Transcripts For CNBC Squawk Box 20240712

It is a blue shirt. It is because they dont know how to do the lighting because it is darker outside now. Ive got the blue and it shows up every day here in the bunker im envious i want blue but im unable to perform. Sad. Lets show everybody what we are seeing for the end of the week here. We have a bit of a mixed picture. The dow looks like it would open down the nasdaq looking to open higher as well the first down day and on pace to snap the first twoweek streak amazon closing down 2 and a quarter of a percent a little bit of a rough ride there. This next story will keep on giving i hope it stops reading. The more i read about it, both sides are locked into things the other side wont agree to one comment about the tech wreck. I know, i know the house is not burning isnt going to do anything for anyone. This will unralravel completely it is nutso on the upside. It seems like it is less accepted moving up then down 7 it is like oh, my god, will the sun come up tomorrow President Trump, dont you agree . 100 . President trump is expected to decide on tiktoks fate thats the question. Will he decide on something that is miles away from what they require. Hell sign off on something we expect sources say bytedance are planning an ipo of global tiktok oracle would take a stake less than 20 sources say walmart will also take a stake we are not talking about the algorithms or any other intellectu intellectual property transfer or any of that stuff that is crucial. Those banks they filled in, i dont think they filled it, did they some fill in. The whole idea is that theyll put everything on u. S. Servers and oracle will be able to, quote, see the code. The question is whether that is going to be good enough . I dont know the answer. Lawmakers expected to unveil the bipartisan deal. Well get an update later in the show about where things stand. News from Goldman Sachs finding two employees who tested positive the two work on different floors and they believe the exposure came from cases outside. And jp morgan also confirmed they have an employee with the virus. As many firms are preparing to bring more workers back to the office well have more on this story at the 8 00 hour. Then youve got the New York School situation thats been delayed now another week that, i think, is more a situation with teachers. They are saying we need to bring people back to the office. Then you have these cases and they are isolated and it races questions. I believe goldman so much has some kind of testing good news on one end those are the biggest banks that can afford to do the same thing with testing not everybody can afford to do that well have dr. Scott on his point is, you know, once again about the schools that we are opening some restaurants that are in doors. Somehow the guidelines are there to do that did de blasio, they feel comfore with that. We want restaurants open to go and buy. That can come later. What seemed to be down low in a list of priorities 100 we think at this point, weve had randy on the show. He runs the Teachers Union in america. In new york in terms of whynew york city will push the time line back. I believe the unions want more p everyo pe and other materials there are not testing protocols and things youd want. The questions then are the restaurants doing the same i dont know you could see worst kaesong ca Case Scenario happens. I worry about my kids. It is the scariest thing in the world when kids get sick the real worry is when the 50plus teachers get it from the kid. A feelgood story for me my beloved draft kings looking here and i was like, i kind of like this. Then it said, you cant do this. You cant do this. It knows all the time. I have to wait to get through the tunnel because of the gps on your phone. Gaming is higher. Hiking the price target to 85 citing the momentum on mad money last night talking about the rise in legal sports gambling in the United States. You really had to go out of your way in the past to place a bet whether illegally with a book maker, offshore, which you are at risk of your credit card getting stolen the idea that someone casual can do it legally will lead to a bigger market. Stocks leading up andrew, im no spring chicken. I never had a bookie in my life, never made a bet in sports thats what hes talking about i dont know what the market potential is there is a lot of people, i knew guys i would watch them and think, you got a problem. Usually from all these nfl games with them and this a small amount of money. A 5 bet on an nfl game and then it is like, my god, they fumbled. You are engaged he would place all his bets and wed have lunch. He would come to the bar on monday morning there was an envelop that passed that was the old way they did it he enjoyed his sundays ive wiped the slate clean. Im optimistic you probably didnt see but joe burrow and the players youve got baker passing to odell for a touchdown. All good even though they lost. Naturally, the person in the New York Post said take the bangles in the under, you saw what happened it was the browns in the over. Typical of the kind of advice you get if you take it well move on and talk tech. On the other side of the break, well talk more gambling. So the tech share pull back. Small caps surge later, dr. Scott gottlieb will weigh in on the latest vaccine time lines for the leading drug makers well talk about schools in new york city and businesses opening up around the country. Squawk returns in just a moment. 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 up to 400 a year on your wireless bill. With the carrier rated 1 in customer satisfaction. Call, click, or visit your local xfinity store today. Do you remember when it was like september love was changing our minds chasing the clouds away i like this song. It has been a tough, tough september for big tech apple down 14 microsoft down around 10 . Chief investment strategist and cnbc contributor how much more do you have to go . Some people think this is a big dip and some thinks it the beginning of the end if you look at the total Addressable Market for these companies, it is incredible. Internet of things is a total Addressable Market thats a huge number sas cloud, wearables in the next two years will be 55 billion. Retail commerce will go from 3. 5 trillion last year to over 6 trillion. Can we see a continued pull back of course. Apple and salesforce are still up 49 zoom is up almost 400 nvidia you do want a pull back. You want to barbell it those stocks are unloved i dont think it is the beginning of the end for tech but i do think there are opportunities elsewhere. Talking about the unloved stocks what is the top of your list the reason you want to own some of those is because retail is Getting Better inhousing and auto manufacturing has had a vshaped recovery i want to own deere number one, they have a ways to go they are the ultimate cyclical in terms of ag and farming the bottom line is margins have upside ups i like a lot as well business to consumer has been strong youll see an improvement in business and for the mix and margins. Ppg is still down and thats a housing place. Back to ups do you like fedex . Same space but youd take ups first. Ups has an interesting story with a new ceo, carol tome who comes from home depot. There is a ton they can do in terms of cost cutting. They posted a 600 basis point. I think there is more upside to ups because it is sort of a turnaround story they are both going to work. I own xpo. Logistics in general is one you want to be involved in. It hasnt gotten into those markets yet. Volatility has come down. I would expect going into the election youll see some volatility i think youd want to use that to be accumulating blue chip companies. Like the ones i just mentioned or maybe if you see pull back in tech, youll get great opportunities. I think you embrace it you have to think longer term. Looking for opportunities then quality balance sheet, great cash flow. Market teams and share, those are all the markets you want to look for into volatility it is great to see you on this friday morning. Have a great weekend you too thanks for having me coming up, we are closing out a fairly busy week for ipos with Companies Like unity. Pretty cool. Bring your game to life. Interactive content. Priced where it initially values the company out of the gate at 13. 7 billion. Up next, well talk ipo strategy after snowflake more than doubled. Well look at the haves and have not nots when it comes to getting a good price for your ipo. Ill be in the chair es servingw 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 find a stock basedtech. On your interestsote or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Good job, michael does. Ok, lindsey now tell the class what your mommy does. My mom has super powers. Its like she can see the future. What . its like she time travels in a rocket ship. Thats cool and then she comes back saying try this or try that. She helps everyone. She helps them feel less worried. Wow mommy, so what is it that you do . Im a financial advisor. She is aig proudly supports all the professionals taking care of our Financial Futures. Here we are. Im in a different setting andrew, im in the chair i know you are playing along with me. Im in the chairs too people say, whats the point . We call it a show. If you dont want production value. Watch nightly news sometime. They go here and there if you dont want that, watch cspan we are trying. Whether it is working is the question it looks great here i am. I cant see the real Andrew Ross Sorkin owning those chairs. I see the game of thrones chair. With a look at the latest ipos snowflake is not the only debut to have a big first day and then pull back. Berkley holdings, lemonade for the average investor, how smart is it to buy at the ipo. We can talk about that the after market has been mixed. If you can get in onthe price. With the latest plays, you couldnt bring an airline or a cruise line public a lot of it is that Interest Rates are very low you have to start with investors and returns when investors are making money already on the public, the returns when they are very good on this space then the market holds up on the returns. Then the issue ens weve seen in the last few months. Is it record issue ens. Then is it going to continue sure. You want to make sure the returns look good. You can hold off ahead of the election well get a typical soft spot. If we are continuing to see the strong returns, we expect the best return for 2014 where alibaba went public. The head of steam will look like the activity we have seen in 992000. Is it fair the way weve looked at it work out. When i was in the business, i couldnt get 100 chairs most of the time then the general public is down on every one of them is that a flaw on the system really, there is two parts to this market. If you are an insurantitutional investor you wouldnt chase snowflake, i dont think. These stocks find their way into valuations in the market, which is why we put together the index because if you buy ownership, it took s p two years to include facebook in that index these are on the returns of the categories our number one holding is zoom who would have thought when zoom went public a year and a half ago, it would be the company it is today these companies will have to beat expectations to justify snowflake today is trading at 200 times sales. I dont think im going to live long enough to see sales close enough to justify that valuation. Those sales for snowflake will have is to be super. Well see some really good reporting come out to justify where it is trading. Other ipos come out a Packaging Company for the Food Services industry. A broken ipo already it trades at eight times ebita below any of its peers in its packaging group. Regular investors are not going to get shares. They have to figure out when to buy in the after market. Thats why we put together this product. It is easier to own a basket of these. It tamps down the risk of having failures and emphasizes very large ipos that tend to be the risky ones. Thank you some of the really exciting names are coming up. Un y unity is going to be today i dont know thanks, kathleen we appreciate it well milk a little more of this chairs segment here. Should it be done differently . We like it, it is exciting so many people seem to end upholding the bag. We are all convinced there is a better way somebody would have cracked the code and thought of a better way. They would have figured out for some reason, this is the better way. You will have these discrepancies. I dont know thinking about the snowflake ipo and whether the underwriters did a good job they should get paid only or a certain amount based on how close they get to the goal if the goal is that they are up 20 or up 30 within the range they get more or less if it is wildly high or wildly low. I dont know. Selfishly, we like ipos and we like covering them. We are over here sitting in the chair because we are performers. So we do like ipos to recover. It is exciting when it happens they are a fascinating milestone. As of the story, it is fascinating. It is not all play money either. We need to be careful in this environment. Youve either got ipos or twoday fed meetings, so bee careful. Coming up, well talk about some new questions about the cdc coronavirus testing guidelines after a report saying they were published against scientist objections and a look at yesterdays s p winners and losers 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. But inside. Theres advanced research, modeling and refinement. Constructing funds that dont simply follow an index. But explore new terrain. Helping you fill portfolio gaps. Connect to client goals. