Transcripts For CNBC Squawk On The Street 20240712

Some traction. Right right. Well, look, i think that the charges that leader mccarthy made which basically are saying that Speaker Pelosi just doesnt want to deal actually are in somewhat synch with what Jared Kushner was saying because that maybe there cant be a deal until after the election how about the next three months . We just decide theres been no ppp for september, october, november, i dont know whether thats sacrificing the american working person for the election or maybe someone actually thinks the economy is coming back david, you know that we are hearing persistent stories that because vaccines are all going to be ready its time to start thinking about a fedex which reports tonight, its time to start thinking about a Union Pacific i have on and time to start thinking about pretty much every industrial like caterpillar, deere its happening although lets i mean, vaccines you know, i dont even know how to parse that exactly, jim vaccines being ready when we actually talk to the experts or mr. Borla from pfizer yesterday who meg tirrell brought us or you listen to anthony fauci, i mean, having a vaccine that is at least approved for emergency usage which may be the case or potentially through phase three and having it actually available to inoculate a wide portion of the population are two very Different Things and the timeline is quite wide. David, i agree with you i am saying that there are people in the stock market who disagree with us i think there are people in the stock market who agree with the president and think that something is imminent and because something is imminent they feel like theyve got to move now, david, and thats why were seeing a lot of aggressive buying right right. And, well, typically the stock market does move before these things, doesnt it, jim . Yes, and people are optimistic carl, one of the things ive seen over and over again is people are saying the reopening of america by retail, reopening the america by restaurants, by cruise ships even though carnival put out some numbers today that arent that good. Do you know what we dont hear, buy drug stocks. People say stay away from those, stay away from health care too hot. Election year. Well, certainly on the heels of the president s comments about pricing and of course kushner discussed that this morning as well, jim, but to your point about the economy, we got some new data from 3m on august sales up 2, delinquencies out of jpmorgan really didnt rise that much in august, Consumer Spending has been pretty solid despite those enhanced benefits running out. So maybe there is enough momentum built in from the summer stimulus, jim, to get us to where a vaccine is at least something you can hold in your hand even though to davids point the idea that you and i and david are going to get one is as germany said today probably not its probably not here until mid 2021. Well, that would be late, but youre right, there is a head of steam. 3m has decided to give monthly figures. I had mike roman on recently, the ceo, and he was saying that things could be good, but this is not good, this is very good i think youre right about a head of steam. Whats happening is when we see wells fargo today talk about how caterpillar is undervalued, deere is undervalued, i just keep thinking that if you get an uptick in airline traffic, david, people are going to say we are back and, therefore, many even there is no stimulus package which is Pretty Amazing because of course we are not trading joes deli we are not trading anns coffee shop those are the ones that we know when you walk down the streets of work and other cities cant open because they dont have any customers. Youve made this point and we will continue to make it because the reflection of the u. S. Economy that we see in the stock market is not the reflection of the u. S. Economy to your point. And i think the big keep getting bigger we cant say it enough and its true talked to lowes of course and marvin ellison, i mean, there are the beneficiaries of this period, jim, and then there are the losers. Right. And the beneficiaries are the ones that are right in front of us, that we see every day, that we see publicly traded, unfortunately those who are losing are perhaps just not as evident at least in terms of our opti optics. Well, i would say as someone who is a restaurant owner, if you have a crowd, if you have too many people, they will shut you down of course, before the pandemic what you were hoping for is a crowd and too many people. Carl, i think that the idea of thriving if you dont have a big Balance Sheet cant be and everywhere we open even 25 diners were seeing a spike in covid. So i think, carl, what we just have to say is we need the vaccine before things return to normal but returning to normal means a lot of smaller businesses just cant pay the rent. On top of that, jim, to your ongoing point about the mom and pops versus the giants, amazon of course yesterday with that announcement hiring 100,000 additional employees and now, jim, getting into luxury in this partnership with Oscar De La Renta which the New York Times fashion critic i saw this morning said this is the highend giving in. Remember those days when they didnt want to be associated, even a nike didnt want to be associated with the main page of amazon, the idea of amazon thats collapsing quickly. Yeah, everyone has really come to realize without it forget it. David, tiffany, are they ready to make a deal with amazon theyre probably telling me that some of it is already on there you know what i mean guys, wanted to also get to a story weve been covering yesterday, of course, jim, you and i spent a decent amount of time on it, it continues to be fascinating because we dont have a lot of answers yet. Im talking about the potential i wont call it a sale any longer. The trusted Technology Partnership that apparently is at least still being worked on between oracle or a group led by oracle and tiktoks owner, bytedance. Weve heard of course the treasury and sifias will review the deal as at least we understand it at this point but there is still a lot we dont understand its not as though we have gotten a press release outlining what the deal parameters are, what the potential consideration that oracle is actually paying to tiktoks owner bytedance is for some sort of ownership position in that u. S. Business in some ways you could view it almost as oracle paying for a web hosting opportunity, right they bring them to their cloud, we talked a lot about it yesterday. Maybe a real positive for bytedance and its owners given that all along we had been under the assumption that they would be forced to actually sell the business and do so at a significant discount to its real value given it was a forced sale, but that no longer seems to be the operative way that were thinking about this because it appears much more likely that oracle is getting some sort of a web hosting deal for which its paying something, will have some sort of ownership stake, will perhaps also include a roll in of some of bytedances owners as well, but, jim, we also dont know what bytedance will actually own. Those of us who are going off the executive order from the president back on august 14th assumed that they had to sell the business thats what it kind of said. Although when you do listen to secretary of the treasury mnuchin and his comments, guys, you will see there is a lot of nuance there in terms of National Security concerns where he never fully says it has to actually be fully purchased. Take a listen to some of the comments we have heard from secretary mnuchin who has been so instrumental in this, given he of course oversees cfius as well which does the National Security review. The president made perfectly clear its not going to continue to exist in this format. And to the extent there is an appropriate u. S. Buyer that can get us comfortable with the Security Issues going forward, that deal will be approved if not, the president has given a deadline and it will be shut down. You know, david jim, i dont know what i dont know what you made of kushners comments with squawk box this morning. I think there is a deal maybe as soon as today i think that cfius review is almost complete, they like oracle, they dont feel like oracle has any ties or that safra catz has explained, look, we have an american company. I think they will get all of tiktok worldwide, they will hire 25,000 people in america, they do only want to list apparently secretary mnuchin is very happy that about the security concerns. Safra catz has spent the whole time negotiating this saying, listen, we are the ones. Oracle is saying, listen, you know, shes saying were ready we have a gigantic cloud presence, we are already doing a lot in advertising david, this is going to be today, maybe tomorrow, but maybe later today. 