Transcripts For CNBC Squawk On The Street 20240712

From apple yesterday plus, jim, fedex and adobe to kick around from last night. Wow i mean, these were congratulations gentlemen and ladies calls because the numbers were so unbelievably good, much better than people expected. Now, this is rather amazing, carl why . Because there were firms that upgraded and pushed and raised numbers for weeks and yet they were dramatically exceeded, fedex because of e com, 96 of the growth is e com and adobe because its how companies are able to digitize quickly, particularly retailers, in order to be able to take advantage of this this amazing wave, this amazing boom of ecommerce to the home because of the pandemic so how can there be such a structural thematically strong story behind ecommerce and packages and growth and the targets that fdx has pulled forward by years and all the good news today on vaccines and therapeutics well, i think whats really convincing here with fedex is that theyre talking about how theres actually a weak economy in the Service Economy and that is weak and they say it really doesnt matter, we have this new material economy at home so, i mean, when i look at the retail sales, they seem weaker, but i think fedex and adobe are at the heart of e com and i dont think that those numbers pick up e com. I do think that when we speak to meg i hope shes talking about the possibility, david, this has always been a focus of yours, about the therapeutics i didnt hear anything today from lily or regeneron in my own reporting that made me feel that, david, that those are on the horizon or that they will get you out of the hospital quickly. Well, listen, they did miss on the higher dose, lily, they had an effect at the middle dose range which is good. That is another data point that does at least support the efficacy of antivirals in this disease, jim the manufacturing capacity of these antibodies worldwide im told even if you stopped all other drugs not enough to supply the need so youre looking more towards once again what i come back to which is that small molecule antiviral that merck is working on that weve got to keep a close eye on. Right well, i do know Regeneron Regeneron has highly potent neutralizers, i just think its september, carl, and the clock seems to be ticking for a lot of these Small Businesses excellent piece, excellent piece on squawk this morning about how the Small Businesses are being hurt so much when was the last time we traded a Small Business and the answer is we dont because theyre not public yep, the big blind spot that public equities have that we have talked about for a long time the president last night, jim, throwing out the three to four week timeline on at least the introduction of a vaccine. So i guess we have to sort of throw that in the mix despite what others in the industry and at nih talk about being in terms of the end of the year instead. Maybe its entirely possible that the trials are not in the thick of things in new york because our rate is so low and what you really need are people in hot spots theres only one active i mean, ive called all the drug companies, the only one active trial that i know i can get in is in the moderna trial, almost all the other trials are just not in new york, which makes me feel like that perhaps we in new york are after a terrible period are not experiencing, david, what the rest of the country is in terms of sign ups. 30,000, 40,000 people, you would think that some of the hospitals in new york would be giving you this like the j j everyone from j j apparently is going to take the vaccine. Right. Im looking at david, i know im supposed to be looking at the camera, but there are places where they must where so many people have the vaccine or are on trial, but they are sure not in new york. No. You know, thankfully of course we went through our very hard time, thankfully as well other parts of the country while suffering much higher rates are not having as nearly high rates of hospitalizations, youve also got a lot of these clusters associated with reopening of universities and colleges, younger people who are getting it, but at least maybe dont seem to be passing it on to a more susceptible population, jim. Big ten. By the way, you are not giving the vaccine to everybody who is sick. Youre giving it also to a lot of people who have nothing. Oh, yeah. Lets make that clear you look for people both who actually have been exposed to the virus but also most of the people youre giving it to havent been you want to make sure it actually generates a response. Whats interesting is the therapeutics are given both to people who are sick but also the people who are not sick who are family members now, that almost sounds like a vaccine in itself. Yeah. But to go and were going to hear about this when we talk about fedex, the complications of getting these drugs to people make me feel like while the president i think, yes, its possible there will be some vaccines, but i dont know if you want to be in the first wave if you are at risk remember, youre being given something that is novel, not unlike the illness, so, carl, i think that while i want everyone to try like its americans duty to take vaccines so we can get this problem solved, i do think that people who are at risk are not wanted in a lot of these trials except for the j j im sorry, age at risk age at risk. There are other kinds of at risk that they do, but you cant given my age get into a lot of these trials and i feel very young. Right right. And, of course, the saying is that the virus will drive the economy and, david, i know youve been watching the bank presentations this week, sort of the narrative that maybe reserves dont need to go up incrementally in coming quarters but you cant ignore what citi has done in terms of price action for a variety of reasons this week. You cant and im glad we can hit it now we want to watch the stock given the last two sessions. Now, part of it may have been an update outlook commentary that was when you read the analyst notes ive done a lot of this morning at least they call it modestly disappointing and thats those that are being negative you know, something of an increase in expenses, the mid quarter update at that conference generally in line with, for example, Piper Sandlers things, citi calling it a reboot citi now given control issues they did speak about adding to reserves in order to dbard against potentially a weakening economy but as well, jim, there was this news of potential oversight or more oversight in terms of Operational Risk deficiencies at the bank either way im curious as to what your thoughts r we see that it may be up in the premarket or may even go up when trading begins in 23 minutes, jim, but citi has suffered a significant percentage loss in two sessions. I thought it was very significant and also, by the way, incredibly really surprising given that they had c card tests and came out with flying colors. People thought that citi went through the c car and came out the best so the regulators seem to not know what theyre doing the big charge off rates in credit cards is something to watch for citi, remember they had a very big move in credit cards, but when the controls are weak what it makes it sounds like is wells fargo. Now, is citi wells fargo wells fargo really did so many things that were wrong, but this is not the time to buy the stock of citi, i think if you really want to be in a bank, which i dont think you should be, but if you want, you want to be in one that doesnt have a lot of banking exposure, building Morgan Stanley or Jpmorgan Jamie dimon has urged people to come back, come back, come back and what happened, covid. They got a case of covid on the trading floor. Covid is like cockroaches, man. It is it may have hurt their plan. Im not sure if the bank somehow was was it being penalized for everybody working from home . Did the stock go up when they came back to the office, it should come back down when they are leaving the office maybe it a follow on effect about concerns from citi and whether that will be affected by jpm their credit card portfolios your point is a good one citis performance still not as bad as wells fargo but its watching up, its down 44 over this year, wells is down 53 . Carl, what people are whispering is how are the regulators going to continue to get them away with that dividend now, regulators never talk directly about dividend, but when you remember that wells fargo they were under heavy pressure and i think that it is really unbelievable that a week ago earlier we just saw the retirement of Michael Corbat and this was not included in the release. Now, a close reading of the release some people could say did give a hint to it. A really close reading and you could have seen that theres some great regulatory pressure, at the same time sometimes you just get had guys, i want to end here if we are in terms of our first conversation today on facebook if we can hit that because, you know, people you can forgive people if their eyes are going to glaze over at the latest story about potential antitrust action against facebook. Perhaps that shouldnt be the case this certainly seemed to be one of the foremost topics of concern. The stock is not looking down much but im referring to a wall street journal story that says the ftc is preparing possible antitrust well, a lawsuit against facebook they spent more than a year investigating whether facebook uses its and this is im quoting here its powerful market position to stifle competition as part of course what we know is the broader effort by the antitrust, the doj and ftc split up the big four and are looking at them. Dont ignore this. This is potential enormous news if in fact it happens. No final decision has been made, this is the journal reporting not our own, this is according to people familiar with the Matter Commission doesnt always bring cases