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. 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 welcome back to squawk box here on this friday morning. The dow looks like it was in the red. Up two cents, if things open right now. Maybe one point. Youve got the s p looking to open up six points higher. The nasdaq looking to open 60 points higher. Soft bank is now selling u. S. Cell phone distributor bright star the japanese groups latest move to raise cash. Bright star now the vice chairman of that company and helpedtake over wework delta looking to reduce the amount of pilots on furlough and facebook is being sued for allegedly spying on instagram users. A report that says the app appears to be using the cameras when the app is not in use claiming the apps use is intentional and done for the purpose of collecting valuable user data. Throw one other thing into the mix. Did you see the news that potentially one of the ceos in contention to run tiktok is kevin sistrom who founded instagram and what kind of battle royal that would be he was on a couple of months ago because hes working on this covid website that is track. Founded instagram and left and is unhappy with Mark Zuckerberg and now in contention to run the biggest competitor that would be a story. Just so i understand, they compete directly i know my kids use a little tiktok but not anything like they do with instagram what would the rational be there . Tiktok is the new instagram unless of course instagram is able to overtake tiktok in terms of the younger market. One of the things instagram has put in place is reels and that is effectively a tiktok competitor remember, instagram put stories in a couple of years ago, that would be a snap chat copy cat. They are copying instagram on one side and snap on the other the question is whether a person like kevin would go to tiktok to make a go of that. Very interesting to watch. Even younger than the people doing instagram . Amazing. Think lots of lip syncing you can do a little millymanilly no. I was thrilled to use my flip phone when im not near a quarter to make a call i like my walk man you are not on tiktok . You are not even a big instagram user, are you . Im on instagram. I think i have a tiktok account. No way. I havent done any dances yet. We should do a squawk dance. If we did a dance for tiktok, i think we could get a lot of followers. I was worried you would start moving what none of us need to see at 6 00 in the morning lets move on. Testing guidance from the cdc issued last month was published against scientist objections the guidelines said it wasnt necessary to test people who dont have koeftd symptoms even if theyve been exposed to the virus. At the time the department of health and Human Services wrote the guidance and dropped it into the website avoiding the agencys strict scientific review process then the white house came back and said it was reviewed another one of these examples of differenting view points implied for political reasons. Joining us now is dr. Scott gottlieb he serves on the board of illumina and pfizer. We keep hearing listen to the scientists we fail to mention, scott, that science over the past six months, some of it is 180 degrees from what we thought the science is sometimes an art and sometimes changes. It has been difficult and will continue to be difficult look, there are scientists on the Coronavirus Task force and the department of health and Human Services if those scientists inside hhs has a different view inside. They are free to draft an opinion on that, they should put it out they went out presumably on the cdc and the implication that they would sign off on it. That the government represent the guidance in a draft it would agree with theyve got restaurants and people can have a nice meal and cocktails. In new york city, theyve got that squared away but not the schools. One should be prioritized over the other but we are still not there look, i think thats right this came up yesterday where new york city announced another delay. They moved forward in opening up a lot of businesses opening restaurants. There is no reason to argue against that there is a low prevalence against that they were able to drive down the infection for now. We should be prioritizing trying to get the schools open first and foremost to see how that goes clearly, there has been a delay. They dont have a plan in place. You see them stumbling to accomplish that goal we are already out of time. Weve got something coming up. Siege what it is lets switch to the vaccines we have moderna on trying to figure out how quickly you would know if this works if it was a home run vaccine, would you know earlyon i dont have any information not in the Public Domain as you mentioned, im on the board of pfizer. I believe the moderna trial reads out at 150 and the pfizer trial reads out at 164 theyll take a look in blinded fashion, at the data when they have reached a certain number of events theyll read out in the trial before completion is very remote it is extremely unlikely. I would expect these to run to completion and reach the significant number of events specified in protocols thanks, scott i appreciate it. Saw you a few times this week. Hopefully well repeat that next week always have a lot to talk about with you andrew coming up, fresh data on tracking the coronavirus and its economic impact. Poppy mcdonald coming up well look at the s p losers lead by illumina and carnival. As business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. [ engine rumbling ] [ beeping ] [ engine revs ] uh, you know theres a 30minute limit, right . Tell that to the rain. [ beeping ] for those who were born to ride, theres progressive. To deliver your packages. And the peace of mind of knowing that important things like your prescriptions, and ballots, are on their way. Every day, all across america, well keep delivering for you. Time for the ej in ups and buyouts of some management employees. People in nonoperational roles today. Unclear how many people ups is targeting but had about 87,000 management positions at the end of last year that may be more than we have around here, andrew. I dont know coming up, we are getting real time coronavirus data from usa facts poppy mcdonald here are the sector winners. Standing out so far, can you see there, the Energy Sector well be right back. 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. Welcome back to squawk box. Weve been talking about opening businesses and schools, in some case the lack of joining us to break down in real time, poppy macdonald. Great to have you on the program. We had Steve Ballmer on about a month ago. We were talking about the disconnect between where the markets are and where the quote, unquote, real economy was. I wanted to talk and dig into that disconnect for the audience because i think you have new data and numbers that put it in some context right i would say its a bit of a mixed bag. Retail sales are now up above prepandemic spending thats positive. Cases are down if we look at comparing july and august, 1. 4 million new cases in july as compared to 1. 9 million with 31 states and washington, d. C. , reporting cases down and deaths are up slightly at 18 above in august as compared to july. So a bit of a mixed bag but were starting to see progress. So, poppy, the other piece of this is weve been talking about School Reopenings all morning in large part because bill de blasio has pushed back the School Opening what do School Openings look like in terms of the data you have on this, look like around the country . The view, by the way, always was that you needed schools to be reopen for the economy to really reengage. Whats so interesting is it seems like the economy has reengaged before thats necessarily been the case. Right so were seeing with the 225 largest public schools, most kids are going back online so about 10. 5 million, about 16. 2 million children, including my own kids in washington, state, who are back online so we are seeing things like dr. Gottleib talked about with restaurants opening before kids are being allowed to go back in person i think were probably most cautious when it comes to our youngest children, but certainly discrepancy there. Are you of the view that this school piece, which is so interesting, that actually if more kids were able to go to school at school, the economy would do even better than where we are given Something Like the retail numbers that you were eluding to before . Thats a great question typically what we do at u. S. A. Facts is we give people and empower them with the data and allow them to make their own decisions. Youve got kids going back online and you see that retail sales are back up. A lot of that spending is happening less in restaurants or in services and its happening more in people who are buying things to enjoy the outdoors or in food sales, right so how that will be impacted by kids going back to school, we want americans to look and say, is that the right decision and we want you to be able to look by states and see how does the kdecision in my state compae to others. Maybe this is a bit of a meta question. In the age of misinformation, theres questions about whether people believe the voracity of information, your whole effort, your whole, you know, enterprise is about trying to put down the facts so people can see whats going on how concerned are you about the fact that people dont believe the facts . Definitely very concerned u. S. A. Facts started because we knew it was hard for people to get access to trusted information, and we did our state of the facts poll in 2019 with the Associated Press and we asked people about their trust in local news, in cable news, in radio as well as in social media, and we found that 54 , the majority, said that they go to social media at least once a day to get information, but only 11 actually trust that platform so that was the biggest gap in terms of trust versus use was in social media u. S. A. Facts we believe the facts deserve to be heard. Thats why weve become a destination where people can go and see by the numbers nonpartisan, not for Profit Organization that want to make that data accessible poppy, we appreciate you joining us this morning and look forward to having you back in the future its so interesting to me that people are very happy to go to sites and to watch stuff and read stuff that they dont even believ , but here we are. Welcome to 2020. Joe . Diane retired and opened that pottery studio. How did you come up with all these backstories . I got help from a pro. My financial professional explained to me all the ways nationwide can help protect Financial Futures in peytonville. Nationwide can help the greens get Lifetime Income because their son kyle is moving back home and could help set up a Financial Plan for mrs. Garcia. And he explained how nationwide can help mr. Paisley retire early and spend more time with his pal, peyton. And their new band. Exactly yeah. Dont forget the band. I havent. Good job, michael does. Ok, lindsey now tell the class what your mommy does. My mom has super powers. Its like she can see the future. What . its like she time travels in a rocket ship. Thats cool and then she comes back saying try this or try that. She helps everyone. She helps them feel less worried. Wow mommy, so what is it that you do . Im a financial advisor. She is aig proudly supports all the professionals taking care of our Financial Futures. Another selloff on wall street led by tech names have traders on edge. Were going to talk about the september slide and where you should be putting your money to work. And tesla getting a new price target from web bush ahead of its highly anticipated battery day. Dan ives gives us his late heest ca latest call on the company the clock is ticking on tiktok that story and so much more as the second hour of squawk box begins right now. Good friday morning, everybody. Welcome back to squawk box right here on cnbc im Andrew Ross Sorkin along with joe kernen. It is just the two of us becky is off today do take a look at u. S. Equity futures on this friday morning after whats been a bit of a wild week. The dow looks like it would open down, 7 points off nasdaq looking to power higher 40 points higher the s p 500 will open up about four points higher joe . Andrew, apple, tesla split their stocks back on august 31st earlier in the summer. And im saying that for mike santoli because it feels like summers over, but its not, mike we need