55 million users, 79 minutes a day for those 55, 100 million per month. Yeah. It is just a prized asset and i know that safra said over and over again we are the ones. We know the metrics, but, jim, theyre just getting right, theyre getting somebody to host on their cloud, right . Whats the matter with that. Nothing im not whats the matter with that the reason why i think the deal is going to be done, david, is exactly why you say, because oracle is a trusted company in the white house, but, david, youre right, i mean, its not going to be that oracle owns it, its going to be its going to be owned by these pe firms, some of it oracle and thats why i think the deal is going to be approved thats why the even the apparently, david, the pompeos and, yes, the navarros have checked off on it. Well, then, carl, that would seem to indicate a likelihood that it will be, of course, approved its not what we thought originally given particularly the executive order from august 14th dont forget, by the way, thats still in effect and also includes wechat which is yet another story we will be following as that date gets closer look, the tie up with zoom if you listen to kushner. Im sorry. Kushners point this morning on squawk, guys, was that there is a disparity of opinion within the owe val, that the president sort of is absorbing that and that its really now up to him as he said. Take a listen. On this particular instance with tiktok some people are pushing for an all out ban, but President Trump is pragmatic and what he basically said is he was going to ban it because there was National Security concerns, but that if an appropriate deal would come up that would satisfy the National Security concerns then they would look at it so, again, there is a lot of voices around the president but ultimately he is the one who makes the decision and there is something was submitted and i know that its being reviewed right now to make sure that it qualifies on all of the different criteria that are necessary. So, jim, it sounds like you think its close. Its done i think its done. Cfius this afternoon, maybe president this evening or tomorrow, president is going to say its a big win the president is going to say that they beat china and that they got all that they wanted and more its going to be a victory for the china hawks is the way the president is going to portray this and it is going to go to oracle and they will have bragging rights that they have a great cloud. David, i know that they want to be the number four cloud, do you know what i mean in the meantime, guys, an exclusive this morning with lowes Ceo Marvin Ellison. When we meco back futures looking pretty good. Dont go away. The big events are back. Xfinity is your home for the return of live sports. Empire was up this morning for the third month in a row and now were getting Industrial Production lets get to Rick Santelli yes, were waiting for august read on Industrial Production, carl, and of course, i will have to tap dance a bit here. Dont see it on any of the Wire Services yet we are expecting a number up around 1 and on utilization rates something above 71 . It has come off some big lows, both of them had huge lows in april, minus 12 on Industrial Production here we go Industrial Production up 0. 4 of 1 less than half of expectations but we did see a half a percent increase in last month july moves from 3 to 3. 5 utilization rates still dont seem to be trickling out, carl i will give it back oh, here we go. 71. 4 exactly as expected. And a revision of a half of 1 on this number as well the july read originally at 70. 6 now stands at 71. 1 jim, back to you well, thank you so much those numbers seem okay. This he seem okay, rick, and thats one of the reasons why i know we will be waiting for secretary for Speaker Pelosi to answer what leader mccarthy said because maybe we dont need a deal i will tell you who is on fire. If it makes you feel like things are great in the economy, its lowes. Today they announced a Major Initiative offering opportunities for hundreds of diverse Small Businesses its going to be like a shark tank and we caught up with lowes Ceo Marvin Ellison exclusively to discuss this and how business s take a listen. You know that weve been committed to trying to help Small Businesses operate in this really difficult economic environment. We started out with 55 million in Small Business grants that weve been i wish ring out and just to give you an update, we have had over 800,000 applicants for these grants since we initiated this program so the demand from this program led us to understand that there is a lot more that we should be doing. So we came up with an idea to try to get more products on our shelves and on lowes. Com that originate from diverse entrepreneurs and we came up with this idea called making it with lowes where were going to launch this virtual nationwide search for businesses or Small Businesses, entrepreneurs, to pitch to us products that we can sell online or in stores and were excited about creating the opportunity for the American Dream for an entrepreneur to get their products in a mass marketplace to serve customers. Well, i think its a great and noble idea i think it also comes at a time when lowes is experiencing a remarkable turn around your stock up about 38 for the year is the finest performing major retailer that anybody follows and some of that is because i think that you had an inkling that a house is going to be functional and you pivoted lowes to be able to meet that demand. Jim, more so than anytime in our life the home is being reimagined so today the home is multipurpose more so than ever. Its a work from home space. Its a homeschooling space and predominant space for entertainment and recreation we are very fortunate and blessed at lowes that our Business Model will allow us to serve all three of those unique needs of our customers and this has been a team effort my Management Team has been incredibly focused on keeping our stores safe for our societies and our customers but more importantly trying to do our best to help the customers manage through this really difficult environment that covid19 has presented to all of us. Marvin, one of the things that you discord when you came in, i remember you telling me, geez, we are a little bit behind in the internet, and the other thing you said was that, do you know what, we kind of lost the pro who used to come into lowes in a remarkably short time youve been able to reverse that how did you do it . Well, jim, as weve discussed before when it comes to solving Big Technology issues for Large Companies you need a couple of things, you need time, you need capital and you need talent. We invested the time weve been working on this for 18 months, weve invested a lot of capital and i recruited some extremely talented individuals who have done this before. Just to remind you, we went from a decadeold platform with lowes. Com and we replatformed the entire site to the cloud that enabled us to have a lot more agility and functionality at a time where customers made a massive shift to ecommerce and digital purchases. So we were right at the right moment in time to do that and in the Second Quarter our Online Business grew 135 and thats on a big base in addition to that we understood that the essence of a Home Improvement business is the pro customer because they drive productivity in every department every day of the week and lowes was not really focused on that so we pivoted and weve launched a loyalty program, we brought in products that better resonate with the pro and we just recently announced that were launching tool rental for lowes our data shows 70 of pro customers use tool rental and we were not in that business. So we launched our first tool rental here in charlotte, we will be expanding it nationwide over the next couple years so we will be committed to serving that really, really important and very and very influential customer while making sure that our ecommerce business continues to be something that customers think first about and were proud that we have one of the highest rated mobile apps in any retail environment today. And that took a lot of work, but im proud of the work that the team put in to make this a reality. Do you think you can continue to take market share gains even when we get covid under control . We think so, jim. Look, the first thing that we did this year is we created trust with the customers all of us, i mean, we were very concerned about the ramifications of going outside of the house in this covid19 environment and so we took extraordinary efforts in our stores to ensure that our customers would feel safe when they came into the building. That has garnered us a lot of good will and return visits. Its my belief that when you win customers and you continue to serve them in a very customercentric focus those customers continue to have you top of mind for future purchases and weve seen that in the first and Second Quarter so we think that if we continue to focus first on the customer, we continue to invest in our associates and we continue to create an environment where we can take the friction points out of every transaction either in store or online those customers are going to continue to come back the macro environment specifically for Home Improvement housing remains pretty strong. Marvin, its carl great to see you and congratulations on the initiative which is absolutely fabulous you know, we are talking about this pivot to the home that you were seeing but its come with a strain on inventories, lots of consumers have stories about going into a store, having the item that they are looking for out of stock are you seeing at least directionally that picture Getting Better or is that going to be an issue for some time carl, its Getting Better you have certain categories like lumber that weve seen demand like never before. You have another category like major appliances, theres been incredible demand. But our supply chain merchant and operations teams have been working very hard and were seeing it get better in every single category. In the retail world we call it chasing inventory and we are still chasing certain categories because demand is simply outpacing available supply but that is Getting Better each and every week. A lot of our viewers, marvin, know you from a prior era which is in the Department Store world. I wonder while we have you, i hope you will forgive me, if you have thoughts on the existential nature of that model right now, whether it can pivot in ways that arent costprohibitive and make a go of it in this new era which obviously has turned that model upside down . Yeah, look, this is this is probably the most challenging era for the Department Stores even precovid19. At the end of the day i have a very simple philosophy and i think it is all Retail Businesses must create a model to serve customers any way they desire to shop whether thats in store, online, buy online, pick up in store or all in between i think as long as the Department Store model is focused on serving customers in the manner in which customers choose to shop, offering a compelling value and taking the friction points out of the transaction they are going to be successful now, you always will have winners and losers, but every customer in every era will look for a value, they will look for im simplicity and they will look for something that will give them the joy of a purchase i think as long as any retailer, specifically Department Stores focus on those elements they will find a way to be successful our thanks to lowes Ceo Marvin Ellison by the way, still to come we are going to talk to few buh founder and shark tank investor daymond john helping lowes get this competition under way seeking to draw in diverse Small Business owners thats later on this morning squawk on the street will be right back stay restless with the icon that does the same. 