Transcripts For CNBC Squawk On The Street 20240712

Wechat on sunday. Back to the race for a treatment for covid and a cure, at least a vaccine roche unveils a new Antibody Test and Vice President calls on trump to step down and tech volatility, the s p and the nasdaq aiming for a rebound to end what has been a turbulent week for stocks. So we will start with tiktok and wechat, jim, just listening to you and andrew a moment ago doesnt sound like you see a whole lot of material to salvage this in the next 48 hours. I think that walmart feels like its given everything it can, i think that the people in the private equity have given everything, oracle, difficult to tell whether they think they can do more, but they had really felt that when pretrump it was looking like it was 43 owned by u. S. , 14 by international, chinese own 45 posttrump they are talking about u. S. Owns 53, international owns 11, chinese own 36 i think its the chinese owning 36 is the Sticking Point david, what level do you think the president would allow this deal or would it just be as long as theres chinese, forget it . Im not sure, jim i think thats one of the key questions and we dont know the answer listen, i stick with my reporting from yesterday, though, and i dont think theres anything in todays news from commerce that indicates that its not possible, trump will sign off on this transaction. Right . Its still very possible he will come to the rescue. Absolutely. In fact, that is sort of the dramatic that he likes. Exactly we just need walmart to say, do you know what, mr. President , you win, we will do it whatever that is and then they get it. Jim, theyve got the deal on the table that theyve offered, i think cfius again in my reporting is that they more or less signed off on it but it needs the approval of the president which is typical at least when it comes to that. By the way, what is completely atypical is the way that the u. S. Government has gone about structuring a transaction, you know, if people wanted to take issue with that in the courts they probably could, but separately as to whether or not you get a deal as we said yesterday, it could be within 24 to 36 hours that the president makes it decision, jim, i dont see anything that necessarily indicates thats still not going to potentially be the case you have to get this ready and tell people i would assume to be ready for tiktok app down loads not being allowed. Yes. And by the way, the wechat stuff is more serious in many ways and part of a company that has a 650 billion behemoth in china and a lot of that stuff takes place on the 20th in regards to wechat. I look at that as a much more Security Risk if i were in the white house. This is the lets call them the tiktok side, they wanted 25,000 new american jobs you could see the president saying, do you know what, you wanted 25, we want 35. They want all data and u. S. Information stays in america the president could say i want you to have no contact with the chinese and, do you know what, theres a deal because what they could say is its going to take us a little time, but we will get there. Right youve been talking about the idea that there would be an ipo. Essentially what you seem to be saying, jim, is that bytedance would sell out of its position over time. Yes. In the public markets, taking tiktok u. S. Or maybe its tiktok uk also, new zealand, australia and canada, its unclear whether they are all included or not, the five is they call them, taking that public and bytedance no longer being a part of it meanwhile, i still dont know that the 20 that i reported oracle is willing to buy, what that is 20 of how theyre valuing this tiktok property, but to your point that makes sense. I would remind people as well the u. S. Government was willing at least at one point to give microsoft, for example, a year with the source code being updated from china before they had to take it over in full and make sure it had no chinese influence or no chinese engineers associated with it. But, david, theyre offering all tiktok source code including the algorithms will be under u. S. Control theyre offering that. Right. Why isnt that enough for the president . Maybe it will be. No, its not. Youre telling me you know that thats not enough is that what youre saying yeah. Okay. I mean, yes all right so your reporting is that the deal that has been proposed, potentially even signed off on by cfius may not or is not enough for the president. Yes, exactly. Well, then that makes us view what weve seen today differently, doesnt it . Or does it i think that walmart is not done. So you think this is designed to put pressure on the parties. Indeed. To get them to concede even more in some fashion. Take it so that posttrump order would be 60 u. S an ipo thats not 12 months from now but an ipo thats now. That they contact the banker and they do an ipo in four weeks david, i think its a deal if they do that, but i just cant see them willing to give in any more than they have. Walmart maybe. Yeah. Well, carl, my reporting was that walmart there would be a board of directors set up, that walmart would be a part of that is correct they would not have as large an equity stake in this entity as oracle, but well have to wait and see, carl, i guess, particularly given what jim is telling us here. It all comes down to which is what he likes, right, the president , i mean, its sort of his playbook. Well, jim just compared it to an episode of apprentice a few minutes ago. The head of instagram just wrote just now about the idea of an outright ban on the 12th of november after the election. Ive said this before, but u. S. Tiktok ban would be quite bad for instagram, facebook and the internet more broadly. What can we read into that, the idea that the chinese would respond in ways we havent yet talked about yeah, i think thats the case because theres a terrific note out today that talks about how well reels is doing for walmart im sorry, for facebook that is absolutely a competitor to tiktok. Morgan stanley says that theyre doing amazingly well and that this is one of the Fastest Growing properties that they have, reels has gone from 0 to 34 in 40 days its having what theyre saying is basically, hey, look, we want this competitor because we want to keep china open facebook, by the way, has never been a big fan theyve always said that if the source code and the algorithms can be kept away from china they are in favor of the deal they have not this is an interesting weigh in david, you know that on the surface facebook does not benefit from what that statement says because theyve got instagram they have reels and reels is hot. Right there are trades going on right now where its buy facebook on this on this news. Yes what do you think of that . I think there are people who believe they do benefit. I do think they do, but thats a free market note from instagram. Its not from Mark Zuckerberg. Right Mark Zuckerberg has not opposed this deal, he just wants to be sure that the source code its the same thing. Source code and algorithm here i dont know how if youre saying that thats going to be here and the president is not happy, what do you do . Say its going to be here and its never going to be able to be and china has just closed it entirely, like prenixon . I dont know. I dont know how you get bytedances ownership stake down i dont believe these parties are willing to step up for the tune that they would have to Microsoft Might have been willing to. Yes. And seemed to be willing to we never had full clarity on exactly where the problem was there. Was it a valuation issue was oracle willing to value this business at a higher level than microsoft was . But microsoft certainly would have been a potentially in a position to buy it all, right . That would have taken off the table this ownership issue. Then what happened . I dont know, jim that one i dont i just dont listen, i havent had a lot of visibility here and there, but not much visibility into this process unfortunately. Didnt satya offer the deal that the president wants wow. Yes i mean, that was that was the anticipation is it would be a full sale of tiktoks business in the u. S. , potential including those other englishspeaking countries as well and that you would get one year in which to get the updates on the algorithm, you would build your own platform during the course of that time and that would be it, it would be yours with your own engineers. Not as much scale as tiktok global. The president could claim that theres going to be 25,000 new jobs, he could say that theres billions in new tax dollars, he could say it creates a new social media platform for america. Arent these all wins in the eyes of an electoral public . I dont know about that i keep coming back to what Lindsey Graham told vanity fair about a month ago and that was that he advised the president not to go after tiktok because he felt that there would be blow back from a certain demographic in this country. Who knows whether the president took that to heart, but that was something that graham did say on the record about four weeks ago. Carl, did he fear that candidate biden would say that this is a give up to the chinese . Thats a very good question coming on the heels of that town hall last night in which he called russia an opponent and china a competitor i guess were going to try to delineate what those two terms mean and how theyre different. If you have a u. S. Ceo, if you have a board thats majority u. S. , what does the president really want . Does he just want does he want bytedance to sell everything right now and have an ipo right now . Does he want that . Jim, youre asking the question, i dont have an answer to you seem to be closer to knowing than i do. Nah, im just another guy im trying. You are another guy. How about if he says and i want it to be like snowflake and i want 250 million just like benioff got. He was apprised of the fact that he couldnt take a fee. He couldnt take a promote we the people of the United States form a more perfect union. Yeah, i should be able to say yes or no to every deal and get a Little Something on the side guys, i dont want to overlook the wechat part of this because when it comes to relations between china and the u. S. , this may actually be the more significant move and a lot of it is taking place as of the 20th as it relates to wechat, remember september 20th for wechat, november 12th for tiktok when it comes to Internet Hosting Services that enable the functioning or optimization of the mobile application, in