to appreciate these next couple of days tuesday its actually over, on tuesday, mike santoli. I was going to say there was a point in time, maybe we should have figured it, that peak enthusiasm, its drifted lower since then yeah. I would say at least it was a shortterm moment of culmination for some of these rallies. Look at how apple and tesla looked this is quarter to date. Since july 1st right here that is that july i mean, that august 31st date when tesla did peak and then apple the next day, the next trading day is basically the date of its peak look at how much theyre up this quarter. Thats the key point the bullishness in tesla among the traders is the own source of data thats the only one thats come off of the recent lows in any appreciable way. Look at the nasdaq 100 etf for year to date it seems significant you had this big run up after the splits were announced, right . So apple announced a split on july 30th. Tesla on august 11th august 11th is a very fascinating date the entire market has been kind of trying to find support this week and last week around the levels we traded at. Thats when tesla announced the split. Most of what weve been doing is unwinding a little bit of that up side over shoot its unclear if theres more air underneath this market ive seen some people say, hey, whats wrong with going back to the precovid peak it would seem like carnage but wouldnt look like anything dramatic i think thats the interplay were dealing with right now. Mike, stick around. Its not a lost summer, would you say . Id say its a summer of discontent though. Not a glorious summer. Lets add another voice and look at the technical aspect of the current market selloff a few days left, ryan dietrich, Lpl Financial research im not going to ask you about your forecast between now and the end of the summer, but in your view, maybe it wasnt expected from some of the air to come out of the big leaders. You dont think its over we dont think this up movement for five months is over youre right, september, august, october can be difficult october is the hardest the nasdaq 100, 200 degrees over the margin it made sense for those stocks to pull back to us were really encouraged by those. What were talking about, as we speak, material is going to open up at a new high industrials are doing well look at small caps so many more small caps than large caps theyre slowly taking the baton. When you think of the cyclical value trade, the economy is Getting Better because small caps should do better. Thats a group we upgraded at lpl research along with materials. We like that with the continuation of a better economy. The market goes sideways the tech stocks keep pulling back but its healthy, this rotation we all complained about techs going up now tech is coming back. Other things are going up and people are still kind of complaining. You just cant make everybody happy, i guess. September is not the greatest month historically, brian, but you think there are some under currents that were positive from what weve seen so far absolutely. Just the rotation that were seeing to other areas. Record fivemonth run. We know that world war ii, 26 times the s p had a fivemonth win streak. One year later the s p was higher, 25 out of the 26 times momentum begets momentum believe me, theres going to be pullback, straight up. When you hear things like that with the improving economic data, that suggests, again, 6 months, 12 months, when i get to the commodity guys, well see the stocks outperform bonds and this whole market will be alive and well in our view i dont know, mike. Were up 60 less than 6 months. Thats historic. Yeah. Doesnt feel that great almost reminds me of the financial crisis i see people, democrats so great for the stock market look at the last administration. When you start at 666 on the s p, its not that hard to double it from there, is it . I mean, are either one of these moves that weve seen bull market moves or just retracements of an over reaction to something well, one of the differences this time versus 2009 is it took four years to get to a new high because you had been grinding lower and the market was cut in half over the course of like a year and a half. This time you had five weeks down, biggest, sharpest move lower by 34 ever and then the fastest rebound ever this has been a much more compressed episode as opposed to this prolonged market phase. Were obviously up at relatively high valuations here youve come a long way in five months but really not that far either year to date or looking back 12 months nothing that extraordinary about those gains. I would look at some of the clues inside whats been happening during this pull back, which is credit markets have been fine. Theyve not necessarily kind of improved that much, but they certainly arent showing a lot of stress. And to ryans point, the cyclical points of the market have been behaving better. Economic implications are okay, i think, in terms of whats been happening. The index investor or watcher is how much net headway can be made if in fact the growth d parts is the majority, growth, defensives, financials 1 4 of the market you are relying on to be cyclically geared for the Overall Index to try to keep going ahead. On the other hand, and thats one of our great new segments we do on squawk, once a week, mike santoli, on the other hand we had novembenovogratz saying the is barely flat and the market is up 20 in the march lows if you had told someone were going to gain it back and the nasdaq is at do you know what people would have said to you to poopoo were back. If you add in the gains of the past two, three, four years, just being able to hold on to those gains, ryan, thats pretty positive in terms of Market Action i dont know if anyone thought wed be near 30,000 on the dow i dont think anyone was thinking that, but you mentioned this idea, yes, were stretched. Look back at small caps again. Theyre not even above where they were in january of 2018 you look around the globe. A lot of Global Stock Markets are not above where we had a major peak pull backs in volatility, you think the Bigger Picture look at things, i think it is more encouraging that, yes, tech is stretched. We get it. So many other areas are forming multiyear bases look at copper copper is strong copper is bringing up mumt yeltr highs. S p 500 earnings next year should be 23 . Honestly, may be a tad higher if the economy keeps opening up that will be a tailwind for equities. In closing, weve got to go, all of this positive momentum weve seen, how much of it is justified by economic fundamentals and what percentage of it is stimulus and fed being in the markets yeah. I mean, lately you have to think a lot of the fundamentals. We havent had the new stimulus plan record housing, manufacturing is up four months in a row. You know, Industrial Production up four months in a row. 1919 youve never had a recession thats up four months in a row we think its a lot of the economy looking better and thats probably why stocks are doing as well as they are. Ryan dietrich, thanks santoli thank you. Is that it for you with us today . For the moment, yeah. All right maybe we can talk you into something in the 8 00 hour im here. All right good thanks coming up, coming up, another ev play coming in the market andrew, im sorry, through a spac through a spac well talk about that xl fleet turns vehicles into hybrid and plugin electric hybrid. The chief officer of xl fleet will join us to discuss that technology. Later Man Group Luke Ellis will tell us why the markets have moved past the pandemic and are now focused on Economic News in the election. We were just talking about that. Hes our guest in just a couple of minutes squawk box coming right back 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. 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. If i could, baby id how can i, when you andwont take it from me day. You can go your own way go your own way your wireless. Your rules. Only with Xfinity Mobile. Welcome back to squawk box this morning xl fleet which turns commercial and municipal vehicles into hybrid and plugin hybrid going public by what else, a spac. Merging with a pivotal company the total value combined will be 1 billion joining us first on cnbc is todd hines. Good morning to you, todd. Appreciate you joining us this morning. Walk us through this transaction. Its the question we ask everybody, why pursue a spac over an ipo . Thank you very much for having me on the show. Its great to be here. Very excited to talk about xl fleet. The industry were in is clearly taking off and its moving very quickly and this provided extremely fast and efficient way for us to get significant amount of capital to build off of our leadership position in the industry we are a leader in the industry with over 1,000 on the road. Were growing 3 x this year. 75 million in revenue next year. Were a real company scaling rapidly in this industry weve been able to develop this position on 50 million of venture funding to date. This capital enables us to build off of that, grow, invest in more products, expand our offering from hybrid to all electric solutions and really build out our Technology Platform to enable charging infrastructure to be deployed more effectively and really deploy a lot of Infrastructure Capital into the market which is massive and just about to take off. Theres the growth piece and also the profit piece. What does that look like were in a good position. We had the lowest cost in north america on a range of vehicles, commercial vehicles that you would see making deliveries, shuttle buses, ambulances and a whole range of different products so we are out there with positive gross margins, which is also interesting in this industry were going to be profitable off that core business but by investing more money in additional products we will be able to scale that rapidly against profitability in a couple years so in terms of the Growth Prospect though, what are you targeting in terms of growth year over year 12 months out well, this year well do about 3x growth. Well continue to beat that going into the next year as well so, you know, were very comfortable with that growth rate were already at a growth rate of higher than that so, you know, we have the established supply chain Production Capacity we have a very low risk and low cost for others in the industry. We dont have to invest hundreds of millions or billions of dollars in factories were leveraging the existing infrastructure and enabling us to scale without huge amounts of capital to build out that capacity let me ask you, had you not pursued a spac, what do you think the time line would have been for an ipo typically the way you were thinking about this prior to this spac boom . I would have said, you know, end of next year would be the time frame but with this additional funds, you know, these windows are open and closed obviously our market is raising a lot of capital right now and were just in a position to leverage our leadership. Were already leading in this industry so these additional funds enable us to move a lot more quickly we have major customers that have come back and bought more were scaling across an industry that is fragmented when you think of the different types of use applications for commercial fleet vehicles, theyre very specialized weve created a solution that can get integrated into all of these different applications we have an advantage in a market that has really combined on this multistage manufacturing process to meet the various needs of the end users right tod, one other question. We had Chamath Palihapitiya who is trying to revolutionize, quote, unquote the spac process. To others watching who are in a situation like yours contemplating whether to pursue the ipo traditional ipo route or go this route, just back through your thinking. Specifically i had asked chamath about the fees involved. Typically youre often giving away 20 of the company to the sponsor. Speak to the economics of this approach our sponsors going to have around 4 of the business so i think weve got very good terms compared to others in the market i think the way that other ceos, i have other friends in the clean energy who are considering this, have tremendously great companies, they have raised money from some of the biggest investors in the world, and this is a lower risk, faster path and for companies that are wellpositioned, i dont think its the right solution for every company, but if youre in an industry growing extremely quickly or about to grow extremely quickly and you have a competitive advantage with your technology or with the leadership youve already developed in that industry, its a great path ipos are expensive as well there are a lot of fees associated with ipos this is another path that i think is going to enable a lot of these to get into the public markets. Okay. Tod, we look forward to following your progress. We hope you come on back and give us an update on how things are going and look forward to talking to you again very, very soon, tod. Thanks again thank you for having me on the show