Transcripts For CNBC Squawk Box 20240712

Arrows dow futures indicated down by about 260. Weve seen down 300 this morning. Nasdaq also down sharply down by 200 points and the s p 500 down by about 37 so significant declines after two other days of losses also playing out in the treasury markets as well. If you want to take a look at what is happening there, yields have gone down, right now the ten year is yield iing below 0. a lot of this has to do with renewed lockdowns in europe. Lets get to karen cho who has more on what is happening there. Thank you very much we are witnessing losses across the markets as we contend with more news flow around more severe restrictions. Weve been hearing the last couple hour 24s that there may moves announced later on today, reports from various Media Outlets suggesting that london will move to a tier two restrictions the london mayor has spoken suggesting that the Health Secretary will reveal the changes in the house of commons. No mingling between households currently there is a rule of six people and they can be from various households but the mayor is talking about 100 cases per 100,000 people and well soon reach that level, but a significant numbareas alr above that level and this highlights some of the pressure applied from the Opposition Labor Party for a two Week National lockdown that has been resisted so far and the ultimate decision lies with Boris Johnson but we already have liverpool on the highest level of alert so pin oigs aubs oig and servins has been closed for the time being. And on the French Market, there havements there of overnight curfews at 9 00 p. M. To 6 00 a. M. And the French Market is responding to those restricti s restrictions bars and businesses have to shut at 9 00 p. M. Sharp the president wants to get the level back to 3,000. And just on germany, we have had record cases there as well but roughly just over 6600 that means that there are some restrictions on socalled hot spots, but it is much higher than what im just talking about with the uk and in france, gathering will be limited to just ten people. And gatherings in private spaces can only have two households so the german stock market was down the most earlier, more than 3 , limiting some of the damage. But what were witnessing is some of the worst selling weve seen since about the 21st of september. Back to you. When you say lock down i go on, there are different it ragtss in differeragt iterations here in the United States, it meant that theaters were closed, restaurants were closed, people couldnt go to work unless they were deemed emergency officials. You are not necessarily talking about that level of lockdown, are you . Well, the labor party has been suggesting that is required in london, the more severe restrictions, a National Lockdown is required to two weeks as a Circuit Breaker as we continue to see infections spiraling. But that is not what were talking about here because the government has been resisting such severe measures given that the uk economy was so hard hit by the severe lockdowns we had earlier in the year, an effort by the government to avoid those type of measures at this point so it does seem that what well see is just tighter restrictions still localized level, but of course london, the capital city, that has severe implications if there are restrictions no mingling of households. And it would coincide with half term as many schools are shut for a one or two week break. Karen, thank you very much. Red arrows across the board there in europe and that is bleeding over into the futures here in the United States. Andrew, good morning. Is it just me or for me, im still surprised when i hear, all right, were reclosing bars. It is like bars were open and you are wondering that is not i cant imagine you can go to a bar here. You have to be outside you have to be insane right, you have to be outside. I havent been to one, but ive seen other people when ive driven by. But part of the issue is that because of the lockdowns that they did pursue, you know, three, four months ago, they were actually able to put some of this to rest for a while. Clearly not enough but that is what allowed people to go he back to bars. Im not suggesting that that necessarily is the right move for us here. But it was partially because of the discipline that they had then that then allowed them to frankly become undisciplined now. This is the graphic representation of what you are saying right there this is this period that went through a lull, and seven be day rolling average of cases per million, and the point that the journal makes is that the eu, that metric, which is very important, the eu has now passed the United States on a rolling average on cases per Million People so weve done a little bit better since there, coming down here, but we almost met up there at a higher level. So were in the middle were in the middle of this. But just myself, i feel people around me, you know, there is apple straighter here and everyone there is a new espresso machine and if there is someone else on the elevator, i feel it. Ill take the next one it really is a weird feeling there are stairs. I come down the stairs sometimes. I let gravity gravity is my friend but in certain cases, it has not been my friend anyway, lets keep going meantime, lets talk about what is going on back here at home Steve Mnuchin speaking in washington, he says that he and House Speaker nancy pelosi remain what he is saying is, quote, far apart on another covid19 Economic Relief package, he says a deal would be hard to