i provision of content, delivery, Network Services enabling the functioning or hospitalization of the mobile application. I mean, basically as of the 20th of September Wechat is not really going to operate in the u. S. At least the way you read this. I know. Again, 10 cent doesnt trade here but if it did it would be one of those companies we talk a lot about. Its 650 billion, its a giant in china in every way in terms of ecommerce, in terms as well of Financial Financial transactions and were taking a real shot straight at it now, this property in the u. S. Is not very large in terms of the overall use of wechat around the world, but its not unimportant for them and so i dont want to overlook that because this is the more stringent of the bans that are taking place as of the 20th. But wasnt it always supposed to be parallel to the chinese blockage of facebook, instagram in china isnt that what its supposed to be i guess i dont think navarro or trump were ever going after wechat or tiktok use in china. No. Okay. Good, i want to be sure about that. I dont think they can, but they can here. Anybody using the wechat platform here. Do you think they just want reciprocity, if they say, listen, we will take facebook, the chinese changed the deal does he want that . We dont know. Carl, i think the problem is that he doesnt know i mean, hes trying to make up his mind. You are the trump whisperer, not you, my manned. I was an apprentice judge, believe me, during the km eshl is when you made up the mind one time i was for someone and i was told the reason they got cut was because of me. Not unlike some things that were said this week its politics, its a mean season, you have to watch everything you cant we just talk about the new core upgrade . Sure, we can do that later. We are going to get to some of the calls this morning, guys, because there are some down grades of names like beyond meat, home depot and lowes, goldman today saying that further fiscal stimulus this year is now unlikely which has some implications for q4 growth. Back in a moment this selenite grey is so pretty, isnt it . Wow jim, could you pop the hood for us . There she is. Turbocharged, right . Yes it is. Jim, could you, uh, kick the tires . Oh yes. Can you change the color inside the car . Oh sure. How about blue . Thats more cyan, but. Jump in the back seat, jim. Act like my kids. How much longer . Thats exactly how they sound. Its got massaging seats too, right . Oh yeahhhhh. Oh yeahhhhh. Shop from home or inperson to learn more about the mercedesbenz sedan family. Lease the c 300 sedan for just 449 a month at your local mercedesbenz dealer. Now you can trade stocks and etfs for any amount you choose instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. Stocks by the slice from fidelity. Xfinity is your home for the return of live sports. We spent the a block talking about tiktok, guys, but vaccines and covid continue to be a story all around the world, jim, this news out of the times that pfizer and moderna may give some clues as to how effective they see the trials maybe earlier than we think. At the same time the uk hospitalizations doubling now every eight days and israel begins a threeweek lockdown today. Look, things are back in play in all these countries i looked at the numbers in madrid and it was looking like they beat it and now its looking like its one of the most aggressive really one of the most aggressive come backs of this terrible disease moderna i will tell you, i think that a lot of us were confused about the mystery of trials, trials in general. The idea that these two companies, moderna and pfizer revealing deals revealing really details right now while this is going on, that is so highly unusual it is so secretive typically, unless theres something that is the holy grail where it just could urs it and then theres no messing around, but, david, you know that this is the most open book 30,000 moderna, 44,000 pfizer and theyre basically giving you it sounds like theyre going to give you updates every week. Well, i guess the market wants it, right . But you cant get any look, if you are in i know. Its not going to be definitive in any way, it may actually mislead to some extent or you may find with the astrazeneca where one patient they didnt release that, that was i think stat reporting on this initially. Jim, i wonder, though, the market will continue to take some of its cue for the hope for and timetable on these vaccines but they started early voting today in virginia when is the election going to start to perhaps be foremost in investors minds or is that not going to be the case i dont know, i got my application for an absentee ballot yesterday in the mail from jersey and its already makes you feel like, well, wait a second, is that a dangerous hot spot where you vote . It makes you feel that perhaps you shouldnt vote where you normally do. Thats the look of the indication to the absentee ballot carl, i think that this election season is now, its yesterday, its tomorrow. This is very different from were going to come in one night and the president is going to be chosen so, i dont know the more we talk about the disease the less i want to go to the polling spot. All right but to your point on the fact that we may not actually know or its possible that it will be some time as others at least its possible, we dont know. No. But that cant be good to the markets, can it . I wouldnt think so uncertainty we know is bad for stocks, but if we get a stimulus package and we get good news on antibodies, which is what my focus has become, then i think that there will be a good market no matter what and i mention the antibodies, david has been on this forever, but theres a vaccine is going to take a little longer to get because of how long it takes to see if someone gets covid after theyve had a needle in the left or a needle in the right. We may come up with something right now that gets us out of the hospital in two days and it makes it so that its a disorder that is dangerous as opposed to the possibility that you will join the 200,000 people who have passed away. Yes, i think thats true. Right. The antibodies, now, remember, they have to be infused, the monoclonal antibodies if they were to get to market, be approved, have enough manufactured but im also keeping a close eye on the small molecule developed by merck thats not a monoclonal antibody, that would be a game changer as well. It is in phase two and phase three trials and something that is worth keeping a close eye on. A number of analysts who follow merck are doing that. And regeneron. Which is a monoclonal. Two very powerful opportunities. Regenerons stock is rolling over as if they have nothing, its down 100 points from its high, but there is a number of stocks, carl, down 100 points from their high in this nasdaq and look like theyre rolling over i was doing a comparison of some of these hot nasdaq stocks to a freeport which is a copper stock. Yeah. If you look at the freeport chart it is its what these nasdaq stocks looked like before the labor day selloff. Sure. You are in the wrong ones if youre barking up brink central. David, this is not the time for z scaler. No, it may not be what about unity, though unity today will be another incredibly hot it would seem initial public offerings, maybe not quite on the level of snowflake a couple days ago, but not far. Im hearing the same kind of enthusiasm, lets call it that. Right. Goldman sachs i think the lead underwriter when do they run out of money . Are they just going to okta to . Maybe. Sell some crowd strike . Would you no, thats what they do they sell what they have they sell adobe after that great quarter. To make room for unity. Exactly, david. Exactly. You couldnt be more right well, guys, as barclays said this morning, its like they were listening to our show yesterday, jim, measures of equity valuations are now at 2000 dotcom bubble levels and we are reluctant to chase the rally, 3100 yearend target. David, how much did we cost yesterday when we gave them that information . Nothing and i dont want their money. Carl, they can keep their money. Thats so gracious of you, jim. I can afford a tie. I can afford a tie. Squawk on the street back in just a moment watch tesla, 5 premarket as piper goes to 515 from 480 and wedbush goes to 475 from 380 squawk on the street is back in a momt. En announcer the opening bell is brought to you by nuveen. A leader in income, alternatives and responsible investing. All right. Lets get to a mad dash. You mentioned nucor. Theres something going on in the country, we saw lumber going up, plastics going up, dow chemical had a fantastic meeting theyre raising numbers big. Today is nucor they do a mid quarter announcement of how theyre doing, they raised the estimates, they expect 50 to 55 cents, consensus was 37 cents. They are not giving you full details about why they are cautiously optimistic but they are flagging recent uptick in demand and frankly it looks like its a nonresidential construction so steel one day its going to be auto, not yet, but, david, to get this kind of increase at this moment with this stock this low tells you that perhaps theres something going on that is a bit of a boone in some parts of this country. Nonresidential, thats the blast place i would think. I know. Were trying to dig more its not oil. Unless its warehouses. I dont know. Yeah. Those are going up i suppose. I keep trying to figure out when you see Something Like this how significant it really is, but because maybe its not just maybe its nucor, but it looks like the other guys are following along. We dont know. Its just kind of a general u. S. Economy call totally out of synch with what we see, but in other parts, but nucor does not make small restaurants or coffee shops. No, they dont. No, they dont. They dont make the 14 to 15 million jobs that are going to be lost if we dont have a stimulus plan. Yeah, carl, its funny, stimulus, i dont know you know, mark meadows he sounded pretty positive the other day meadows when we had him on but doesnt seem to be as positive now no, and then goldman today the prospects for further fiscal stimulus have dimmed further as another week has gone by without think progress title of their report is further fiscal stimulus in 2020 looks unlikely guys, something a little bit different today at the new york stock exchange, theyre doing a virtual overlay, this is for unity, san franciscobased company which makes software to make video games so they recreated the bell podium in a way that lets all of their employees take part in the bell ringing and were going to see where unity opens later on today, but kind of a unique opening bell this morning at the nyse, jim. I want to see some of these stocks are so out of whack with their cohorts. Take two interactive, created grand theft auto and rock star, which is a company that is considered to be the absolute best is worth 18 billion. Are we going to have some crazy price for unit. He that exceeds that in the same way that people are still buzzing about what happened with snowflake. Snowflake went from being something incredibly exciting to being something that felt like a top for a lot of people. I think the money is going elsewhere, i think its going to the nucors and the dows. There is not stuff vils to be able to handle all the money thats coming out. Lets watch this and if its another one that is just way too high its going to be another one, david, are people going so say, do you know what, ive had enough i think that people should be very concerned about what i regarding as being a total hangover from snow flame. Im looking at snowflake now, after yesterdays decline. I dont know where the multiple to revenues is at this point, still got a 60 plus billion dollar market value. 