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Jim, as we await that between the vaccine news, the obvious m a news, data really hasnt thrown anything to think that the bulls wont try to build on yesterdays momentum. Well, there was a report that came out last night, a pretty good report by key bank, i read it and they had good things to say about apple, facebook, trade desk theyre going crazy. I mean, its just like and analysts report driving stocks and one of the things that i think is different about this market versus others is that when analysts squawk and raise price targets, david, and we have seen this time and again, the impact is outsized ive been trying to figure out why. Its almost if the institutions are trying to play catch up with the indices or just the institutions are trying to play catch up with the robin hoods. I dont know or is it the robin hoods listening to the analysts . David, its been so long since someone will say you should go buy nvidia and people then go buy nvidia we used to laugh at it and now, david, its like, wow, that analyst people dont even know the analysts names, that analyst really made some good points. Yeah. Look, david, weve been around forever and that should not be whats driving things. Almost knocked my camera over there. Sorry about that yeah, i agree with you and we should point out, jim, as we have many times but we have people who are joining us for the first time who are sort of engaging with this topic to a certain extent there are some analysts who really do a great deal of work, who present an interesting take on a company who are in the afraid of antagonizing a companys management, but tend to be fewer than the average who are looking to plug things into a model and potentially raise the price target when appropriate and or go with the momentum would you agree . Yes i mean, for instance, theres six different firms that told you to buy adobe ahead of the quarter tonight. Maybe value added, the stock has been going up, but the notion of adobe beating the quarter is not shocking, the motion of coming in here tomorrow morning and carl saying to me carl, adobe is up big, whats going on and the answer s well, the analysts predicted that digitization is doing well and youve got to buy adobe. Carl, this is i want to make this point that its really important that people recognize that this is galconda so to speak. Even as america seems like its anything but halcion the stock market is filled with stocks that either get bought or the analysts love them, whether they are industrials and its cat and deere or whether it is biotech where theyre doing something against covid or whether its fedex which reports tonight and Union Pacific has said their business is on fire. I mean, there are two different worlds there is the world that is underneath that blue and white ticker that you see and then theres america and never the twain shall meet. Jim, with he keep waiting to see if that macro weakness underneath has any effect on aggregate demand or economic output, but for the time being the thesis youre framing is exactly right. Take a look at delta today up 3 , jim, we know the airlines have done well this week but thats going to take you back to june, right, on the idea that, i dont know, is it a vaccine play, is it somehow a slow realization that transmission is less on a plane than people feared back in march and april i think its both. That will be a big issue for people want to fly. People want to go places the airlines have been able to say, listen, wear masks, its safe, and these stocks turned out to be cheap. Now, you are going to get periodically somebody theres going to be a skunk at the party. Carnival cruise comes out and says theyve got to do a stock offering, they see real issues and, david, thats america, right . I mean, you cant you cant cruise right now thats a real indicator that there are some companies hurting, but when you go into 5g and 5g is china, then youve got something strong david, by the way, china, not only are they back, but the numbers theyre putting up are really pretty phenomenal china had a true v recovery. Yes. Or at least in the midst of what is a v recovery, which is far from clear here, although in certain pockets we certainly have seen that kind of a rebound, jim by the way, speaking of rebounds, guys, its nice to see that tesla is back firmly over the 400 billion market value and apple is businessman above a 2 trillion market value, still below the 2. 3 trillion that it inhabited for a brief time there, but both stocks have rebounded as you see and that is reflective overall of a nasdaq that comp that has been rebounding lately at least the last couple of sessions one stock, jim, not rebounding today but turned around yesterday but is now down is nikola which weve been focused on for obvious reasons i dont know if youve had a chance to page through what i have, hindenburg released another report this morning, you know, going over many of the same things it did in its initial report but basically making the point that in nikolas response they did not answer many if not i think 43 of the 53 questions that hidden berg had were not answered this is going to be a Battle Ground stock for a long time. It is interesting that you get this dichotomy the people from nikola are saying we went to the sec, the people from hindenburg are saying we welcome the sec. I mean, i dont know if everybody welcomes the sec then perhaps there is a difference of opinion about whats happening right now for instance, i think that when you speak to people at nikola they will say, yes, it is true, there was a picture, a thing of a truck, yes, we who said that it was really we never claimed that we were behind the propulsion its the kind of thing that the sec is just going to have a field day with, but at the same time they got 2 billion they got 2 billion from gm and its a startup they need another, what, probably a couple billion. I mean, if they want to be like tesla. I think that hindenburg actually hurt the fundraising activities here i think that this was when you have 2 billion from gm and mary barr that meant you could get a couple more billion. I dont know if they can get it now. Did they get the 2 billion i thought they were just issuing the shares to gm i dont think gm is buying them, are they so they are not actually taking in capital no, the endorsement i think what they were going to do is take that endorsement and shop it to wall street and get a couple i dont know, do some people are doing converts we should do spacs and converts right here lets see, cdj the cdj. Carl, david, jim, we will do a spac. We will just have a by the way spac, spac, spac, right, carl convertibles shopify this morning, jim, i know you saw that. Mark dow this morning said its a spacpickers market. Yeah, it really is, its a spacpickers market. I like that. Look, is gm its not look, they didnt give the 2 billion to nikola. Is it a spac is nikola a spac from trevor i dont know what i find is that anything flies. I mean, gary cohn was on yesterday, he hasnt made up his mind yet about whether he likes the president , its getting late in the game not to have your mind made up, hes doing a spac and i know there are some people in the financial industry doing some spacs and i feel very left out. Everybody is doing a spac everybody is doing a spac. As i like to say, everybody has a spac and a dream by its way, guys, listen, we benefit at cnbc from this. We will have tough questions for people when they come on and price their spac, when they are raising the money, then they come on when they announce the potential deal, then they come on when they close it. So this morning we got that whole road show from chamath that was fascinating on squawk box, all his presentation from open door. That was interesting to watch. Yesterday we had gary, today jeff smith from starboard will be my guest an hour or so from now talking to us about his spac they have raised the money, they havent actually done a deal and we will keep coming back to some of the key things people should be aware of there is a significant promote, it does dilute, the spac manager gets a lot of equity not a lot, but a good amount, as much as or up to 20 sometimes allow its been coming down in recent deals and, you know, jim, you have to start to wonder what are the available candidates how does that actually work . You know, is it limiting to a certain extent and is it from an audience of companies that you may not want necessarily to see Public People have been saying that of course about nikola, that perhaps it came public too soon through the spac route, it had been considering going public in sweden. Sweden. Yeah, like spotify. Yeah. David, i think that were going to get to a spac too far were going to get tired of spacs. Every night on lightning round i get people that say what do you think of this spac or that spac. Its just like asking what do you think of this manager or that manager except for the manager makes a lot more money from the spac than he does as a hedge fund. Right now, listen, they will always come back and say, hey, our holders get to make a decision and they can vote with their feet and say no. That hardly ever happens you have had, you know, you have had a couple that have gone awry, global blue is one, for example, that really went very poorly in part because of the underlying change in the business at that company that was the one led by third point and tom farley, remember yes. With silver lake the seller of the business but oftentimes they get the deal done by the way, why is it so important . Why do they come on . Why are they marketing to our audience because you want that first day pop when you announce a deal you want it to immediately trade well above 10 bucks. Take a look at chamaths spac from this morning if we have it and you will see it is performing very well on the strength of his presentation and announcement of that open door deal, which does have a Large Revenue base and he said of course theyre buying it or taking it public or agreeing to it at a one timesrevenue i