Transcripts For CNBC Squawk Box 20240712

The sessions you want to take a look at whats happening with u. S. Equity futures this morning. Dow futures up 10 points, s p up by three we are still under water for all three major averages even after the gains we saw yesterday the dow down about 3 . The nasdaq is down 5. 6 also bumping up against the end of the quarter. Major averages still in positive territory. Youll see now, it looks like the 10year is sitting at 0. 65 of 1 . Andrew, welcome back thank you, becky House Speaker pelosi said democrats proposed a new 2. 2 trillion relief bill saying it is a compromised measure with in funding for schools and airlines white house chief of staff saying President Trump would be willing to sign a 1. 3 trillion relief package well see, guys where this all heads. Inching along we went from 2. 3 to 2. 2. I dont know where the white house is Vice President mike pence said yesterday americans should expect a rise in covid cases in the days ahead as testing increases in some midwestern states show some worrying trends some crazy infection numbers in sparsely populated states like 25 infection rates. The warning comes as the global death toll hit 1 Million People. President trump says the government plans to disprib ut 150 million rapid covid tests from abbott labs as we move into the fall season. Cdc warns that shopping could lead to highrisk activity also participating in turkey trot road races. Dang, we have to cross that off our list i didnt are we missing something . My life feels empty. The turkey trot road race. Where did we get that. Did someone who writes this who did . The cdc. The cdc said avoid the turkey trot road races and parades and gatherings for large indoor events thanksgiving something to do with thanksgiving any of the events associated with this. You know that will be coming people are tired of the restrictions i dont want to go to some crowded indoor, not that i shop anyway but i dont want to go anywhere where people are rubbing shoulders. I would never use ptsd lightly because it is a serious thing but we are a little bit i do feel affected 0 in the future. Dont know when well get affected i feel when people are close to me does it ever go away i was wondering i like giving people hugs. I dont know that ill ever be back in the elbow not even a fist. That could transmit it someone gave me a fist they put their fist out. I put out the elbow. I dont want to touch. No skin to skin for now. Wow you must be a lot of fun i do miss hugs. The New York Times out with a report saying Top White House officials pressured the cdc to down play the risk of sending kids back to school. In a search for alternative data to show the pandemic posed little to children where dr. Redfield got in some water he was overheard making a private phone call requesting advice put out it has people in this position where they are not always sure what to believe. Leads to this fear that exists in our society right now it is a mess because it creates real credibility problem. Talking the vaccine issue. Part of that is the credibility of the government and whether the program will be administered properly cnbc has confirmed two women have come forward claiming Sexual Assault claims. The first from his cousin claiming that he groped her at a family wedding in 1989 first reported by the wall street journal after she tweeted about it the second comes from an event involving a minor in 2004. That complaint was filed on friday the reports he strongly denied and he resigned about a week ago following that report from short seller claiming that he had made false statements about the technology in order to attract investors. You can read the full story on line the full story over the weekend about how the actual truck design might have not even been his either might have been stolen from another company he had met with years ago. A lot of questions coming out about this not just the story of nikola but General Motors and the Due Diligence they had done on nikola and the stake they have taken in the company right it seems like separate stories doesnt it either the batteries in the trouks work but then again it may all be hes already gone the larger story is diligence. The story about spaks and the disclosure and how it works to begin with second is General Motors and whether they made their Due Diligence. You hire people to do real Background Research about who you are about to get into business with. Im a big fan of mary barra but she came on our air. Both of those women came forward after gm took the stake. Ive seen tweets both of them came forward after. Anything from your past is going to come out and catch up with you. Who knows what happens i have read one of the womens account and it was pretty graphic. Effectively a startup in history to find out where they are and what are their stories and if you want to do business with them. Im a huge fan of mary barra 1 she came on to talk about the wonders of this transaction. I wonder what gm does now interesting about what they can or cant do. The former gm executive that is there now trying to run things well talk about this more. Coming up, apparently, thereer there is a debate tonight. A big win by President Trump or joe biden could mean for the markets and delivering alpha back for the 10th year go to the website to see the lineup and to register well be right back. President trump and former Vice President biden preparing to face off tonight. Keeping close tabs to what the two men may have to say amid the recent wave of market volatility leading up to the election it is 9 00 guys. We have to work tomorrow what do we do . Two choices stay up late or get up early and see some of the highlights, right . I guess. Are you going to watch any of it ill watch the first hour youll be lath ar gik punchy 10 00 to 5 55 for you. So youll get. You almost get not bad, right . Thats about right. You have five minutes or give yourself seven or eight . I dont know i do remember the debates from four years ago i didnt know who was winning either of those debates i dont know if either of these guys are great debaters. Remember biden had some tough stuff. The question becomes are voters swayed at this point . There are still some that are undecided. It could factor it into election and with early voting starting, this is probably your last debate before some of those early votes come in. It is an important issue tomorrow, well bring you full coverage and reaction to everything that happens in tonights debate tomorrow marks the premier of the news with Sheppard Smith make sure to tune in tomorrow at 7 00 p. M. Eastern time up next. David teppers return may impact 150 milonolinheli he t states finances more after this quick break. 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 hmms and ahhs heard incall. It was the move that shook an entire state when david tepper left new jersey for florida, it affected the entire budget now hes back and more about what it could mean good morning. When david tepper moved to florida, they called it a new forecast risk because the amount of taxes that one taxpayer paid. Now hes back just in time for new jerseys latest tax hike state president saying tepper called him saying he moved back to new jersey in january and that, quote, you got an extra 120 million coming from me meaning the new 10. 75 tax rate of tepper will be around 120 million a year when he moved to florida he became a National Symbol of propone nanlts despite saying then he moved to be closer to his mother and sister not to lower his tax bill he did not comment on reasons to move back to new jersey but im told it is also for family reasons. No longer the poster boy for lower state taxes. Jand Jeff Gundlach is threatening to leave california and move to a lower tax state. Back to you. Robert, no mention on this. If he moved back in january well before the new hire rate kicked in more than the top rate remember new jersey had this premillionaire tax compared to those making 5 million or more. That rate would have been in effect when he moved back. That tax rate since he left went from 9 dort 7 to 10. 75 many would argue that proves he didnt move for tax reasons. Look, hes now got nine states in the country proposing tax hikes in the country this will be a grand experiment to see p whether new york, new jersey, connecticut whether the wealthy truly move for tax reasons and what impact that has. I think you are baring the lead with andrew andrew, 120 million isnt too much to want to live in the garden state where becky and i live you finally went out of all the places someone in your position could go, you picked the jersey shore and got that tat. Like david tepper, i did it for family reasons it is a great place. Thats where we process all the sewage you send us from new york i see. We dont have any room here. Am i right or am i right thu new wealth tax maybe 400 a year top tepper alone will be about a third of the entire revenue of this new wealth tax. Relying on the new wealth tax to keep them. Our next guest, i think why did bogey move he moved to casa blanca for the waters hes a florida guy arent you in florida, mark . Im staying in florida. Im not moving or not increasing for the waters. Yes is. We are talking the capital preservation you look around. You are at the end of your roam, when you got there, all you found is a gordian knot. Is that right . That is basically something impossible to unralph it is so surreal as a result, it is tough to figure out thats right. Ive been on wall street over 20 years now and on your show as well this is about as tough a time for people to invest as i haver seen what the fed is doing is very good for the government coaching Interest Rates really low. Making it incredibly tough for seniors you cant find any yield anywhere all of those i just mentioned for fear theyll come back and bite you you dont believe in the poles or what either side is saying about anything . Almost impossible as an investor with the fed and with covid, you throw all of that in the mix what does that mean . Sell, sell and if you are in high yield, do you sell that do you raise a lot of cash are you worried in terms an election, are you worried about a democratic sweep i read an article that said it would be so fiscally stim tiff to get an idea if that would by up or down yes, im concerned. I think it is a good idea to have some extra cash generally in my life, the republicans were a little to the right and the democrats a little to the left. You no we are seeing a giant divergence between the two parties. Not just the candidates but the parties. The democrats want to raise taxes. Thats problematic in a number of ways cautioning in the first we are having a little audio problems i dont know whether you can meet me. You are frozen right now we missed the last couple of comments you were making let me check with you. Can you hear me and can you repeat what you said you are there now what did you just summarize the last 30 seconds we missed i would be cautious preservation and capital is the key going into these elections i would have additional cash, take some profits in equities, maybe out of the money puts. This is the time to be cautious and preserved. Ive learned that keeping what you have is a lot easier than trying to make new money that must be pretty good expression has to do with alexander the great. Really found the knot and then alexander took the sword and smashed it thats good. Sometimes i get that way with shoe laces i can see you doing that got to be patient. Thank you. As you said, 24 years. Hopefully will be another 24 that we are talking. Hope im not at the end of my rope andrew. Thank you. Coming up, United Airline pilots reach an agreement to cut their hours in a deal the company wont furlough any pay lots. But the jobs in other positions