100. Its still 100 . 231 its high was 319. You know, all i can tell you, david, is that its absurd versus its own group, versus its own group. Remember, zoom is the fastest grower, zoom also they are about similar growth, but guess what, zoom is incredibly profitable. Right. And gloom is at r50 tim50 tis the underwriters priced it at zoom levels, zoom is the most expensive company in the market until snowflake. One of the difficulties people have is that snow fla i can is not that easy to understand. You know when it says allow versus not allow, im getting a snowflake ad every half hour to trial and then theres some bot that asks me what im looking for. I dont know what to tell the bot, i feel terrible, but not that the bot has feelings, if you brick it does not bleed, but it is just something all i can say is that snowflake is too difficult to understand for the people who bought the stock. And Frank Slootman is so great maybe whats a little more easy to understand, jim, is this call out of opi on home depot and lowes which im sure you have thoughts about saying the market is too lax about the chances of a postpandemic reset in Home Improvement retail they take both stocks down to perform. Look, i think that you could argue and a lot of people are doing this, by the way, theyre taking things down because they feel like the beyond meat call that stocks have moved too much and they want to be able to declare victory. Everybody has a victory in home depot and lowes these stocks are up tremendously from the bottom. Lowes is up magnificently from the bottom you could make that call but here is my problem, carl, how about if home depot goes from 279 to 234 do you upgrade i think home depot is a magnificent company and could counsel down a little but if it does i dont think the stay at home thing is going away when i read about goldman the two companies that wanted to bring people back, Goldman Sachs and jpmorgan there were people who came down with covid and now theyre doing contact tracing, not as well as i think the chiefs game, but where they did incredible Contract Tracing david, you know, jamie dimon really wanted people to come back. He did. He wanted traders to come back listen, i think there is a desire on the part of people to go back, too not everybody. If youre young. If youre young, but even im hearing from even my cohort that there is people are sort of tiring to a certain extent of working out of their out of their homes. Their spouses bore them they dont like the dog . Let me go risk it and get covid. Its been more than half a year at this point. I suggest the stop by the moderna trial and then go to jpmorgan. That doesnt mean that suddenly offices will be filled with people, they are not. If we do get cases which seems inevitable its going to slow if not stop entirely that sort of move back to the office. Listen, new york had been saying for some time you can come back to 50 and nobody seems to even be close to that number. Closer to 10 to 20 percent is where things stand right now and thats for urban areas i think around the country. Carl, one of the things that i think we have to watch, salesforce, nice note today, positive, had an amazing quarter, salesforce one of the first ones to shut down, salesforce was saying theyre not going to open they will be the ones latest to open and they are closing deals left and right. People arent going on planes, not that salesforce had the expensive dinners, but im saying it may be cheaper to run the company from home and in the end you may want to train the jpmorgan beginning class thats what they wanted to do, but if salesforce is saving a lot of money, margins are going up and theyre closing deals by zoom, i dont know i mean, do you really need to go back to the old ways i dont think theyre going to go to go back to the old ways. Look at what larry fink said this week about employment at blackrock, maybe never getting back to 100 jim, some of the High Frequency numbers that we track have been rolling over in september, chase card spending, open table diners, Airline Traffic as you said, hotel occupancy, apple mobility data. And then you top that off with what bostic said this morning and that is that there are signs of the economy slowing as the summer boom sort of wanes, jim. These are very big issues and if you are to international in the International Business as united is, there is a tremendous amount of business they have a lot of countries wont take us i dont know if people realize if you are going to go to spain you need a visa, okay . If you are going to go to italy forget about it, even if you have a business there, a wine business, an olive oil business, you cant do it. Then, you know, carl, when you have a lot of business travel, like delta has and american, its not coming back thats why people like southwest air now because they feel its better as a leisure play, but im not im not particularly sanguine about how the airlines are doing here its not coming back the way i thought it would have. Its just not. Are you concerned, jim, as well we had this discussion yesterday go ahead, carl, sorry. Im just saying as the executives were hat in hand at the white house 24 hours ago. They need help. I think that they should go back to the old deal that they had, you know, i spoke yesterday, a grant seems to be nogo, but i really do feel that we have to be careful of a second wave. We have to be careful of i look at the colleges numbers every single day in the New York Times and this business travel, if your company was based on business travel, your company is going to miss the numbers big. I really feel that way and its something weve got to watch. That was going to be my question, jim. I think theres got to be some concern about a second wave to a certain extent weve been low for a long time, for example, here in this part of the country it doesnt mean you stay that way. At least, you know, again, as temperatures start to cool, as people are indoors more perhaps, you have to you have to worry about that i would assume. Yeah, i think so. I think, carl, that there are a lot of people who got complacent and kids come back from college and they have covid. By the way, one of the most stunning things do you know that of all the casinos i thought wynn was supposed to be doing the best in terms of trying to get rid of covid look at this, the company wynn says they are 497 of the positive cases of wynn out of a test of they have 548 all together out of a test of 15,000 people thats too much. You cant have 548 employees and theyre very good, they brought in Johns Hopkins to try to figure out how not to have covid. Indoor it is so hard to prevent covid. It really is because air circulation. Its very hard. Yeah, i dont know what reports youre getting out of vegas but i think traffic is particularly good there still. Las vegas reviewjournal, it seems legit. It is legit you can just see with your own eyes in terms of the traffic levels there. Las vegas sands 424 total employees test positive. Right. Compare this to the nfl is anyone amazed that the nfl they just had all their tests, right, they are all tested and no one came out positive unless theyre not talking about it thats a lot of contact in that game, in those games and a good game on thursday night for once theres some good plays last night, jim. Werent they . The number two running back for cleveland is better than the number one running back on almost every other team. Incredible. Yeah. But to your larger point, i mean, i guess at this point were going to be hoping, right, that we are not headed for, as you said, something that they are experiencing now in spain, france, is close to setting new daily case records and we mentioned the uk i think every front page in britain today is about how either tester tracing has failed, 10 million under lockdown, failed promises from boris johnson. So were just hoping that that wave is not headed towards us. I know. And there are places like bars that are just very hard to control. You cant wear a mask while you drink a margarita. How sagelike is that, david that may be one of the keenest observations you have ever had. Dont you think by the way, when you can come up with that mask which he can keep wearing and drinking your margarita then you really have something. I dont have that yet. Keep working. Small molecules. I dont know im not sure what i mean i have no idea what im talking about. You dont. And i take physics. And sartorial lessons. You dont like the open neck. I know. Speaking of sports, jim, i see Morgan Stanley goes to 142 on nike, underestimated earnings power. One of the pest performing dow stocks today. There are so many people that come out today saying good things about nike. Some people are using 130, 140 notice how no one cares that nike is so big in china and they are not worried about any sort of a blow back nike has a deal with the Sports Ministry we dont really have a Sports Ministry in this country to keep it so that people are athletic i think nike will have a fabulous year, a lot is direct to consumer and how much money they make. Make far more money wholesale than selling to foot locker. People are recommending foot locker nike is a travel trust name but i think niek rewill be maybe one of the best performers in the dow going forward. Will you look at that. Will you look at that. Its up 1 . It even did well because of the Michael Jordan programming. That was early quarantine facebook is also up over 1 , jim, giving at least some belief to the idea that, hey, maybe there are investors who think that tiktoks potential demise here in the u. S. Would be beneficial for facebook. We will keep an eye on those shows. Technology overall, carl, you have tesla up again over 4 , one of the more notable do you know why, david . Why david, battery day is coming up oh, battery day, i keep forgetting when is that the 20th . 