dont have the ticker, guys, its long, but we will find it and bring it up for you. Were looking for it, we will find it. David, youre describing well, not necessarily a dump, but certainly a pump i dont know is that good no right . Come on the show, pump your stock. They are not selling, theyre pumping, theyre not dumping they need it to go up, right, because they want it to be clearly in the green its a sales pitch and i dont think people are ready for that its not like when you bring on tim cook he says, listen, i think you ought to buy apple he says maybe you should buy an apple watch. I find at a certain point that this is going to end badly, but, do you know what, then i sound like just one of these cranks that comes on all the time, but im not a billionaire so i cant really say its going to end badly. Thats what billionaires say, carl like a billionaire is deeply, deeply involved and worried that they may be less of a billionaire. And they always say that it ends badly but i would say that there are too many spacs and the people who are thinking about doing the next spac, i mean, come on, slow down with the spacs. Art cashins note today leads with a story about the south sea bubble and he says im not trying to make the point that were definitely in a bubble, but the spac element of these the enthusiasm in the ipo market is something he has not seen in a long, long time. Fitsy says with the swings were seeing in momentum trading this is the biggest week for ipos we have had in ages theres one that is coming called snowflake, Frank Slootman runs it. When i look at the numbers the numbers are just staggering. They are all triple digit growth they have remarkable client base they have a product that really does get rid of the sill lows and adds in the cloud. David, when i look at cloud strike i could pay 200 for the darn thing im not kidding. For snowflake yeah. Yeah. Yeah. Yeah, its its going to be quite an ipo, but some are saying as youre sort of pointing out reflective of a lot of speculation jim and carl, didnt want to end our conversation here at the markets open without hitting citi which is down about 2. 3 after a decline yesterday. Jim, we seem to be getting a few more reasons why perhaps mr. Core bet may have taken a somewhat earlier exit than anticipated, arent we yeah, i think so. Its disappointing remember they got a very good bill of health from the from ccar, but when you lack controls and you basically make a very big mistake that cost the bank a lot of money then the company theyre going to i bet you i wouldnt be surprised if they make him get rid of the dividend, david. I mean, honestly this is a good time to exit. Yeah. Piper keeps it overweight, says that a lot of this is already priced in and that the risk controls are bearing fruit, but citi obviously and the banks in general today not lighting up the scene. 3419, lets get to bob pisani this morning hey, bob. Hello, guys happy tuesday. Nice open, five to one advancing the declining stocks, good overseas, good european numbers, china ip numbers, retail sales a little better than expected. Good overseas. Again, though, tech is leading every single day weve had nice move on energy recently, Consumer Health care, banks were up, all 11 sectors were up at the start blanks have now drift nood negative territory overall its the same story, its the same 10, 15 big cap tech stocks, your microsofts, your apple, your semiconductor names, your nvidia if you look at broadcom, put up some of these names here and they are the ones that are leading once again. You can see it every single day these big names that keep moving the markets, but remember something, earnings season is getting upon us in the next couple of weeks and the numbers are going up this is the most important thing to realize about the stock market, take a look, earning for the Third Quarter have been increasing as we get into the quart. This is against what normally happens because normally analysts cut their numbers as the quarter goes on, they are not doing that right now, they are actually increasing the numbers overall and, yes, tech is getting an increase, but this is pretty unusual and this is one of the reasons the market is holding up so well its hard to argue for a big selloff on the stock market when earnings are increasing overall and not just in technology stocks, but even in some of the cyclical sectors for the quarter. Waiting for the Fourth Quarter numbers to go up and then we will have an even better rally going into the close for the year we will see if that happens. Meanwhile, weve been talking about all of these spacs and things like that what an ipo week you briefly mentioned snowflake, but i miss being down on the floor of the New York Stock Exchange for things like that. Youre talking about 2. 9 billion theyre trying to raise. Will price tonight, a market cap north of 30 billion for snowfla snowflake. Unity software a 3d Software Company is going to raise almost a billion dollars, almost a billion dollars. J frog does Software Updating essentially, theyre going to raise a half a pllds sumo logic does data analysis, theyre going to raise almost 300 billion they will trade on thursday, j frog will probably trade tomorrow, will price tonight. This is a software tsunami coming in for ipos the book is out of control for snowflake, guys. 28 million shares at 100 to 110 a few days ago the price talk was 75 to 85 they have raised it essentially a third. That is an amazing raise ive been doing this 23 years with ipos, raising by a third in a couple days thats a big, big book overall snowflake just to give you a sense is not only the largest ipo of the year, its the largest software ipo ever at 2. 9 billion thats the midrange of what theyre trying to raise. The next largest would be vmware, that was way back in 2007, believe it or not, guys. 2007 is what you want there. So the bottom line is moves up j frog here, they are also updating this he do Software Updating they have 39 to 41 from 33 to 37 thats an indication, carl, that all of these companies, everybody, is updating their software all around the world because of the pandemic and these are the companies that are beneficiaries of that. Carl, back to you. All right bob, thanks. We will talk to you a little bit later on bob pisani. Still to come this morning, Speaker Pelosi will be with jim, talk about where things stand with the stimulus talks and whether or not this new compromise bill from the Problem Solvers Caucus can bridge any gaps we are back in a minute. I keep working my way back to you, babe with a burning love inside yeah im working my way back to you, babe and the happiness that died i let it get away servicenow. The smarter way to workflow. Its made for this guy a veteran who honorably served and its made for her shes serving now we made it for all branches and all ranks whether they served one tour or made a career of it. We also made usaa for military spouses and their kids usaa is easy to work with and can save you money on auto, home and renters insurance. Become a member today. Get an insurance quote at usaa. Com quote usaa. What youre made of were made for a lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Rest easy, mets fans there, is joy in metville, at least today, based on the news that we got late yesterday of course confirming that wed reported a couple of weeks back, when we told you exclusive that steve cohen entered exclusive talks to buy the new york mets after a heated auction, mr. Cohen is going to become the new owner of the other Baseball Team in new york, struggling a bit this season but certainly as i said, a lot of hope for the future, given his potential ownership. Now, Major League Baseball still does have to sign off on the deal, though that is expected to occur, one would have anticipated the wilpon family controlling observ inling owners for the past few can he cades has done enough Due Diligence to have good sense mr. Cohen will be the choice of most of the owners in order to get their approval 2. 4 billion is the reported number of course, it is lower than what mr. Cohen was very close to inking a deal last time that fell apart over any number of different issues, closing costs, management agreements and the like, but guys, its a big m a deal, 2. 4 billion and he still has a day job but one would expect in the days, months, years ahead that mr. Cohens attention will perhaps focus more and more on overseeing a team that many of us are hoping will see the post season, perhaps not this year, jim, but for many years to come well, david, i know you are obviously a met fan. When you say theres joy here, is that because steve cohens willing to spend much more money than the wilpons or theyll clean house . What is the advantage of steve thats a great question i think that it is, there is a belief that he will have a willingness to spend but i also think, jim, and be curious to see if you agree listen, we know about many of the missteps that mr. Cohen made, including one key one, of course, through his career, but at the same time, when you look at what he has been able to build again in the hedge fund industry, there is a belief that he is somebody who is always looking ahead. Baseball has changed so much, when it comes to technology, and things of that nature, and that he is going to be able to execute and build a very strong franchise, jim, similar to what hes been able to do in the Capital Markets for many years yes, lets hope its that easy, david. Its a different kind of business all sectors are positive except for banks. Apple and microsoft leading the dow. Were back in just a minute. Apple of course hosting its first major Product Launch of the year today were going to be looking for a watch and an ipad at the very least. Stock is leading the dow and hanging on to a 61 gain for the year back in a minute at leaf blowers. 