reach before the november 3 election. But he said that he would keep trying and as President Trump continues to champion his efforts in those negotiations we should tell you, the secretary is going to join us live at 8 30 a. M. Eastern time this morning it is a conversation that you do not want to miss where we will probe and ask him about all of this and the state of play and part of a selloff on any given day, we look for reasons but things dont seem to be going so great there well see. It will be great to have him on to ask him he made some kind of comment about that the democrats are not ready to give anybody a win between now and the election and well need to ask him about that because i dont think that he had said that up to this point because he was holding out hope. And he wasnt going to say that because obviously because that poisons the well exactly but he said it and everybody else, all these other senators have said that, but he has never said that along these lines. And he has now. United Airlines Reported a loss, 8. 16 a share. But we need to remember that wouldnt be bad, that would be pretty good. But it is per share unfortunately in the Third Quarter. Worse than the 7. 53 loss analysts had expected. Revenue roughly in line though well talk to scott kirby, he will join us in an exclusive interview at 8 40 a. M. Eastern meantime, elon musk announcing the second price change now for the model s in a tweet yesterday. He said that the gauntlet has been thrown down and says the prophecy will be fulfilled, model s price changes to 679d 69,420. A love of juvenile musehugh mory working the 420 into the Purchase Price this second cut coming after a start up led by a former tesla exec priced its sedan at 69,900. And you remember also the 420 price tag was also used for his efforts at one point to take the company private. Or not yeah, im usually int juvenile hugh more, but enough already. Anyway, shares of clouds Computing Service fastly are plunging this morning. The dough lcompany lowered its e because of Geopolitical Uncertainty. Tiktok accounts for about 20 of fastlys revenue you First Six Months of the year and that stock is down by 29 this morning. And i do have a question about this i know there was so much uncertainty surrounding tiktok, but you did it actually lower usage . There were threats to shut it down seems like maybe more people were downloading it. I dont understand it yet im open to being sold on how great it is, but so andrew, you have still not youve seen tiktok, but you havent produced a tiktok, is that still i have not produced any tiktoks. I thinks answer to beckys question, it did both. In many ways, more exposure for tiktok but at the same time, a lot of the big influencers and maybe this was going to happen anyway, a lot of the big you influencers set up shops independently on what is called now reels on instagram. So they are running both of their platforms oftentimes with the same content in both places. So to some degree instagram was a beneficiary of this whole back and forth. I get the instagram beings beneficiary. But were teens not using it because they were worry that the Trump Administration would shut it down . No, i think that those teenagers some of those teenagers ended up staying on tiktok but also setting up shop elsewhere at the same time and because of that, are now maybe using some of the instagram and Facebook Services this ways that they might not have otherwise. Id like to bomb ypoll you gn this we were talking about fastly and we had twilly on yesterday and an ipo recently of a Cloud Company. Ill having trouble picking my favorite Cloud Company dont forget ibm. And do you have a favorite . Can you distinguish between the Cloud Companies and do you have a favorite that is the best Cloud Company, andrew . Which one do you think really i dont there are so many it is easier to pick a nonCloud Company. By the end of it, well be a Cloud Company. Well be a nonlinear tv Network Living on peacock to some degree is a Cloud Company. Okay. That is my favorite then you came up with it right there. You just hit it. You did that for me, andrew, fantastic. Coming up, some new lockdowns in major european cities helping drive overseas markets lower well be monitoring it and u. S. Quequity futures are down still up near 30,000, so like 1 welcome back wells fargo firing more than 100 employees for allegedly defrauding a fell Pandemic Relief Program multiple reports now saying the bank determined that former staffers knowingly defrauded the Small Business administration by falsely applying for covid19 relieffunds for themselves and this is a story that doesnt help the reputation of wells fargo, which has been a reputati reputational mess sadly. And i think this is different. In the past it was bad employee behavior, but it was insend iz radioed and i ed and ignored by management but now i give kudos to the bank for finding those employees and getting rid of them. This is different from the did you have that they have gotten dinged for in the past when i read it, i was like who was doing the hiring at wells far go for a number of years . Like holy god. Whatthe hiring at well far go for a number of years like holy god. What was the f you could have skit about that almost a candidate comes in, what are you looking for . You will pretty sneaky, youre hired. Joe, im with you 100 of these people, it is one thing to give them credit for how many were doing the accounts i think i still have a couple no, im kitdding, i dont, but you know, having been a stockbroker, if you could