22nd its like singles, you introduced me to i think isless day in china. I did. Talking about making million mile batteries and boosting the amount of batteries they are going to have. I think it will be show man, maybe they will do a little dancing, singing in the rain if its raining, do you remember how well that dancing thing went over. I think he should shelf the dancing. I really do that that would be my only piece of advice to him. Dancing with the batteries. He might be able to figure out a mask that you can drink a margarita through. If anybody can its musk. They will talk about cobalt, i think he will make fun of all the other ev companies i wonder how nikola will fair. They are a little bit under the gun right now. Those trucks. Its been a story this week, jim. Its funny, a long week, right . Remember we started with merger monday with nvidia buying arm, with immuno medics getting bought, by gilead. Nikola, carl, you a know down a lot, up a lot, too we havent even said spacs everybody has utz got recommended today citi said that utz is a buy. I happen to love utz for the record i love utz potato chips and cheese balls cheese balls. Someone told me i should start a spac today, too. Why not . Everybody has got one. Everybody. Whats the point, david carl . Tesla is the best performer on the ndx lets get to bob pisani on this friday hey, bo be. Happy friday and happy quadruple witching we are stuck in this range 3300 to 3400 range, indeterminate open a look at the sectors, 3 to 2 advancing the declining stocks but flattish is what i would describe it. Materials have had a very good month overall, flat today here, Consumer Discretionary not doing much even tech not doing too much industrials another group thats had a good month overall if you look at the mega caps theyre mixed but remember something this has not been a good month, all the mega caps are down 10, 12, apple is down 14 in september so you want to keep an eye on that today this might matter a little more, we had a quad route witching this is the quarterly expiration of individual stock futures and options and the Index Futures and options thats the quadruple part of this thing usually these four days they happen four days a year, usually the heaviest volume days of the year, the s p will balance at the end of the close, i dont think that will be a significant event. The reason were watching this more carefully is there has been a lot of activity around call option buying in the mega caps i will give you an example apple is around 110, there is an expiration call there, call strike price at 110 but a lot of activity around the 112. 50 strike price if this goes above 112. 50 during the day you might see increased activity there is more interest because of the call buying thats been going on in these me go can a cap names. Equity options trading record levels in the month of september. Weve got another ipo trading today and another one above the range. Were waiting for unity to open, of course, 3d games here, 25 million shares at 52 i want to put up the prior price talk we were talking about 34 to 42 on tuesday then on wednesday they said, huhuh, its 44 to 48, and now they priced it at 52 this is the fourth time this week its happened, fourth time weve had four ipos all of them are pricing above the range so we had snowflake of course, we had sumo, we had jfrog, all of them priced above the range. Snowflake opened at 245 and thats the Reference Price essentially, its below that jfrog opened at 72, its also trading below that sumo logic opened i think 26. 64 so just a little bit below that right now. All three of them are essentially above the opening price which is the one that matters for your average retail trader the big money tends to be made on the first day of trading by the Institutional Investors who bought in the day before this is an ipo truism, folks working here as well finally i want to note today on power lunch Tyler Matheson and i will have an interesting discussion with one of the experts on active management, with he like to debate this all the time, active versus passive management, the chief Research Officer at buckingham wealth partners, on why active management still does not joe put perform, the book goes through the Academic Research on stock picking and basically concludes it doesnt work. Market is highly efficient, too much capital chasing performance and the dumb money is shrinking. He will talk about why Warren Buffett was successful and why the robin hood traders likely are not going to be successful thats 2 00 eastern time with Tyler Matheson and myself on power lunch. Back to you. We look forward to that, bob pisani, thanks. Been an interesting morning of fed speak, including from some members who dissented this week lets get to Rick Santelli yes, absolutely, but it doesnt seem to be moving the volatility needle much in treasuries, as you look at a one week of ten year note yields look at how flat it is volatility is quite low. As a matter of fact, the move index which measures treasury volatility, ice bank of america index its at an all time historic low, yesterday it closed just above 38 thats the money month volatility read. If you contrast that with the three month volatility read what you have is a huge differential, a big difference, which points to the fact that the buzz in the treasury complex is that volatility index is pointing to the 11 3 election as the potential biggest event risk for treasury volatility in a decade, something to Pay Attention to. Now, if we look at the dollar index since july 1st, what you can see is that it really has outside of july for august and september been a sideways move as well. This is a big deal considering its so close to 27month lows also keep in mind if you really want to know whats going on in markets, you monitor the flows u. S. Stock funds for the week ending wednesday had 994 million in outflows. This is an ongoing issue and the taxable bond funds had a 23week in a row inflow, this week it was 7 billion but maybe the biggest news is money markets. Money markets eighth week in a row of outflows and this one a little over 50 billion is historically large finally, the big currency story over the last quarter really has been the yuan, the chinese currency if you look at a chart starting on march 1st of the dollar versus that currency it has had a historic run of strength not only against the dollar but many of the maimer developed currencies, carl, jim, david, back to you. Rick, we will talk to you in a bit. We have a new member of the squawk on the street family, yesterday morning at 10 05 a. M. Our senior producer gave birth to a gorgeous baby girl, ella meyer cohen. What a beautiful name. Both baby and mom are doing fine our congratulations to proud parents lauren and zach. Jim, lauren is one of the people who make this show stick, make it work. Oh, my, yes, but, i mean, i just find that i miss her, we used to see her on the floor every morning. I miss the floor, too. Lauren gave me my first mask by the way. Nobody like her and im going to say congratulations, mazel tov, fantastic. Nothing better. Always nice to see good news. Isnt it . For once congratulations, guys we will take a quick break back in a minute everything we have, weve earned. The unmistakable lexus is. Get zero percent financing on the 2020 is 300. Experience amazing at your lexus dealer. Experience amazing 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 is all about one thing the stock market. He doesnt want to see anything happen its all about his reelection it should be about the American People, and theyre in trouble if we dont do by the way, his own cdc director contradicted him recently. He said if in fact you wore this mask, nothing else but this mask, you would save between now and january another 100,000 lives. And so we have to be honest with the American People but tough. They know as Franklin Roosevelt said, things get worse and worse before they get better and better, but you got to level with the American People shoot from the shoulder. Theres never been a time theyve not been able to step up this president should step down. Thats biden last night talking about some of the developments of the past few days, jim. Namely that the president did contradict redfield on mask efficiency and a vaccine timeline the hhs spokesman stepping aside after accusing scientists of sedition the president saying debts would be lower if we took out the blue states look, i think the fact is as Time Magazine on their cover says, 200,000 thats the number 200,000 people died. No matter what, it shouldnt be political. 200,000 people is a lot of people to do whatever weve been doing is obviously not enough either party and i just think that obviously all we have is mask and social distancing right now and how these are ever disputed when theyre really the only things weve got is a shame by anybody. Im not republican, democrat, david, you know, we dont have enough against this thing right now. We dont. And you can do the math. 4,600 is the number of deaths in china. They had 1. 3 billion people. We have 330 million. Were roughly running at 200 times the death rate s p 500 now turning negative back to 3348 back after a quickre bak when disaster strikes to one, we all get together and support each other. Thats the nature of humanity. No one thought that they were going to do this before it happened, and everyone just did it. I think thats the way that human nature should be looked at. The big events are back. Xfinity is your home for the return of live sports. When was the last time ge led the s p for the week not just the comments from larry this week about cash flow, but the momentum behind some other industrial names like dow and 3m, freeport and others. Well watch those as we get the top of the hour aoue in cplof minutes. Dont go away. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. 