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. Lets get to jim and stop trading. Carl, trying to describe the situation with analysts upgrade and how much it means. Very good company, cyber arc, cyber security, barclays goes from hold to buy, and the stock is immediately up six. I mean, this is the kind of thing ive not seen since the 80s we see it over and over again and analysts recommendation can move a stock mightily. We have a lot of recommendations for the rokus and facebooks out there today and theyre all moving, so just keep in mind, this is an incredibly bullish moment, and usually doesnt last too long, but when it lasts, you got to make the hay. Jim, eamon javers is on twitter backing up what you reported about a potential decision on oracle tiktok today. Oh yeah i think thats going to happen i think working overtime, made a good case this is the american bid, bring in 25,000 jobs. Cfius likes it and i think the question is it the president going to sign it today or tomorrow could be tomorrow. Cfius today. All right, jim. Youre going to stick around for david kostin yeah, why not something to do. All right, in the meantime what do you have on mad tonight . Lennar, reported great numbers but nothings enough with this crowd and lance fritz, Union Pacific supposed to be doing badly, what a stock, what a group. We got some winners tonight. Lets make some money. All right, jim, yeah, in the meantime good tuesday morning, everybody. Welcome to squawk on the street. Im Carl Quintanilla with david faber. Jim is sticking around for part of the hour at least a big hour ahead with an exclusive with Speaker Pelosi, sta starboards jeff smith and we will begin with the markets this morning, and for that well turn to goldmans chief u. S. Equity strategist david kosntin. Good to see you. Good morning, carl, nice to see you. Its encouraging Reading Research from throughout your desks for the past couple of weeks, not just yearend targets but the q3 rebound, employment, Consumer Spending. I wonder if you can sort of distill the overall message you guys have been sending out for the past month or two. Well, i believe its pretty optimistic you want to think about a couple of things. First of all on the economics front look at the super forecasters project from the good judgment. Were looking at Something Like 70 probability of a vaccine, mass distributed by the end of the First Quarter so thats certainly a good backdrop. The Economic Growth forecast for 2021 by my colleagues here in Goldman Sachs economics forecasts around 6 , average annual growth next year consensus is a little bit less than 4 that gives some room for upside in expectations. My colleagues throughout the Equity Research department here at goldman have a reopening of america index, carl, this is reading 5, just read 5 last week, if you want to think about 1 as a lockdown and 10 as normal, back to where you were at the very beginning of february, just had a reading of 5, so pretty much halfway back thats positive, and then you look at some of the indications on the earnings, earnings expectations that we have right now for 2021 around 170 of earnings, consensus around 165 so i think theres upside margin there, and one of the interesting things, carl, is people are now focusing on 2022. I think thats partly a rationalization of the move in the share prices were looking at 188 for 2022 so a couple years of strong recovery, and then positioning is also pretty modest right now, its not fully stretched, that we saw say in late february this example. So those are some of the reasons that give us some optimism on whats taking place, and its one of the arguments in favor of some continuing focus on Growth Stocks, particularly in the Technology Area would be a big area of focus for us in terms of discussions with clients, and then by extension one of the issues if you get a vaccine and most people on the buy side seem to be anticipating in october theres an identification of what the vaccine could be and by the end of 2020, the end of the year, probably having that approved by the fda. Im not an epidemiologist but thats what investors are expecting. All thats pretty positive and supports a 3,600 target that i have for the tp at ts p at the this year. I was going to say, isnt there upside risk to 3600 at yearend and how has your view about potential turmoil or volatility around the election changed . How do you see that changing in the next 50 days so the market basically prices consensus and market prices the expectation, and if you look at the Digital Markets in terms of predictive and you look at the polls, are suggesting that a likelihood is of a blue wave right now obviously changes on a daytoday basis, so the market level at this point would suggest Equity Investors are comfortable with that as an outcome. Now, theres a lot of variables around that, exactly what is the proposal on taxes, if you look at the biden plan, that would suggest some downside to our baseline forecasts if you look at what that might be offset for example by some fiscal spending, so theres a little uncertainty what ultimately will be implemented but right now investors seem to be reasonably comfortable with that as a prospect, and so clearly theres a lot of uncertainty around the mailin ballots and when well actually get a final resolution, not just of the presidency but also the senate races in order to get any change in legislative policy, particularly on the tax front is conditional on both a presidency as well as the senate and so theres a lot of uncertainty around that, a lot of people focusing on hedges in december, as opposed to november, with the idea that maybe you dont get a resolution of all of those mailin ballots having been counted by say the latter part of november. A little bit of uncertainty there. David, first of all if you listened to the first hour i apologize, i stole completely that vaccine from you and i realize i didnt credit you, so on that i apologize. David faber and i discussed something important. Do you personally believe well have a vaccine in the First Quarter or is the market saying that were going to have one, and that this was as you chronicled a sixweek change and its happening right now there is a wide degree of expectation that there will be a vaccine identified by october. Now this came as a surprise to me back in july, when i was dealing with a lot of Portfolio Managers in fact, david and i had a conversation i referenced a zoom dinner that we would do basically like were doing now, sort of remotely, and i was extremely surprised, a dozen Hedge Fund Managers on there who were based on their pharmaceutical analysts and their biotechnology analysts were highly confident there was going to be a vaccine later in the year i was not as sort of confident in that view, but it does seem now you have some major trials that are out there in terms of phase three trials, so i have my colleagues, Terrance Flynn and salvine richter biotechnologists at goldman, we are in touch on a daily basis to understand some of the medicals that are frankly beyond my knowledge and biology to understand those but thats the view of many people and i think the market certainly jim, as you pointed out is pretty confident that that is the path thats likely to happen. Do i think thats likely probably in the first part of next year, the people will be vaccinated and i do believe that as an assumption in our Economic Forecast as well as more importantly in our market forecast, that thats a baseline if were wrong on the vaccine, clearly we have to adjust our market forecast. David, your zoom dinners or whatever with managers, does anyone ever just say you know what its just a great market we got the roibhood guys buying, new people buying, great earnings its a great take. No one i know wants to say that but isnt it true . Well, it is the economic story is we had obviously a terrible situation from a human cost and from a disruption in society, but basically things are slowly moving back, but it will take time for some areas. You can think about this from an earnings perspective if you look out as i said, people are really looking at 2022, not just 21 2022, and if you look at that growth rate in energy and financials are going to be lower earnings, you got negative kind of compound annual growth over a couple years and the other extreme you have technology and health care doing much, much better, Something Like 10 compound annual growth so its a story of gradation, some areas are doing really, really well. One of the things you and i, jim, were emailing about was this concentration and the concentration in the market is creating huge number of issues for a lot of Portfolio Managers particularly the growth managers and we often lookbenchmark, ind. If you look at the russell 1000 growth index, the growth index, the top five stocks are 39 , 39 of that index from an equity capitalization basis, and that creates some diversification challenges for a lot of growth managers because if you own simply an index weight in those positions, you were just hugging the benchmark, you would be out of compliance with the ftc guidelines what makes a diversified mutual fund so thats creating issues how much tracking error and how much positions can the Fund Managers own in these large Growth Stocks which thats whats driving the market, these bigger cap tech companies, and so there needs to be ultimately in my view a handoff to some other Growth Drivers of, to get a market that moves materially higher so we have some modest upside but not extraordinary. I think you are looking at 5 ish return through the end of the year and 10 , 12 through the middle of text year. Strong returns but if you want to get anything more than that there needs to be other drivers in the market, if my view. Finally, david, does the market care anymore if we get another stimulus package it would be a positive development. I think most people believe theres going to be some interim resolution we often hear 1. 