open accounts, it was so hard because you had to make so many calls. If you can just open them in the phone book, hey, this guy looks good, he has an account. Huge problem no question. And they ignored it for years. Their system was set up to incentivize some of those things Corporate Culture might have been an issue. Lax for sure. Yeah worth pointing out by the way, and this may make beckys point to some degree, jpmorgan had not a problem in terms of this level, but there were people at jpmorgan that they ended up firing that were involved in fraud as well. But i think the level and extent of the number of people involved from the outside from what it appears on wells fargo seems so extreme, you have to think that there is some kind of cultural problem at play here those are fair points and does bring up questions. Lets talk about another story about School Undergraduate enrollment fell by 4 , dragged down by a 16 drop in first year students the biggest drop came in freshman enrollment in Community Colleges down by nearly 23 . The National Student Clearing House Research Center which compiled this data said strained Family Finances was probably the biggest factor enrollment in graduate programs actually increased by nearly 3 , probably people thought maybe staying in school was a better idea than getting out there and trying to find a job i dont know, college was so great. Remember last time really nothing is expecteded of you except studying, grades. And it is a great four years obviously. And i feel bad for people that are i used to think that it would be a semester. Now it looks like a year and i hope that is it. And even high school, you know, senior year, i feel bad for my son,s it is like hes at home,i is sad, you are missing out on some of that we didnt appreciate it as much back then and how great it really was. Now things are expected of us. Unfortunately, we never do in the moment that is the saddest part, right . Yeah, youth is wasted on the young, andrew, right anyway, this is interesting too. Alabama head football Coach Nick Saban in tand the schools Athletic Director now tested positive for covid19. Saban who is 68 said he didnt have any symptoms but he immediately isolated at home alabama is scheduled to host georgia on saturday. That is always a really big deal both teams are coming ve doing s year, so a big matchup. Wish them both well. Meantime, saturdays game between florida and lsu has been postponed after the gators had a surge of 21 positive tests this week they are scheduled to the builtin bye week that the ncaa now has, so the week of december 12th and a lot more coming up this morning including well talk about robert smith who reportedly settled a tax probe with the just tis department, about 1 140 million well talk about what landed him in hot water and in the next hour, well dig into the story that says that private warnings by white house advisers including larry kudlow helped hedge funds get ahead of the pandemic selloff in february and march. 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That would be among the largest settlements ever by an american taxpayer to settle an offshore tax investigation. Smith is expected to enter into a nonprosecution agreement admitting to liability for taxes owed and for not Filing Foreign bank account reports now, all of this stems from an offshore entity that was created with a 1 billion investment from houston billionaire Robert Brockman that was made as a seed investment in Vista Equity Partners in 2000 you now, at issue was whether smith paid taxes on 200 million in profits that he directed to this offshore entity and whether he failed to properly disclose that entity to tax officials smith who is worth more than 5 billion is reportedly cooperating with tax investigators which could lead to further announcements and charges at a press conference in San Francisco later today. And we should add that i reached out to both robert smith and vista and neither is commenting for now. Back to you. Robert, appreciate the report i was going to say, you know, ive been trying to dig into report this out just like you. And my understanding, this took place when he was in his 30s and because of the way the offshore tax structure, he was paying with the carry if you will that was drenktsdirected to him but t paying effectively the money sent to this offshore tax structure. The offshore tax strublgcture le on used that money as part of a charitable philanthropic payment which i think was efforted or not only the way to pay philanthropy, but also to escape the tax payment. My understanding is that as part of this settlement, he will accept and admit, i dont know if it is wrongdoing per se, but to acknowledge that the mistake was made the question i was going to ask is whether you think this has any inch pli indication k impli philanthropy or his business given that vista itself seems to be unrelated to it, though obviously connected given the original funds well see obviously they had a call with investors yesterday where they tried to quell some of those concerns over whether vista was a target, which they are not he owed taxes on 30 million he will admit that he did owe that 30 million on the 200 million in assets and income but he is worth 5 billion so i think that this could largely put this behind him. But remember, this offshore entities was created and directeded eby bob brockman wh gave the seed money to really help launch vista equity back in 2000 and according to these report, brockman said look, i want you to pay a portion of your