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. Every curve, every innovation, every feeling. A product of mastery. Lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. A lot goes through your mind. How long will this last . Am i prepared for this . Are we prepared for this . With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations, with access to taxsmart Investment Strategies designed to help you keep more of what youve earned so youll know youre doing what you can for your family and your future. Thats the clarity you get with fidelity wealth management. Jim, whats on mad money tonight. What seems to be a duo. Ive got slice and splunk. And splunk, by the way, dougs going to explain what happened here with snowflake, whats going on with that group maybe that groups too expensive. Jim, i look forward to that thank you a lot going on. What a week. See you tonight. All right have a good weekend. Watching tiktok all weekend. Not football, tiktok yes well see you later. Mad money 6 00 p. M welcome to another hour of squawk on the street. Im carl qintonilla. Back to 3,350. Now getting Consumer Sentiment and l. I. E. Lets get to Rick Santelli yes, on the university of michigan sentiment, this is the preliminary read for september at the end of the month it will be tossed for the final read the first voyage here is a big number 78. That is much stronger than we were looking for and actually its pretty much the strongest since the effects of covid really started to hit. 89. 1 was the march read. This is the best since then, but obviously it can get revised higher or lower. And lets go through the internals. Current conditions, moved from last months final 82. 9 all the way up to 87. 5 and on the expectations, another pretty good jump from 68. 5 to 73. 3 on the inflation front, a bit of a surprise here. If you look at the expectations for oneyear inflation, it was going to be around 3 . 3. 1 has been kind of the High Water Mark here. It dropped down, it dropped down to 2. 7, which is actually the lowest going back to april this year when it was 2. 1 and if we look at the five to tenyear projection, that was a 2. 6. Thats versus 2. 7, our final read on our last look. Leading Economic Indicators for august are up. Up 1. 2 , largely as expected a very nice pop on the revision to last month from 1. 4 to 2 carl, back to you. All right thank you so much. Rick santelli. We have full coverage on what is the big story of the day. That is the Commerce Department issuing a ban on new downloads of tiktok beginning sunday, along with wechat. We have more from washington, d. C. , and beijing. Were going to start with aman as the headlines continue to fly. Good morning reporter yeah, good morning. Senior Commerce Department officials wrapped up a Briefing Call with reporters to explain exactly what the changes are ive got a lawnmower in the background i apologize. What the changes are theyre saying, theres been confusion about it as of sunday here, they are saying that nobody will be able to download either wechat or tiktok in the United States after midnight sunday. But that the degradation in functionality that will happen after that will only happen on wechat for a period of time, and then the tiktok degradation of functionality will begin on november 12th. I asked officials if that november 12th date has anything to do with the election which happens to be on november the 3rd. Is this an effort in effect to get this passed the deadline of the election in order to avoid a backlash from tiktok users officials from the Commerce Department denied that and said this has nothing to do with the election its coincidence, they say, because they backdated this to the august 14th president ial executive order, kick that forward 90 days, thats how they landed on november 12th. That is how they are explaining the difference in deadline between wechat and tiktok. Theyre giving tiktok an additional amount of time to go back to the date of the executive order. Also they dont imagine that all users in the United States will stop using these apps. They say theyre not going to go after individual users for using them, but they expect starting on monday, particularly on wechat, there will be a degradation of service and that is because theyre going after the data hosting and content Delivery Services aspects of this. Those additional behindthescenes support mechanisms that these apps use to get the data closer to users to make it more functional theyre going to block that from happening. The companies that provide services to apps will no longer be allowed to do that. That will make the service degrade here in the United States and finally, theyre saying ultimately that they wont comment at all on what they expect in terms of legal challenges from apple or from google they do say that these days you see legal challenges across the board on just about everything, so they say theyre prepared for a legal challenge. They say they hope to work in cooperation with apple and google in removing these from the apps stores for both of those platforms. You could one day see legal challenges to the administrations active hand in trying to structure a transaction for the purchase of tiktok which goes sort of above and beyond what we certainly have typically seen. Its one thing to review a deal that comes in, whether its antitrust, its another to dictate to a certain extent terms. Which leads to my question to you any update at all on what we can expect from President Trump if and when he finally makes a ruling on the oracle deal as we understand it to be thus far, on not purchasing all of tiktok, but bringing it over and at least the web hosting part of it reporter thats a really good question. You know, it looks to me like what youve got here is theyre putting the meat on the bones here of whats going to happen on sunday if they dont get a deal in the next 48 hours. There is the possibility that they do get that deal. And officials from the Commerce Department on this call were very careful to say that theyre structuring this terms of tiktok so that it can be removed if the president approves a deal between now and the end of the weekend. So this is something where theyre saying very clearly this is in obeyance until sunday at midnight and if the president makes a decision, well pull the scaffolding back down. Eamon, thank you. We know youll to report for us. Lets turn now, as well, to unice. She joins us from beijing. Weve been talking a great deal about tiktok wechat, as i pointed out, is extremely important, perhaps not as much so in the u. S. But certainly for its parent around the world, an enormous chinese company. Its the one bearing the brunt of these orders sooner rather than later, isnt it reporter it is but not as its not really going to have as much of an impact as you might think because this Commerce Department decision only affects wechat in the United States. So thats 19 million users and then it doesnt touch the chinese version which is 1. 2 billion users. And thats the part that the u. S. Business community here had been most concerned about. Whats really i think a climbdown for tiktok is that this decision only shuts upgrades and maintenance on sunday thats what the commerce secretary had said but the real shutdown is on november 12th. So that allows byte dance to have more time for a deal if there is, in fact, a deal since this all happens as you guys were talking about before, after the election now one of the big concerns has been about political manipulation by beijing. And just to give an example of how this works on wechat, we tried to send a photo of president xi jinping on wechat this is what happens this is the photo of president xi i tried sending it on wechat on the phone on the right you could see on the left, the message never appears. I tried sending back a sticker of xi clapping, and it never makes it so people here create workarounds to evade the sensors. You can make a screen shot, flip the photo, or scribble on it to send it through, just dont expect it to be there for very long so as you guys can tell, its very Common Knowledge that people have here that you dont talk about sensitive issues on wechat these days, no talk about the muslim weegers when talking to staff. Dont say anything in big group events and im pausing because were being censored right now in big group chats, you could get the leader of the group, the person who started the group in trouble, potentially detained. And then you dont criticize leaders names, especially xi jinping. Eunice, you werent censored here at least. Thank you for your further reporting. Eunice yoon in beijing lets continue joining us former facebook chief privacy officer chris kelley good to have you give your overall take on what we heard from commerce this morning and sort of how it fits in for you in terms of the u. S. approach from a National Security concern about these two Services Thanks so much for having me. I think this was almost a predictable action with regard to tiktok in that its delayed and that theres the possibility of a deal. The wechat moved forward is aggressive and almost instantaneous. And it is a bit of a surprise that this is as sort of draconian as it is, that obviously byte dance has an option to fix this with the type of deal that theyve been talking about with oracle and walmart. But you know, ten cent, theres nothing they can do at this point. It will be a large effect on the chinese diaspora in the u. S. Because so many Chinese People in the u. S. Use wechat to communicate with family. Obviously knowing that its censored and knowing that there are different other restrictions but it is the standard, you know, way to communicate like text messaging is here in the United States or as whatsapp has become around the world. This is a big deal for wechat at the very least, and essentially its a threat from the administration if you dont get a deal done to the president s liking, that, you know, bad things are occurring for byte dance, as well, and for tiktok right on the technical aspects of this, again, its our understanding certainly from reading it that tiktok, youre still going to be able to use. Although youre not going to be able to download it. The optimization that takes place is going to affect wechat as you point out much sooner as of the 20th. That will have a significant impact, right . Going after the cdns is a big deal basically saying that no u. S. Company can facilitate any of this traffic in any of the natural ways that the internet has worked thats a big change. As