5 trillion as a size, but that gets thrown around, but theres i think an expectation that congress is likely to act at some point, certainly before the election, but that, does it make a difference, i think it would be an incremental positive. Right if the earnings picture is Getting Better, especially for some of the outer years, when or if i guess is the question do buybacks and dividends follow suit you brought in expectations earlier in the year for both of those things so its a great subject in terms of a discussion at the corporate level. I think at these levels, mergers are probably a better use of cash for a lot of companies, as opposed to buying back their stock. I think theres questions still on Balance Sheets strength, the liquidity, solvency, not as acute issues as they were at the beginning or early part of the pandemic in march and april, but the question is, are they likely to return i think in some areas in technology, we do get a good amount of buybacks in part to offset optionsi issuance and in part because they have a lot of Free Cash Flow other areas will be much longer in terms of recovery and spending money on buybacks, even on Dividend Growth as well. I think part of that relates to that sense of tale of two cities you have some areas of the market where theyre getting pretty Strong Revenue growth and Earnings Growth and others where youre not thats where youll get to split and so in aggregate dollars it is incumbent upon households or Foreign Investors who are likely to be a source of demand for u. S. Shares as opposed to or compared with corporate buybacks. The dollar is weak and a weak dollar environment historically is an indication you get more demand from Foreign Investors by u. S. Shares. Sure. And performance obviously that tends to pull in some of the Retail Investors as well on the households david, thats great stuff always good to talk to you, until next time, thanks. Nice to see you david kostin of Goldman Sachs. When we come back right here, House Speaker nancy pelosi on those talks about, well, more relief funds, the upcoming election, oh, and a lot more, keeping track of comcast shares which are up and citi shares which are down well have that as well. We got no free pass. Everything we have, weve earned. The unmistakable lexus is. Get zero percent financing on the 2020 is 300. Experience amazing at your lexus dealer. Experience amazing as business moves forward, were all changing the way things get done. Like how we redefine collaboration. 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Ill give you a hand. And im gonna put lisa on crutches wait, what . Said shes gonna need crutches. She fell pretty hard. You might want to clean that up, girl. Excuse us. When owning a Small Business gets real, progressive helps protect what you built with customizable coverage. And im gonna eh, eh, eh. Donny, no. Oh. This was the theater i came to quite often. The support weve had over the last few months has been amazing. Its not just a work environment. Everyone here is family. If you are ready to open your heart and your home, check us out. We thought for sure that we were done. And this town said not today. A lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Nancy pelosi believes that if she makes it tougher, its harder for President Trump to get reelected. Her own members are upset because they are going to get sacrificed in this election. They are getting beat up back home thats why theyre willing to offer their own bill, and nancy pelosi is saying its okay if you lose, as long as were able to defeat the president. That is all wrong. All right, that was House Minority leader Kevin Mccarthy earlier on squawk box. I bring in speaker of the house nancy pelosi to react to that, because its a pretty serious charge to say her own members are upset because they think theyre being sacrificed madam speaker, wellment could to the showelcome to the show. Whats going on here you know i wouldnt stoop to the level of soresponding to silliness. I got off a call with my colleagues, we are committed to staying here until we have an agreement that meets the needs of the American People were optimistic that the white house at least will understand that we have to do some things we have had a disagreement on crushing the virus, and thats a very important part of the heroes act, testing, tracing, treatment, mask wearing, ventilation, distancing and the rest thats really every time i come on the show i tell you, this is it open government, we are open economy, you want to open schools, crush the virus we also want to help state and local government which they are accusing of all kinds of things, because they dont want to help them, but we have to, because its about jobs and the fiscal soundness of state and local government is very important to the fiscal soundness of our country and its about meeting the needs of people, our heroes, hence the name health care workers, police, fire, transportation, sanitation, food workers, teachers, teachers, teachers to teach our children and speaking of teaching our children, you know that over 90 of the funding for education and Public Education in our country comes from state and local government. So we feel very proud of the work that we have done it is scientifically academic academically institutionally documented to be what meets the needs of people hungry in our country, maybe 14 million children are food insecure, many millions of their families are on the verge of eviction we have that in our legislation. They do not. So this is abont about the president. Its about meeting the needs of the American People and im very proud of the work my caucus has done in promoting this and addressing the disparities in how if youre africanamerican, youre many more times likely to go to the hospital with this, hispanic nearly five times more likely to go to the hospital for the coronavirus. We have a big challenge and if we could just look to science and fairness, we can get the job done working together. Well, madam speaker, i think that all of america will agree we dont want anyone to be hungry let alone 14 million children apparently they do, they dont have money in the bill at the same time what is the bottom line minimum demand, skinny package so we can get something done now and deal with other issues later this is no later with this administration this is the opportunity, and a skinny deal is a republican bill, not a deal at all. Theyre making a skinny, Chuck Schumer and i call it emaciated proposal for a massive problem we have to face that reality as you know better than i, the fed is spending trillions of dollars shoring up our economy in other ways, with Monetary Policy we can fiscally spend the appropriate amount of money to meet the needs of the American People, and by the way, its stimulus you know better than i that we are a consumer economy and the more we have, whether its food stamps or Unemployment Insurance and the rest of that, that is rental checks, that is stimulus to the economy, while it helps people maintain their dignity. Madam speaker, a lot of those people and the bread winners in the family have been hurt specifically by the government, meaning local governments doing the right thing, frankly n closing down businesses. Business interruption. Why not try to at least target say hospitality, restaurants the industries that you know are bleeding nationwide to get that done, and then think bigger. I know you said that nothing can be accomplished but we need to put some money in these peoples pockets now. We do we have the restaurant act, mr. Bl blume blumenauer has the legislation, its expensive 125 billion. Wed welcome that into our bill, we have to cut further into the original 3. 4 trillion, but i think its very important to do. I come from san francisco. Restaurants are Community Life youre in the new york area, you know what that means, but it means that all over the country, and so yeah, we want to be sure though that as we do the Small Business initiatives, its not like you have a second dip you have a second dip without having the oversight or without having the proper opportunities for womenowned, minorityowned, veteranowned, ruralowned businesses to be able to participate in a strong way. So were not in disagreement on this its just that it all takes money, money that the republicans were willing to spend on giving tax breaks to the top 1 , 83 of the benefits to the top of their tax bill going to the top 1 and that money that i think is appropriate to be used by the fed to shore up the markets, you see the stock market is doing well, thats a good thing, but lets shore up the middle class in our country as well and do so based on science to get rid of the virus, and then we can open up and take our economy into the future in a way that it lifts up everyone well, youre talking about science. Youre from san francisco. Incredible wildfires yes i studied at school that creationism was a mistake, theres a flat earth, not so good, the president and you dramatically disagree on whats happening with the fires and science. How could you agree with science on something as hard as a vaccine or covid19 . Well, if youre in contempt of science, as the president seems to be, when it comes to addressing the coronavirus, these many months, in his own words, contempt for science, and also not only contempt for science, but acting upon that contempt by having his henchmen interfere with the Data Collection and how it is reported, and how tests, the fda does its work and god bless them all for standing up both the people at the fda, the scientists there, the pharma executives as well as people at the nih supporting testing, testing, testing, even though the cdc guidelines are weak in that regard, so they have acted upon their disdain for science in a way that has been very negative, a. B, theres contempt for science on the climate issue is of longevity. Its just not President Trump. The republicans for years have always had legislation to prevent any advancement of what happened at kyoto or the paris accord, the president pulled out of that, but that was a reflection of some of the sentiment about colleagues in the congress, of course in the total pocket of thes ifily fuel industry, as they are in the total pocket of the gun, the nra and other lobbyists and the total pocket of so many dark special interests that present us from making the progress we need to make we want to do it in a unified way. I was go ahead. Madam speaker, im listening to you and three days ago you told cnn you were optimistic about a deal i am. Really . I thought id take it right off the table here this very minute. Mark meadow say he was the skunk at the party, didnt really, got in the way between you and i think secretary mnuchin. What deal can we have, crazy nancy, sorry, that was the president , i have such reverence for the office, i would never use that term, but it is but you just did. Oh, come on, you know what i mean i know what you meant, i do i think its a travesty to ever call look, you spent