income that carry into this offshore entities and brockman would have control of that if he ever wanted to. And youre right most of smiths income was taxed and reported, but it was this portion that brockman directed intothese ois offshore entities so brockman could control it and that appears to how it all started. And youre right that the money eventually flowed into his Charitable Fund which went to morehouse, carnegie, all the things that hes funded since then and was it the 34 million he was going to spend to pay off all the morehouse students debt last year, was that part of this whole thing . Robert may know im not sure money is fungible, so you could argue that money has gone from one fund to another. Clearly some of the funds was used for philanthropy, i dont know if it was the more house dou househouse or not. Do you know . This offshore entities was created in 2000. The money was transferred into what is now his Charitable Giving fund in 2014. So that was six years ago. Morehouse was last year. So this not offshore fund or the onshore fund has been in existence since 2014 30 million is the taxes he owed 110 million is the penalty, fines and interest okay. Robert frank, thank you to explaining all of to us. Big lineup still to come, at 7 00 a. M. , we have walmart ceo Doug Mcmillan and then new Jersey Governor Phil Murphy. And 8 00 hour, well bring you the president of shopify and a news making interview with Steven Mnuchin and also the ceo of United Airlines a lot still to go this morning rudow jones how down 270, s down 36, nasdaq having big up days, but giving back almost 200 today. A lot of it has to do with covid worries. European countries are trying to stop a second wave and londoners are being told that they will not be loied to mix with other households inside and Public Transportation should be avoided and the government of france declared a state of emergency giving it powers to put in a curfew from 9 00 a. M. To 6 00 p. M. It will be in pra place for four weeks. The number of people hospitalized with covid passed a threshold of 9100, First Time Since june and european stocks are showing similar losses to what were seeing. Actually worse than what were seeing so far in the United States andrew meantime facebook and twitter decided to limit the reach of a New York Post story about alleged smoking gun emails showing hunter biden introduced his father to ukranian businessman. The Biden Campaign has denied this story and nbc has not matched the post reporting or seen the emails in question. And in a new twist last night, twitter Ceo Jack Dorsey tweeting that the communications ash its actions were not great and blocking the ability to share the link without context was unacceptable it is a drama. Joining us right now, joanne litman from the newt of advanced study. And also ben smith, with the New York Times. Good morning to you both a lot to debate here and try to understand the powers of social media during this period joanne, ill start with you. Are you in agreement with what twitter and facebook are doing or do you think that journalistic organizations i think that we have to go back should publish this stuff . Yeah, look, the original sin here for facebook, for twitter, for all the social platforms is that they didnt want to have any rules around speech. Which they dont want to be considered a publisher and be liable for that content. The unfortunate situation, that then led to this cesspool of conspiracy theories and mal information. And now they will belatedly trying to put the rules in and there is no on consistency this is an incredibly ham handed way to handle that New York Post piece because by doing so, what they ended up doing is calling much more attention to that story than it otherwise would have gotten so you have a situation where but this goes very much to the issue of who do you want to either be the arbiter of the news and of the quote unquote truth. Ben, what do you think who do i let be the arbiter of the news . You of course. But i think, you know, as joanne said, they just totally reacted. Twitter executives essentially watch journalists and activists yell at them and decide they ought to do something in realtime when you just watch it play out and you almost feel the impulse from the twitter team that is like gosh, we own twitter, all this stuff playing out, we have to act. And as joanne said, it totally black fired. And i do think what facebook did, you so either beginning of what sort of looks like a system they didnt ham handedly ban it, they have a system under way in which they essentially caused things to like reduce their spread while their independent fact checks check out whether something is factual i dont know, there are a lot of problems when you have largely underpaid junior journalists at these Fact Checking organizations as the ultimate arbiters that is its own huge problem but i think the notion that the real problem is the speed with which things can go viral and there are cases where like just damp it down a bit does make sense because often the context isnt available. Joanne, how would you set it up and the reason i ask, you have a situation where historically News Organizations that were considered credible and by the way the New York Post was considered as part of that because they have an editorial operation and they have editors and the like, obviously you can argue that they make mistakes, maybe they make them on purpose, by the way all organizations including mine own make mistakes so should the stories be distributed and should be