okay. When we come back were going to talk about the number of people in the covidrelated mortgage Bailout Program and how its shrinking well bring you those numbers after the break. Later, dan ives of wedbush talking about tesla and the highly anticipated battery day join us in just a bit. Squawk returns right after this time now for todays aflac trivia question. What automaker says 97 of its vehicles sold in the last ten years are still on the road today . The answer when cnbcs squawk box continues congratulations welcome to the aflac program. Aflac now tell me, what does aflac do . Aflac pays you money directly to help with unexpected medical bills. And is Aflac Health Insurance . No, but it can help with expenses Health Insurance doesnt cover thats right. Are there any questions . Coach yes . Can i get one of those cool blue blazers . You know i cant play favorites. Alright lets talk coverage. Its go time get help with expenses Health Insurance doesnt cover. Mmm hmm get to know us at aflac. Com to a world that must keep turning. The world cant stop, so neither can we. Because the things we make, help make the world go round. They make it cleaner, healthier, and more connected. Its what we build that keeps things moving forward. So with every turn, well keep building a world that works. Now the answer to todays aflac trivia question. What automaker says that 97 of its vehicles sold in the last 10 years are still on the road today . The answer, subaru okay thats good. Still running. Still on the road. I mean, not just just not not just left somewhere. Anyway, we have some breaking news diana, theyre left on the road. Theyre still left on the road but they dont move. You know, youve got to call someone to have it towed anyway, were having some breaking news on the mortgage Bailout Program. Lets get right to diana olick i love your shot, diana. I am still worried about Michael Myers. Worried about the cars. Worried about Michael Myers peeking out from the bushes. That looks like haddonfield. What have you got . Reporter im going to talk about mortgages. The latest release is the number of borrowers in government mortgage Bailout Programs is shrinking. Those in private label or bank bailout due to covid19 is rising the total numbers of mortgages in active forbearance where borrowers delay for 3 months declined by 26,000 according to black knight this is the smallest drop in the last four weeks. Just under 3. 7 million homeowners remain in these plans. Thats 7 of all active mortgages. Borrowers with fannie mae and freddie mac saw the biggest improvement but there was a slight bump up in bank and private held mortgage bailouts the latter have very different terms and vary bank to bank. Were watching closely how many borrowers ask forex tensions so far 3 4 of those in bailouts are in extended terms. 1. 7 million plans are set to expire by the end of this month so it will be important to see how many come out and how many still need help, joe okay, diana i think i asked you this before and there are differences. Ten years ago could we see foreclosures coming out of this program like we did ten years ago . There are some key differences a lot of key differences. No, i dont think we would see anything like that first of all, we dont have those kind of numbers. Second of all, you have a different Housing Market you have equity in homes if there are some borrowers who get through the year long term and simply cant get current again, they would likely either try to modify their mortgages through the banks and lenders or they would just sell their homes because they could probably get a good price, pay off and walk away with a little bit of equity there will be some, some perhaps in fha mortgages where you have a much lower downpayment where they wouldnt be able to get out from under their mortgages so they would go into foreclosure or short sale, but it would be a much smaller number than a decade ago. All right, diana. Youre fine. Nothing going on behind you. Youre great. Youre good reporter ive got it. I was onthe lookout for you we might put a big foot in there. We do that once in a while to liesman. Thanks andrew. Still to come on squawk box, joe, man groups luke ellis is going to join us with his latest market perspective. Wedbush raising the price on tesla. Dan ives joining us with his perspective and the preview of the companys battery day next week take a look at futures at this hour we look like weve got some marginal green arrows. S p 500 looking to open 7 points higher back in a moment a new way to shop thats completely tailored to you, with hundreds of your favorite fashion brands. Tell us what you love and what you dont. The more you yes and no, the more we get you. We will build a shoppable feed thats so you. No two feeds are alike. This is shopping made genius. Download the app and shop in a whole new way. Lets get to dom chu who has a list of this mornings Market Movers i knew thats what you had, dom, because youve done this for us before i have. I feel like im getting to be a veteran doing these augmented reality tombstones its not golf but its close lowes and home depot. Down 1 1 3 . Its due in part to analysts over at oppenheimer. Downgraded the stock in larger competitor home depot to a perform rating it was a prior outperform. The target prices for both were lower. They still like the stocks medium term. Feel like in the near term investors need to factor in a possible slowdown in sales growth post pandemic adding they prefer lowes over home depot. Also the discount valuations those shares lower premarket along with home depot. Next up, shares of facebook up about a percent or so. 40,000 shares of volume premarket the social Media Company is getting a little bit of help from morgan stanley. Its 295, it was 285 they keep the over weighed rating they have a bump up in profit expectations with reels and facebook marketplace well cap things off with shares of beyond meat down 3 4 of a percent. The plantbased Meat Alternatives is a mouthful it gets downgraded to under weight it was neutral before. They keep the 122 price targets. They say the stock at current levels is over valued due to increasing Competitive Pressures from impossible foods which they say is taking market share at Grocery Stores they also, by the way, say restaurant chains may not be likely to add new menu items as they streamline during the pandemic those shares off 3. 5 . Whoa, whoa, whoa, whoa, whoa. Whoa. You bring up golf how great is it that we can have this streaming on peacock now and see a leading group and then it moves to the golf channel for part of it, then to moves to big nbc. Are you understanding the synergy, the symphony. I was going to say symphony we talked about it on worldwide exchange. I can watch it i dont want to tell people to watch it on the big screens, but i tell i want them to do it on their ipads and phones which is what im doing right now. I dont want the bosses to get mad at me. Dom yes. I apologize we have breaking news we have to jump in here with. Reuters reporting that President Trump has decided to block the u. S. Users from using tiktok and also wechat. This will take place on sunday youll recall that the deadline was set for the 20th i should say this is a report reuters sigciting sources the Trump Administration has now blocked tiktok as well as wechat that would take place on sunday. It would end, if this is the case, what has now been a saga and soap opera for several months now about the future of these two companies. Of course, chinese based tiktok owned by bytedance it would also, i imagine, end the conversation between oracle and walmart, which were in talks. Not over until its over. You dont think this is its not over until its over but according to this it says you dont think this is pressure excuse me you dont think this is putting some pressure to change the on both sides maybe to change the structure of how they were going to do it, andrew . Weve got until sunday, right . Is it really, really going to happen i dont know. Im telling you that this report says that the Commerce Department will, quote, deplatform the two apps in the United States and bar apple store and alphabet, which of course owns google, and others from operating these apps on any platform that could be reached from within the United States. This according to a senior commerce official saying this news literally crossing as dom was speaking there this morning. Were going to continue to sort this out and bring you more information. Could this be part of a negotiating process . Perhaps. Pressure. Pressure. You know, one of the things thats been so complicated about this is its unclear how you negotiate the National Security issue. Right. Meaning once youve decided its a National Security threat and that the process as you know bytedance and Chinese Government you remember the National Security threats of huawei, we were getting around with trade you know, with Little Things we wanted in trade. It goes back and forth its like whether thats right or not, whether thats ethical or not, they all seem like bargaining chips sometimes. You know what the bargaining chip here is the 20,000 jobs, 25,000 jobs that are supposedly going to take care of some of the things youre talking about. In a Perfect World if you stuck to your guns, this was not going to pass muster right. Maybe you should be glad. It appears it appears based on this report that the administration may, in fact, be sticking to its guns. Right in what it originally laid out. It had to be totally owned and in full control by a u. S. Company. That was something that, as you know, bytedance in large part because of the pressure that had been put on them by the Chinese Government had said, no, were not going to do that it looked like the transaction that the Trump Administration had effectively rejected back over the summer when microsoft had been in talks earlier about a minority interest in the Company Effectively hosting so much of tiktok on azure. We focus a lot on tiktok on the program over the last week or two given the constant headlines about what was going to happen with this particular deal. The implications for wechat being shut down in the United States are real. As you know, wechat is like water with people inside china the states communicate with their partners in china. So its going to be very interesting to see what kind of damage that does in particular, we could probably show apple stock as well, what that might mean to apple as a company because apple wont be able to have wechat on its phones google technically wont even, but i wonder whether on google youll be able to create some kind of work around and the like maybe outside of a google authorized store as you know, google has multiple app stores on its platform apple really does curate and control the whole thing. That unto itself has been a competitive or anticompetitive question if that is the case you know what, want to bring in dan ives right now hes also looked at those issues were going to talk with him about esla. Bring him in. Dan ives is mapping director of Equity Research at wedbush. What do you make of it, dan . The issue of apple and microsoft, the export rules, look, i ultimately think its a game of poker. Puts more pressure into the weeds. Thats going to be the key here in my opinion. He says the u. S. Is putting out new rules on tiktok. You would say its not over until its over . You expect this to be a work around or not . Yeah, i do. It couldnt happen in the microsoft situation because they wanted to acquire it with the source code. Given the partnership, i do believe theres a work around. I think by sunday night a deal likely still happens i think this is all part of a 48hour clock about to strike midnight situation, put more pressure on the deal to accept these terms as well as the china government remember, those export rules that they changed, thats the key here because that really put a poison pill in acquisitions. See, andrew, this is you were saying maybe they really will stick to their guns and well see principles upheld that they talk about with microsoft whm when it comes down to it, its probably deal making, dont you, andrew would you rather have them stick to their guns . Larry ellis raised a lot of money for the president. Right. Then theres jobs what would you prefer . That it gets done in this particular instance i think youre not going to trade jobs if you believe its a genuine National Security threat i dont think you trade squobs for something that has a genuine threat to the country. Whether it does have a threat to the country is a larger question down the road. When it comes to this negotiation, to the degree you think it isnt over and dan believes something will happen, youre going to have a couple of things have to happen the Chinese Government would have to blink and say, its okay for bytedance to sell a majority stake in tiktok to a u. S. Company. That has not been on the table, by the way, for at least the last week and a half as far as we understand it from our reporting. Not only would the Chinese Government have to authorize