far as you can tell, is the administrations demands with regard to Data Security explicit and detailed enough for these companies to follow right now . How would they implement these demands . Its a real challenge right now. As they look at it, to know exactly what the administration is asking for. Obviously a full sale was the thing that was the original object, and that would be fairly straightforward. I think that there was some willingness on the part of the administration, certainly some reported willingness, to allow for a transition period if that was the end result with that not becoming the end result it gets a lot murkier and the question of how you measure whether u. S. Data flows back to china at all can be a challenge for the way that the companys structured so thats i think the word theres a whole bunch of details in that realm that are being worked out right now where, you know, a proposals been thrown in, i understand that apparently theres that its been reviewed and said its okay. Now with the decisions from the president. You know, there may have been particularly from the discussion that you guys had last hour, there may be some other demands that the president will attach to this before this happens. You know, this is another step up to say, you know, the clock is ticking they delayed the potential electoral impact of banning tiktok before the election but they theyre trying to force a deal as quickly as possible right chris, theres been some interesting back and forth on twitter today. Adam wasari who runs instagram said this would be bad for instagram, facebook, and the internet at large. Vanessa pappas, the interim tiktok chief said we agree, and we invite facebook to publicly join our challenge and support our litigation do you think thats possible im not sure that thats going to happen. As my law School Classmate Bobby Chesney has analyzed well and teaches at ut now, its not the the legal challenge isnt likely to work thats i think on a lot of levels unfortunate but so i dont think youll see facebook joining that. But you know, obviously that could definitely be a challenge. I think its good that adam is out there saying that this is not the best way to do business overall. But its something thats understandable and certainly within the National Security power of the president to do and finally, as regards to china, india, and bans on apps including these over there, i wonder are there lessons that we are able to take from that, analogs that might be applied to what may happen . The u. S. The fragmentation of the internet is not a good thing for u. S. Companies generally speaking we do want to have the ability to go around the world and to offer services around the world. And so i think that if we get into titfortats that theres a lot of problems here obviously, you know, the chinese internet has been on its own, great firewall operation for quite some time. A number of u. S. Apps including facebook and instagram are not available there. So you have these issues where stepping up and taking action is not necessarily a bad thing. There is a risk on data, on probably, you know, particularly with regard to the possibility of political manipulation over time with regard to tiktok and with regard to data flowing to the Chinese Communist party. That is a real concern that american companies, the American Government should be focused on. But we should also be trying to preserve an internet that allows for a robust, wideopen competition of apps. So this is a step away from that on the part of the American Government which should be watched very closely again, you know, legitimate concerns about data flowing and data misuse in china and russia and in free places around the world. But we need to assure that we are acting as responsibly as we can to support an open internet. Chris, thank you. Really glad to be here. Thanks so much as we go to break, we continue to grind around 3,350 this morning of course, well see if things change ads quad witching happens today. Later on, a closer look at the biden proposal that may cause some investors to dump shares if he wins in november. Well explain in a minute. The shift has begun. The antes been upped. To lead the charge. Good had to be amazing. And amazing had to become the expectation. The drivers feel it every time they get in. The power. Has shifted. The power. Our Retirement Plan with voya gives us confidence. So we can spend a bit today, knowing were prepared for tomorrow. Wow, do you think you overdid it maybe . Overdid what . Well planned, well invested, well protected. Voya. Be confident to and through retirement. As stocks approach the end of what has been a somewhat choppy week of trade, still on pace to snap a twoweek losing streak tom gavel an and megan shu, member of the M T Bank Family and cnbc contributor good morning to you both megan, start with you. How are you reading this phase were in now obviously sharp correction in the nasdaq its been the highest fliers that have led the way down some traction in more, you know, cyclical valuetype areas. Do you think that this unsettled period has more to go, and how would you reposition for it . Weve been paying really close attention to thing tooling back and forth of the market between those Tech Companies that you mentioned, more growthoriented strategies, and value or cyclical parts of the market i would expect in the near term to continue this back and forth trading off of leadership between growth and tech and more cyclical areas like value. Recently we took some steps to reduce our underweight to value. So we were favoring growth and had had an underweight to value. Not because we expect some long, prolonged period of value rotation i think that get that we need to have sustained, betterthanexpected growth, higher yields, like i said, gross to the upside. I dont expect that over the longer term, but i definitely could see if you get better vaccine news or some upside surprises to growth, some waves of value outperforming growth. I think its going to be a back and forth. Diversification and having both in the portfolio is important. Tom, you know, do you think that this move actually is justified by what were seeing in the economy obviously a lot of things on the industrial side seem like theyre moving in the right direction. We just dont know if were at a little bit of a stall here in August September yeah, so i would agree with the observation that theres this back and forth going on between growth and value cyclical and growth of companies. Theres also other things i think that investors need to consider that were overdue for a correction in stocks what weve experienced these last four months of 45 move has only happened three times in the last 100 years its a very rare occurrence. A correction is overdue. Theres a lot of things on the horizon that we have a confluence of events with some of the risks out there shortterm traders may seek to lock in gains before the end of september. So i think investors have to be a little careful in here to items of advice. Firstly, if youve participated in the tech rally id go back and look at your exposures if you have a position size thats too big, you may want to consider paring that down in case the correction gets nastier or if we do get an increase in Capital Gains taxes. And lastly, in the volatility that i think is ahead, investors need to stay focused on true north and what their longterm investment goals are everybody seems to to focus in on the fact that we have an election out there less than two months away and nobody yet, though, can quite say what that might mean except that investors get a little bit of a deer in the headlights ahead of it maybe you have an anticipation of more volatility but does it make sense in an ongoing basis to assume theres going to be a meaningful Inflection Point in how markets oregon the cycle behave from there . This election cycle is, as we all know, incredibly unique because of the economic environment we find ourselves in its also a close election generally in the lead up to closer elections, the market tends to tread water actually regardless of who wins, we have historically seen the market breathe a bit of a sigh of relief. Theres clarity. You can at least move forward. And the market tends to go up. I think this in this election, theres issues that could be a bit concerning on both sides of the aisle. We have seen markets start to price in volatility and risk on and around election day. But i still think that going beyond the election risks regarding higher taxes are probably underpriced, as well as on the right side of things, risks around trade reescalating and that being a headwind to the market were cautious ahead of the election were not trying to make bets one way or another instead, were trying to kind of hover closer to the benchmark than we normally would and just if there is volatility on or around election day, keep your longterm focus and try to ride through that. Which sort of leads me, tom, to one last question about sector risk as it pertains to a potential change in policy would you argue that thats more acute in banks because we hear a lot about who might run treasury under biden versus energy, because a lot of the discussion last night at his town hall was about fracking yeah. So if there is a change in washington, if theres a change in leadership, markets generally dont like uncertainty they dont like change theyd rather have a continuation of the policies that have been put in place. And its difficult sometimes to take Campaign Rhetoric and translate that fully into policy reality. So if there was a meaningful change in washington in the composition of the three levers of power, then some of the sectors could have increased focus on regulation that could hurt them. Thats really just speculation at this point. And finally, meaghan, a lot of the dynamics that have benefited industrials, commodity prices, things like that, imply a global rebound does that change anything in the way of your kind of regional orientation or plays outside the u. S. Well, we have had weve had a slight underweight to equities but a slight preference within that space for international development, which has held up better of late regarding, you know, in the texting issotext selloff as well as having the virus. I think that there are headwinds there, as well the good news on the International Front is the data coming out of china has been strong weve seen credit impulse increasing, weve seen demand increasing there and