the arbiter of it . Yeah, this was a very unusual situation because the New York Post as you say, it is a mainstream news organize and i love the post. It is a tabloid, they stretch things and play with things, but they usually dont do what they did yesterday which this particular piece was beyond the pail fle for the New York Post because it wasnt verified but the fact is that we have never seen Mainstream Media publications being fact checked and shut down or, you know, reduced in terms of sharing by a facebook or twitter. But we also had never seen them having to do that for a president of the United States this is the issue here is we have to get to a point i do think where the platforms have do bear legal responsibility, some legal responsibility for the content that they are that they are promulgating there they have tried for years and years to say were not a publisher, were essentially just like the telecom wires, we have no control and no responsibility for what appears on our platforms now, they have belatedly trying to figure out how to do that, but a big part of the issue is simply that they dont have consistent rules they do have some rules, they are constantly changing the rules. They only facebook only recently said okay, we will ban Holocaust Denial posts which is something that they were allowing for some reason so they changed the rules, but you then they dont consistently enforce them and that is the first step that weve got to see going on there. Ben, is it too much to ask that maybe if the New York Post is a tabloid and likes to play things up, is it too much to ask for a reputable News Organization just to check into this, dont they have some type of duty just to if it is absolutely false, they should confirm that it is absolutely false. Isnt that something that they need to do instead of just not letting it get out i think with this one actually, the system was working. Like you had other journalists basically saying that this is shady, well try to report around it and see what is going on it also is not totally clear that it was false from top to bottom biden denied that meeting that was alleged took place, which i think that the broader could not text is it was in the context of a bunch of monday sense thnonset matter very much anyway. And this was a story that was totally incomprehensible to people that are not participants in this marvel character universe of this largely fake ukraine scandal. So i dont think that this was something that would overthrow american democracy i think it was a garbage story largely in the way that it came out and how little the post really even knew about what it had. But the journalists without the help of twitter really would be able to figure out but if the New York Times or Washington Post goes and finds that there was what do you call if . It would be called play for pay if confirmed if you made 83,000 a month because you set up a meeting between, you know, my guy, which this crazy emails say, that would be something usually that woodward and bernstein would be all over it. The New York Times and other outlets have reported with many thousands of words on joe biden and ukraine. And the core allegation obviously is that biden allegedly pushed prosecutors to intervene on the behalf of a company that his son operated. And the truth as far as i can figure out, that is just not true and these settles are sort of happening in that context. So it is okay though if that didnt happen, is it okay to broker a meeting is it okay for politicians and kids do stuff . No, it is gross. I think the issue with this story is like the strange neneso the emails and how unclear it was when the post published what was real and what wasnt. And the broader context that i think hasnt born out. But those are journalistic problems that it is fine to argue about, you dont need twitter coming in and deleting things joanne, ben, thank you. It is a longer debate and conversation but i imagine that it is one that is not going away appreciate you waking up early coming up, a new report out of europe says that governments are calling for a crackdown on big tech details next plus dont miss our exclusive interview with walmart ceo doug mccmillon in the next hour and, in more and more cities, the unprecedented performance of ultra wideband. The fastest 5g in the world. It will change your phone and how businesses do everything. Im proud, because we didnt build it the easy way, we built it right. This is the 5g americas been waiting for. Only from verizon. That selling carsarvana, 100 online wouldnt work. But we went to work. Building an experience that lets you shop over 17,000 cars from home. Creating a coast to Coast Network to deliver your car as soon as tomorrow. Recruiting an army of customer advocates to make your experience incredible. And putting you in control of the whole thing with powerful technology. Thats why weve become the nations Fastest Growing retailer. Because our customers love it. See for yourself, at carvana. Com. Welcome back want to draw your attention to a story out of europe that is putting pressure on the big tech stocks the Financial Times is reporting that france and netherlands are calling on eu competition authorities to take measure against the Big Technology giants as additional legislation is being prepared. The ft cites a position paper that says breaking inthe Big Companies is now, quote, on the table. And that is an issue none of these companies are named, but you can guess who they might be targeting. Apple, facebook, amazon and alphabet shares all down around 2 apple down by 2. 