that, bytedance and its investors would have to authorize that its unclear whether the price that oracle was prepared to pay even before was enough, which may have also played into the thinking in terms of why sequoia and General Atlantic which are big investors in bytedance and the companys founder would not have necessarily wanted to take or sell that company in this respect. Having said that, the value of tiktok and bytedance is literally falling by the second as we speak because if, in fact, tech tok won tiktok wont be available to u. S. Users, poof, tens of billions of dollars disappear. There is a lot of incentive to try to make a deal but the question is what that deal could look like and we all knew what the deal should look like clearly nobody wanted to do that over the at least the past couple of weeks. Hard to know hard to know where we are, but i would also suggest and im curious where dan comes down on this we chat issue we havent talked probably enough about it, but we chat, as we said, is the dominant Communications Platform for folks in china it has big implication for folks in the United States who are going to be talking to them, whether theyre business people. Chinese americans trying to talk to their families and what that does to the quote, unquote platforms. It has huge implications, especially from a communication perspective. You know, and also i think the other question, which we believe right now in china, especially for chinese sold iphones, wechat stays on those phones in china but no doubt, this is look, its a fort sumner moment in terms of this move which is why its a key 48 hour tiktok and wechat, if that plug gets pulled, that would be a rachetting of tensions clearly. In terms of just playing it out, dan, what are the larger implications if you start to try to go through the permutations and think through the dominos after this, does china retaliate in some other way what other Tech Companies could be at risk does an apple, to some degree, become at risk or some other large American Company that does a lot of business in china yeah, of course apple has sort of been the poster child for the u. S. china cold tech war. I do believe thats a contain risk here how strategic apple is going to be in china this is no doubt something that can have wide reaching ramifications both on the enterprise, the consumer side for many u. S. Companies trying to break into china. Thats why i think this is something its not just about tiktok and wechat here, its much broader ramifications to see what happens over the next 48 hours thats why oracle and ellison become a lynchpin to getting this done. Okay. I think we want to get over to eamon javers is eamon with us reporter yes, good morning. Hes been working the phones. E eamon, what are you hearing . Reporter im texting people to see what we can confirm what it looks like from the reuters that has crossed, this is putting some teeth into the threat to delist these guys from u. S. Systems, right . So what theyre doing is putting some muscle behind that september 20th date that Steve Mnuchin told us about earlier in the week this doesnt mean necessarily, the way i read it, that theres no deal happening right now or no possibility of a deal between now and september 20th right what were getting now is some information directly from the Commerce Department, and im literally being sent this as i stand here bear with me one second. Now we have Commerce Department, this is an email from the Commerce Department prohibiting wechat and tiktok transactions to protect the National Security of the United States this is now official in the past couple of seconds here as im talking to you, andrew theyre saying in response to President Trumps order signed, to safeguard the National Security of the United States. There you have it, official announcement of this that was an exclusive breaking news piece from reuters now the rest of the world has it directly from the Commerce Department again, this they seem to be leaving some wiggle room here for the president to pull a rabbit out of the hat in terms of announcing a deal before that deadline that would prevent this from happening only the folks inside these companies and inside the white house know exactly where those negotiations stand at this minute and whether thats a reasonable prospect or not, whether there is some deal that could be done before this prohibition goes into effect on the 20th, andrew. Eamon, i know youve been doing this on air with us as youre reading that email, but in terms of looking at that language from the Commerce Department, the idea that theres a little bit of room, how much room do we really think there is do you believe that this was this is part of a negotiating tactic historically, maybe you have to throw history out. Is it the kind of thing weve ever seen the Commerce Department put out a statement one day i guess anything is possible in this day and age yeah. I think thats where you have to land. The next 24 hours things could change. The amount of wiggle room is 48 hours today is the 18th, the deadline is the 20th. The question is can they pull off some multifaceted deal that solves all of the pieces of this equation between now and then. That seems like a long shot and difficult but who knows behind the scenes how advanced they are. This is putting muscle behind the president s threat, were going to do this earlier in the week we saw Movement Towards momentum of a deal it seemed like that 20 acquisition by oracle might get the official blessing from washington then you saw the republican senators coming out saying, wait a second, this doesnt come anywhere near solving the National Security implications this is the reason we wanted to do this in the first place then the president backed off and said, i havent approved anything either. Thats where the deal momentum fell apart we have a statement here from wilbur ross, the commerce secretary. He said todays Actions Prove President Trump will do everything in his power to protect our National Security and protect us from the Chinese National party that statement underscores the political reality for the president , which is he needs to be seen politically as the toughest person on china in this debate he doesnt want to have Senate Republicans saying you chickend out. Thats what i meant. He has to hold the hardest line on china. Eamon, thats what i was going to ask you from a political perspective, clearly theres pressure on him to block these companies from doing business in the United States the question i was going to ask is politically, whats the pressure on the other side for him . I mean, part of it, i imagine, is whatever may be a consumer backlash you know, people think about, you know, young kids lip syncing who may be unhappy with the president if, in fact, this service were to be shut down, but beyond Larry Ellison and that pressure, are there others out there . Are there Big American Companies that are pushing on President Trump to allow a tiktok transaction or wechat to be used reporter you know, we havent heard a lot from other companies about this transaction, right i mean, you havent seen a bandwagon effect of other companies saying, hey, wait a second, this is inappropriate use of u. S. Power. We did see the president back off of charging a fee, a transaction fee after forcing the transaction for the you states government. That seems to have fallen by the way side we havent seen a ground swell of other companies coming to tiktoks rescue here partly because they want to stay out of the political frey and not get their nose bloodied and they may see an opportunity. What wilbur ross has said, we have taken significant action to protect americans while promoting our National Values and aggressive enforcement of u. S. Laws and regulations. There are companies that deal with i. P. And cyberrelated information who have been victimized by the chinese and dont have a lot of sympathy for what theyve done over the years in terms of hacking and stealing intellectual property. Well keep our eyes on this eamon, thank you for bringing us that news live on the air. You bet. And walking us through it, literally. We did it all contemporaneously. We appreciate that very, very much you bet. Coming up, well find out what the ceo of man group, the investment firm, Worlds Largest hedge fund group, luke ellis, find out what he thinks the tiktok news means for the trade war. Many other issues. Markets are mixed. The nasdaq is strong well be right back. When it comes to parenting, youre a pro. You know reflexes are key. You know your kid doesnt step around puddles. And wet shoes, not cool. You know what else isnt cool . Those cheap leaky diapers. Because with luvs, you get the prolevel leak protection youre looking for. Luvs, parent like a pro. 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. Xfinity is your home for the return of live sports. Joining us right now is luke ellis, ceo of man group. More than 100 billion of assets under management luke, help us just sort of think through what you think the implications are for the markets and what could turn out to be a broader trade war if, in fact, you think this is a final decision. Good morning, andrew. Well, look, i think this is a good example of what i suspect were going to see a lot over the next two or three months, which is just this is more about politics than it is anything else. Theres going to be a competition amongst the president ial campaigns to look more aggressive on china its very hard to see how you get resolution were going to get a bunch of headlines which sound more and more hawkish if its real and we get through the election, im absolutely sure the chinese would retaliate. My guess is they probably wont in the short term because they know a lot of stuff is going on around getting through the election so youve built this thing where politics is going to ramp up the rhetoric around the trade talks. I listened to that quote of the statement and wilbur rosss campaign to the degree you think the chinese would retaliate, as an inve investor, how do you want to be positioned if that is the case so for the next couple of months youve got to deal with choppiness and youve got to stay relatively light on your feet, but i think if china is forced to retaliate, actually, im in tiktok is very important. Wechat is more important wechat is an institution in china or amongst Chinese People and all of our we have a bunch of Chinese Nationals work for us in the states and they all use wechat with their families the chinese diaspora uses that if that goes through, then china will be looking to retaliate on something which looks like, you know, a tech bellwether thats operating in china are you making reference to apple . Im avoiding making reference to apple apple has done a remarkably good job of managing to keep a foot in both camps and to maintain good relations and so hopefully for the sake of apple shareholders theyll keep doing that i dont think the Chinese Government, if this plays all the way through, is going to leave it un without any form of pushback. This breaking news has pushed our conversation into a bit of a different direction than i was anticipating we only have about a minute but i do want to get some thoughts from you in terms of how youre trying to position yourself in the next couple of months. What you think of whats been a tech rally and some people are calling a tech wreck and what you think are some of the under loved cyclicals and whether you think theres going to be a bounce and were not there. Look, i think the broad thing weve seen is the market has reasonably got its head around the balance between the fiscal and monetary stimulus, the question of while case numbers are going up, death rates have seemed to be coming down were going to get a vaccine or some better treatments over time so sort of the market is got its head around the reasonable balance of that. I think is looking at politics and trade. Its about europe, brexit and i think thats going to create a lot of things. When you look at the tech stuff, look, im an old options trader. Right now if somebody does a very big set of trades, the market has a remarkable ability and how much a lot of the soft bank options were. Soft bank. It looks like they might be expiring. Luke, we appreciate you joining us and helping us through some of this breaking news we hope to have you back to talk more about the markets very, very soon. Weve got another big hour ahead. Well break down whats happening here inside are cofounder and ceo hen Henry Blodgett is going to weigh in were back in just a moment. Look to go snap a twoweek losing streak. Anticipation of higher taxes under joe biden could it trigger a wave of stock selling if the former vp wins the presidency . Well tell you the thinking behind this particular theory. Talk about it. Final hour of squawk box begins right now. Good morning welcome back to squawk box. Becky is off today u. S. Will block downloads of the two popular apps starting this sunday. Commerce department putting out a notice moments ago well get the latest on