remain in the balance. Well talk about the high stakes deadline well do that next as we head to the break as we look at yesterdays s p 500 winners and losers 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. And then found the home of my dreams. But my home of my dreams needed some work sofi was the first lender that even offered a personal loan. I didnt even know that was an option. The personal loan let us renovate our Single Family house into a multiunit home. And i get to live in this Beautiful House with this beautiful kitchen and its all thanks to sofi. Good morning welcome back to squawk box on cnbc we are seeing some slight green arrows yesterday, the dow was up 400 points s p futures show us up about six points a points and nasdaq up by 32 we are now less than 48 hours away from a major funding skpidation for Airline Workers joining us now, great to see you, nick. Starting with what you think hangs in the balance right now what hangs in the balance are thousands of jobs and communities that small, medium and large will get going into the future congress has 48 hours to act and give a lifeline to its air industry and employees it is a good one 70 would keep people out of the grands, spending money and health care. 30 as you know was provided in loans and warrants on the company to be paid back. I think the big question is that was a loan provided in march with an expectation if we are being honest with a different time line than we have today. Now we have a better sense of the time line that could go even longer do you think the structure of the transaction and help would change, which is to say this will look more like a dip loan that would allow the airlines to continue to operate and taxpayers receive a lot more so that when things get better, it is not just that the economy continues to improve but the Share Holders would put the money at risk. No, we dont. A lot of reasons why this pandemic was no fault of our own. We have seen an up tick of demand in the early summer we thought would be helpful this is a jobs bill. Plain and simple all of that money we received last time and more from our companys till went directly to the payroll. Everyone from our pilots, flight attendants, gate agents need to be retrained and certified because of safety requirements you cant just take them off the job throw in the keys and start them up. Im not suggesting we fire these people but that money comes in and we are not going to treat the Share Holders of the airlines different than we treat those in hotel or lodging companies. I think taxpayers are be being kept back but what is in place theyve had their own place. Keeping them on payroll and keeping them out of unemployment why are you so intend in helping Share Holders. Why are they an advantaged class. I have no debate with you about keeping the airlines up and running. Strictly why should the Share Holders of the airlines benefit. You could structure so that exact number of employees keep their jobs and planes stay in the air. Only distinction is that the share holder is not advantaged i dont think they are advantaged right now what is happening here is the answer to keep the airlines is a noneconomic activity weve undertaken substantial selfhelp measure cutting management pay and cutting leaves you do recognize the share holder becomes advantaged otherwise the company would either otherwise go out of business or have to spend its own money or have to go to the private markets at terms that are much worse my question is why are you pushing on behalf of the share holder and employee. It is very strange that you dont have airlines saying we are very happy to accept money because we want to help employees and the economy but we recognize share hoerlds should not be advantaged. Andrew, i know this is a thing with you i dont believe the Share Holders are advantaged it is for the employees. It drives the industry all the time it can help empower recovery people want to get out and travel lets be frank, if you want to go see your family from california to washington, d. C. Or new york, you are not going to drive or take a bus or train. You need to fly there. We want to keep the ability to do so. 100 . By the way, nick, those arguments were made in the financial crisis in 2008 you have to keep the economy going and banks otherwise if the economy falls, it falters. Do you think the terms provided by the banks were too onerous. Frankly, the taxpayers got paid back not just in terms of the way the economy did in way you are suggesting but cash as well. There is a real distinction here between banks and airlines. In 2008, youve written about that extensively thats banks acting poorly, hurting their customers and take the economy down we have a once in a lifetime pandemic that is nobodys fault. It is a very different situation. The government needs to respond different to this than they did in the financial crisis, which, again, is something they brought on them sexes aselves and the ey 100 . Do you think lodging and others should get the same terms . They got better terms and how would you pay for that i think it was over time. They got better terms in cares one with direct grants pushing for a deal that doesnt apply to us but larger we think the economy can pick up and recover but it needs help right now. Its once in 100 year situation. The government can act here to try to ameliorate. It cant just go to hell in a hand basket. Nick, we appreciate you coming on. An important topic we hope we find a solution to help those employees and keep the planes in the side it is so important to our economy. We have a glimmer of hope today. Thank you. You bet joe. This goes back years is this all about those babies in first class crying and ruining your trip . Becky, is that what this is about . It used to be they had the roots they had those and the gates there was no competition i dont know what happened it is scaring from the financial crisis having studied that and seeing the politics of it okay. So it is not about the babies. You pay all that money and the miles to get the upgrade do you remember the actual kid how old was he i have three myself im very sympathetic they are back with the nannies way in the back. Coming up with an early read of jobs in america ahead of payroll report a pulse check on Small Business. That is next, stay with us salen from last quarter but we are hoping things will pick up by q3. Yeah. Uh. Boss doug . Sorry about that. Umm. What. Its. Um. Boss you alright . [sigh] [ding] never settle with power e trade. It has powerful, easytouse tools to help you find opportunities, 24 7 support when you need answers plus some of the lowest options and futures Contract Prices around. Dont get mad. Get e trade and start trading today. 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Claim your seventyfivedollar credit when you post your first job at indeed. Com promo welcome back a battle in the world of Luxury Brands is heating up lvmh in a quarter suit against tiffany. Lvmh says the conditions necessary to close the acquisition havent been met and they will not be able to complete the deal as it stands they cited the pandemic and the threat of u. S. Tariffs and if you follow this closely, you know little of that is in tiffanys chrome lvmh getting pressure from the french government. Tensions over trade that have worked their way into this potential merger right now, lvmh shares up 0. 4 tiffany shares down just slightly when we come back, paycheck ceo with us on payments and jobs ahead of the payroll report. P and looking at s p leaders before we head to break. Thats what my dad does. Good job, michael 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. Welcome backs, everybody paychex releasing their report since may. Hiring is down 3 year over year joining us is marty muci, the ceo of paychex marty, we did see a slight increa increase when i say slight i mean slight, 0. 06 . How do you put this in context its an increase. It is an increase what were seeing is a continuation of Small Businesses bringing back jobs slowly. We saw hours worked up again meaning theyre using the employees they have already to work hours and the wages are holding pretty well as well. So i think were still seeing jobs come back Small Businesses are being careful particularly coming out of the summer going into the fall with concerns were certainly hoping that the next stimulus will be approved here by congress and the president because they really need it right now. What do you think when you hear the last debate we had about whether the airlines should be granted special circumstances and be kind of carved out and getting that ahead of time. It is a big deal and we need the planes up and running. What about Small Businesses, the rest of them i think Small Businesses are really, really in need of that additional stimulus. Theyve done well in being resilient and holding on and the ppp loans really helped a lot. They need more flexibility in those loans. They need additional dollars they need longer periods of time i think one of the things in Small Business thats interesting is new business starts are up 20 over last year so Small Businesses are finding ways to be resilient, theyre finding new opportunities and thats really strong and of course, you know, construction continues to be strong sales of new home sales are up 40 , over 40 over last year theres a lot of good and resiliency here. We need more money to help Small Businesses to carry on through the fall why do you think youve seen a 20 increase in Small Business starts are these people who used to work for big businesses . Are these people who used to run other Small Businesses who didnt work out and trying to recreate themselves . Its a combination. People have been laid off and they find this is a time to start their own business theres more money available at the last recession there was not a lot of home equity built up now there is home equity a lot of Small Businesses use home equity to get a loan, to get the cash that they need to start a business and also i think youre finding that businesses, there was a great article in the wall street journal over the weekend about Small Businesses that have changed their business if you were a trainer and people arent going to the gym now to work out with you, now youre fixing bikes so people are being very resilient finding new ways and its amazing that theyre up 20 in this environment but thats Small Business america for you. Great to hear marty, thanks for checking in with us. We will talk to you again soon. Thanks, becky andrew . Meantime, as we head to a break, take a look at shares of amazon and target right now. Both in the green this morning amazon launching a 4. 99 per month personal Shopping Service for men while target announced its big annual shopping event, deal days will be the same two days as amazons prime day that will happen october 13th and 14th. Coming up, Morgan Stanleys mike wilson is with us he says the correction may not be over for stocks dpieste yesterdays strong gains well talk about it next futures relatively flat. New stimulus for investors we will get you ready for the trading day ahead. The clock is ticking for the airlines industry. Will there be last minute layoffs or a bailout tonights election could set the tone for the markets what you can expect straight ahead. The second hour of squawk box begins right now. Andrew andrew i think we must have lost andrews feed. I dont think he hears whats going on here. Good morning, everybody. Welcome back to squawk box here on cnbc im becky quick along with joe kernen and andrew ross sorkin. Andrews here. Joe kernen anyway i dont know what and then i couldnt hear him. I dont think he hears us or we hear oh, i i think its his ivv droppfv dropped out. And its a mess revealing a new 2. 