even when it makes preparations to do so. Jim, it is possible this is going to happen, the ftc is going to file suit to break up facebook look, i have to tell you that when i think about it i want the stock of instagram, i want the stock of facebook, i want the stock of whats app. This is not necessarily a negative thing for stockholders, but if you are running facebook you dont want to be told here is what the government says you have to do i think that they all fit in better than, say, an alphabet. I havent seen facebook steer anybody. I havent seen facebook make it so that there is just a collapse of competition if anything, lets just put it out there. If you get tiktok here and you get an ipo for tiktok and tiktok is an American Company unlike what the wall street journal says you have another competitor snap is more energized than it used to be we know twitter is better than its been. I personally have seen the wrath of twitter i do think that, carl, the ftc oh, what, sometimes its your time but the ftc may just, i think, be saying something thats later than what the facts are now. Dont forget ftc may not be including how much facebook is doing for Small Businesspeople, which is pretty incredible a lot of people say, including gary vanercheck. He is mr. Corbat e com and hes saying that facebook is the best value for anybody who wants to reach customers. Said it on my show i loved it. A lot of snickers this morning, jim, about this stop pay for profit campaign, but, you know, kardashians got 60 plus million followers, i think more than that on instagram and even though its only for 24 hours do you believe that this describing of sorts by celebrities is an incremental move on top of what we saw from some advertisers like nike we have seen this before. Whats interesting, and i know, david, youve seen this, too, its not like facebook has ever really made the great inroads in the consumer brands. Now, a lot of the companies that use them have actually had very good results these people are all obviously important, but some of them put the hate on somebody sascha byron kobe, thats something new. So long seems to stop Facebook Orlando bloom, right now Orlando Bloom, i havent seen his face or name in ages i dont know whats going on with him is he working anymore . What the heck do i know i just did a program with leonardo dicaprio. Handsome. Handsome . Whats it . Fsh has with stood every single challenge will. The boycotts from advertisers, remember that one . Yes. The top 100 advertisers not a huge part of them. The potential antitrust action things like youre seeing there, criticism from congress, from the president. That said, lets not forget, carl, this is a Republican Administration potentially getting ready to take action against facebook and we have an election coming up one would imagine the democrats would not be any less severe in their approach. Im on it every day and do you know what, i am going i am going to take a minute and not be on it that will show them statement. You made your point. Making a statement. Thats what Orlando Bloom is doing now, carnival row. He was one of the disney characters he was in the pirate movie. Sure. Yeah. Yeah great. Guys, theres a ton of news obviously on gm and boeing and we will get to adobe this morning. On the sale side calls tesla, cat, lenr. 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Sundays were made for football on xfinity. Thats simple, easy, awesome. Add the more sports and entertainment package for nfl redzone. Click, call or visit a store today to learn more. Investors continue to digest the news out of apples Product Launch event the Company Unveiling new watches, ipad, this bundle of services and other offerings as well at least two firms raised their targets today, needham goes to 140, they were at 112. 5, piper goes to 130 from 113, jim. And laura martin of needham does say that the economics of bundling are very powerful, especially for a company like apple. Look, i think that there is a big issue with apple which is every time they do something there are people who say its just incremental, its just incremental. Do you know what, inn kreksincr adds up and that is what apple is doing i got my bill the other day from apple, it feels very much like my cable bill now except for i have to look at it because it drafs me crazy because it is so big. I know you dont add a watch, but i do blood oximeter every day. Yeah. Why do i do it . There is this thing called the pandemic so i measure my blood and its a pain in the butt, i keep the max mow thing with me everywhere i go, now i dont have to. Incrementally i like that. Incrementally do i want the different sports, you know, the kind of like fit bit kind of stuff . Not me, but that doesnt matter. Yeah. Theres something for everybody here. The oximeter conceivably has i mean, is particularly important in the current environment, right, because it can be a sign of the virus you know, people take here is an oddity people take your temperature. Huhuh, its not that, its the blood oximeter thats far more important. Thing of the things i proposed to different people is we ought to have from iff a taste strip slngs we get up. Initially the doctors were split, they said taste wasnt bad. Now we know that taste is probably the single biggest indicator, taste and smell i like anything that makes it so i dont have to have one more device that i schlep around. Carl, i dont think people realize that this apple watch has now become one of the most potent forces and if they could somehow get my Health Care Records on it so that if im not conscious you could just look at it, i know theyre working on that, then i would feel like, do you know what, i have now got the holy grail for health care i think thats where theyre going. Tim cook has always said that he believes his greatest legacy will be health care and it turned out to be on the watch. Youre sure everything is accurate, jim . I mention that because i have been using the watch, appropriate one for my son, its a 3, ive been using it for open water swimming but the actual readouts im getting are not always accurate, my heart rate seems way higher than potentially, my splits on 100s are all over the place, when there is a current its longer even though i go the same amount thats unfortunate and not good that means there could be false positives, you get a blood oximeter at 91 i dont know the answer to that. I do think that anything that makes it seem like that youre doing okay and youre not is no good i have a problem when i swim, which is that the siri doesnt work because somehow the water gets inside of it. I dont know if you had the problem. You turn a little knob. The crown yeah. Yesterday it said i think youre working out and i came back i said, yeah, im working out. There you go, theres the interaction weve been looking for, carl. I dont want to say that the word word siri because ive got it and she went off on the other show i mention she understands spelling shes smarter than my late dog so were you moved at all by spotifys response and their concerns that this bundling might actually have some deleterious antitrust effects . Look, spotify ive been back and forth with them, i know how they feel. Let it go to court i mean, let facebook go to court for that matter. I think that the apple look, i think that the Apple App Store is the greatest thing ever because i never would find these sites otherwise and i do think that, by the way, just to go back to facebook, when you do these antitrust investigations, david, how many times has alphabet been investigated for antitrust . They have been investigated, nobody well, the europeans have certainly been much more aggressive than the u. S. , jim. Yes. This does take place, you have to bring your case and it can be and typically is years, but it doesnt mean to come back to facebook in particular, that if the ftc does decide to do it is not an unimportant moment for that company, it is a very important moment. I think they have to look at small and medium sized business and how its been an explosion for them by the way, on apple watch to circle back, i have the credit card, i like that, always gives me i did some buying on the credit card the other day, gives me whats up ive found health care good but i am disturbed about you said well, it may just be on the fitness thing in particular for that one application i dont want to throw anything out there. It may not be that easy to measure for an open water swim. I think you should thats something that has to be ive had such Great Success with it. Yeah. But maybe, david, you have to wear it on your arm. I do. Maybe you had it in the wrong place. I know where im putting it thank you, though. When we come back adobe getting a lift on those numbers from last night. We will talk to Shantanu Narayen later on on squawk alley. 