your whole life in Public Service. Let me just say this, anything the president says is a rejection of his own insecurities he calls other people crazy because he knows he is he calls, complains about this, that and the other thing because he knows his own shortcomings. Hes a master of projection, so any time he says something, you say uhoh, thats what hes thinking of himself. As i do this, im touching my pen he pin here which is a flag pin and on it, it says one country, one destiny. One country, one destiny and thats what were about. You can combat the divide in this country that makes it so that half the country does well and half the country does poorly it just happens to be the half that does poorly votes democrat . No, thats not what this is about. Okay. This is about the United States of america. This is about a great country that we all love and we love our constitution, which the president disrespects. We love our land, which god gave us from sea to shining sea, which the president degrades almost twice a week, if not every day. We love our people, a nation of immigrants, unless youre blessed to be born a native american, which is a blessing to you, to our country, and to all who love you and he denigrates them and we are at our values as a country to speak of hope to the world of a democracy, of a government formed by the people, which he dishonors so we have a disagreement there. People do listen to the president. A president s words weigh a ton, and when we have a new president , joe biden, i think he will be a very unifying force. He believes as do i what our founders have guidance, e. Pluribus num, from the many one, sewn into abraham lincolns coat on that fateful night thats november, a long time for people who are starving or people who are incredibly poorly off. You have not spoken to the president since one year ago is it worth it to call him and say listen, we just cannot have these people starve. We have to do something. Is it worth it to put in a call . What is the point the president has sent his representatives and he has confidence in them, then i do, too. We did this with president bush when he was president , and sometimes with president obama, but my experience with the president is that he really has a complete alienation with fact, data, evidence and truth, and so if youre talking to him, youre almost wasting your time, because its not going to pan out. Dont take it from me. Look at your coverage that you have all had of the president sitting at the table with democrats and republicans, house and senate, and saying you just bring me a bipartisan immigration bill and i will sign it well, i dont know who checks up on him on those things, but that completely disappeared so again, well discuss the, when it would make a difference, but i dont see that it makes a difference besides, it wasnt a year, that was october when i said to him, mr. President , with you all roads lead to putin, lit me remind you, and that he took a picture of and sent it out to people, thank you, mr. President , and i did communicate with him at the state of the union address. Okay, very good i want to thank nancy pelosi and again, you know i was being facetious when i used the term involving you. Of course i did i respect you anyone who gives their life to Public Service and is speaker of the house should not be called that name. I dont even want to use it again. Dont worry about that. Let that be your biggest problem today. Thank you so much. Thank you so much always good to talk to you lovely to chat with you, thank you. Jim, that was interesting i wonder though whether or not you think that moved the needle in either direction in terms of getting an actual deal done . I think its hard i think that thats a pretty hard line that you just heard, and it will be difficult to step into that buzzsaw i think, if youre secretary mnuchin or mark meadows. What do you do youll look like youre weak and weak to the president of the United States, and thats really the problem. All right jim, thanks for sticking around for that stuff all right, thank you very much see you tonight yep mad money 6 00 p. M. Eastern time lets get a news update with our sue herera good morning, everybody heres whats happening. Louisville, kentucky, has reached a multimilliondollar settlement with the family of Breonna Taylor the settlement includes reform measures for the Police Department a new studyclaims the toky olympics will be the most expensive summer games yet, and thats before billions more are spent rescheduling the games for next year. Olympic officials though dismiss that report. Poisoned russian Opposition Leader Alexey Navalny posing for a picture with his family saying he has been breathing on his own for an entire day. Navalny plans to return to russia in southern germany a 26yearold American Woman may face fines for spreading covid19 Officials Say she visited several bars despite having symptoms and being told to quarantine until her test results came back. Bavarias governor calls her actions a model case of stupidity. You are up to date thats the news update this hour david, ill send it back to you. Okay, and i will take it, thank you, sue now for our etf spotlight this morning, well look at the ishares u. S. Consumer goods ets, the ticker there is iyk, up double digits so far this year, and you can see currently trading up 0. 78 etf getting a lift from its second Largest Holding do you know what that is yes, its tesla. The stock by the way rebounding from recent lows, still down about 13 from the absolute highs it saw this year, but as i said earlier, safely above that 400 billion market value is tesla. Were back in two minutes. Joining us to dig in for more on the state of activism is ceo jeff smith great to have you back nice to see you. Our audience and investing world know you as an activist. I wonder the fit for a company that would be considering merging spac to go public. Do they want the public as a partner . Is that a threat to certain managements that might want to partner with you how do you make the pitch. Hi, david, how are you . Nice to talk to you. You, too. Look, were spired of spac and the launch of s spac, another stage at starboard at starboard we invest in undervalued, undermanaged companies that are underearning or get involved and make a difference and those are Public Companies already, where we buy a stake in those companies and we work with the Management Team to get them to perform better, to focus on their core business and improve their Bottom Line Results and improve value for the benefit of shareholders and usually one of the larger shareholders for svac spac, were looking to do the same thing. Were looking to find simila companies that are private, they start out private and we merge them into svac and were really good at taking those businesses and using our expertise as Public Company managers and Board Members and governance experts in improving the discipline, improving the focus, improving the Revenue Growth rate, improving the operating margins and if you do both of those, if you improve the Revenue Growth rate and the operating margins, you accelerate the bottom line profitability. When do you that, you create a lot of value for the benefit of shareholders and change the perception of the company and improve the multiple along the way. We do that with the Public Companies and looking to use svac to take a great private company and make it better a great brand, a great business, a business that should be well positioned in its space but maybe isnt reaching all of its poteent from what most of the spacs out there are doing. Yes yes, it is to answer your question it is different, jeff i want to get back to the activism let me focus on that right now we see companies that are early in their growth cycle but certainly growth names, almost all of them, i mean we know you as you point out, somebody who came into darden, helped turn that company around, somebody came into papa johns and helping to turn that company around, but turnarounds dont seem to be a great sale prospect when it comes to a spac. You want to get that stock above ten bucks when you announced that deal. I dont know, is it selflimiting in some way what youre rigtrying to do its differentiated, david. We dont do the same thing as everybody else does. We take a look at whats happening and try to make it better and different, and on brond for what we do and thats what we do were highly, highly operational, as you know we transform businesses. We see this as a great opportunity and a great opportunity for those kinds of businesses, and i can touch on what types of businesses they might be and what they might look like, but to go back to your earlier question about whether somebody would choose to work with starboard, we did some other things that were different with svac, too we looked at our relationship network. We have amazing relationships from the past 17 years doing what we do, in all different industries, with great operators and we combined some of our best relationships into svacs so we have aaron russ ul, anthony s sanpilippo, nigel travis and greg waters, where we can bring a lot of expertise in terms of transforming the business. When we call a company, there is he a common misperception people dont want to hear from us jeff smith is calling, is anybody going to pick up the phone . It doesnt work that way people love talking to us. They think were smart, they think were good at what we do and want to hear our ideas for how they can ransform their Business Companies that may be afraid to talk to us that would be in the public marketplace would be ones that would be insecure, theyd be worried, theyd be worried if we got involved we might replace them as a manager, but thats because they could be vulnerable and theyre not performing well. Thats not the case for most companies that we talk to. Most of the companies we talk to doing our research, we talked to companies all the time, they love talking to us, want to talk about their issues if theyre secure and feel good about how they run their businesses they love to hear our ideas and love to partner with us i recruit talented managers all the time to companies. Our recruit ceos and members of management all the time, recruit Board Members all the time, we talk to