4 , amazon down by 2. 2 and facebook by 1. 6 but there has been talk around this we focus so much on the u. S. Potentially regulating some of these things well have to see what happens with europe. Something bill gates told us yesterday he thought you should be watching too. Well talk more about the Big Tech Companies after this break. And the next guest has three stock picks for you saying despite the runup, if you pick the right es, onthere is still room to run. Well be right back. Welcome back our next guest says that even with massive yeartodate gains and information technology, theres room for growth as long as you pick the right stocks joining us with her picks is joan joanne feeny,and you say you still like big names like apple or microsoft, but it when it comes to the stocks you like the most, youre focusing on semiconductors why is that . Yeah, thats right, becky you know, the one thing we really recognize about this market is the i. T. Sector in the market as a whole has been driven higher by a handful of stocks our clients are expressing that same fear as i. T. Comes too fast too far, the key thing is to look specifically at the stocks that still offer value and that still have room to run. That can be in semiconductor, we like a few of those a fair bit but also cyber security, digital payments, but a handful of them in the semiconductor space, broad com, qualcomm, nxp, right in the online tail winds were seeing because of covid. They have diversified into software and right in the middle of the iphone 12 super cycle and in addition, they offer good income for clients, and some of our clinents are thinking about income given how much the stock market has gone up good income just in terms of the dividend yeah, broadcom is offering 3. 4 dividend. They have done this in sequential decembers we are expecting a 10 to 15 increase in the dividend when we customize portfolios for clients, we give them a lot of insurance by mixing together the potential for appreciation and income so you have to be in information technology, but you dont have to own the index you can own the ones that are offering a good value, 3 1 2 dividend, likely to continue to raise the dividend year after year, plus they have the strong tail winds of online, cloud, cyber security, Software Plays so thats a good one, and then you look at a company like nxpi, go someplace else, look at a different tail wind. Theyre heavily exposed to autos. Not only is the auto sector rebounding, manufacturing rising but the electronic content in cars is going up significantly, and then when we move to electric cars, thats more content for a company like nxpi. They offer a small dividend but nevertheless, theyre offering good Growth Opportunities as that electronic content in cars goes up. So you know, clients from our perspective, theyre looking for that mixture, and you need to be in i. T. To get it, but you can also find income there joanne, thank you for the conversation today and the ideas, its good to see you. You bet, becky. Good to be here. Andrew . Thanks, becky coming up, we have a huge lineup of guests coming your way, including walmarts ceo, Doug Mcmillan is joining us new Jersey Governor Phil Murphy, treasury secretary, Steven Mnuchin, and United Airlines ceo, scott kirby and a whole lot more two big hours ahead as squawk box rolls on. Im only 21 but ive never been afraid of hard work. 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Change in plans. At fidelity, a change in plans is always part of the plan. Wall street struggling to rebound, not doing a very good job of it this morning after a twoday slide that we have seen with the markets the election and coronavirus aide from washington keeping investors on their toes. Weve got a look at what you need to watch at the opening bell thats straight ahead. Plus, walmart ceo Doug Mcmillan joins us to talk about the business round tables new initiatives to advance racial equality in the United States. And well be hearing from new Jersey Governor Phil Murphy on the battle against the coronavirus. Also, much more, second hour of squawk box begins right now. Good morning, welcome back to squawk box here on cnbc im Andrew Ross Sorkin along with becky quick and joe kernen. We are in the red this morning in large part on the back of some red in europe as concerns continue about potential lock downs there. The dow looking like it would open down about 252 points right now. S p 500 looking to open off about 34 points and the nasdaq looking to open down about 168 points were going to keep our eyes on the futures for the next two hours, two and a half hours before this open to see where things continue to head one way or the other becky. Thanks, andrew. This morning the business round table which is made up of over 200 of americas largest employers is going to be announcing a new Corporate Initiative to try and help create more equitable access to Economic Opportunities for black americans and other communities of color for more on this, lets bring in our guest this morning, joining us now is Doug Mcmillan. He is the president and ceo of walmart. Hes also the chairman of the business round table overseeing this initiative, and doug, its good to see you. Thanks for being with us this morning. Thank you. We spoke with you about all of this, this initiative, what the brt was looking into over the summer, and you have found, made some progress, and youre here to tell us about it where do things stand right now, what have you all learned after looking