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. Busy wednesday morning as we respond to fedex and adobe, obviously the fed this afternoon. Snowflake will be a big story today on the ipo front and futures are hanging in there g lls autixbo s minutes. Announcer the opening bell is brought to you by nuveen. A leader in income, alternatives and responsible investing. All right lets get to a mad dash as we count you down two minutes before we get an opening bell. Adobe is certainly going to be a feature today, jim. Adobe was a tour de force, it was one of those things where record traffic to adobe. Com, strengthened creative cloud, strengthened all the clouds. They even awesome strength coming back in small to medium sized businesses but had tremendous growth in the Million Dollar deals we saw particular strength with a number of transactions greater than 1 million in new annual subscription value, which means that that annual rate of revenue, david, the retention had a they have, is really extraordinary. Adobe is how you get on the web and look professional and anyone who has used adobe whats incredible is the annual recurring revenue comes from everybody. Right. Comes from my daughter. I mean, comes from anybody who likes to express themselves. Anyone as shantanu always says who wants to tell a story because we all have stories. Another Conference Call that if you read it you feel better, but then you can say, well, of course, i mean, what are they doing . Theyre doing ecommerce, david. You talked about this name, weve talked about it for years i do want to take a look, can we, at the fiveyear chart it does give you a sense there are plenty of times when it is a better thing to be a longterm investor, hold on for the longterm Value Creation that this man shantanu has been able to put in place as a result of changing the Business Model years ago. What caused this is he went to the cloud and it killed the stock when he did. He is a visionary. One of the great stocks of all time yeah. Thats for sure guys, there is the opening bell, at the nyc this morning it is snowfla snowflake, celebrating what will be the largest ipo of the year, we will talk to the committee after it hopes for trade at the nasdaq also celebrating an ipo its jfrog, provider of Continuous Development release management software. We will talk to both ceos later this morning on squawk alley. Snowflake will be a big talker for us today, the berkshire involvement, the Pricing Power in terms of where they are coming to market, the valuation on revenue pretty much got to look far and wide for something that rich at the open at this scale. There isnt it will be the richest, highest valued ipo we have ever had. Now, frank is putting up numbers that are just amazing, triple digit and the market is struggling, struggling to figure out how to value this, so why not give it theyre saying, listen, if zoom is 50 times sales we have to make this a little bit more. You get stock on the opening and then you buy you get stock in the deal, you buy stock in the opening, get a good bases, but frank has put together a company that makes it so you can have analysis in the cloud like no other. A threat to amazon in that way the other day we saw bob pisani talk about the idea of how do you value a stock or value the market maybe its worth 60 billion and people dont even know what im afraid of, carl, there will be people buying it and they think its weatherrelated robin hood, men in tights, men in sweatpants, men in snow suits. Although, jim, you know, to your point, to your larger point, goldman has a report out this morning saying that investors are looking for something other than the big five. Right. They call them the future five and their list is auto desk, service now, paypal, vertex, intuitive, but this may fall into camps like that, right . Definitely. People will be looking for secondary names where the concentration is not to great as david costen told us yesterday. Costen is on fire you go into any kind of big company and there are all of these analysts trying to annualize all the web data well, frank has come up with something that makes it so that you dont need any of those people you get the web data that you need, slootman is known as the man who took service now from a company that had 100 million in revenues to 1. 2 billion and then he quit why . Because as he told me i like to do these things. I get them to where theyre scale and then move on he has done it here and thats one of the reasons why people love it. Why does sales force love it they love slootman i didnt know that Warren Buffett loves slootman he has been my guest many, many times. This guy is belichick. Hes the belichick of the valley belichick is a winner. It turned out to be not brady, it was belichick guys, a little color just on the ipo itself i mean, jims point, carl you are making the same one this one will be one to watch because im told the book session trord naer. Yes. Jim mentioned salesforce and berkshire as core investors, that certainly doesnt hurt, slootman, everything else, its kind of a perfect storm. Snowflake storm, that like a joke do you like that . I liked that. I tried to tell a joke yesterday it didnt go over, maybe yours will. Maybe yeah, mine was not what yours was. But where this thing opens, jim, i have no idea to your point. I dont know what multiple of revenues its going to be, whether its going to have three numbers or two in terms of the multiple, but its going to be enormous and, again, it is an extraordinary book in terms of orders that are coming in as you might expect for a name that weve been talking about for weeks already. I thought it might eventually go up to 75 to 100, maybe 110. They did the deal at 120 and now you have a company that if they 35 billion, but, david, given the demand on the ipo, i think that it could be substantially more than that triple digit sales. Is there a number which you tell people stay away . I dont want to i know this is going to sound i dont play more than 50 times sales has been where i just say, are you kidding . Right. Because 50 times earnings is expensive. Yeah. But i understand the power of slootman and it may turn out like nvidia where jensen wong, jensen had a vision and the vision came out and its entirely possible that slootmans vision works out and the stock will be cheap on 2023 numbers. Its possible, david, because slootman is that good. Listen, the growth rate is going to be enormous, carl, we are talking, again, just so people understand, Data Analysis that happens rapidly in the cloud, they warehoused your data and they immediately are making connections at enormous speed for mobile gaming companies, you know, they talk about slicing and dicing trillions of interactions by their users learn when to offer advance president s for free, when to ask for in app payments. Even the Investment Business now. For years hedge funds have always tried to get ahold of various databases to try to get a sense for whatever they might be looking at, credit card data was always important and things like that. Jim, im looking at this hedge funds are using the services to connect to other data sources, retail sales, weather reports, i mean, you name it to try to get an edge. You dont think that web services can offer Something Like this . I would think aws is a Huge Customer. Yes, i know. I should say snowflake is a Huge Customer of aws, 1. 2 billion theyre going to spend over five years. Nobody has this product right now, slootman convinced Marc Benioff Marc benioff bought tab low. I thought tab low had aspects of what slootman is giving, but, carl, they sing the spaces of this company as if its mesionic thats how people feel about snowflake. I said that slootman is not a salesman, he is an operator and an operator who never stops. He is a caught in the office guy. He is a cot in the office. Thats what you want. We cant wait to talk to him later onned too. A lot of media news, right now its big ten football announcing that the season will happen. The president tweeting about it as we speak saying it is my great honor to have helped we will see what that means for sports, guys, even as ratings for football have been down year on year. Big piece in the times, david, about tenet and why that is leading some to believe that theaters, at least the distribution of theatrical content has a tougher slog than we might think. Yesterday our boss, Brian Roberts, of course, ceo as well, theres a tweet from the president about big ten football, which, hey, listen, we will take it take what we can get Brian Roberts was talking about strength in broadband, extraordinary and a number of things getting back to sort of a normal level, but not the slate for next year or at least not his expectations in terms of how movies were going to do. By the way, jim, worth mentioning as well, given when you think movies you actually think streaming which there are endless choices now, at T John Stankey talking about introducing a service that is going to be lower priced version of hbo max, its going to be ad supported. Remember peacock, nbcs entrance, is ad supported, there is a higher tier where you dont have to have ads as well but the main part of it is ad supported. Interesting. I look back at my notes from when they introduced hbo max, almost a year ago, not quite, and they had mentioned the possibility at least of avod or was at least part of the conversation then, but they are now talking or he is talking about some content where you want the experience to be commercialfree but others where you can get the light load so that, you know, that is coming as well but, david, i mean, i know that at t is struggling mightily the stock is at 29, comcast up 4 obviously they have theme park besides, but tmobile, david, tmobile, i thought that tmobile once john ledger was done well, the pizzazz would go tmobile is up 50 . Its up 50 roughly for this year and much of that gain has been since the deal obviously closed and even in the face of that enormous sale of stock by softbank of tmobile shares as they continue to monetize so many of their stakes, this week of course it was the arm deal they announced with nvidia mike sievert no let up there as well they added more subscribers than any of the majors, there are three now, of course, verizon, at t and tmo and now they are at 145 billion market value. I keep an eye on at t. Theres still some distance but they are kind of in the ballpark in terms of even size in the market, its worth watching, as, by the way, is dish. I havent talked about it in a little while, guys, but dont forget Charlie Ergen is out there still putting together what is supposed to become at some point a nationwide competitor in the wireless market in 5g it may have a lot more Enterprise Applications than at least initially but the idea is to roll it out to consumers as well that was an important part of why the doj allowed sprint and tmobile to get together in the first place. Well, all i can tell