tiktok from eamon javers. Reporter this Commerce Department action applies to tiktok and wechat. This will go into effect on september 20th two days from now, unless the president agrees to a deal thats been on the table pending among all of these companies to get american control over some of these assets. Heres whats in the Commerce Department newsletter. Here are some of the actions the commerce says theyre going to take theyre saying this order would block the distribution and maintenance of these apps in the United States. It would block mobile funds transactions within the United States on wechat itself. It also current u. S. Users would be able to keep using it, the Software Updates wont be available. There are a lot of actions theyre taking what that does is put that muscle into that threat that the president said by september 20th, if theres no deal, were shutting these things down this is the u. S. Government using its Legal Authority to do exactly that on sunday a big question mark here is going to be over the weekend can there be some kind of resolution here thats going to check all of the political, economic and technological boxes that have to be checked in order to make this thing happen back to you. Before you go, i had one real question which is as ive been looking through this release, i dont know if youve had an opportunity to see what seems like a discrepancy as of september 20th, as of november 12th for 2020 for tiktok the following transactions are prohibited it goes through a list does that mean there is more negotiating time on the table for bytedance and tiktok. That sounds like what it implies based on the language that you just implied, andrew. I dont know why there would be a separate time frame for tiktok on that point. Believe me, were trying to get u. S. Officials to talk to us about this right now to explain exactly whats been done here. We know theyre going to explain it throughout the course of the day today. What wed like to do as all of these companies are being impacted moment to moment, get them to talk to us and explain it to us right now okay. Its happening. Its happening right now thanks deidre bosa covers these companies and what comes next well try to figure. Good morning, deidre. Reporter andrew, i was looking at that. That november 12th date. It looks like the order says that these actions are prohibitions in the order may be lifted on that date. So i think starting on monday when this executive order takes effect or sunday night, that is, wechat and tiktok users will still it sounds like they will still be able to use the apps but as eamon says they will not be able to receive Software Updates and may not be able to download it. You might see a rush weve seen this in the past for different situations but when an app that users know that an app wont become available, theyll all rush to download it. We could see a spike in downloads. Weve seen a similar thing with huawei thats a big Chinese Company thats been in the middle of this trade war they stopped receiving updates from android that has hurt their business not being able to update their smartphone which is a huge business for them with that android operating system we could see big hits to wechat, tencent the wechat parent and tiktok if users can no longer receive updates. Earlier you said wechat is like water in china everyone uses it in fact, theres a group that asked a judge in the United States to delay this executive order. They described it. Some of them described it as if they were losing a limb because they are so reliant on it. Many Chinese Americans use it to communicate as their sole means of communication to family back in china i even have someone on wechat. Its my only mode of communication with her there are so many implications here some of the most biggest ones, disney, mcdonalds, starbucks, walmart, their operations are so entrenched in the wechat app there are questions about will their usage be stifled by the wechat order that will have major implications the other is apple and android if they cannot update their operating systems or even host these apps on their platforms, will users turn away in china . Right now as i look through these guidelines as you guys are, too, they say that they are not going to be able to access it in the u. S. For apple and android they can give users wechat over the Chinese App Stores a payments implication here. The guidelines say any provision of services for the wechat mobile application for the purpose of transferring funds or processing payments in the u. S. Will be prohibited that is a big opportunity for tencents biggest competitor, alibaba. A lot of people are downloading tiktok now, right now i guess its moved up to number 2 this morning. I dont know whether we showed that there it is. Reporter one more thing. Wechat users will continue to use it there was talk yesterday now that we have a few more specifications the hopes may be dashed. Thank you, deidre andrew, i guess i should do this i dont use tiktok but this may be your last chance now. Even though i dont know whether i want it. Now i feel like ill be missing out on something whats my apple password do you know . Oh, ive got it. Anyway, bring in. Well do a video together. Well do a lipsync altogether lets bring in henry i know hes been waiting to join us ceo and cofounder of insider. Lets sort of walk through this, henry. A, are you surprised that thus far the administration did not blink . Do you think this is part of a larger negotiation or do we think that this is now the law of the land . Well, i think in looking at the press release that came out this morning, the two words in the first paragraphs, President Trump, President Trump tough on china. I hope for the sake of tiktok users and wechat users around the world and not just in the United States, this is just a lastminute let me show you how tough i am, you have to bow down to what im demanding, and obviously lets hope that there are no Security Risks. Hard to get into the details i assume this will be resolved in the next 24 to 48 hours i would hope so. Its going to be extremely disruptive if not. Can you imagine a scenario lets do tiktok first but then get into wechat. Can you imagine a scenario where if youre sequoia, General Atlantic, you have a stake in bytedance. We have to sell a majority of this company to the United States, we just have to, but at the same time you have the Chinese Government, i believe, telling bytedance you cant. How do you square that it is tough for the owners and operators of the companies, no question about it, and i dont it sounds like there is a deal that could be approved that could satisfy this. Again, i think weve seen in other negotiations like this President Trumps m. O. Is to make a grand announcement and then declare victory while accepting tiny concessions that dont move it. My guess is thats what the boards of the companies or management of the companies are hoping for otherwise, as your prior guest raised and everybody is talking about, there may be major retaliations here. We want to think its America First thats the mission, were going to decouple from china these economies are totally interlinked, not just technologically. That is much easier said than done you could easily see this escalating if we dont resolve a situation like this. Henry, what does this escalation look like one of our viewers pointed out which we were talking about we chat, theres no conversation about we chat selling any of its business to the United States, a viewer saying, guess what, you cant use whatsapp in china. Why . Because the Chinese Government blocks it. Its not everyone is arguing its got to be the same in both countries. It has not been for a long time but, again, our economies have still gotten incredibly interlinked. Approaching it this way where it is last minute, huge dictate, this is the way its going to be, this is going to be very disruptive even if the idea is over the next five years we try to decouple weve seen theres no way to wave a wand or Say Something and make it the same in both cases yet the idea is both companies do well, both economies do well and we work towards a better situation than weve had as deidre said its hard to over state how important wechat is. It is so much more integrated than most of the u. S. Apps that were using for comparison henry, part of me wonders whether these negotiations can drag on much longer than sunday, maybe not for wechat but for tiktok in large part if you look at that statement and that what seems like a bizarre different date, you know, september 20th for wechat but then november 12th for tiktok. Guess what happens between now and november 12th . The election if there was some political pressure on the president and the administration to not to end tiktok, this will allow the service to continue through then does that provide time and political cover to some degree for the president and the administration over these issues yes i thought it was great you picked that up this is something we see in a lot of press releases from this administration where there are inconsistencies or something that immediately has to be clarified. As you point out, that does leave time to actually get into the details, again, my guess is that this is a big, high profile announcement that says were tough on china and that there will be some extension that will at least give everybody time through that november date to figure out all the details henry, we have heard there have been a number of u. S. Companies that have made calls over the last several months to the administration around the implications of shutting down wechat i dont know if weve heard so much about that in the context of tiktok. If youre tim cook who is happily or proudly a watcher of this program, if you are waking up this morning to this news and youre apple, how much risk do you think this puts that company in well, i assume tim cook has better information certainly than i have on this and has been following it and probably has a lot of lines into t and i really do think theres a lot of showmanship here we know this is the way our president negotiates and sometimes he does follow through so you cant be he is unpredictable there, but my guess is thats the way apple is looking at it. As youre talking about it and suddenly apple has to close down china, Something Like that, the implications are huge. Its just if it continues to escalate, it is a huge deal. It is not a matter of just simply decoupling and going about our own business the Global Economy is not structured that way anymore. News is news, henry obviously were focusing on this i think we wanted to ask you what youre going to do with all of your snowflake stock you got on the ipo have you already told . Are you buying more . What do you make of that i dont think you have any im kidding. You need to disclose that you dont actually have any, but it was crazy, huh i couldnt i wouldnt have been able to get any i didnt put in in time but i wouldnt have been able to get any. Nobody would. Highlights some of the challenges with the current ipo process. Obviously the stock was very under priced relative to the market demand. I think as weve talked about this in the past, it is extremely hard with a company like this to get a very precise valuation and the valuation is very high. No question about that it doesnt matter that theyre not profitable now this kind of business ultimately becomes profitable later we saw that with salesforce and many others. Thats not the concern but the valuation is extremely high an it will settle in here just looking at the fundamentals of the company, it looks great i can understand why lots and lots of investors are excited about it valuation does matter ultimately yeah, thats what i figured good thanks for playing along you have to be pretty special to get in on Something Like that when it moves like that. Not that youre not special but i am not special enough thank you. Youre welcome. Thanks anything else, andrew . You all right . Were going to go now. Were going to go on and talk about something else. Were going to ask a question about whether taxes could hurt the economy im worried about twitter because theyre going to say were talking politics people from that side, if you say the slightest thing, its like, leave politics out of it how do you talk about whats going to happen to the markets if we dont talk about tax policy you brought it up a lot. You ask everyone what will happen. Lets do that always. Come what may take your best shot. Coming up, whats good and still lagging in the economic recovery we scoured the data up there, important take aways about the companys reopening process. Heres what i was worried about reading, andrew. We will look into whether anticipation of higher taxes under joe biden could trigger a wave of stock selling if the former vp wins in november you know whats going to get triggered . Biden supporters just for reading that as we head to break, check out the price of wti crude up 10 this week. Crossed above the 50 Day Moving Average for the First Time Since february stay tuned youre watching squawk box on cnbc the big events are back. Xfinity is your home for the return of live sports. High frequency data is helping wall street forecasters. Steve liesman has new data points and joins us with his latest road back barometer i dont know if youre going to mention nevada youve come a long way love you, baby love you you did. Im doing my best, joe. The High Frequency data is showing improvement continues but the pace of improvement is kind of stalling take a look at the chase credit card spending. Down 6 1 2 year over year that had been a little bit better it came back down a little bit the kronos time punches, up 0. 