2 trillion coronavirus aid bill for more on whats in the package, ylan mui joins us it was 2. 4. Theres designated funding in the ppp for smallest businesses, hardhit companies 1200 in direct checks and 600 in enhanced Unemployment Benefits that run through january. Nancy pelosi said democrats are making good on our promise to compromise with this updated bill which is necessary to address the Immediate Health and economic crisis facesing americas working families right now. Pelosi spoke with Steven Mnuchin last night theyre supposed to talk this morning. The window for getting something done before the election is rapidly closing. Back over to you okay. Thanks for that. Meantime, tonights debate has the potential to shift expectations regarding who will win the election and based on that sway the markets one way or the other. Here to chat about the potential impact of various Election Outcomes on the markets right now on the phone with us, Barbara Reinhard at Voya Investment and, barbara, the question is do you believe that theres a possible change in the outcome based on tonights debate before we even get into the implications of all of this. So its well known debates do not affect swing voters. It seems to be it solidifies people that were going to vote for trump or already going to vote for biden but if you think because of the, you know, unique nature of these two candidates not being able to be on the campaign trail, it maybe has more of a possibility to swing some of those undecided voters you dont think, barbara, there are certain people, maybe less on the trump side, more people looking to try to understand whether biden is, dare i say, up for the job you heard ylan say he is undecided. If he performs well, that might be interesting some people think he wont perform well in the debate i think it is, indeed, up for grabs because theres been a narrative around his ability to really perform well given he would be the oldest elected president , but i do think that its very narrow on the margin of people that are undecided voter. I think its less than 6 of the voting population at this point. So a number of people have wlr made their decision. And additionally, mail in voting has already started in a number of states. Don, lets talk about the market implications of in. Are you of the view the conventional wisdom is if biden were to win, short term there might be stock sales later this year, people trying to capture Tax Advantages now if you think theres going to be higher taxes later . I dont know what you think that means for the longer term. I dont know if you think if trump wins thats good for the market short term maybe its good for the market, long term, what do you think . Yeah, theres a number of questions there. What are the odds that taxes are higher, i think it depends what your investment horizon is if there are going to be tax increases short term and if biden wins, i think thats very likely then i think there are arbitrage. People are going to sell off, et cetera then theres broader questions about what is the effect of his agenda on the economy in the short term as well as the long term in the short term, his agenda is highly stimulative hes much more likely to pursue a broader stimulus package along the lines of a 2. 2 trillion bill that pelosi has outlined. Hes much more likely to pursue that and his broader agenda, hes prepared to spend more than hes going to tax. I think thats broadly stimulative in the short term, even if it may not be in the long term. So thats a question ill ask barbara. What do you think the markets will like better i agree that that is, indeed, bidens tax plan would be more than offset by the Stimulus Program and the funding that hes going to put to replace the coronavirus. I do think that over the long der term its going to be a wash over the next fouryear period i think the economy is in desperate need now of an extra stimulus plan and a comprehensive plan to combat coronavirus as well. It would be well received by the equity market, however, there is also the change in leadership, right . Having an incumbent lose their Reelection Campaign generally can cause a little bit of instability in markets but it generally gets pretty much past it within four to six weeks after the election don, does anybody care about debt anymore thats absolutely really difficult question i think in the short run the costs of debt are low given how low Interest Rates are and, you know, the opportunity cost of not investing when the economy is in a really weak position makes it such that we should be doing so now if biden wins or trump wins, republicans are going to care about the debt as the stronger the economy gets it will matter but for the next year or so, i dont think so i think i would expect don, why do you think that no matter who wins, but i think you said if President Trump were to be reelected that there would be a renewed emphasis on the debt and the deficit given that in his first term and frankly even during obamas two terms there wasnt there was a focus by republicans on it there hasnt been recently even precovid. Yeah. I think republicans theres a different conception of when deficits matter. I think to the same degree democrats share a different view people want to focus on what they perceive to be good deficits republicans are lowering taxes and theres a perception you should be lowering Government Spending whenever you get the chance and i think democrats believe with real Interest Rates being so low theres a Good Opportunity to address it. Don, barbara, were going to leave the conversation there appreciate it very, very much. Thanks. Becky, i can hear you now. I feel like imthat he a verizon commercial i figured you lost your ifv it happens. Where Companies Stand when it comes to being diverse. Weve got the data next. Then mike wilson, chief Investment Officer at Morgan Stanley will be our special guest. Well talk to him about why he thinks the september slide could bleed into october this year. Before we head to a break, lets check on the markets this morning. We did see a huge up day for the markets yesterday. Dow was up by 410 points gain of 1. 5 s p up by 1. 6 this morning the green arrows continue a bit muted but the dow futures up by 28 points, s p up by 6, nasdaq up by 33. Squawk box will be right back. Coming up, Morgan Stanleys mike wilson joins us why consumer cyclicals and small caps can play a market and how we might not be finished with this little period of digestion, indigestion. Whatever you want to call it ups shares, sorry ups shares rising after key bank upgraded the stock from over weight to sector weight. The new ups ceo carol tomay, a note to clients. Planning to accelerate i knew it was u. P. S. Squawk box will be right back. Its going to do it. Good morning, becky there will be several panels focused on diversity Morgan Stanleys carla harris. They founded the value act and thats recent to include it. The impact with a proactive esg or environmental social governance agenda. Ahead of the event, we wanted to look at the highest course when it comes to diversity and inclusion. Its based on such metrics as board diversity, Flexible Working hours, internal promotions and solid wages and working conditions according to the data provider, banking and Investment Services insurance has the highest scores the top of the index includes blackrock, natura, accenture and royal bank of canada as for delivering alpha, well, the index would have eked out a slight outperformance relative to last year, guys thats interesting. Proof of performance, slight but still beat. Alphas alpha. Alphas alpha who are some speakers that are going to be at the Conference Tomorrow we have a great lineup tomorrow book ended with the treasury secretary Steven Mnuchin and then senator elizabeth warren, actually, will close out the Conference Tomorrow. You should be hearing two opposing viewpoints on the state of the economy, what needs to be done in terms of stimulus, so forth on that front. Throughout the day we have some really rare speakers josh harris of apollo. Investing icons. Despite the fact that its digital. Im sure it will be great. Delivering alpha is tomorrow back for a tenth year. Go to deliveringalpha. Com. Still to come this morning on squawk box, Morgan Stanleys mike wilson is going to talk to us about the markets and airlines are staring down a deadline that could determine who wins and loses in the sector gord gordon methune and app harvest will go public through a spac Martha Stewart will be with us right here on squawk box at 8 15 a. M take a look at the futures right now. Were back right after this. keeping your oysters growing while keeping your business growing has you swamped. you need to hire i need indeed indeed you do. The moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base so you can start hiring right away. Claim your seventyfivedollar credit when you post your first job at indeed. Com promo futures indicated up 400 points on the dow. Nasdaq up 26 s p also up. Markets now, mike wilson, chief Investment Officer for Morgan Stanley. Very youth full mike wilson. Youve gotten younger. You look like youre about 26 on that picture i know what youre trying to do. Thats fine. Youre a young guy eternally youthful so i want to summarize how i see what you were saying you were negative when the market kept going up because you were worried about a recession and the pandemic hit and you got your recession then against all odds you got really bullish when no one else really was and youve ridden it all the way up were looking for a bull case of right about where the s p is right now. Lately youve been sort of comfortable that we were in a consolidation phase and you also switched to some different parts of the market and youre still there but now we have an election coming so i want to hear what you have to say about that and whether we are still in this new bull even if we get a sweep by the democrats do you think were still going to have a bull thanks, joe thanks for having me i think the election is, you know, taking all the oxygen out of the room. Of scours, we have the pandemic still, which is still on peoples mind. We have a second wave coming how we deal with the second wave is going to be more important to the market than the second wave itself, similar to the lockdowns. Its political hunt season risk of lockdown, activities along those lines are more elevated its all coming to a head. We have five weeks to go tonight is a big night from an election standpoint it will remain volatile the consumer moving average is a good support line. Not far from here. 3100 in s p terms. The up side, you know, we really hit some very powerful resistance, 3600, 3550 we got rejected. That range makes a lot of sense. Thats a big range, joe. Thats a highly volatile environment. Weve been advising clients, take your exposure down a little bit here in this period. We think the most Important Message we want to leave with clients is this is a bull market as weve been saying, large. Its a new Economic Cycle more importantly, so into this consolidation we want to be adding risk and we want to be adding risk in areas that may not be so obvious to most folks which is instead of buying some of the leaders, you want to rotate towards parts economy, parts of the market that have not yet benefitted from what we think is going to be a recovery that goes into next year. Those are things that people dont own much of. All of the concerns that you mentioned that cause you to think of consolidation will continue, you expect them to be to end favorably i think you say in the note. Okay so we get that after the recession it sets up a new bull market. If biden were to win in the sena senate, do you just ignore that or would it present issues for you . No, lets talk right about it i dont think the outcome of the election