. And check out this boat. It just started rescuing migrants from boats in trouble in the mediterranean it is funded by the artist banksyand has already saved 89 people a safe port for them to disembark has not yet been found. Thats the news update this hour carl, back to you. All right. Sue, thank you very much dow is up 52 pretty steady for a friday morning. Later this morning well check in with trk paicgelsinger. More towers and more coverage than ever before. Tmobile is americas largest 5g network. With more 5g coverage than verizon and at t combined. Experience it now with our best deal ever. Unlimited for 25 dollars a line for four lines with 5g access included. Its time to join tmobile. If feds jackson hole summit is wrapping up as always, one more history books. Steve caught up with selfof e the several of the president s and has the latest not virtually but really i caught up with them. Its a virtual summit, but we did real interviews. Fed officials were saying their read of the economy is its going sideways right now with the recent surge in the virus tempering Economic Growth and while that could pick up soon, they hope, longer term the Philadelphia Fed president has concerns about the job market. Hes worried the corporate cuts could hurt jobs. In the short run theyre cutting costs to get through that period. In the long run, if people dont have jobs and people arent getting income, theyre not spending money and if theyre not spending money the companies cant grow the top line. If they cant, theres only so much cost cutting you can do at some point you run out of steam. Now, cleveland fed president added shes seen Companies Call back on hiring as well she defended the feds historic easing policies saying they had not led to an asset bustle investors in equity markets are acting rationally. I dont feel right now that we are engendering an asset bubble i feel were supporting the economy and doing what we can to make sure Financial Markets continue to function and that credit continues to flow to households and businesses. Well look at Financial Stability issues with Monetary Policy Going Forward yes, stock prices are elevated and youre right to point that out. She says she believes easing fed policy will be needed for what she forecasts will be a slow recovery. One she said will require additional fiscal policy and carl, i guess the more worried these folks are the better the market does i guess in some a lot of people who watch our program understand why that was a great interview this morning. Thanks when we come back, coke reorganizing the Business Operations talking about trimming the work force. Stock up 1 . Well tell you wt hait means for the stock in a couple minutes. Stay with us i have an idea for a trade. Oh yeah, you going to place it . Not until im sure. Why dont you call Td Ameritrade for a strategy gut check . Whats that . You run it by an expert, you talk about the risk and potential profit and loss. Couldve used that before i hired my interior decorator. Voila maybe a couple throw pillows would help. Get a strategy gut check from our trade desk. music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. With analysts going all in, our traders place their bets and which could surge. Find out more on tdirang nation. More squawk on the street coming up. 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. Coke is reorganizing Business Operations. We caught up with the companys ceo and sara eisen has more on this move. Good morning, david cokes big reorganization announced today its not driven by the pandemic. It sped up the changes that were in the works for a long time to set the company up for growth and to be more lean and more efficient. That was the main message i got this morning from the ceo. So what coke announced it is shifting 17 Business Units currently go to only nine under four different geographies. The goal is to make management more accountable to those geographies. There will be layoffs. 4,000 people eligible for layoffs for those voluntary packages in north america including canada and puerto rico it may not end up being that many people, but that is a significant amount it represents about 35 of cocacolas north American Work force. It does not include international which we do expect to come as well. Remember, the backdrop here coke saw the biggest sales decline last quarter in decades. Down 28 for sales as half of this business comes from away from home. Bars, restaurants, stadiums. Quincy told me this morning i think covid19 will pass and this is really about setting ourselves up for a longterm future he also maintains that april was the trough its something he told us on earnings a few weeks ago that he continues to see volume steadily improve and that the defining factor here for coke and for the economy he says is going to be the intersection between the degree of lockdowns and the degree of stimulus that will be the shortterm macro driver that will effect the company. He atted the companys in great shape and the effort today is to focus on the winning brands. Think to pour good marketing and digitalization and analytics into brands, coke la has 400 plus brands but its half that contribute to about 98 of sales. So he told us last time he was going to get rid of zombie companies. This is an effort to formalize that through the company to focus on a few key brands innovating them, marketing them, and ultimately positioning them for growth when the company and when the economy really does fully come out of the pandemic david and carl yes i mean, you think they would have done this regardless of the pandemic at the same time . Does it give them cover in some way to do it at this point or is it more than they would have otherwise done i think its happening faster than it otherwise would have happened quincy said the conversations were happening back in january or even before that as they wanted to set their company up for growth to make it leaner and make it more accountable this has been a trend in consumer Package Goods companies. There are parallels with what Procter Gamble did and they reduced Global Business management to get profit up. Its been yielding results the matrix structure of a lot of these massive consumer Package Goods giants has been scrutinized and focussed and revamped i would think of this as more a part of this quincy said covid taught us we have to be bold and think big on certain brands and just forget some of the others whereas the old cocacola may not have done that and wouldnt move as quickly. It sped up the changes but not necessarily the cause. And yes, maybe an excuse, because we are seeing a lot of layoffs and a lot of companies reset their businesses as a result of major disruptions. Thats a good point were seeing the acceleration take place in a number of industries sara, appreciate it. Thank you. Good to see you. Sara eisen with the coke news. Look at shares of herba life the company settled. Prosecutors accusing the company of providing corrupt payments to chinese officials to boost business there again, down 3. 