5 unchanged gain from the last month. Then the burbio Community Activity index, libraries, chambers of commerce, recreational activities, that is also at an alltime high instead of moving in whole points its moving in tenths of points chase card spending, theyve divided that into high unemployment states and low unemployment states. The high unemployment states, they lag just a little bit compared to the low unemployment states maybe thats a sign of the lack of the additional federal spending, that difference had been wider its gotten a little bit closer. Its something that were going to be watching over the course of second. Moving on to look at the kronos time punch data. That had done very well. The 2. 7 monthovermonth increase june 1. 9 then it started to flatten were guessing thats going to be commensurate with plus 1 million when it comes to the jobs market the week after next. Finally community index, the variation in the country how much open the different civic activities are basically at 58 a lot of libraries are still closed some of the chambers you can see some states are fully open take a look at whats going on in wyoming my friend alix there, his son is doing football. Some places like california, new york, florida, theyre not doing that kind of stuff one of the things were picking up here, both of you do your share of charitable activities ngos, nonprofits, charitable, theyre not up and running i did a couple of virtual fundraisers this week. Maybe we could take this friday morning to say, hey, youre not getting the same requests for money, go ahead and write a check, do your best when it comes to charity these days because those folks are hurting right now. Yeah. Good point, steve. Let me ask you quickly we were talking ipos and how hot it is. Obviously theres a lot of money flashing around. You know, markets back do you think gdp wise and economy wise that these plays on stay at home type businesses, is that additive, the gdp net net to make up for all the shortfalls with restaurants, travel, Everything Else . Is it possible where where were missing were making up in other plays . I think there are two things going on, joe. Its an excellent question one that i have to think a lot about. First thing is, the data looks for Economic Activity in places where it knows it exists and so if its not happening here but happening over here where youre not looking at it, its possible the data misses that thats a really important point. The other thing is that you have decline in activity of productive assets or newly productive there will be a tradeoff there over time what you look for is have we come up with solutions that are long run, more productive i think in some cases we have. Some of this work at home stuff means you dont have to get into a car. My car is less productive, my home is more productive. Theres a ways to go to figure this out a more productive solution and that ends up, over time, adding to gdp in the moment theres what you call creative destruction. Youre losing the horse and buggy. Youre gaining the car or whatever it is were gaining now were gaining higher wifi, better connectivity, better ways of using that stuff. Its a great question and one we have to follow but no easy, quick answers or solutions nkts okay, steve thanks andrew coming up when we return, much more on the looming ban of tiktok and wechat in the United States that news just crossing the wires this morning we will speak with tech Portfolio Manager paul meeks sending workers home because of a coronavirus case infections have been reported in a number of Goldman Sachs plees. Well bring you the details when we return right after this employees back to the office gold man sax and jpmorgan had employees test positive. Joining us for what this means for those banks and the future of office work and coming back to work, the pandemic, kate kelly, New York Times reporter and of course cnbc contributor kate, great to see you you reported yesterday on two Goldman Sachs employees coming down with covid. I think the big question people have is how these are getting discovered are the banks running Testing Programs how does this work i dont know if weve lost kates ifv there we may be having a bit of a technical difficulty i this i weve got her back. The travails of pandemic life. I dont know if you can hear me. We were talking about the testing and how banks are approaching that issue. Yes, andrew i think to varying degrees the banks are all trying to test employees and see, number one, do they have a temperature are they feeling okay every morning when they come in. They put in other social distancing protocols my general understanding is the doctors who are advising goldman on health and wellness as people return in greater numbers, believe those cases were acquired somewhere out of the Office People got tested because their kids were going back to schools, schools required it, things like that people who sit on different floors and different areas did not get the virus at the office, although i think theyre taking precautions now. Well, that was going to be the question a number of these banks do have plans to bring more and more people back to the office. Is this changing that equation at all so far it doesnt seem to be, Andrew Jpmorgan has put a stake in the ground on this frankly what theyre doing, which is asking mds and other Senior Executives to come back in earnest is not dissimilar to what goldman is doing and what others have done theyve been a little bit more public there was a stock trader who had the virus and they had to send them and theyve had a bit of a pr stumble here. Jamie dimon went so far as to say he thinks if we dont get people back to the office and sort of in a more Community Work environment, we risk over doses and suicides down the road because people feel so isolated. He clearly feels very strongly about this whats interesting is others are taking extremely different views. Deutsch bank there was reporting to suggest theyre telling people they are rough and tumble in terms of culture. One of the things ive been surprised by is that banks which have been relatively profitable, more than profitable enterprises, you havent seen with very few exceptions big businesses that are asking their employees to come back, implementing the kind of Testing Programs and regiments that youre seeing at some of the universities at beaudoin college, youre testing every other day. After that youre tested twice a week these are universities trying to protect people you would imagine given the high stakes nature of the banking business, the value of these employees, that there would be a greater investment in testing. What do you think of that . I think thats happening. I think how comes are handling this and, for example, theyre offering testing for people that are in the office once a week. I think theyre paying for all private transportation to the office so people can avoid mass transit and the risks of that. They have a Contact Tracing program in place, goldman does, too, by the way. I spoke to one hedge fund that employs about 25 people in new york they have a mandatory return to Office Program in place and they have a forehead scanner when you get off the elevator they said most people have their own private offices. Theyre avoiding the Conference Room even in the office theyre using zoom so there are a number of ways, some a little more aggressive than others. In terms of keeping people safe and if cases do emerge, they limit the spread within the office all right kate kelly, great reporting. We appreciate you joining us this morning thank you. I look forward to seeing you i hope soon in person. Yes that would be great. You bet joe . Thanks, andrew. Coming up, youre warned. Looking forward to seeing you in person, too good. Thatll i feel youre so close. Do you know how big that screen is its that i dont know, is that 100 inches . More than that youre huge, andrew. Youre looking good. The joe biden proposal warning you that might cause investors to dump shares if the former Vice President wins in november. Stay tuned youre watching squawk box on cnbc breaking news this morning the u. S. Will block downloads of tiktok and wechat starting this weekend. Both of the popular apps are owned by Chinese Companies eunice eun joins us. I was watching you on spy kcam. You were frantically tapping on your phone downloading tiktok under the wire, im sure did i catch you . Reporter i already have tiktok and i also have wechat. I cant survive without wechat here i think thats whats interesting well, what i found interesting is actually i think this is a bit of a climb down from the Commerce Department because the important points that i saw was that the decision only affects wechat in the United States and the big fear here among people in china but also within the because community is it could have affected the chinese version, which is wechat. It isnt going to have much of an impact. Were talking about for wechat in the United States having 19 million users versus in china which has 1. 2 billion users. Of course its critical to get things done in china the other way that its looking kind of weak and a bit of a climb down is with tiktok because with tiktok, the date that you guys were talking about was really important november 12th date commerce secretary wilbur ross had said that the real shutdown is going to be on november 12th. The shutdown on sunday will only affect upgrades as well as maintenance. So thats not really a big deal and, in fact, will give bytedance and oracle, walmart perhaps as well a lot more time to be able to figure out what kind of deal they want and what would work if they do, indeed, end up doing a deal at all all right, eunice i mean, it hit and it was like, whoa, what is this weve been talking about it ever since. We need some time. Well see what happens between now and sunday i think this is far from over and this is i dont know where we are, what inning it is. Anyway yeah, well, i think actually businesses in china, the u. S. Business community that has large operationness china are probably all cheering this the executives that i spoke to and the business lobby groups had all been pushing the Commerce Department and the Trump Administration in general for some type of mitigation. So to me this looks like mitigation because they are not going after wechat in china and that is really where the community was most concerned because they do everything on it, like im pinning stuff on my phone, im using wechat to, you know, message people, use it like most of the community here, especially the Business Community uses it for marketing, to try to communicate with staff and chat groups. So really important in china, not so important outside of china. Eunice, thank you andrew thats a fascinating take, by the way, because it really i dont want to say its unconventional, but it may very well be the view from china and may, in fact, be an interesting view if thats the way u. S. Companies are thinking here that its going to give everybody more time to get to a deal. Meantime, democratic president ial nominee joe biden planning to raise the National Gains tax. That can ripple through the markets. Robert frank joins us with more on that. Robert reporter andrew, yeah. A huge question for investors as we head into this election, one youve done a great job of raising in the last few weeks. History shows an increase in the Capital Gains tax will lead to short term gains but it will not drive down the market. In 1986 the Capital Gains rate increased from 20 to 28 . Investors sold stocks and others in advance Capital Gains realization soared by 60 in 1986 but, and heres the big but, the markets also kept going up. With the dow and the s p higher at the end of the year and rising well into 1987. Now in 2013 the Capital Gains rate increased again from 15 to 23. 