i think that that all bodes well for those cyclical areas like materials, industrials. So that is why were seeing a little bit of lift in that part of the market. Yeah. Strength in the chinese currency certainly telling that story thanks a lot for your time this morning. Thank you now for our etf spotlight. Looking at the Consumer Discretionary select sector spider etf, that is ticker xly. It is up over 15 year to date currently trading up marginally, about a sixth of a percent two of the top five, home depot and lowes, under pressure after being downgraded by el pasoheimer to perform from oppenheimer to perform citing sales declines as a risk factor both stocks have outperch perform period the s p well take a quick break stay with us with the icon that does the same. The rx, crafted by lexus. Lease the 2020 rx 350 for 409 a month for 36 months. Experience amazing at your lexus dealer. You know limu,g after all these Years Experience amazing its the ones that got away that haunt me the most. [ squawks ] cause youre not like everybody else. Thats why Liberty Mutual customizes your car insurance, so you only pay for what you need. What . Oh, i said. Uh, this is my floor. Nooo only pay for what you need. Liberty. Liberty. Liberty. Liberty. Good morning, everybody, im sue herera heres your cnbc news update it is the first day of early voting in richmond, virginia inperson voting is available at the local Registrars Office or a satellite voting location. At one Registrars Office the lines formed before it even opened up. Inperson, early voting periods run from friday, september 18th, through sudden, october 31st, in that state Harvey Weinstein has been stripped of the prestigious cbe honor by Queen Elizabeth he received the honor for his contributions to the british film industry. Weinstein was sentenced to 23 years in prison earlier this year for sexrelated crimes. And the pandemic has forced u. S. Retailers to stock shelves with foreign toilet paper. The demand has been so high recently that in order to keep the shelves stocked retailers have had to buy unrecognizable brands, mostly from mexico dont worry, though, apparently charmin is not going to disappear. Supply chain experts expect the mexican and other foreignmade rolls to be on the store shelves only temporarily while u. S. Manufacturers catch up with demand youre up to date. Thats the news update this hour carl, back to you. All right, sue. Thank you very much. As we go to break, look at some of the gainers on the nasdaq tesla on top, miccon, moderna, and tiktok with a statemt. Ckn monten makes it beautiful. Stateoftheart Technology Makes it brilliant. The visionary lexus nx. Lease the 2020 nx 300 for 339 a month for 36 months. Experience amazing at your lexus dealer. As we said before the break, tiktok has a statement in response to commerce lets get to julia reporter carl, thank you tiktok saying that we disagree with the decision from the Commerce Department and are disappointed that it stands to block new app downloads from sunday and ban use of the tiktok app in the u. S. From november 12th going on to talk about how they have 100 million users here in the u. S then they explain that theyve already committed to an unprecedented level of additional transparency and accountability, saying, quote, this is well beyond what other apps are willing to do, including thirdpartyaudits, verification of code security, and u. S. Government oversight of u. S. Data. Saying, quote, an American Technology provider to be responsible for maintaining and operating the tiktok network in the u. S. , which would include all services and data serving u. S. Consumers, saying we will continue to challenge the unjust executive order which was enacted without due process and threatens to deprive the American People and Small Businesses across the u. S. With significant platform for both of voice and livelihoods. We had a tweet earlier from vanessa pappas, she is the interim head of tiktok, saying they believe this ban would be bad for the industry responding to instagrams ceo saying that he believes this would be bad for the industry. Pappas inviting facebook and instagram to publicly join the challenge and support the litigation of course, tiktok did file litigation in august challenging the governments action here so you see oracles shares down. 9 , walmart shares down fractionally over to you. Julia, thank you so much. Well get back to you soon on this fastmoving story playing out in public. Meantime, joe biden proposing to raise the Capital Gains tax rate that could lead to selling in october. Robert frank with how it might work reporter good morning, big question for investors here. Joe biden calling for an entertain in the Capital Gains tax rate from 23. 8 to 39. 6 that would be the largest increase in history. And history shows that Capital Gains increases do lead to large stock sales. In 1986 as part of the reagan tax plan, the Capital Gains rate increased from 20 to 28 . Investors sold stocks and other assets in advance of that increase Capital Gains realization soaring by 60 in 1986 then in 2013, Capital Gains rate again increasing from 15 to 23. 8 . And again investors sold, leading to a 40 increase in realizations the impact on the overall market direction is a little less clear. That tends to be influenced more by the economy, Interest Rates, earnings but Research Suggests that the increase proposed by biden could lead to a 60 to 70 increase in realizations or asset sales. Offsetting that would be the low Interest Rate environment that were in right now, the shares of investors who are subject to Capital Gains taxes in the first place. Only about a quarter of the stock market right now is owned by individual investors who pay Capital Gains taxes. The rest, three quarters, are owned by pension funds, retirement funds, overseas investors, and paththroughs which do not pay the taxes so david, that would offset or perhaps dilute any impact from a Capital Gains tax. If only a quarter of the stock market is owned by taxable individual investors back to you. I did not even think about that robert, thank you. Robert frank by the way, thats a great place to start with our guest. Joining us to dig into a lot of these economic plans is evercores founder and Biden Campaign supporter, roger altman on Capital Gains hey, david. Good morning. Good to see you. On Capital Gains, somebody whos, you know, made their livelihood in the Capital Markets and advising corporations and founding an investment bank, what do you tell your friends who may disagree with you about why cap gains should go up you know, david, i think what you have here are two very different visions of america going forward. The trump vision is everythings great, the countrys on the right track. What we need is a Capital Gains tax cut to get rid of obamacare through the courts and an administration where the president is entirely above the law. The other vision, the biden vision is we need to rebuild and strengthen this country. We need to invest much more heavily in science, research, and connectnology. We need to assure technology. We need assure that americans have access to health care and community college. We need to take a much more aggressive approach to climate and we need to fix our crumbling infrastructure among others. And in order to do that, we need higher Economic Growth rates which will generate revenue, but we also need higher tax rates for the highest earners and on corporations and thats the biden vision. Now the problem with the trump vision, in my humble opinion, its wrong, is that only 27 of americans, according to real clear politics this morning, think the country actually is on the right track. So theyre not buying that vision yeah. They may not be. Although we will wait and see, 46 days from now, maybe actually a few days even after that on Capital Gains, though, specifically, roger, you know, if larry kudlow were here, he would say, listen, its going to depress investment if you raise the Capital Gains tax. The only way to actually enhance investment and actually generate Economic Growth, well, in addition to a number of other things, is to actually lower cap gains. How do you respond to those who say youre going in the wrong direction here well, i just dont agree with it thats obviously what makes horse races. Ive known larry a long time, and i respect larry. But i dont agree with him on this as mr. Frank pointed out a minute or two ago, yes, an increase in the Capital Gains rate would always lead to sales of Equity Securities prior to the Effective Date of the increase that would be that would happen every time. But that the longterm effects are really not historically negative and those longterm effects depend, as he just said, on broad macroeconomic factors, not just the Capital Gains rate. You know, for better or worse, ive been in finance a long time, and ive never seen any examples of people who dont make investments, which they think are good ones, because the Capital Gains rate is a few points higher than otherwise it might be i dont believe thats the world we live in now also, of course, one of the largest legislative wins for the trump administration, of course been the 2017 Corporate Tax reform right Biden Campaign says they would erase corporate rates. As somebody who deals with keep in mind the Corporate Tax rate was 35 when mr. Trump took office. It was a widespread view at that time that it was too high. The Business Roundtable at that time was talking about 28 , and the the 2017 tax cut reduced it to it 1 . So the biden proposal is lets take it back to 28 , which is where the Business Community generally speaking was at the time Trump Took Office in terms of its judgment of what the right rate would be. And i think thats an intelligent thing to do. Were obviously not taking the idea is not to take it back to the much higher levels that we saw before Trump Took Office. And i think the Business Community would be comfortable with that. Would they rather have on any begin day a lower rate sure but would they find 28 to be a sound Corporate Tax rate i think so roger, the principal objective or motivation behind the idea of raising these taxes as biden plan has it, is it mostly fairness, or is it revenue . On the revenue side, its not clear it would be that big a mover of the needle relative to total spending, and have we not seen with the explosion of deficits in the last year or so, we have not really seen the adverse results of that in higher Interest Rates or these other factors. Did we not just get a lesson in how much fiscal spending power the government has without having to necessarily offset it . Well, i would disagree with you on your comment on revenue actually under this vision that i talked about at the beginning here which requires very substantial new investments from infrastructure to science and technology to climate, we need new revenue, and the biden tax plan actually would generate quite a lot of it. I might add that federal revenues as a share of gdp are running about 68 . Well below the average rate of the past ten years or 20 years or 30 years. So were not talking about some very historically high level of revenue to gdp result here were talking about getting back partway to the average levels of of recent history but i do think the amounts of revenue that would be raised here would be pretty substantial. And i think the country needs it roger, from where you sit right now, whats your sense of the u. S. Economy i think the u. S. Economy, david, is soft i mean, 11. 