5 cnbc has a new cfo Global Survey more on that after the break stay with us traded goods. Tools, cattle, grain, even shells represented value. Then currency came along. They made it out of copper, gold, silver, wampum. Soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. Thats why its time for Digital Currency and your investment in the grayscale funds. Go digital. Go grayscale. Coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions. Touchdown only mahomes. Expect anything different . The big events are back and xfinity is your home for the return of live sports. Welcome back a new cfo Global Survey looking at what a joe biden presidency might mean for wall street and the economy. We have the results. Good morning. Thats right 75 of global cfos believe joe biden will win and replace President Trump in the white house. A change from last quarter when the cfos were almost split down the middle they basically split on the Congressional Elections with 52. saying republicans will maintain the senate. Nearly a third believe democrats will get control of the senate and the house. Today the tenyear yield is at historic all time lows 20 believe it will fall lower between a quarter and half percent. The dow now at 3. 5 from the alltime high more than a quarter believe it will continue to go higher and top 30,000. However, 42 say it will fall below 25,000 first during this pandemic weve seen a changing m a environment boeing and zero ox abandoned bids google and black rock say theyre open to deals despite economic the current environment is a Fertile Ground for deal making but others say its difficult to make deals a lot of good information, frank. Summer school is back tonight. You want to talk about whats in store . Yeah. We have a great lineup Courtney Gibson will join us a lot of people who watch halftime are familiar with her shell give break downs of individual stocks that are surging right now. We have on two Financial Advisers with insights about investments. People are thinking about college savings. Well have interesting ideas about 529 plans and roth iras. I like that very topical well see you at 6 00 if not before frank joining us coming up after the break, william hill making a big bet on the United States. The ceo will join us to talk about their latest acquisition dow session highs up 130 were well off of that back in a moment this selenite grey is so pretty isnt it . Wow. Jim could you pop the hood for us . There she is. Turbocharged, right . Yes it is. Jim, could you uh kick the tires . Oh yes. Can you change the color inside the car . Oh sure. How about blue . Thats more cyan but. Jump in the back seat, jim. Act like my kids. How much longer . Exactly how they sound. Its got massaging seats too, right . Oh yeahhhhh. Oh yeahhhhh. Visit the mercedesbenz summer event or shop online at participating dealers. Get 0 apr financing up to 36 months on select new and certified preowned models. Lets get to Contessa Brewer take it away nice to see you. Nevada regulators just approved your deal with Cg Technology which was canter gaming. A couple weeks ago a big deal with caesars how does it position you competitively . Thank you for having me were very excited about it. We have had the market share for a number of years. Now with caesars and canter, this allows us to operate sports books at some of the biggest places the venetian and the cosmo were really excited about it. When folks start coming back to las vegas like they used to, those police stations wi those places will be firing away we saw the nba walk offs in protests for systemic racism what is your position on these athletes taking a stand . When you see something wrong you have an obligation to speak up and Say Something thats what these players are doing. I watched what doc rivers said, the milwaukee bucks, you know, theyre a real serious issues in our country and theyre shining a spotlight on them and using their platform to do so. If the season were to get cancels i think they lose that platform so im glad theyre going to be resuming i comment them for speaking up and making people focus on them. Certain there has been an unusual offering of sports in august im told in nevada alone your mobile bets are up 130 and your inperson bets are up 50 . Is the end of stimulus checks of the additional 600 in unemployment had an impact do you expect it to . It is a great question. Typically in august we would have just baseball, and now baseball came back at the end of july and now we have basketball and hockey playoffs going on there is a lot of bettingtivi bettingtiviti bettingtivitibettingtivit activities but i expect that to continue through month once the games get going again and then of course football season is right around the corner we have not been as focused because there is no exhibition games this year and so much happening in the other sports. But were set up to have a very strong fall season as things move forward as of now, customers are really interested in wanting to bet and a little sbit that there is less to do in many respects, right . People are not going out to eat as much. There is no shows, no concerts one of the things that people are doing is turning on the tv to watch sports. Morgan they have been called the purest plays in gambling, would there be an advantage to william hill to go public here in the United States were very much aware of what is happening in the public markets. And as you expect it is a subject of a lot of discussion internally on our side we wanted to get through the merger so we could operate those books mobilely and across the country, and that rollout has been ongoing we got the approval from the regulator in iowa. So were looking forward to opening next week at the Caesars Properties in Council Bluffs iowa. So there are kal park conversations that are something that folks are looking at. And no doubt you will be among the first to know. The first, im hoping we have Just Announced a deal with points bet, you announced one with points bet. How important are sponsorships when you look at the competitiveland cacompetitiv landscape . I think they are important. They bring access to customers, right . We put a lot of focus into our own technology, into building out or platform, and we tried to do as much as possible internally you come up with a great product and then how do you get it into the customers hands . The cbs sports deal is something were excited about, they have a great digital platform you go to cbs sports and you can see the william hill logo there already. From a seasonal perspective. There is access to customers through that i think there is a big role to be played. They have fans and we have a product we want to get into the hands of sports fans the ceos es there expressed some surprise at how well igaming is performing Sports Betting is where a lot of attention goes, but the casino games are really raking it in. How much does your strategy involve trying to expand we Just Launched our icasino in new jersey in the last few weeks. The early results have been terrific i wish we had gotten to it earlier. You can see the cross sell, right . Peel come in because they think of william hill as a Sports Betting brand. A top brand of course over 80 plus years so they come thinking about sports b sports, but once theyre into the app they can play casino games, blackjack, roulette, or slot type games. It is legal now in new jersey. It is legal in pennsylvania, michigan is expected to go live later this year or early next. The casino will be part of the offering there as well it is more states past legislation, i think you will see more and more of that. Joe asher, it is great to see you. The states as they consider mobile gaming and Sports Betting, those additional revenues are something that could add to the state tax revenues as well that was fantastic, thank you. It is 8 00 a. M. 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