you, carl, is that the football numbers a lot of people said they werent good, the contest between the two october at that gentleman narian quarterbacks, brees and brady. Biggest numbers since 2019 why is that bad . Why is what bad the football numbers. Theyre pretty good. You can still reach people other than tesla, i saw all the ads for cars, tesla doesnt have to advertise because its a Technology Company that sills cars seemed like everybody was back and it does seem like you can still reach people with live sports i think we are covering that its going to be good for business so i dont know. Im not as negative on tv as i was before we had every single station having a playoff game. Im glad you mentioned necessary la, though, down for the first time in five sessions, jim, as reuters has this piece about gm, company memo that they saw in which they will announce a family of ev drive systems and motors as they transition in reuters words to a fully ev lineup and my guess at this point we will look for more clues about just how much gm is going to bring to this contest this inevitable contest between it and tesla. Weve got two price target bumps of course well below where the stock is Credit Suisse at 400 and Deutsche Bank also going up big but not anywhere near where we are where the stock is. Here is what i think matters, battery day. Battery day is coming. Battery day. September 22nd. Battery day. This is not like in philadelphia where they threw batteries at the players, the team. Literally what this is is expectations across the board that elon musk may have as much as a million mile battery to a battery that lasts longer than people realize so you dont have to worry about charging. David, what are you hearing . What am i hearing about a million mile battery about battery day are you going to go to work on battery day . Yes, i am going to work on battery day. You dont have it off no, i have not been given it off. Wow carl, there are people talking about this is im waiting for the email in my inbox. Game changer, game changer, and you are not going to necessarily want to buy gm and sell tesla on september 22nd battery day. Guys, before we end up here and head to bob i did want to hit Eastman Kodak which was the focus not that long ago for me you may recall, the 65 million loan that the company appeared to be getting to helped fortify the supply chain for pharmaceuticals in this country, coming from something called the International Development corporation whose charter had been changed by executive order. I could go on and on here. Why im talk about this now is because remember there seemed to be potentially strange trading in the stock and also some of the Senior Executives were given options right before the announcement special committee employed a law firm, came back with a report, blamed disclosure issues on a junior employee, able to meteor advisory about this loan in a way that made it appear that the information wasnt embargoed, that means you cant report on, it on concerns surrounding the options grant they said there was no intent to manipulate their timing. As for the welltimed gift, kerr George Garfunkel who gave almost 30 million worth of stock in a charitable donation, they said, hey, it doesnt appear to have violated federal securities laws kodak shares are soaring. How would you get that ruling i dont know. I guess they investigated and decided just what i told you im going to investigate doesnt mean they didnt get the loan one of my favorite lines you called this Peter Navarros spac which makes me laugher. I sometimes try to amuse is he going to try to revive his spac i dont know but i can tell you that i can aing gump that is what i call a generous ruling, its a generous ruling thats sui generous generous ruling carl, back to you. Jim, modest gains here as we are trying to hold 3,400 lets get to bob pisani. Good morning, carl. Happy wednesday, everybody three to one advancing the declining stocks, three up days in a row for the s p 500 were trying to break out of this 3,300 to 3,400 range so we are at the top end of where weve been trading in the last five or six sessions see if we can hold that. A defensive tone to the open the major sectors, industrials opened strong but thats because fedex has been really strong show you that in just a Moment Health care, Consumer Staples doing well tech is up but apple is down microsoft has been up or down on either side of positive or negative since the open. Energy fraction alley up, thanks still down, banks doing absolutely nothing as usual. Want to show you fedex here. Fedex is up 65 in year its essentially taken off since the last Earnings Report the last Earnings Report was the end of june and has been straight up here year to date for fedex since that last report the end of june up again today and up for a simple reason, theres a simple way to understand this and thats what you want to do is look at the ground part of their business thats the ecommerce part of the business fedex ground Revenue Growth 36 here thats not a typo. Express up 8 , freight down. That ground, thats the ecommerce business which is exploding and doing really well and the numbers were even better than anybody anticipated and thats the key to understanding fedex and most of these the growth in some of these names that are out there in the transport space. Ten years ago i think it was mark andreese nsaid famously software is eating the world hes absolutely right its becoming more true if anything were getting four ipos this week that are software and this is now the biggest year ever for Software Ipos, so far to date including the four this week 7. 8 billion has been raised in ipos, this is Software Ipos, 5 billion was what we had in 2018 that was the biggest year ever for Software Ipos. You can see were passing that and we havent even had some of the big ones coming, palantir is coming, osan na is coming, im ex plugd that from these estimates here you might say why are they all coming now they all fill certain niches that are important, snowflake does data management, a pure play on cloud computing, i think thats why theres so much enthusiasm about it. Jfrog does Software Tools for Software Updating essentially and unity does 3d video game development. Half of the top online games use them sumo logic does Data Analysis, study how customers interact with the companys website and asana does project management. These are all filling various niches that are important. The enthusiasm level is it worth the effort worth the prices snowflake has been upgraded essentially in the price three times in the last week so 28 million shares at 120 but a week ago we were talking about 75 to 85, then he upped it to 100 to 110 over the weekend. We just got an upgrade hypothetical for unity software, this he do 3d games they are at 44 to 48 yesterday they were at 34 to 42. So you get the idea here, guys, the world is dying for software and these companies are providing it guys, back to you. All right bob, thanks a lot. A lot to look forward to this afternoon with the fed statement and the presser. Lets get to Rick Santelli hey, rick. Hi, carl. You know, it was a big deal yesterday when china had their first positive read on retail sales for 2020 now, the u. S. Has had four, today was the fourth, but it was still a bit of a disappointment up 0. 6, wasnt nearly as strong as what we were looking for, about halfstrength but also remember its the advance which means if it was a puzzle we are missing quite a few pieces, we will if i will it in for the next couple weeks and see if it changes when its released in its final form look at the intraday of tens, you can clearly see the disappointment in the way Interest Rates fell after that number was released, this he all all over the world, a high correlation with u. S. Data and all the sovereigns and bunds actually went minus 50 for a while. If you look at this chart from late july you can see how rare its been to be closing under minus 50 basis points so we want to pay very close attention to that level when it comes to foreign exchange, especially as we go into the second day of the fed meeting as carl pointed out, were obviously going to be in a highly stimulative lower for longer at least if the fed has their druthers on Interest Rates. That isnt dollar friendly and the euro has been very strong of late but is starting to give up ground, whether its against the chinese currency or the yen as you see in this end of july euro versus yen, yen is at a 1. 5 year low against the yen. The chinese yuan right now its currentlysitting at nearly 17month lows. Carl, jim, david, back to you. Rick, we will see a lot of you today. Still to come white house chief of staff meadows on the stimulus talks and this new proposal from the house Problem Solvers Caucus dont go anywhere. The chinese yuan right now its dont go anywhere. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Every curve, every innovation, every feeling. A product of mastery. Lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. Experience amazing 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. Welcome back we want a discussion about the tiktok deal were waiting on potential approval we dont know the details. The well street journal reporting byte dance says theyre keeping a majority stake in tiktok and oracle would buy potentially something. Its in many ways a web hosting deal the data would stay in oracles cloud. But this is fascinating for so many reasons the key one being that all along at least i was under the understanding that the administration wanted the company itself to be sold to a u. S. Entity and now youre going to have the chinese still controlling it and if youre kevin mayor who resigned because he didnt think you were going to get a chance to run global tiktok and move the Head Quarters to the u. S. And its moving exactly as you hoped it would, and you brought oracle to the table, you must be saying what did i do im not sure you can call what the journal said to be totally accurate the key element is what you said theyre going to do an ipo within 12 months the eligible shareholders will make it so a majority of the shares will be owned by nonchinese once you do the ipo. S the its a Global Distribution the majority of the board is u. S. Passport holders. The Head Quarters in the u. S im calling the wall street journal article suboptimal. Mayor must be kicking himself. It was the deal they originally planned it was. Isnt that something yeah. Carl . Wow must hurt guys, 3410 as we await the fed waiting game dont go anywhere. When you see or hear of others confronted with hate, there are many positive actions you can take. Volunteer, call friends, or host a Community Meeting to denounce the hate and talk about the shared values you do have. Adobe going negative on the heels of earnings last night look at the laggards well talk later this morning about the quarter. And about the stocks arnely 50 appreciation so far this year. Back in a moment when the world gets complicated, 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. Good morning, mr. Sun. Good morning, blair. [ chuckles ] whoo. Im gonna grow big and strong. Yes, you are. Im gonna get this place all clean. 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. And im gonna eh, eh, eh. Tmobiles new offer on iphone 11 pro is even better on our most powerful signal. Switch and get two new lines of unlimited for only 90 and 2 iphone 11 pros on us. Only at tmobile. Lets get to jim and stop trading. People luke about nikola and justice. Justice not going to tell me what theyre investigating but i know apparently theyre interested in more than just within truck reveal. Theyre interested in a lot of what the company put out as looking like a truck that was going a little fast that was actually just going down a hill. The Justice Department doesnt seem to like that set of facts i cant imagine why. Not so good, carl. Stocks still above levels a couple days ago. They need to raise money. Thehydrogen stuff. The savings of hydrogen, i deal with companies, i cant find anybody who says they can get it that cheap im looking. But nikola is excited. I know its captured a crowd, and they should recognize not everybody in the government is that thrilled with what nikola has done in previous years yeah. You never want the Justice Department the Justice Department investigating you, bad bad. Not investigating you, good. Investigating you bad. Tonight i have box, and then i have campbells soup i dont know, really hitting smucker. I think blouse did a good job. And a breakout quarter for aaron. And adobe being down, isnt that something . And beyond meat is up. Im told i get my meat balls today. Jim, well see you at 6 00. Mad money at 6 00 p. M. Eastern time welcome to squawk on the street. Business inventories, lets get to santelli this morning hey, rick. We need to get to the people who put out business inventor s inventories. Here it comes in celebration up. 1 this is the first positive read on business inventories for all of 2020. Last time it was above zero was december of last year when it was also up 110. We dont see any revisions sometimes revisions are slow but while were waiting, were going to aim east and go to diana for National Association of Home Builders Housing Market index. Diana . Well, rick, home Builder Sentiment set another record high in september. Increasing five points to 83 according to nahb wells fargo index. Thats the highest in the 35year history which matched a record high last month anything above 50 is positive. All three of the indexs components hit record highs. Current Sales Conditions rose to 48 sales expectations in the next six months increased to 84 and buyer traffic rose to 73 builders are facing a hurdle, fastrising prices for lumber. Lumber prices have jumped more than 170 since mid april adding more than 16,000 to the price of a typical new Single Family home that according to nahb and warehouser, the largest lumber producer, the company said yesterday that several of the fires have reached the companys t timber lands but its too soon to see the potential Business Impact its a huge story in housing right now. Thank you. Other big story this morning is about the ipo market biggest ipo of the year and the Biggest Software ipo ever, snow flake. Onford is here to kick you have a discussion about that. Carl, yeah. Really it is remarkable. Snow flake is a company thats making an argument that its got a new way of helping to manage data for collaboration, for analysis in the cloud. A whole new way of looking at data and securely allowing companies to collaborate with their partners on it its remarkable. Almost exactly a year ago carl, you remember, we had frank slueten on they were coming off a 3 . 9 million valuation. If they hold at this ipo price, theyre close to ten times that. Theyll come in bigger than hp and Palo Alto Networks this company is very much of the moment big data, cloud, analytics, the idea that Companies Need flexibility because they dont know where theyre going to be serving customers. They dont know where their employees are going to be. This is the type of technology that allows that, and recently when we talked about how all of that story of snowflake is very much coming together take a listen. Were a Cloud Company weve been preaching to the choir for the last decade on this and when a crisis like this happened, it becomes more obvious to those who have sort of lagged in the transformation. So if cloud was hot before, its going to be red hot once we get through this so for a lot of industries, this is really great in the world of tech for a sense of the scale, guys, del bought emc four years ago. They closed on that for just twice the valuation. 67 billion. Twice the valuation that snowflake would be coming at today. Weve seen so many Cloud Software names come to market with Great Success to what degree is the berkshire blessing setting this one apart . I think maybe for traditional wall street that means something. Frankly, berkshire, Warren Buffett, in particular, they dont have the best track record in picking horses in Enterprise Technology i dont know for the Technology Investor it means that much, but it does perhaps represent the new blood at berkshire, their willingness to look at the enterprise at large and say maybe we missed the boat a bit on amazon and others getting in on those early maybe snowflake based on how big the vision and possibility is, maybe its okay to go ahead and get on this horse early. John, you know, listen, from a perspective of just what the ipo is going to look like, we all know its going to be up a lot, at least it would appear thats going to be the case based on the book, based on what we saw youve been talking about berkshire and sales force as core investors there i dont know you know, what would you compare this to . Is there something you can remember either in the same sector or that has had the same amount of enthusiasm around it thats hard, david. Its a good question theres a ton of excitement around enterprise names. We get excited automatically as perhaps the press or maybe retail investors, products you can get your hands on, that you used, at airbnbs, but i said weeks ago, i think snowflake is the one to watch when it comes out. I think youve really got to compare this to even efforts inside companies that have been bubbling up over a long period of time to aws, so accident occur a azure if youre getting technical, you have to see where the value is in the cloud story is it infrastructure or software enablers that are built on top of the infrastructure . Theres going to be a battle for that and names like snowflake will be important fighters in 2020 theres been so much made of the idea that the ipo process needs to be redone people are doing spacs and direct listings. Unity is looking at some sort of a bidding process to come up with price discovery, and then here snowflake doing a traditional ipo, and one that appears to be quite successful, raising over 3 billion in primary capital in addition to another billion dollars through private placements with sales force and then another secondary from berkshire at hathaway how do you think snowflake has been successful with the traditional method while others are pursuing traditional routes . What has wall street saying we want this for this company i think theyve been careful. I think the story has something that a lot of different people want frank, this is the Third Company hes taken public as a ceo and by the way, the valuation is 33. 3 billion. 