matters as much as policies politics is different than policy heres the thing were in a recession, were in a pandemic we think its going to be very difficult for either side to avoid those facts and what that means is were going to get more spending from congress whether its before the election, which now is the chance of that has gone down or after the election. And the markets smart enough to look through that and go, okay, its a waiting game at this point. Were going to get it either now or later because ultimately the politicians will have to cave to the fact that were in the recession and a pandemic and we still need some of that fiscal support. I think thats the main message why we dont think it means in the short term longer term, whos in the white house and in Congress Matters a ton. We think that effect will be felt more at the sector level and the market level as i mentioned, we think the market could be supported by more fiscal spending lets talk about some of those industries democratic sweep, folks are worried about more regulation in the financial area and perhaps energy with the environmental focus. Those are sectors that wont do particularly well. If you look at technology, however, thats an area ripe for regulation in many peoples view theres a view democrats wont be as tough on the tech sector and they wont be as tough on china so that helps that area. Its clearly as important. We think it will be a close election in both the Congressional Elections and the white house. That will keep the volatility high however, you want to skew your portfolios depending on who wins. So well get back into the sectors. I remember four years ago, i mean, the people that you know, that didnt that obviously didnt want donald trump to be elected were calling for like armageddon really in the stock market it didnt really happen. We had some pretty good gains until obviously the pandemic and a lot of them come back, but now all i hear is either side, you know, right . But to return to the regulation and higher taxes and even if there is, you know, an expansion in fiscal stimulus, maybe it doesnt matter, but that seems to be what youre saying youre not overly concerned one way or another if we were to return to a much higher Regulatory Environment and higher tax environment you dont think its possible to get there based on trying to come out of this pandemic . Its going to be tough to raise taxes probably for anybody. Thats right. The bottom line is the Business Cycle ultimately rules the roost in the short term. Were a the the beginning of a new cycle and thats overwhelmed. Mike, you dont care about okay, we go to 28 maybe on corporate taxes. We reverse some of that. For people making over 400,000 we go sharply higher in Capital Gains and others i dont know what happens with we go back to the environmental regulations with pressure from the new green deal proponents. We go back to some headwinds there. I can think of a lot of other regulatory issues too. That wouldnt at least perhaps hold back gdp or hold back the economy . Maybe not the stock market because the fed is still going to be at zero. Do you think well grow as quickly and see wage gains the same as we saw for the last four years prior to the pandemic . Theres a lot of uncertainty. When people run on platforms or policy choices, you know, talking is one thing getting it done is another once again, you already mentioned it, this is very difficult to raise taxes next year we think its 2022 and beyond the fracking industry could be at risk. Environmental concerns they mentioned that specifically same thing for Financial Regulation i would argue, joe, the fed is in charge of Financial Regulation the fed seems to want to, you know, help the banks at this point because they need the banks to get to their goals for inflation. One last comment with respect to the election the polls have been leaning towards a blue sweep for several months the way we measure it and look at the stock market, the market is saying that a blue sweep is going to happen internally so its dealing with that right now. The surprise would be if its not a blue sweep and that would its somewhat priced the market has leaned in that driks. Yeah. Just a shocker with all the polls. Mark pen runs. We had mark brand on saying he feels like hes living in another world where he doesnt believe anything on either side so i dont know i dont know what to do with the polls here, mike and the betting markets, same thing although theyre much narrow narrower well see whether its in the market that its a blue sweep or whether the market doesnt believe some of the polls. I dont think we know the difference, do you no. The polls have proven to be less accurate in the last five or ten years. I dont know what explains that exactly but, you know, its not capturing whether it be turnout or shy votes a whole bunch of things are sort of driving this inaccuracy doesnt mean theyre worthless, it means they havent been very good more importantly, starting with tonight once again, we have a series of events in the next four or five weeks where this thing could swing back and forth multiple times in terms of the way the market is thinking about it the market is good at figuring this out thats why volatility is going to remain elevated look, lets take advantage of that when there are certain things that go for sale because people are worried about the polls shifting around or this fiscal deal not getting done, risk of lockdown, lets take a look at that and put money to work because ultimately i think things resolve positively over the next three to four months. Maybe it doesnt matter american business, hopefully it doesnt matter that much this is consequential. There are a lot of things happening. Its going to be a heck of a month like we havent had nine unbelievable months so far, mike thanks i guess well keep that picture. Can you see it do you have a tv set when was that taken, high school well, i mean, ill tell you this, it was taken when i was a lot younger. Anyway all right, mike Morgan Stanley, chief Investment Officer. Thanks for coming on well check back in the near future, i hope becky. In other words, the picture was taken six months ago when we all felt a lot younger. Yeah, exactly yeah. When we come back, just about a week after stepping away from the company that he founded, serious new allegations against nikola founder Trevor Milton coming to light details after this break. Tomorrow marks the deadline for new airline funding. If they dont get it, jobs are at risk. Will Congress Reach a new deal well hear from gordon methune squawk box will be right back. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. How did you come up withd opened all these backstories . Tudio. 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. Vice president mike pence said americans expect a rise in covid numbers as testing increases. This worry comes as the global death toll hit 1 Million People. President trump said the government plans to distribute 150 million rapid covid tests made by abbott labs in the coming weeks as the country moves into the fall season. And the cdc now warning that shopping in crowded stores around thanksgiving is a higher risk activity that could contribute to the spread of covid19 meantime, the New York Times out with a report overnight that says Top White House officials pressured the cdc this summer to play down the risk of sending children back to school the report says white house officials tried to circumvent the cdc in alternate data to show that the virus was less in children this created credibility problems and real worries about what may happen when the vaccine gets announced joe . If youve been having trouble accessing your email on outlook, you are not the only one. Microsoft says it has resolved an issue affecting multiple Services Including outlook, word, excel and teams. The issue was first confirmed by microsoft around 7 p. M. Eastern time last night and it was addressed around midnight. A battle in the world of Luxury Brands is heating up. Lvmh filing a countersuit against tiffany. Lvmh says the conditions necessary to close the acquisition havent been met and it will not be able to complete the deal as it stands. It cited the pandemic, the threat of u. S. Tariffs on french goods and tiffanys request to extend until the end of the year this is a very interesting one andrew, i dont know if you have thoughts on where this comes down it doesnt look like it had anything to do with tiffany. The french government was pressuring lvmh saying they shouldnt go ahead with the deal or put it off until something is cleared up around the threat of global trade the United States making charges that they may raise tariffs on french luxury goods. The french government told lvmh, forget it, you cant do this. My only thought is this is indicative of whats happening across the world france has had national champions. Lvmh is one of them. Clearly, the decoupling thats going on is not just with china but to some degree with even countries that have long appeared to be allies. Yeah. I just wonder if theres a breakup fee or who gets blamed and how in this. This is a different sort of scenario to watch. Youre right, its the decoupling thats taking place everywhere to watch a deal get broken apart, who gets blamed i have to look through the filings. I dont actually thats a good question. I dont know who ultimately would pay the fee. Remember last week the journal was talking about, you know, how unprecedented it is what were doing with tiktok and saying asking the question, who are we, france, in terms of statism. They do this remember when yoplait. What pressure. If you try to buy i mean, you better you better be ready for some serious fighting if youre going to try to buy is it great . Andrew, becky, did you ever watch versailles louie xiv, it is amazing like xrated at times. I have a new appreciation and love of i mean, it is at that point it was the center of the universe, versailles. Beautiful place ive been there. The french, theyve got the most beautiful city and the greatest culture i actually understand sort of the you know, how they feel about their brands and its you know, its thousands of years sz now were hearing theres sexual allegations. 1999 and was first reported by the wall street journal. Involving a minor in 2004. The electric truck company. Thanks, joe when we come back, will there be that could be for the markets. October 1st is fast approaching. The day when the c. A. R. E. S. Expires for Airlines Company ceos said the industry could face tens of thousands of dollars of furloughs if no extension is approved. Want to get over to phil lebeau. Reporter andrew, youre looking at at least 30,000 airline employees are scheduled to lose their job starting on thursday that depends whether or not there is an extension of the c. A. R. E. S. Act we heard ylan mui talking about it united will be laying off or furloughing fewer than 12,000 employees. Originally it was supposed to be 16,000 they were able to prevent 2850 pilots from being furloughed on thursday what is the deal with united and the pilots the pilots agree to fly fewer hours, essentially a pay cut, but their jobs are going to be guaranteed until next june 58 of the pilots at united approved this change meanwhile, you have american airlines, it has announced the largest number of scheduled furloughs, 19,000 scheduled to start on thursday. American is also scheduled to borrow 5. 