5 million americans who had jobs in february dont have them now. 25 of americans say theyre either behind on their rent or mortgage payments, or theyre afraid of falling behind one out of eight americans say they dont have enough to eat. I dont think those are signs of a vibrant economy. Now we all know that the economy fell as a result of covid and the related lockdowns, but as you said about half an hour ago on this show, to say that weve months managed the miss managed the response to covid is an understatement. You quoted the fact that about 200,000 americans have died in the past seven months compared to 4,600 chinese, and the chinese population is four times the size of america. So their death rate our death rate is 200 times theirs theres no excuse for that and in my view on that basis alone, we need to a change in leadership understood. That is a reported death rate, we should point out, as well there may be undercounting in china. Finally, what about the corporate boardroom . What is your sense now in the willingness of ceos to do things, to engage, even virtually in putting together deals . The level of dialogue, dialogues has intensified quite a bit. Its more active now than it was a month ago. A month ago it was more active than two months ago. You see the dollar volume of m a m a in the Third Quarter so far its higher than it was a year ago so i think there is a higher level of activity occurring. And thats been building for some months, david, because right after midmarch when the virus erupted and the lockdowns were imposed, those types of dialogues were went into the freezer, the deep freezer. About three months later, they began to come out and a thaw began to assert itself and now were seeing some of the results of that. Well see how far this goes. It has a fair amount to do with, as it always does, with equity market levels and with credit Market Conditions and availability of credit and so forth. But yes, theres there are higher levels of activity occurring now. All right roger, thank you always appreciate your taking the time thank you youre welcome. Good to see you guys. You, too. Carl yeah, sure were watching another ipo this morning. You can see it there unity. Its going to be very strong, making its wall street debut, of course thats why we call it initial public offering. 65 to 67 is the indication dont miss, by the way, first line cnbc on squawk, ceo of unity. Back in two minutes. Some see a Grilled Cheese sandwich and ask, why . I see a new kitchen with a grill and ask, why not . I really need to start adding less to cart and more to savings. Sitting on this couch so long made me want to make some changes. Starting with this couch. Yeah, i need a house with a different view. And this is the bank that will help you do it all. Because at u. S. Bank, our people are dedicated to turning your new inspiration into your next pursuit. Everything we have, weve earned. The unmistakable lexus is. Get zero percent financing on the 2020 is 300. Experience amazing at your lexus dealer. Is a recent reversal in technology a sign of something more serious resqwkn n trading nation. Mo ua othe street coming up. The lexus es. Every curve, every innovation, every feeling. A product of mastery. Lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. Welcome back were all watching this high freakily Economic Data steve leasemans going to wrap some up for us hey, steve good morning, carl. Yes, the highfrequency data showing a slowing in the recovery in some gauges. Even outright declines in others, suggesting that there are some challenges right now for the economy in september even while some of the data has been pretty good lets look at the highfrequency data that wall street is watching the jpmorgan credit card, chase card spending data, down 6. 5 . Its about flat from where it was the last time we reported this and well look in more detail in a second the cronos time crunch, they look at the millions of workers punching time clocks, up exactly what they were in august that will lead to probably a similar type of job gains. Finally the kbw restoration index. That had the biggest decline since april 10th looking at the claims data sorry, the spending data by claims, boy, you guys are moving fast in the back room there, looking at the spending data by claims, going back to the prior one, you see the low unemployment claims are down as well from where they were thank you very much, compared to where it was previously. And its all dragged down by the high unemployment claims going to kronos and that gauge of time punches, you can see its the same number we had in august after those very, very strong may and june numbers. That led to about 1. 3 million jobs created, down from 1. 7. Maybe well be in the same ballpark rafael bostick, atlanta fed president , saying on the wire that definitely seeing a slowing to the recovery. Whether or not that has something to do with how the stock markets reacting, it seems to be ignoring the economic fundamentals before now maybe mike is paying more attention. Yeah. Could be on the consumer side well have to see if that does play to the stock market thank you. Shares of draftkings hitting a fresh high up 30 after expanding its partnership with espn on a yeartodate basis, up a whopping 400 . The United States Postal Service is here 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. Every day, all across america, xfinity is your home for the return of live sports. New protocols, the ceo of three vegas casinos including the resort and hotel and casino. Great to see you, how are you doing . Pretty good we talked about some of the challenges of testing. If were looking for bright spots, it sounds like the sports book is one of them. Absolutely i think i heard david say earlier today lets look for some good news here the right that were seeing nfl football is unbelievable we expected this season to really jump up in volume opening thursday night with the chiefs last night with the battle of hawa ohio, i think everybody in vegas is shocked we expected a big surge, but this is really something yeah we, have been talking about penn a lot lately too, why do you think expectations were, i guess, tempered compared to how reality is playing out was it a concern about resurgence in the leagues, and why do you think that has not really happened . I would not really say that the expectations were lower in any way. Expectations were at breakout levels we were looking at new numbers and numbers just exceeded them the pent up demand is amazing. It just exceeded everyones record expectations. Derek, how do we get a handle on how big this can become i guess the big question if youre a public investor is is there enough to go around longer term i think it really comes down to some of the analysts having to figure out the business models, you know what draft kings is doing, and the optioning their ta positioning their taking, their making a number of moves and then you have a number of other companies from what caesars is doing, mgm is doing, what, really what circus sports is doing. We all have different models here and boy this is great to see what is happening in america. We got a little competition and were in a mark that is growing very, very rapidly this will be very fun to see how it shakes out. How are you easing peoples concerns about the actual casino floor and the degree to which we can safely sit together at a table, play cars, do slots, is that are we making any any headway . Certainly with nevada based casinos. I think the social distancing guidelines are in place, and what everyone is doing from a casey know perspective is really trying to put people in a position where they feel comfortable and safe so i think we have seen every week that we have gone by. And i think the numbers you see particularly in nevada, bars reopening on sunday night. Just a couple days from now. So i think were seeing the progression. I think things have changed. June 4th is a little different from the customer last weekend we have no there is no more issues with people wearing masks. There is no more issues with people having other difficulties coming into a more public environment. Everyone is taking care of themselves and i think everyone really wants to come out and be safe and have some fun so, is Airline Traffic and capacity the next piece of the puzzle that has been a big story this week. No question about it. We have talked with the airport here and really las vegas is dependent on airline travel. I think everyone is trying to get back, but october 1 is a big day for the airlines where they set up their flight schedules, obviously las vegas is very dependent on this. But i think youre starting to see some really good moves when i am down here in my casino and i get to meet customers, there is no academy that the customers are coming in seeing i feel better about flying on an airline, about being on delta, i feel better about taking a flight on spirit they field more comfortable and that is really, really critical for the Hospitality Industry and the travel industry to come back yeah, no question about it. Derek stevens joining us were on the look out here for the first trade on Unity Software prices at 52. You see the indication of 69 71. Well talk to the ceo when up malytas ain coleinutes stay restless with the icon that does the same. The rx, crafted by lexus. Lease the 2020 rx 350 for 409 a month for 36 months. Experience amazing at your lexus dealer. 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