333. Thats a lot of threes interesting. But i think he could have done whatever he wanted when he came on earlier, in terms of the way of coming to the public markets, when weve interviewed him earlier, i asked him specifically if he would look at some of the other methods. Certainly with the track record, clearly with the relationships he was able to line up to participate in this, he could have done a direct listing ill be interested to hear his perspective on why he chose to go the way he did. Even if this pops at the open, its hard to argue they left a lot of money on the table given the valuation. When it comes to direct listing, well be focussed soon on pallatire and then theres the spac craze which continues yesterday there was a road show for the squawk gang for the new deal it was an open door. And theyre already filing, leslie, i dont know if you saw it, to raise another half billion for the new spac thats the benefit of being public one thing said yesterday that i find interesting is the idea that investors are really looking for alternatives from faang in order to generate the outperformance and i think that could be also part of the reason why youre seeing so much demand for the Software Ipos this week. Its because investors see this as a way to generate alpha before they have to show their end of the year returns. Three more months. People are expecting volatility around the election. Ipos historically growth ipos are able to generate alpha for the funds and with so much concentration in five names. Weve talked about it so much here in the s p. People are looking for new growth names in order to achieve in a with snowflake, you get almost three times top line growth on a trailing basis thats technically fiscal year 2020 numbers you know, triple the top line despite the losses investors are pretty much ignoring those people are saying okay, growth at scale is something that you just really dont find in the market you know, at least from this size and scale that you see with snow flake yeah. And i should make it clear, that was a report of them looking to raise another half a billion they havent actually filed it and that social capital. Lets move on now. Eli lilly with positive data on antibody treatment meg has that news. These are the first results on a drug designed specifically to treat covid19. An antibody that was isolated from one of the first patients in the u. S. To recover from the disease. Heres a look at how they tested the drug these are interim results from a phase 2 trial that included about 450 patients mild to moderate disease they were not hospitalized and they were given the drug by i. V. Infusion within three days of getting symptoms. Now, the results suggest that the drug helps reduce the amount of virus that people have earlier than if they were just left to recover on their own the results also suggest the drug may prevent severe disease and hospitalization, particularly in higher risk groups which in the trial was defined by age and bmi there are some caveats we should point out to the trial it only met the main goal of the study with one dose. The main goal was reduction in viral load after 11 days and most people with mild to moderate disease do get better just by themselves you saw that in the placebo group. It was only a small number of patients hospitalized in the study. Only 14. Its difficult to draw strong conclusion from the data and the full data arent yet published we dont have the whole study. Nonetheless, i talked with the chief scientific officer this morning who said this is a glimmer of hope. Heres what he said. This is really exciting proof of concept data sho that shows for the first time that a drug that lowers viral load in patients with recently diagnosed covid19, that mechanism can also help in symptoms, and it could also help prevent hospitalizations its exciting to see this early data it gives us great hope that neutralizing antibodies will be an important part of the fight against covid19 theyre continuing to test the drug by itself and in combination with another antibody and theyre going to talk with regulators about next steps including potentially filing for an emergency use authorization if regulators suggest thats the right way to go. Back over to you how is this administered . And i mentioned that also, i like to make the distinction between this and the small molecule antivirals that were also keeping an eye on as well which would be in pill form how would this be administered yeah. So this is an i. V. Administration we talked about that with dan from lily. These are mild to moderate patients that are not very sick and not in the suspect they need to get this drug within three days of their symptom onset. They would have to get an infusion of it it takes about an hour its not as simple as having a doctor prescribe you a pill. You pick it up from your pharmacy and go home and take it its more complicated than that. Youre right, its not that holy grail of a pill for covid yet well wait for the holy grail. Thank you for bringing that. The ftc reportedly preparing annttrussu ait it against facebook what that means for the social media giant next stay restless with the icon that does the same. The rx, crafted by lexus. Lease the 2020 rx 350 for 409 a month for 36 months. Experience amazing at your lexus dealer. If i could, baby id e how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with xfinity mobile. Apple announcing new watches and ipads but the company launching the new Service Fitness plus following the surge in stayathome lifestyle. Lets bring in our guests today. Thank you both for joining us. I want to start with wamzi youre most excited about fitness. Pel ton didnt make a billion dollars last year. They sell hardware with the bikes and the treadmills where do you see the opportunity for apple here and do you see it taking share from some of the other Legacy Fitness providers out there . Good morning. The opportunity is within the install base of apple watchers you think about the potential users, install base in globally, there could be close to 100 million users. You think about the penetration of the users incorporating families and penetration rate within the aggregate install base and apply the annual subscription numbers, you can get between a billion to two billions reason the range of apple, this is very possible thats a bull case scenario. At the same time, are they going to take share in theyre going to take share from a lot of fitness apps there are a lot of apps today that people pay for within the app store where people are using it more tracking various things, for training for marathons and a host of activities there is free feature functionality and also a whole lot of things that people pay for for fitness. And this makes it easy for a family to enjoy something at a very attractive price point. How much of this is kind of opportunistic sign of the times and does it have staying power beyond the pandemic . They announced their blood oxygen monitoring through the apple watch. They have a Digital Content offering assuming things eventually go back to normal, with will these things be as much in demand as they may be right now . Its a very good question i dont think its in the air and related to the pandemic. Concern that nobody and being able to track it and create an environment in which you cannot control some things, its good i think it was a way before the pandemic and the pandemic is just stressing it out and making it more visible id like to take a step back and say everything apple is doing today is very thorough, there are two things that were interesting in yesterdays announcement the first thing is the subscription and apple one so were trying to move tag away from hardware and into subscriptions. Another one is the fact that policing a low sb watch, like a cheaper watch for the low end of the market, and the conditioning of the hardware. Of the higher end watch, and you see the same thing on the ipad they are expending the diffusers with lower price points and taking benefit from all the consumers, we still have very good power, and you can spend more money on iphone, on apple hardware, and that strategy is probably the right one, but the thing i really stress, this is going to cause the margins as you do that the hardware in the higher end model and the higher end price, and youve been waiting for the gross margin with the marginalized pricing. Hearing you talk constructively about the announcement yesterday makes me wonder how that fits with some of the concerns that youve telegraphed clearly in the past few weeks. Do you see yourself changing your rating again . Hey, carl look, i mean, our concerns of being around gross margin. Look at apple not including chargers right . So its just a sign that there is a lot of cost pressure. Those concerns remain. They will remain for the iphone. If they continue down this path, of sort of pricing higher for products, i think it does create demand risk in this environment. Other than that, its also interesting to note that if you look at sort of the gross margin profile, and compare sort of where they price the s. E the s. E. Watch was not the cheapest watch they offer today which is different from the phone. I would argue this is mid range pricing and not quite as attractive, given the feature functionality, youre going to get your full detection for 110 more relative to 169 price point for an apple watch series three you can get on amazon today. All right . So its not the cheapest model theyre not putting in a charger. It shows you the initial signs of gross margin pressure they need to overcome gross profit dollars, they move the demand curve better. Currency is moving in their favor. It doesnt change the overall concern the risk reward at these levels are balanced. I hear you with regard to Gross Margins but is now the time for apple to be super aggressive when it comes to pricing, especially given the uncertainty surrounding the economy, consumer spending, still to deal in washington. Are they taking more of a prudent approach by maybe being moderate with their pricing . I think this is the time for them to sort of use their Balance Sheet to allow for subscription base or installment pricing. That is where theyre going to be able to try to move the demand curve in their favor. Now, that said, all the points that you noted are head winds for the company to overcome. So in this particular environment, i think its going to be challenging to raise pricing and keep Gross Margins flat thats one of our main concerns in looking at the stock going into this cycle is that there could be gross margin pressure on the hardware side thats difficult to work on if they pull it off on the Services Side and theyre able to strike a balance in terms of keeping the gag aggregate gross margin flat, good for them but youre seeing the signs of pressure creeping in in the way theyre introducing products well get insight into that on the hardware side when they announce direction to the iphone what is your expectation on that front . What do you think the market needs to see on the iphone 12 front, especially after all the product announcements yesterday . On the iphone 12, what i learned, one of my conclusions from yesterdays event is the pricing is going to be similar introducing a iphone 12 at a similar price to the iphone 11, theyre aggressive on pricing. We learn from 5g, iphone 12, the 5 additional price, i think all that, you subsidize it i think iphone 12 pro, i think 100 the same way the watch yesterday is at the highend watch was better priced. And also the ipad air. And the reason for that is that might be likely a consumer demand that what we learned over the summer is that in todays situation, consumer demand has on one hand you need lowend products, lowpriced products to help the lower end of the market. But in the higher end of the market, they buy expensive products, and these are the affluent consumers i was referring to that stay at home and travel less and the earning power has not been affected yesterday. Not affected their job yeah. It will be certainly interesting to see thank you both for joining us today. Im sure well have you back on soon with additional announcements this year. Thank you thank you thanks for having me. Getting some indications on snowflake by the way between 155 and 160. Well watch it closely other big stories the ftc reportedly preparing a lawsuit against facebook well turn to julia on that. Well, carl, the ftc which has been working on the investigation into facebook since last june has been saying it wants to wrap it up by yearend now the wall street journal is reporting the ftc is gearing up to possibly file an antitrust lawsuit after investigating concerns facebook has been using the position to stifle competition. Examining the acquisitions of potential competitors. We received no feedback from facebook on the report this raises the question what is next for the investigation a majority of the five member ftc commission would have to vote in favor of a suit, and then the question is what remedies the ftc would seek in they could range from demanding breaking off a piece of the company to a fine to placing restrictions on facebooks operations now, to mandate any changes the ftc would have to prove that facebook violated ainntitrust law. Zuckerberg was interviewed about a month ago on this topic by the ftc after a congressional hearing where facebook defended against antitrust concerns. Zuckerberg was joined by google. The doj is reportedly preparing an antitrust lawsuit against google as well the house antitrust Sub Committee is expected to release the findings on big techs potentially anticompetitive behavior certainly a lot to watch here. And the culmination of many months of work by the ftc. Julia, thank you. Now for our etf spotlight. The ticker iyt extending the gaining for the year and currently trading about 1. 1 right now. The Group Getting a boost from its largest holding, fedex, the company out with better than expected Quarterly Results profits jumping 60 helped by a surge in daily package volume. The stock trading at a twoyear high, up 6. 6 right now were going to take quk eak. A ic stay with us welcome back, everybody. Heres your cnbc news update at this hour. The eye of sally hit land this morning near Gulf Shores Alabama as a category 2 hurricane. With maximum sustained winds of about 105 miles per hour, the slowmoving storm is bringing a lot of rain and flooding along the North Central gulf coast newly aavailable Rapid Response testing the big 10 schools have decided to play football this fall reversing their decision last month to delay the decision until spring. Players parents and President Trump have been critical of waiting. In new mexico a wildlife mystery. Head birds being found around the state. Its not known exactly how many are dying but it could be in the hundreds of thousands. Scientists are trying to figure out whats killing them. You are up to date thats the news update carl, back to you. All right. Sue, thank you very much were keeping our eyes on snowflake pricing at 120 were getting indications between 160, 165 of course, well talk to the ceo after the opening trade. Later on mark meadows on the ongoing stimulus talks squawk on the street is back in a moment. Dow is up 100. 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. Lets get become to the market were higher on the s p by about. 2 were awaiting the feds post meeting statement and chair powells News Conference this afternoon. With us al an blinder. Any expectations about what will be talked about today in terms of what would be different i think the verbiage and the statement has to change in view of their announcement of the change in their basic strategic framework. These changes shouldnt induce any market reaction. The markets already expecting Interest Rates are on the floor for years. And thats basically what the fed is going to say but in a different way. I think they probably spent a lot of time word smithing this statement, and they wont be unhappy if the market gives no reaction allen, we talk a lot on the network of late for obvious reasons about the sense theres almost two economies theres the lets call it the amazon led economy or digital led economy that seems to be very strong, or is very strong, and then theres the local restaurant on the corner economy that is not strong at all. What can powell talk about or what can the fed do to try to contain that sadly not a lot, other than the obvious which is to try to give the economy a boost when its needed. Unfortunately on that score, its given almost as much boost as it can. Maybe theres a little bit more than that it can do, but not less thats why you hear it from chairman powell, we used to hear years ago from chairman berna e bernanke, please, fiscal policy, wont you help us . Hell probably repeat that not in the statement but in the q and a. The only other thing is there was a main Street Lending facility which has barely gotten off the ground, but thats not aimed at a local corner restaurant they call it for Small Businesses, but these Small Businesses may have hundreds or thousands of employees its not your local restaurant yeah. Well, all right. It gets us to fiscal policy. Mark meadows, the chief of staff is going to join us shortly. What would you say to him in terms of weathhether we need mo stimulus, more relief and whether we need it fast . I would say that its obvious that we need more relief more than stimulus at this stage, but you can call it what you will. We need more a lot of it has disappeared. You can pat them on the back for the cares act, although that didnt come mostly out of the administration that was a very good thing most of that money is gone now we need more, and the thing i would press him on, if i had him in front of me as you will, is aid to state and local governments. Where are the firefighters whether the teachers and police paid on and on and on by state and local governments, not by the federal government. Theyre being crushed by greater expenses and of tremendous fallout in Sales Revenue and yet the administration, the republicans in congress have been stubborn about not giving relief to the states. This is the last fomc meeting before the election. Theres been commentary with regard to investors in the markets about the potential for volatility surrounding uncertainty with the election, delayed results and so forth people are starting to position for now. Does the fed have any recourse here to help maybe calm some of this concern surrounding electoral volatility well, its a good question. I think first, they have to be reactive rather than proactive we cant have chairman powell go out there he wont and say im worried about instability after the election and therefore, were doing x, y, and z. If, in fact, we have financial instability, frankly im more worried about political instability, but the fed cant do anything about that if we have financial instability in the post election period, the fed is going to step in as the fireman as they have in the past, and douse the flames as best they can wherever they are. If theyre in the stock market, the bond market, credit markets, banks. We may not have any of that, but they will be at the ready. Theyre not naive. They know were in for a potentially rough period after the election, and there may or may not be things that the fed needs to do on the financial front. But thats sort of the limit of their ability. Bill dudley came out a few weeks ago and said some of the fire at the fed is attenuating just the fact that theyre experiencing laws of diminishing returns as they embarked on so much stimulus over the last decade or so do you agree with that do you think that especially if we see a continuation of this pandemic and its economic fallout, with a second wave, a delayed vaccine and so forth, do you think the fed is going to be have i guess more of their hands tied with regard to having a meaningful impact and propping up the economy . I do agree with dudley in the sense he meant it, that the fed has sort of pulled out the stops already. What i was talking about a moment ago is if no brush fires start showing up in the Financial System that arent there today, so theres no fire to douse, but if there are more brush fires and there is a fire to douse, the fed will run then the fed will be able to do something that its not doing now. It doesnt have to do now, and i dont doubt that it will do it, but on the broad picture, which is what dudley was talking about, giving the economy more umph, giving aggregate demand a boost, theres not very much left that the fed can do finally, allen, on this Fiscal Relief question, do you think chair powell will pointed in his comments . Perhaps more outspoken than he has in the past about needing more help from the federal government i dont know about more hes been fairly direct. You have to remember what the fed used to be they would say nothing and say it cryptically hes been fairly up front about goading the congress and the administration to do more. I dont know that hell be stronger on that than hes been in the past. Its been a pretty clear mess e message, and hell probably repeat it. Well, well watch closely always appreciate you taking time for us to know what to focus on thank you. Youre welcome. Watching some of these indications on snowflake, biggest ipo of the year. Now looking at 175 to 180 as we are awaiting the first trade the ceo will join us first on cnbc next hour on squawk alley after the opening trade. In the meantime, nasdaq has gone red as apple adobe by and other are red as well. We have aunts. Youre slouching again, ted. Expired, expired. Expired. Thanks, aunt bonnie. Its a lot of house. I hope you can keep it clean. At least geico makes bundling our home and Car Insurance easy. Which helps us save a lot of money oh, teddy. Did you get my friend request . Uh, ill have to check. doorbell ringing aunt jonis here for bundling made easy, go to geico. Com. Hello . 