5 billion from the Treasury Department. Thats the other deadline that comes up, tomorrow when airlines have to commit whether or not they take a loan from the Treasury Department or whether they say, no, were not going to do that. As you look at the passenger levels, theyve leveled off between 65 and 70 at that level the airlines are definitely going to have to become smaller does the government step in with some type of payroll aid take a look at shares of southwest and delta. Both of these airlines, along with spirit, are foregoing treasury loans no, we are not borrowing this money from the Treasury Department were still waiting to hear from several of the airlines, so far american and united have both committed to taking treasury loans. The next couple of days will be interesting, guys. Phil, question for you. And i hope its not a curveball here kou could you ever imagine an environment thats so challenged that there would be more consolidation, meaning the government would allow more consolidation given the circumstances of the industry . Possibly. Possibly but not much more. I think that most people within the industry when you talk with them believe that the feeling is that youre at the right size in terms of the number of carriers right now but there could be some on the edge there do you see a deal perhaps where somebody consolidates with a jetblue or consolidates with an alaska thats a possibility remember, right now american, delta, united, southwest, they control more than 80 of the markets. Youre not going to see one of them snap up an Alaska Airlines because i think that the regulators would say, wait a second thats becoming too much. And real quick. The reason that some of those airlines that you mentioned earlier are not taking the loan is because they think the warrants are too onerous whats the rationale combination of the warrants being perhaps something they dont want because it would dilute the shareholders but also they believe they can get to where they need to be strictly by doing this in the private market it gives them a little more optionality in terms of repaying it, restructuring the debts down the road thats the key for a number of carriers keep in mind, southwest and delta have a sizeable number of employees who have decided to take unpaid leaves of absence. Lets do it in the private market if things continue to be terrible, six months from now, and the government has to step in again, theyve got a little bit of wiggle room in that they havent already taken as much debt out as their competitors. Phil, thank you great to see you joining us right now for a look at the future of this industry that has been so heavily impacted by the pandemic is gordon methune. Hes a cnbc contributor. Gordon, there has been so much of a push for trying to get a deal done from different section tors, different parts of the industry do you think its going to happen i sure hope so, becky once you dismantle a network of pilots and the seniority and unique training by aircraft, its really very difficult to restore that that doesnt mean it cant be done, but its expensive and time consuming and may slow down an economic recovery because of failure to have capacity available when the business returns. But do you think there is likely going to be a package that comes together between now and two days from now . Well, i hope so hope springs eternal here. Its getting real close to the wire, becky, but it could be done and it should be done and its going to take some extraordinary effort, but lets hope that they do the right thing. A lot of employees and a lot of businesses as well if the bill doesnt pass, if there is no help that comes from washington immediately, will these layoffs take place as the airlines telegraph absolutely no choice. I mean, its just one of those things where if they dont have the sustenance of government health, the cash flow returns to the negative numbers that started off at 20, 30 million a day and they just cant sustain that its not sustainable we heard already from phil that a couple of the airlines, american and united, have said they are going to take loans from treasury. Those Treasury Department loans do come with a lot of stipulations and it does things like say you cant buy back shares, you cant help the shareholders, you cant give certain executive pay that goes along with it which has made it unattractive to some of the airlines you have both southwest and others it was southwest and delta who have said theyre not going to take these loans right now what would you do if you were running one of the Major Airlines right now to the extent my Balance Sheet would let me do it, i certainly would refuse mainly some of the Corporate Governance strings that the government has put in there and really its just too con straining to take the loans if you dont need it unless others have gone out commercially and they were able to do it without the covenants theyre a lot freer to do exactly what they want given the circumstances in the future. Gordon, this is very different than where we thought we might be six months ago obviously this is going to last longer you have some places that are expecting that we wont see demand for passenger traffic, Airline Passenger traffic return to normal prepandemic levels until late 2023. One of the organizations has said they dont expect it to happen until 2024. Are we just past the golden era for the airlines that we have seen over the last several decades . Is that not going to be here for several decades to come . I think thats quite a possibility. Dont forget theres a whole supply chain that brought the airlines up for services, food, engine repairs and Extensive Network of downstream layoffs that are going to add to the Public Employee layoffs. The Economic Impact is going to be very severe its going to, as you mentioned, take a long time to get back i sure hope so but it doesnt look like its going to spring back any time soon. There are going to be upstream layoffs, too. When you look at the Aerospace Industry raytheon is talking about how theyre going to layoff 1500 people in their commercial Aerospace Unit its seen an incredible drop in demand as well i just wonder, you want to see the economy held up. You want to see the employees taken care of and held over. When you talk about demand declines, 70 or greater in Airline Travel when you were talking about years of this to come, how much can the government do and how much needs to be the airlines kicking in and saying were going to have to make some serious changes. I think youre right, becky theres a day of reckoning regardless of the best efforts of our government to substitute the treasury for the revenue they derived from the commercial market so its going to have to size itself to be selfsustaining with our government and i think thats a pretty big cut, at least on the foreseeable future if they could get a vaccine that you could get everyone vaccinated, it would be a wonderful cure to restore the confidence that passengers need to return to flying with 200 other people thats got to happen and im not sure its going to happen soon soon enough whampt. What do you think thats going to mean for shareholders do you own stock i have a very small part of my investment in airlines. I didnt see it as a good investment for a number of other reasons, and of course when you get my age you tend to get out of equity and sustain debt for your investments where theyre more secure. But there is a down side to the market cap of these airlines and its going to be recognized predicated pretty much what the government does in the near term and over the long term as you mentioned its got to be whatever the market will sustain. That may be a drastic reduction. What would you say to those in washington considering this bill or if they are considering stripping it out or doing something just for the airlines alone . Becky, i would say do it because if you look at the massive amount of money thats been put from the refresh ri into the private markets, this as a percentage of that is a small one. The air transportation is vital to the return of the economy you cant attend a meeting in tokyo by taking a ship over there. Youre going to have to fly. So International Commerce as well as domestic commerce depends on having a viable air transportation system. I mentioned once you take it down, its real difficult and time consuming to build it back up gordon, thank you for your time today good to see you. Good to hear you, becky lets check the futures before we head to break. Down about 7 points now. Turned negative on the dow down 11 now. Nasdaqs up 8. S p up battle for the ages tonight in cleveland. I was talking about garrett cole and shane bieber for the yankees versus the indians cy young award winner versus a guy with a 300 million this is a different battle that were talking about. Youre seeing those two players there. Case western, great school in cleveland. A lot happening. I want to say it happens at 7. Doesnt happen until 9 should be earlier. Well talk about the biggest topics that affect y aound your money next well be right back. Its a vide. You got to move the phone in front of you like. Like its a mirror, dad. You know . Alright, okay. Hows that . Is that how you hold a mirror . [ding] power e trade gives you an awardwinning mobile app with powerful, easytouse tools and interactive charts to give you an edge, 24 7 support when you need it the most plus 0 commissions for online u. S. Listed stocks. Dont get mad. Get e trade and start trading today. 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. No follow up so far not providing much help the airlines, schools and more it doesnt have a chance and the latest well speak with Martha Stewart live right now. We can be here, you can be here were asking nicely. Im joe kernen along with becky quick. Andrew ross sorkin u. S. Equity futures are up and down 20 points they had been in the green for most of the morning. Now all the averages are down slightly the s p down a little over a point. Nasdaq down 5 and change big plus arrows yesterday. A nice session to start off the week after four straight weeks of declines. Not a great september but we got a couple of days left. Well see. Nothing going on in the next couple of days treesh ri yields 9 is to late i dont understand 8 00 is primetime. Whats wrong with 8 00 why 9 . Why 9 . Youre talking about the debate tonight. Yes. And why so late yes. I agree its 6 p. M. On the west coast and thats a little early if you go to 5 p. M. A couple of septogenarians, they might be both gone. When was the last time they were up past 9 00. Both less cranky than you. Three septo no, im not. Anyway all right Business Leaders agree that Congress Needs to come up with another stimulus package we have a new one from house democrats. 2. 