8 and, again, investors sold leading to a 40 increase in realizations or sales. Now the market was flat for the second half of 2012 and beginning of 2013 but Research Suggests that an increase like the one biden proposes on its own would lead to a 60 to 70 increase in realizations or sales. But even if they sold, investors could jump right back into the market after capturing that lower tax rate, which means stock prices wouldnt necessarily fall so you could see a big increase in Capital Gains tax revenues in 2019 which would be good for the federal government and states, but not a prolonged market decline. Investors could sell, capture the rate, and jump back into the market guys, back to you. Hey, robert, does all of the Stock Ownership by Pension Funds and Retirement Funds also play into the impact . This is huge, andrew. If you look at who owns the stock market and how many investors are taxable, subject to the Capital Gains tax, only 25 of investors today of the ownership of the stock market is held by taxable individual accounts 3 4 of the market is Pension Funds, ira, defined benefit plans, overseas investors, passthroughs entities that are not subject to the tax. So the fact that only 1 4 of the market is owned by taxable accounts could dilute any impact of a tax increase. Okay. Robert, thank you for bringing us that. Thank you. Were going to continue that conversation right now joe . Stay on the beat, robert. Because, you know, biden wants to raise 3 to 4 trillion over a decade and in addition to i mean, that Capital Gains move that youre talking about, trump wants to go down to 15 or at most 18. 8 from the 23. 8. I think you probably said this biden wants to go to 39. 6. Then you have people over 400 grand are going to have he acknowledged, theyre going to get taxed. He wants to go Corporate Tax rates back to 28 from where they are now at 21 so that somehow that comes to 3 or 4 trillion if you figure thats fine to go into the government versus the private sector, thats fine. There are offsets and we probably owe a lot of money. Thats fine. Know that is the bottom line and were going to talk about it now. For more on what the biden presidency could mean to investors and what to watch out for if you are an investor, lets get to libby libby cantrel is head of u. S. Public policy at pimlico corporate individuals over 400 and then Capital Gains does any of this give you pause . Youre at a big investment firm. Just wondering what you think, libby . Yeah. We, as you predict, have been having lots of conversations internally about this and with our clients but, joe, i dont need to tell you this, but really whats going to be incredibly important to sort of sort out the rhetoric to the reality is the composition of congress. Right of course, as we all know, its very easy to say things much more difficult to practically implement them, especially on the tax side i think my and our expectation is that, you know, yes, taxes will be going up under a Biden Administration assuming that he has a democratic congress, Democratic Senate in particular, but once they get through the machinations of sort of a legislative process, theyre likely not going to be as draconian as how it looks on paper. Especially around the Capital Gains going up to the ordinary income levels for those making more than 1 million a year, i mean, could that happen . Sure but if you have a narrowly divided senate, things like that could very much get watered down so i think the bottom line here is, yes, taxes are going to go up under a Biden Administration, again, given assuming you have a Democratic Senate, but likely are going to be watered down once you get to the machinations. Andrew probably wants to ask the question he asks a lot, libby. Andrew, you know your question about given the economic backdrop because of the pandemic and other things, will it be harder or is it a good idea to even attempt to do that . Go ahead, andrew do you think joe biden would have i think theres a real question about whether youd want to raise Corporate Taxes or, frankly, any taxes in the midst of this pandemic given there are still conversations about whether theres stimulus necessary to keep the economy going. And what raising taxes would mean in the midst of all of this thats not to suggest that it may not make sense in the future, of course, to raise taxes in a pro cyclical way when things are better in large part to pay for all of the things weve just encountered, but at a time when theres still a conversation about stimulus, i wonder what you think . Andrew, i think that is an excellent point. I think sequencing is going to be top of mind for biden and democrats, especially if they dont get any stimulus before the election or before january of 2021. Ive been of the view that the political Downside Risks of not passing anything before the election is simply too great that does not look like thats actually the case. It looks like any sort of hope for additional stimulus before the election has faded very significantly. Especially if theyre in that situation come january 2021, the new government, new administration and they havent passed any stimulus, i mean, raising taxes is not going to be priority number one. Its going to be getting the economy on firm footing. If that does include, you know, more of a rescue relief package, but also more emphasis on recovery, which will likely be more infrastructure, more jobs, what have you. I think youre exactly right you know, this is not lost on the biden folks. Theyre not going to be tone deaf going into a slowing economy, they nderstand raising taxes i not great for macro economics. Just to put a fine point on it go ahead, andrew. So you dont believe in we had Vice President biden on this program and asked him basically the question i just asked you, which was, you know, in the midst of a pandemic would you raise those tax rates . He said, yes you think that is not a bluff but a bit of hyperbole given the way youre thinking about it or no i think we have to take former Vice President biden at his word once things go through the legislative process. This is not just about the president. You have to actually get a bill passed through congress. This is, again, where through the composition of congress and how what the Senate Looks Like in particular, if it is a very narrowly divided senate, those democratic new Democratic Senators are going to have a view on what they want to do i think the view will likely be a focus on reviving the economy. With that say the, and i just want to be clear here, i mean, there is no sympathy for very top earners on capitol hill right now. On both sides of the aisle at some point will taxes be increased under a Biden Administration on those folks . I think absolutely i just think the sequencing will matter again, when we go through the legislative process to bring in other members of ongress, thats when i think it will be more focus on it thank you thank you. We need to treat these issues very delicately. I think we did a good job there, andrew not too many people people triga this point, but, anyway, whats coming up . Okay. Weve got the biggest factors dragging down tech, we will talk about it after the break and dig intohayone wt u ed to know stay tuned, youre watching squawk. Its the satisfaction of upgrading to a bidet seat, just like that. And the simple joy of washing your hands, without ever touching a faucet. We think its the Little Things that matter. And we know you do too. Thats why we create moments to feel kohler clean, every day. Coming up jim cramers first take on the markets this friday morning. Stay tuned squawk box is coming right back lets get over to cnbcs headquarters where jim cramer s jim, want to get your first read here is on this wechat and tiktok news and what it really means. I think that walmart and oracle will be working all weekend to try to figure out how they can satisfy the president i think theyve already feel theyve given him everything they can but obviously thats not going to get it done there has to be a step up, there has to be a change i know that neither walmart nor at this point the backers of the deal obviously speaking here about ga and oracle feel like theres anything left to give. They thought it was going to be a landmark deal with oracle, walmart and tiktok and the president was going to be able to trumpet it as a fantastic win. Its not a fantastic win its not going to get done and i think theyre really scrambling at both of these companies. Jim, what do you make of this they subtly shifted this absolute band date to november 12th we were talking about what that really means and what that date means. It may very well mean there is a lot more time to negotiate, it also puts the final ban if there is one after the election. Yeah, i know. I think that the side that is trying to get it done, the other side of President Trump, doesnt view it like that. I think they view it as this weekend or nothing i read the language and i said, do you know what, this is the wiggle room they need, but thats nothow they view it they think its going to come down to this weekend its certainly possible, but the president is the guy doing this. Its not any of his advisers, its the president and so nobody knows whats going to happen. I mean, its a little apprenticelike frankly. China is the Security Risk, if they can prove that they are not a Security Risk they get the deal done. Jim, we will look forward to morph your commentary in just a couple minutes. Have a great weekend, guys. You, too. Have a great weekend joe . Thanks, andrew. Joining us now for more on this story and the global tech trade, paul meeks, Portfolio Manager and Investment Committee member at independent Solutions Wealth Management can you see the future whats going to happen, paul, in your view . Well, in this particular deal ive always felt that there was a high uncertainty that it wouldnt be done at all. That at the end of the day, you know, both sides want to at least save face and say that they won a couple of battles, but the chasm between these two is too far at the end of the day i would be surprised if really anything is closed. So you just are and what would that end up resulting in, you know, from here on out in terms of the u. S. china relations . Well, one of the things that i worry about, joe, because you know i focus on the tech sector, is out of all the things and there is a lot of stuff going on in the world right now, this intensifying battle in technology between the u. S. And china, is what scares me the most they have a decision that theyve made that they want to take particularly their Semiconductor Industry aggressively inhouse and were allowing them to do that and as that progresses over time right now they probably are producing about 40 of the chips that they own, in about four or five years they want to get to 70 . At that point because thats the most important part of technology for the u. S. Visavis the relations with china, if we get to that point, we are going to need them more than they need us and thats really worrisome for technology. Overall, paul, what is the state of the not technology, but tech stocks, given the last week and a half, two weeks yeah, you know, when i come on the air if i feel its time to ring the bell i do so pretty loudly, but right now im cautious on the sector and when i say im cautious on the sector id recommend that the average investor would try over time to at least be neutral what i see you should be in a u. S. Stock portfolio, which is about 30 to 50 of those stocks in tech, right now id keep it a little light. You know, were going into the election, the u. S. china nastiness continues and of course not just since covid, but all through 19 and the beginning of 2020 we had a massive rally in tech stocks so frankly even some of thigh favorite names have gone too far too fast, ever since labor day were starting to see some of the valuation froth being blown off but i think theres more to come. When would you recommend snowflake . What price oh, wow i dont know if ever you know, its obviously in a hot sector, but id have to see that company germinate with at least several quarters of Publiclytraded Company results and the stock to be much, much lower. You know, there are other plays in the cloud that i would probably go to first you know, obviously there is a lot of hype around that stock. So youre cautious. Is there anything you would buy today . Are there three tech stocks youd buy today and three that you would sell yeah, i would say now for somebody thats really longterm focused make it fast, though, paul. Weve got 20 seconds make it fast yeah. I would say my best longterm idea is micron technology, mu. Worry about the august quarter, already past us, worry about the november quarter, frankly, longterm i think the stock doubles, i dont see the same upside from my other tech names. Paul, thank you. Yes, sir. Well see you again soon. Andrew, we will see you next week if i have trouble down loading this tiktok thing i can call you, right, or text new. Download it now, but as you said, joe, i think im squarely in your camp, i think the negotiations continue. Yeah, thats what we thought right at the beginning anyway, have a good weekend. Make sure you join us on monday, squawk on the street is next good friday morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer and david faber. Futures are steady on this friday as the story of the morning is commerce, banning updates to tiktok and wechat beginning sunday or National Security concerns. The question is what can happen between now and then our roadmap will begin with the tiktok trade the white house is set to block u. S. Down loads of tiktok an