private companies all the time they pick up the phone when we call more than i think anybody picks up the phone when other people call, so the access to companies is not going to be hard when we call a private company, theyre going to want to hear what our ideas are and what we can do with their business theyre going to love their business its a great business. But if im running a company right now and considering doing a deal with you, as merging into your spac, arent i going to be concerned youre going to get rid of me if you dont like my performance . Youll have a significant ownership right off the bat. By the way, that might be viewed positively by your holders, but im not sure how its going to be viewed by the management you choose to partner with you have to separate this, and maybe go back to the conversation about spacs in general. Spacs are coming out as an alternative to an ipo. Its not really a sale its alternative to an ipo and a negotiated transaction as an alternative to an ipo, and it actually works really well and we can get into a whole discussion about that, because its a negotiated transaction, many ways is a more elegant solution to an ipo, a traditional ipo, which can be funky. If you have a wellrun private company, and lets not talk about the ones that are merging with spacs because those as you talked about many of them have been late stage Venture Companies that are high growth, high risk and those can work, too, but if youre a well run private Company Looking to do an ipo, youre probably not going to do in an rspac. You do a traditional ipo or use another spac youre talking whether the ceo of the spac is going to be insecure and unwilling to have a conversation because the company is not necessarily run so well but you have to separate that. Most of these companies were going to be target are are 1 billion plus, probably 1 billion to 3 billion plus in value. The ceo is usually not the owner, so were going to be talking to the owners, and these are going to be businesses that are great businesses but arent reaching their full potential, and what were going to provide to them is the opportunity to take those businesses, merge them into our spac, into svac, bring together our governance structure and expertise, our leadership to take that business and get it to the levels they know it should be able to get to but where they cant get it there themselves or dont have the energy or dont have the time right or dont have the resources to get it there themselves and we can provide that leadership either by coaching up their ceo or other members of the Management Team and we many times work with the existing Management Team and make them better or sometimes by replacing some members of the Management Team and maybe thats required maybe thats whats necessaryive and ransformative again for th owners and good of the business and constituents and great employees of that business so getting this business into a i get it. Yes, i get it. I wonder, jeff, in a way, its not like youre competing with other spacs, though, because as you say youre differentiated. Youre competing in some ways with private equity to find these businesses, it would seem in some ways, yes but not exactly. So if these businesses want to be acquired for all cash and willing to sell for all cash at their existing valuation, remember, they may not be performing as well as they hoped they could be, then theyre going to sell to a private equity firm, an all cash transaction at a trailing 12month interval, based on performance that may not be as great as they are [ inaudible ] but insid, thtead want a combination of cash and liquid currency, and jeff, yeah, i think were unfortunately beholden to technology in a way we typically are not and looks like we lost jeff although we managed to have our conversation looks like were losing me, too. Im not sure, but i want to thank jeff smith, there i am i want to thank jeff smith he and i are going to have a larger conversation about activism again in a few weeks as well so he will be joining us once again on cnbc, we hope, in a few weeks time. Carl, want to send it over to you now. Yep, techs Getting Better, david, but still not perfect that was good, though. In the meantime, when we come back exclusive interview with lowes Ceo Marvin Ellison and daymond john about a new initiati initiative us. Lease the 2020 rx 350 for 409 a month for 36 months. Experience amazing at your lexus dealer. Rapidly groping retail in the market, find out more on tradingnation. Cnbc. Com more squawk on the street coming up. Incomparable design makes it beautiful. Stateoftheart Technology Makes it brilliant. The visionary lexus nx. Lease the 2020 nx 300 for 339 a month for 36 months. Experience amazing at your lexus dealer. Experience amazing our Retirement Plan with voya gives us confidence. We can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Im good at my condo. Well planned, well invested, well protected. Voya. Be confident to and through retirement. Lowes is working to help Small Businesses that have been affected by the pandemic earlier this morning we had a chance to talk to lowes Ceo Marvin Ellison about that initiative take a listen. The essence of the existence of small Hardware Stores or local businesses is their connectivity with the customer and the community, and i think that will never change there will always be local Hardware Stores, or Small Business owners that are in the hardware business that when that customer can walk in, it feels like that you are speaking directly to their needs, based on the local nature of how you operate that business, and also how you plugged into the local community, and so although were a big company, were fortunate to be classified as an essential business, we understand that the success of our broader Macro Economy is going to be the Small Businesses and the ability for Small Businesses to continue to grow and thrive, and we understand that covid19 has created an incredible strain on the economic viability of many of these Small Businesses. We are as a Large Company doing our best to help we believe that if you operate in an environment, a community, your goal should to be make that community better, and our Small Business Grant Program making it with lowes program is a small way for to us try to contribute to the communities in which we operate in all right, so the retailers teaming one shark tank daymond john to mentor entrepreneurs, listen to their pitches and give them a chance to get their products on lowes shelves. Damon, good morning. Thank you for having me. What a great idea i mean it is like sharp tank on steroids, and it is so much richer than just throwing money at a problem what do you see for it lowes is already in the space of having grants for Small Businesses so im not sure how we collectively got together. But they had the dedication way before covid19. While other people are trying to figure it out, lowes is already in the space and often that is the most important part now how do you get it to the masses they want this vehicle to do so. Without taking a percentage of the company like the sharked would. You must have some idea of what the population is out there of diverse mall businesses ta might want to pitch, how many people do you think might apply . When you talk about diversity, you know, suppliers, youre not only talking about people of color, youre talking about females, lgbtq youre talking about veterans. So this could be a lot of people you know you think about it, shark tank gets about 40,000 applicants a year. Think about this you can get a million applicants, hopefully. I want people to step up to this and 21 million of them are one man or one woman shops but five people will get the final chance and they will pitch to myself and the executives at lowes. That brings the question how is your what is your criteria going to be . Is it going to be any different than if you were in your chair on shark listens to a pitch there . And do you think longer term if it gets people who might have thought you know what . Im destined for a career in services maybe it inspires some to think that i have ideas. Thank you, right now everybody in the world and in our country, this is what we care about they all think about how theyre going to pivot and make that change this did i have rainuates a pitch for me all i can do right now is care about does this problem. Does it have empathy for a customer is it making it lighter, customer, faster for someone and i can think about what is the best pitch web the best person to operate this i know distribution is there and highlighting them on a stage is there. Many times i have to think that once the lights go down, who will distribute this how will i get my money back now i view it as a consumer saying wow, this is a great product, how will it make my life better. That is an amazing position to be in and not have any vested interest in how this person will succeed and help change the world. We cant wait to see what interest is like and then certainly as you start to cur rate acurate all of this and pick some winners. Were proud of you, thanks make sure everyone goes to low lowes. Com, because theyre going to help support Small Businesses thank you for doing the same well said, well see you later, david i want to take a look at shares of comecast there having a very strong day the company ceo appeared at the Media Conference and was talking about broad band being very strong saying theyre on track to have more than 500,000 additions in the Third Quarter also 15 million signups for the p peacock service. So that is also seen as perhaps a positive one thing that is not a positive 2020 is not launching a lot of new movies next year well have a down year as we have a strong late well keep an eye on that stock and more as we come back from stock on the street the 2020 is 300. Experience amazing at your lexus dealer. Experience azing you can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save 400 a year on your wireless bill. Plus, get 400 off when you buy the new Samsung Galaxy note20 ultra 5g. Welcome back to squawk on the street near the highs of the session right now with just about every sector in positive territory as you see behind me. 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