2 trillion in spending. Ylan mui joins us with the latest good morning reporter good morning, becky. House Speaker Nancy Pelosi is set to speak with the treasury secretary this morning this is their fourth conversation as they try to revive negotiations that have been stalled for months. Democrats latest proposal includes 436 billion in state and local funding for a year 25 billion in aid for airlines. No furloughs through march 1200 in direct checks 600 in enhanced Unemployment Benefits and designated funding and ppp for the smallest businesses, nonprofits and hardhit companies there is some division among democrats about whether to actually bring this bill up for a vote there are those who just want to pass something before the election, even if it doesnt stand a chance in the Senate Others are calling on pelosi to still hold firm for a bipartisan deal members of the Problem Solvers Caucus plan to send her a letter saying it is essential to send the senate a compromise bill that is real and can be signed into law by the president of the United States. The house is scheduled to go on recess on friday so that doesnt leave a lot of time to get this done, becky. Members could always be called back to washington if theres some sort of break through back over to you. Ylan, is there actually any overlap in this proposal with what the white house has said theyll support or is the proposal as it stands now sort of dead on arrival reporter i think thats the frustrating thing for republicans. There are a lot of areas of overlap. Democrats sort of sweetened the deal by adding some things from the previous package back in the spring theres now the money for the airlines, now the ppp extension, more money for schools they came down in some areas like state and local funding as well as money for the postal service. There are a lot of areas they do agree. Pelosi has been adamant this is all or nothing deal and unwilling to vote on certain items. Even if the white house wanted to go ahead with some of this, the senate is a very different story. There are Senate Republicans have said they are not going to vote for something that comes close to a trillion dollars. Is there any way to get this whole threering circus back under one tent reporter talking is better than not talking a bill is better than no bill, but on the key log jam provisions, it doesnt look like there is Much Movement all of the negotiations weve seen so far, some of the discussions weve seen have all been around the edges on the margins so, you know, anything could happen while lawmakers especially are in town but the bar is very high ylan, thank you good to see you. Joining us now to talk more about the latest stimulus proposal as well as some things we might expect in tonights first president ial debate, lahn hi chen and a politics fellow at the Hoover Institution. Bigtime economist, lahn hi. Do we need more stimulus there are people in need theres no doubt there are places where we could definitely use some relief what is the snapshot of the economy as you see it right now . Well, i think what were seeing is an economy on the rebound. I think theres no question in my mind that people as you say, joe, need help do we need large scale package do we need to be giving state and local governments of additional assistance at this point in time . Is that really going to create an additional environment where we see more job creation and more Economic Growth and job prosperity i think perhaps targeted assistance, folks that are unemployed but the notion of having a huge stimulus package i dont think is the answer and i dont think fundamentally gets to what we need at this point in time at this point in the coronavirus crisis. Do you think we need a full 2. 2 trillion would you have liked the original proposal to go through that Speaker Pelosi was proposing . Something over 3 trillion . Are we above stall speed already in the economy we are definitely not above stall speed in the economy i mean, i would challenge lanhee the job growth has slowed over the last month its not what i think about the need for a stimulus. Its actually what investors think about a need for a stimulus, people, jpmorgan, Goldman Sachs cutting their project shuns of growth precisely because congress is not acting so and the president isnt acting we dont have a deal that requires additional stimulus i would say on the issue of state and local, state and local funding is about not firing teachers, not firing firefighters in the middle of this crisis. As we saw in 2009 when states contract, that hurts Economic Growth over the long term. It creates a downward pressure thats why physicia fiscal stim find it amazing that the president has not negotiated directly with nancy pelosi over this i saw some of the nearest comments about this debate tonight so i cant wait to get her started on this. I want to start with you, lanhee youre a romney guy. You remember the first romney debate oh, i remember. A lot of time incumbents seem like theyre, i dont know, coasting or something and romney really i dont know what happened on the next two debates. It was like a rope a dope or something. I have no idea what happened what do you expect tonight to see . Incumbents supposedly sometimes dont do well in the first debate i think tonight will be a complete free for all. The president will come out and do what he did in 2016, which is essentially let her rip and see what sticks. The reality is nobody challenges president s for the most part so they come into the first debate, they usually come in, you know, a little bit of a sleep walk, a little bit of a sense that theyve got this, theyve been dealing with these issues for four years i dont necessarily think donald trump is in the same category. I think he relishes these moments, i think he enjoys having something and people out there campaigning a bunch. The president has restarted a heavier schedule joe biden has been in his basement essentially for the last couple of months. He hasnt put on a tough schedule either. Were going to see what the schedule is. President s have the potential to walk in to a trap but tonight i feel like trump is going to come out and be pretty aggressive regardless of the circumstances. Andrew, were you going to ask nira a question about the debate or stimulus . I was going to go stimulus with a second question about the debate why dont we get her views on the debate first i think we should, yes. You know, i think actually donald trump is no holds barred on this debate it will be mistake for him. He is right now losing particularly suburban women and large numbers. He needs to change the calculus. If he thinks doing the things he does throughout his presidency as attacking people, viciously attacking biden is going to help him, from a partisan perspective, i would say have at it i think he has to explain to people why hegs handling of the virus isnt what it seems to be. Divisiveness thats his opportunity here. He doesnt have that many opportunities left i worked on joe bidens debate prep in 2008, many years ago, when he was up against sarah palin. He really focuses on how policies affect peoples lives i was going to ask both of you about another stimulus question in the context of the debate, im curious, actually, where both of you land on this news story that came out i guess now and another second story from the New York Times related to trumps taxes and whether you think that has any impact in terms of changing peoples perception or mind you know, you hear from a lot of people who said this is pretty much what i expected and then put some details or meat on the bones. So ill jump in here. In 2016 when that first story, which was much less significant came out, it actually did hurt trump for a few days hillarys numbers went up, trumps numbers went down. This story seems to be getting effects for weeks now. Its not that we havent upped the margins. Particularly for white noncollege women, the idea that donald trump is less impacted than they are, as a waitress, teacher, nurse, its annoying and irritating he seems to have gamed the system to lower his taxes in a way that, you know, does raise questions at least about some degree of fraud. What do you think, lanhee well, look, i remember a time when democrats attacked mitt romney for paying 14 in taxes this is obviously something that they will use. I think Vice President biden will use it tonight. I think the difference between where we are today when we were in the guessing with the number of voters less affected. 2 in wisconsin according to an nbc news poll. Its not clear that this is going to move the needle in the same way that some information that was introduced late in the cycle will in 2016 i think neera is right about one thing, it does hurt trumps impression amongst those who maybe see him as somebody who was a very successful businessman, is a very successful businessman, or have the image of him draining the swamp. This notion that he took advantage of these things i do think will leave a mark with some part of the population. Neera, thanks American Center no, definitely not aei lanhee chen, Hoover Institution and stanford economic genius thank you. Andrew coming up on the other side of this break. Thanks, joe. A very special interview with Martha Stewart and the ceo o oof a of agtech going public by, what else, a spac empt e. U. Regulators going to have a planned buyout of fit bit. Stay tuned youre watching squawk on cnbc welcome back to squawk box this morning agriculture tech startup appharvest is going public through what else, a spac. The deal will provide appharvest with nearly half a billion in proceeds joining us is appharvest founder and ceo Jonathan Webb and joined by Martha Stewart and shes an appharvest board member. Congratulations on the deal. Jonathan, im going to start with you i remember we had you on the show probably a year and a half ago so congratulations to you on this new development but explain why you wanted to be a Public Company especially given the spac structure and right now the questions about those structures well, andrew, thanks for having me. Why go public now . Because as you can see, the facility here is built well be selling tomatoes here in the coming months and we want the consumers of our fruits and vegetables to be the owner of our company, be the advocate and marketing with us and help drive agriculture here forward in america. We felt it was the right time to take this Company Public and allow the average everyday american across our country to buy into this company with us. Hey, martha, how did you get involved in this well, i met jonathan just this year in utah at chef dance which follows the wonderful Sundance Film Festival there we talked about sustainable agriculture. I have noticed and im part of a secular shift to vegetable based diets here in the United States and appharvest fits the bill the way that they are going to be able to grow vegetables and fruits sustainably, not causing any of the water scarcity and the land degradation and the deforestation thats occurring here in the states really, really interests me. And i think that they are riding a wave into the future and im so excited about it. Jonathan, can you explain how we think about your valuation. The enterprise value is 1 billion. The company doesnt have any revenue right now. Sort of walk us through the math for the public investor that now will be getting in and frankly getting in early this will almost be like a Venture Capital deal in a more traditional world. No, andrew, its not a Venture Capital deal weve had some of the best early investors in the world in our company. Steve case, a whole list of incredible investors that have gotten us to this point. How do we look at the valuation, andrew my background was building some of the largest Solar Projects in the u. S. And in my lifetime the way most power will come from renewables, most cars will be run on electricity most fruits and vegetables in this world at scale are going to be grown indoors in a controlled environment. We simply do not have a choice, andrew we hosted the u. N. Security council here in kentucky they came to listen to what was going on here. Why . They have outlined the world needs 50 to 70 food by 2050 some are saying we would need two planet earths to grow that food with the way were currently growing it today an dpru, how you value this company, what does it mean to grow fruits and vegetables globally indoors thats what were working to tackle this half a billion dollar transaction is gasoline to put in this motor to let us drive forward and keep building here in a region we love of central appalachia why are we building in this region were getting wetter if you look where were growing our fruits and vegetables, california is on fire. Southwestern u. S. , drought strick stricken we have pushed most of our produce down to mexico trucking it 2,000 miles to get to major markets. What were going to do is rip this to central appalachia were going to put it indoors where we use 90 less water than open field agriculture and get to 3 4 of the u. S. In a days drive. How do we value that there are people a lot smarter than me, fidelities that have led this half billion dollar transaction. My job is to make sure were building andrew, keep in mind when i met with you a year ago this facility hadnt started construction yet we built one of the largest structures in the world. This is two times larger than amazons largest facility. 