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. You know your kid doesnt step around puddles. And this town said not today. 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That is at the heart of the problems at boeing according to this committee boeings response to the report, as this report recognizes, we have made fundamental changes to the company as a result and continue to look for ways to improve. Change is always heard and requires daily commitment but we as a company are dedicated to doing the work they also took a number of shots at the faa in particular for not sharing as much information as the committee would like faa administrator testified in front of the committee he said we learned lessons from the review of what went wrong with the 737 max dont forget, Steve Dickson will pilot the 737 max with the new software system. That will happen sometime over the next couple months it sets up whats the future for the 7 37 max look for an ungrounding in the Fourth Quarter they have more hurdlings to clear. It will likelyhappen late november, early december limited givelies by the end of the year and revenue flights with the airlines. Once the Pilot Training takes place, it will happen early next year look at shares of boeing back to march 13th of last year. Look how much the stock has moved lower and stayed lower the reason its higher today, theres nothing in this report that is a bomb shell that hasnt already been reported collectively, its incredibly damming, but theres no new wow, i hadnt heard that before within this report dont forget, boeing has lost more than 1,000 orders or having maxes that were scheduled to be delivered, having them taken off the books. Theres a price boeing has paid. Perhaps the market expected it to be damming thank you. After the break an exclusive with mark meadows. rba itwo. President trump last night said hes optimistic about another round of stimulus, but jpmorgan sounded maybe a bit less optimistic at the 2020 virtual singapore summit yesterday. Take a listen. The governments of the world took dramatic, bold rapid action, fiscal, monetary the vaccine companies, i think thats admirable were going to be finger pointing and yelling and screaming for years about the parts that didnt go well. It is a little disappointing we havent come together in the United States with another round here i think we do need the round joining us exclusively this morning is the white house chief of staff mark chie of staff mark meadows. Good to have you welcome back. Its great to be back with you. Thanks so much so yesterday Speaker Pelosi was on our air and said the house would stay in session until a compromised was reached. Jared kushner said a deal might not come until after te election has this problem solvers proposal moved the needle in either direction well, i think it has. I think its a thoughtful suggestion when ever you have republicans and democrats coming together to put forth a compromise, i was read into that over the last several days in terms of what might be coming and then obviously saw the details of their plan yesterday and not only am i encouraged, but i think the president himself is encouraged. I spoke to him just a few minutes ago. And if thats really a serious thought for consideration i think that at least it provides a foundation for us to come back to the table and start to talk about where maybe we disagree on a couple of priorities but at 1. 5 trillion its certainly higher than the number we had, but its not a show stopper at this point. Just want to applaud the work of the Problem Solvers Caucus of staying engaged. If the speaker is serious about staying in until we get a deal, lets start the negotiations back and hopefully help those people that are hurting the most during this pandemic yeah. Lets talk about priorities, which you mentioned state and local aid at 500 billion kind of splits 195 from the white house, 915 from the house is state and local aid the number one priority . Or is it more about industry aid, direct checks or Something Else well, i think the number one priority for the president has been more the direct stimulus and help to those that are hurting, whether its either direct checks or expanded ppe program that helps Small Businesses making sure enhanced unemployment is there for those who are still without a job. Those are the Top Priorities but when we look at state and local, that has been a major stumbling block for us still at 500 billion i would say that that is more than what were seeing in terms of lost revenues im not saying that they may have to look at their proposed budgets. But if were talking about trying to replace some of the lost revenues, hopefully that number is closer to the 250 to 300 billion range but again, if were theyre negotiating between those guardrails that the Problem Solvers Caucus put forth, at least it gives us something to talk about and im encouraged. Specifically new money for documented state general revenue short falls, i believe it was 250 billion. Now, thats of the 500 billion in total for state and local aid. So, again, i guess just to get even more specific is that 250 billion for those revenue shortfalls something you think is commensurate with sort of where you might be . Well, we looked at the revenue shortfalls and estimated both state and local to be around 250 to 275 billion. As you recall in the previous cares act we put forth 150 billion of which there are still over 100 billion of that waiting to be deployed and so, as we look at a combination of those, certainly im going to leave it up to the senators and the house members to find that sweet spot, but i can tell you the president has been very clear if were looking at real needs and real lost revenue, hes willing to consider it. What hes not willing to consider is really a bailout of Pension Funds and poorlyrun budgets across states that theyre using this pandemic as a way to supplement that so as long as its something that is real and that it is part of what this economy caused when it was shut down artificially, then were certainly willing to look at it. Mr. Meadows, its funny listening to you we had obviously Speaker Pelosi. We had treasury secretary mnuchin and mcconnell and you. On and on. This is more optistic i can remember somebody being in terms of getting to a deal in at least a couple months, would you agree . Im probably more optimistic about the potential for a deal in the last 72 hours than i have been in the last 72 days and its really a key and clarifying point that you put forth that i think is accurate that if were actually willing to engage what keeps us a part is smaller than perhaps what the headlines have been. So much has been focussed on a 2. 2 or 2. 4 trillion number and a 1. 3 trillion number this proposal actually gives us some real specifics to talk about and the other thing if the speaker is willing to stay in, im willing to stay in the secretary is willing to stay in and ultimately the president has encouraged us that if theyre really wanting a deal that hes willing to make a deal finally, mark, i wonder, retail sales came in this morning for august it was a little bit lighter than we thought, but it was up four months in a row. And thats, of course, including a period where those enhanced benefits had expired theres still a school of thought that says this is not necessary, households have built up a lot of savings. Is there any reason to think the white house would argue this is the last deal if were going to get a deal, this is it . Well, i think what we have is some very encouraging numbers both economically and really as we start to look you just mentioned a number of those indicators that our economists and certainly secretary mnuchin are tracking very closely at the same time, i dont think that there is any belief that were totally out of some of the concerns on Small Businesses, the airlines and others that would allow us to look the other way. So, if theres going to be a deal that actually helps us make a soft landing, i think that deal has to happen in the next week to ten days and if we get that deal, then hopefully it is targeted towards those that are still struggling or have the potential to struggle in this latter part of the third and Fourth Quarters. Mark meadows, white house chief of staff, mark, thanks so much nice to hear you encouraged at least about the developments of the past couple of days. Thanks meantime, dow is up 119, s p back to 3409 trying to get the nasdaq out of the red. Couple big interviews still to come this morning on squawk alle alley. Snow flake ceo as the indications continue to rise, 190 to 195 after pricing at 120. Back in a couple of minutes. Introducing stocks by the slice from fidelity. Now you can trade stocks and etfs shantd knew nar yen. For any amount you choose instead of buying by the share. Shant knew nar yen. Shant knew nar yan. From fidelity. The slie get your slice today. 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