600 semitrucks of materials coming to a rural county in Eastern Kentucky how do you value this company, andrew you tell me. Weve got some of the hardest working men and women in the country that built this facility this is project one. This is project one. You tell us what project 2, 3, 4, 5, 6 look like. Were on a war path to change agriculture work get chemical pesticides and labor practices we can all be proud of. Jonathan, everyones rooting for you and for others in this space to have great success. The question that im asking, and specifically because of the spac structure, the disclosures around spacs and frankly the questions in part because there have been other spacs recently, companies that havent had revenues before that have raised questions about how the public should be thinking about these things, specifically public investors who have not been part of a quote, unquote road show that would have typically happened in a more traditional ipo. Yeah. Andrew, no, great question keep in mind, this spac was only 100 million. We raised 375 million from some of the most sophisticated investors in the world, again, fidelity with a significant check in that. We went on that road show, andrew the spac was just a vehicle. My background is building some of the biggest stuff in the world. The spac was a vehicle to help us come from the journey we gave them an opportunity to look at this company i cant speak for every spac transaction, but i can speak for us the spac we use, novus capital, was 100 billion of this half billion dollar transaction how will the Public Markets look at this . Feel free to call up fidelity. Martha, you are now involved with this company. Youre obviously involved with some cbd products with Canopy Growth im curious, in this environment given whats happening with spacs, would you ever think of respacing yourself im spackled already. Im part of marquis brands which is a private company within new berger vernon. Very good group of people. Were on a growth pattern, but this this fantastic ompany, this appharvest that i have become involved with, is so fascinating to me because i have visited the netherlands, which is now the second largest agricultural exporter in the world after the United States. The netherlands is a tiny little country, but because of the efficiency of sustainably grown product under glass they have become a power house i want to see what can happen with this kind of this technology i think its just a brilliant step in the right direction for the future of our country. I cant stand to see whats happening in california with the players, the drought in the south. I cannot bear it i cant bear the drought here in bedford, new york. Very difficult to cope with, but this is going to help in a very big way if we can grow a lot more stuff under glass in such an efficient and water saving method i dont like to see the degradation of our land with all the chemicals necessary to grow stuff. So this is a very fun for me project but also a very serious project. And i love jonathans imagination. Before we let you go. Martha, i want to get your quick thoughts about what the post pandemic world looks like. Jonathans obviously been able to plow through this period. Andrew, it looks like this right here this is what it looks like, andrew how the rest of the world looks after all of this and specifically you have had so much success with social media, how do you think it all changes . Well, im very lucky because our business is focused on the home where everyone has been guaranteed now for almost 7 months so home, redecoration, home entertainment, home cooking, baking and the new book out. Cake perfection. Its going to be a best seller because everybody wants to know how to make the best cakes its hard to live like this, but if youre focused on the right parts of living as we are, and offering your products on a very in a very wide spectrum of retailers, you can do all right. Macys, amazon with the online sale, its been okay and im not and i get up every day and i go to work just as i have for the last, you know, 30 years every day creating wonderful new products for the homemaker. So i think post pandemic i cannot wait post pandemic. Its really very important for all of us to get back to more normal lives but lives that change and we are going to be living in a different way. Well see. Well come back and talk to you in a couple of months. Okay. I hope we get to do that in person look forward to seeing you in person i actually want to go out there and see what youve created, jonathan. Andrew, bring the team. October 21 october 21 our governor will be here martha will be down here bring the world from new york down weve got a big farm, 360 acres. Come look at what the future of agriculture looks like this is what a post pandemic world looks like, andrew were going to rebuild this world coming out of this pandemic with more resilient systems. We have to do it for your kids, everybody else watching the show we dont have a choice we have to move fast we appreciate you having us on, thank you. Appreciate you both becky. Thanks, andrew the word from Johns Hopkins University Last night. Worldwide coronavirus deaths have topped 1 million. Coming up we will speak with former fda commissioner dr. Scott gottleib about what the u. S. Can expect this winter. Tomorrow delivering alpha is back for the tenth year. Visit delivering alpha. Com to register stay tuned, youre watching squawk box right here on cnbc. Well have you tried thinkorswim . This is totally customizable, so you focus only on what you want. Okay, its got screeners and watchlists. And you can even see how your predictions might affect the value of the stocks youre interested in. Now this is what im talking about. Yeah, itll free up more time for your. Uh, true crime shows . British baking competitions. Hm. Didnt peg you for a crumpet guy. Focus on what matters to you with thinkorswim. 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. Car vending machines and buying a car 100 online. Vented now weve created a brand new way for you to sell your car. Whether its a year old or a few years old, we want to buy your car. So go to carvana and enter your license plate, answer a few questions, and our technowizardry calculates your cars value and gives you a real offer in seconds. When youre ready, well come to you, pay you on the spot, and pick up your car. Thats it. So ditch the old way of selling your car, and say hello to the new way at carvana. Coming up, dr. Scott gottleib on the rising number of coronavirus cases as the worldwide death toll tops 1 million. Stay tuned, youre watching squawk box on cnbc keeping your oysters growing while keeping your business growing has you swamped. you need to hire i need indeed indeed you do. The moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base so you can start hiring right away. Claim your seventyfivedollar credit when you post your first job at indeed. Com promo welcome back to squawk box. Rick santelli has breaking Economic News for us rick andrew, we normally will cover advanced trade balance because the advance number, like many advance numbers, ends up morphing when you get all of the pieces of the puzzle but this one is big time. If we look at the advanced trade balance on the advance, minus 82. 9 billion close to minus 83 billion and it is now the biggest negative read on trade balance ever sings recordkeeping started in 1989. The reason i think it needs to be viewed as so important is because it now is becoming a barometer for whose economies are dealing faster in other words, we are bringing in more than we are exporting net ratio and thats to the tune of a gap of minus 83 billion which means that the goods and services we are bringing in, this one is goods that we are bringing in, of course, are coming from countries whose horsepower is ramping up faster in a covid world than ours is. Thats the way many investors will look at it. It goes a long way to explain how the recent currency moves have been underpinned by which countries have the hottest hot spots. Hey, rick, is this a situation where you see asia kind of recovering faster . I just wonder hue this compares to what we saw 6 or 9 months ago, 9 months ago when asia was starting to shut down. Did we have the reverse where we were exporting things but we werent getting things in . Is this what you would have anticipated . You know, i think that is kind of the superficial macro view and it is after it. We can dig deeper and see other issues there for the most part, that is the way i would currently describe how investors are going to Pay Attention to the number. At this point that is the most important issue with regard to monitoring which countries are exporting and which are exporting to the tube of getting back to precovid levels. I guess we can hope that we rebound at some point what they are doing right now, thats the big question well follow the same curve as when we all started importing the virus, will we follow the same curve of recovery as well yes the more you dig, the more issues arise another issue here of course is consumption. Even though certain economies may be feeling faster than others, the lockdown consumption economy is Something Different to Pay Attention to in this drama as well. Rick, thank you for bringing this to our attention. Well see you very soon. In the meantime, according to Johns Hopkins university, worldwide deaths pass 1 million mark joining us is dr. Scott gottleib hes the former fda commissioner and cnbc contributor some of the 234u7numbers peoplee watching where theyre seeing increase of 10 or greater in 21 states 18 states or so have seen it in the middle line. They have it contained but not necessarily going down and only 11 states have seen a decline of more than 10 . How would you characterize what were seeing right now does it surprise you given what you had anticipated what we might be seeing this fall . Thanks, becky just picking up on the last story. If you look at whats happening across asia, theres no measurable coronavirus in most Asian Countries right now. Japan has this if you look in south korea, they have 20 or 50 cases. They dont have any cases. Thailand has very low cases as well malaysia is the only asian country where they have some measurable coronavirus asia really has gotten control relative to whats happening here in the United States or in europe right now whether or not this is the beginning of a fall resurgence more cases are picking up as we enter the fall and winter. Well level up as unclear. Theres 30 states where the rate of transmission is above one, meaning thats an expanding epidemic 15 states with the positivity of 10 . Those are worrisome signs. The final point ill make are the people who believe we wont have a dense epidemic are those who argue theres a vast army of people who have residual immunity from past coronavirus, the socalled tcell immunity. They have tcells that have been programmed to react to could he vied virus in petry dishes we dont know if those tcells confer any immunity. The balance of the evidence which is that they dont for most people so theres not a vast army of people who are immune to this were nowhere near herd immunity at least in my opinion. So you think that we may not necessarily follow the same arc that these asian nations that seem to have it under control may not be pre we followed the curve on the way up but we may not follow the curve on the way down well, theyve been able to maintain control they got control of their epidemics and theyre keeping it down theyre entering seasons where they would see more spread now, too. What youre seeing is more universal adherence to more simple precautions that are aimed at trying to keep infection at bay things like universal masking. You dont see them overtaking simple steps you see better tracking and tracing in place people are more willing to comply with regulations and ordinances that allow the governments to trace infections and quarantine people who are sick theres better adherence to the blocking and tackling of getting control of an epidemic certainly in the United States and even in europe israel for that matter as well those countries are experiencing resurgences. If we want to preserve our ability not to wear masks, the price we have to pay for it heading into the fall and winter is tolerating more infection you believe the which one of the models do you believe in terms of showing us where we might be, i dont know, three months from now . Well, i think the ihme model which shows above 400,000 deaths is probably wrong. I dont think were going to get that high by the end of the year were doing a much better job of preserving life. Were going to see the case fatality rate and as ive said before, weve cut in hospital mortality with innovations in care and the introduction of better therapeutics. I think were going to have a lot more infection heading into the fall and winter. We could see a resurgence that dwarfs the other waves weve had. We will compensate with more infection in gaining improvements and outcomes with patients thats my fear at least. As we head into the fall and winter, the conditions are right to see continued, more aggressive spread of this virus. Were heading indoors where kids are back in school, back at College Campuses work is trying to start. Work is becoming more complacent and tired of the restrictions. All of those are going to set up a fall and winter that will create a risk. Youre seeing the rising infections right now youre taking a lot of infection for the most dangerous season of this virus dr. Gottleib, thank you i hope that were able to turn off of that track but it does give me concern, too i want to thank you for your time today good to see you. Thanks a lot. Coming up, details now more details on allegations of misconduct by nikola founder Trevor Milton. As we head to break, back to investing. Check out the price of gold. Weird . Sold off, is it really just risk off . Supposed to go the other way Financial Assets its down this month on pace for the worst month in four years but still up more ayan 4 in the quarter st tuned, youre watching squawk box on cnbc cnbc has confirmed that two women have come forward with Sexual Assault allegations against Trevor Milton. The first came from miltons cousin claiming that the former ceo groped her after a family funeral back in 1999 it was first reported by the wall street journal after she tweeted about it the second alleged assault, which has not been previously reported, comes from an event involving a minor in 2004. That complaint was filed friday in saint george, utah. Through a spokesman milton strongly denied what he said were false allegations and declined to address the specific details of the womens complaints milton resigned as nikolas ceo following a report from short seller Hindenburg Research claiming he made statements about the electric truck companys deal that led to an inquiry by the sec and doj. For more on the full story go to cnbc. Com. When we return, jim cramers first take on your Tuesday Morning markets. Plus, how much volatility can we expect in the final quarter of the year . Much more squawk box straight ahead. Well be right back. Lets get to cnbc headquarters, jim cramer joins us now jim, we went into the abyss, we fell deep and hard, the economy and the stock market, we came out of the abyss quickly and hard here we are now, worries about a second wave and an election coming that will probably live up to 2020 mayhem. So what the hell do we do its september 30th tomorrow, so where are we what would you be doing now . Stay the course. Stay the course stay the course i think that the idea of the flareup in the fall, i think were one of the reasons why weve been doing all the things weve been doing is because we fully expect it. I dont think were getting enough credit in the country as being really a testing nation now. Theres testing everywhere, testing at school, testing at work at least we wont have people who get it hanging around the office i think that thats different and better, we do have the therapeutics that dr. Gottlieb said all the doctors say the fall will be a disaster if you build in that its going to a disaster that means you shouldnt need to sell im anxious to watch the debate like everybody else, but debates do not move the needle and i do think that the economy is much better than people think, joe. I mean, theres parts of the economy that we know arent good, but there are other parts of the economy that are extraordinary. I think that theres a miss the boat aspect of the stimulus, it kind of happened already if you were going to save certain industries, you had to do it because theyre done i think its kind of like if they any of these people work for a living, joe, they would know they missed it. Those places are closing and will never come back so its almost like the Creative Destruction that used to take years, its like everything, time dilation, everything happens quicker what were losing were gaining with some of the digital plays and some of the it actually did accelerate the move to some of these friends that were happening. Right. But the baton is being passed to where its not a net loss, it might be break even or actually additive. Its just that its to the bigger ones. You wiped out the Small Businesspeople when it comes to the essential services, against a lowes, or home depot, restaurants are finished, you know, they cant make money at these levels other than in florida where they went full boat so enough. I mean, they had a chance. Secretary mnuchin had a chance, Speaker Pelosi had a chance. It was too late. The ppp ran out and, i dont know, i mean, people just filed for bankruptcy its not coming back it is Creative Destruction its just that i think a lot of us wish that the smaller guys had more of a chance, but, joe, it came and went and it was a casual but i dont hear anybody saying, wow, thats too bad which is a shame because a lot of companies and a lot of people will be unemployed but they missed the boat the government missed the boat and they ought to just admit it. They ought to say, hey, do you know what, we didnt get it done, sorry, and move on. All right im not happy about it. Im being facetious. Its a disaster because theres 14 Million People who are going to lose their jobs but they had a shot, joe, and they didnt do it so move on, restaurants, hotels, hey, you know, easy come, easy go, i guess thats how they feel. All right jim. Thank you. Thats what theyve got. Thanks. We will see you in a couple minutes. Tonight on mad money the ceos of thor industries, polaris and mccormick. An eclectic mix. Andrew. I want to take a close look at some ex wits that should be on your radar as we get ready to finish up the Third Quarter and begin the fourth joining us right now for that is joe teranova, a cnbc contributor. Great to see you, my friend. What are you doing right now what would you actually be buying in this environment good to see you as well, andrew i think weve got some monthend rebalancing thats stabilized the 10. 5 decline from septembe to last thursdays low i think the market trades in a consolidation range between 3275 and 3425 but i think the opportunity is to mine for equity names, specifically if you think about the financials not many people want to buy banks right now, right, andrew, but the trading environment will remain volatile. Some of the names that i own book Goldman Sachs, Morgan Stanley, the ice and nasdaq exchange, these are winners in a highly volatile trading environment. You could look at some of the research and Ratings Companies like s p global and msci and also the consumer remains incredibly strong. I heard jims conversation with joe. There is a tailwind behind the consumer and that takes you to the names most of which i own which would be names like nike, names like lululemon, theyre clearly supportive, home depot, lowes is going to have a spectacular Holiday Season as the do it yourself Home Improvement reaches the next phase which is now home decor, a place like lowes is where the consumer is going to go for that i mean, youve also been an owner of apple and microsoft do you hold, buy, sell what do you do those are core holdings, the one that you consider adding to would be amazon. I suspect that those are really the big three to have in core ownership in a portfolio certainly as it relates to mega cap growth joe, totally separate question we had the coo of app harvest on just before with Martha Stewart and every day if its a monday, if its a tuesday, there is a spac if you are an investor out there and you see these spacs, how are you supposed to measure them and judge them yeah, thats a great question i think reputationally you have to look at who is operating the spac, but i think, andrew, its more indicative of the environment. Youve spoken this morning much about the headwinds challenging the market, the election, a second wave for a virus, the increased tensions between the chinese and the u. S. , but i think, andrew, what supercedes all of that is the 90 trillion worth of global liquidity that has to find a home thats one of the reasons why there are such an increase in spacs in 2020, but ultimately where to participate comes down to who is operating that spac and can you get behind that veteran operator is there a debate trade to be made today before 4 00 p. M. In terms of what may or may not happen tonight yeah, you know, listen, everyone has got their four outcomes and we know what they are. I think the most challenging one would be the absence four outcomes i know about two outcomes. What are your four well, youve got a red wave, youve got gridlock, you have the blue wave and then you have the lack of an outcome and with the lack of an outcome i think you have that knee jerk reflex environment that will challenge the overall market for an extended period of time, but very controversial statement, andrew, i think whoever it is that wins the presidency markets keep chugging along higher behind that 90 trillion worth of global liquidity. And youre not a believer that there is a selloff for tax purposes if biden wins and there isnt if trump wins or Something Like that . You have an offset. If Vice President biden was to win the presidency, the negative tax consequences offset by the reintroduction of globalization. I heard mike wilson talk about specific sectors, yes, i agree with that on the tightening of regulation and then potentially there is more spending which could do the work for the Federal Reserve in lifting yields fair enough joe, always great to see you appreciate it. The markets look like they are going to open higher this morning. We will see everybody here tomorrow morning, postdebate, we will bring you, of course, all that have analysis, joe and becky. I dont know if you will stay up late or wake up early to watch t but we will be doing it all. Squawk on the street begins right now. Good Tuesday Morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer and david faber. Stocks are holding their collective breath as were ahead of the first president ial debate of the season, one of the last chances to change the contours of the race. We are on stimulus watch as the global covid death toll surpasses 1 million. Our roadmap begins with dow, s p coming off their best day in more than two weeks but september still looks to be the first down month since