into this a little more deeply sure. We kicked things off in june, and as you may remember, we asked ceos, members o. To take on complex systems in the country and try to understand why all too often inkequities are being generated, housing, health care, education, the equitable justice committee, craig arnold, Randall Steven chuck robyns has been great, another with other ceos that, worked together and went through over the last few months looking at policies and what companies do, how government works, and today were generating a report sharing our findings and it does focus on what we the businesses can do in particular Large Businesses but hopefully theres some ideas in there for smaller businesses as well, but also policy recommendations in each one of these areas to try and create an outcome where we have a more equitable system i would say we have learned a lot, talked to over a hundred different experts and we dont see this as the end, becky, we see this as an update on what we have learned and recommendations we are making to the country and for ourselves. There is obviously a lot more work to do with everything going on from the pandemic to all of us trying to make sure the economy gets to where it needs to get to, the election, we want to keep a spotlight on Racial Equity and keep the work moving forward. What are one to two of the recommendations you came away with from big employers, things you and other companies can do. Youve got to start at home and the work were doing theres a lot of agreement that we should increase transparency, share more data. Companies are putting out more metrics more often, which helps with accountability. Everyone is looking at our hiring practices, promotional practices, pay equity, making commitments as it comes to that. Looking at the Board Structure in composition, executive management, the associate based overall, trying to make sure that all of our systems that exist within these companies, look in our case, in walmart, a company that looks like america because thats what we serve so if you look at our board or executive management, thats what we want to see in time. And in terms of the Public Policy initiatives obviously when a group like the business round table gets behind it and says this is something we want, if you flex your muscle and really push that, with legislators, it could make some progress what are maybe one or two of the biggest Public Policy initiatives that you all will be pushing for as a result of this . We hope so. One easy one is the digital twitwi divide we have to get rural broad band to the rural areas during the course of the year we have seen whats happened. Our sales of laptops at walmart, and all of the challenges that people have had as it relates to education. There are other things that we can do to change some of the federal housing rules. Really it comes down to communities, becky, and if you looked at this from a system view, all of these systems, the education system, the finance system, they end up landing in a community. If you think of a place, what are the ingredients that are there that change the outcome so that when someone is born, the zip code theyre born in does not dictate their future thats how these things need to come together and work there are a lot of policy recommendations and people can find it on the business round table web site we hope that youll go read it doug, i want to ask you about how americans are doing overall right now, and at walmart, you probably have a better idea than just about anybody in terms of the consumer walmart sales make up 10 of overall u. S. Retail sales. What are you seeing right now from the consumer and what does that tell you about their health yeah, as it relates to the kind of challenging side, i think what we see is the separation and the stimulus conversation comes to mind we need to make sure were getting support to families that need it. Some are struggling more than others we have to identify them and get them the help they need. We have to make sure the Small Businesses can come back online to a greater degree to what its currently looking like, and take care of bigger Industries Like the Airline Industries consumers are finding ways to have some joy. You know, weve got halloween coming up and people are buying Halloween Costumes i think theres going to be a celebration of christmas and the other holidays that will be strong, as people are at home. I think that feeling of safety and togetherness people are still searching for ways to have as much normalcy as they can doing that in terms of spending on some of those things that arent absolute necessities, how do you kind of break down just what the health of the consumer is right now are people feeling flush, still, like they were a few months ago when we spoke to you not everyone is in the same camp there are still people being at home more, spending medicine or their home, and doing things to redecorate, and those kinds of things but there are other people that are struggling paycheck to paycheck if they have a paycheck, and so many people are unemployed, were seeing that pressure as well its really a spectrum, you know, it always is but this moment in time has more separation in it, in terms of how people are feeling and behaving than we would normally see. Andrew . Hey, doug, i wanted to ask you a little bit about the supply chain last time we talked to you, we talked about how its very hard to buy a bicycle still or, you know, gym equipment. What kind of stuff is now back in stock that wasnt, and what kind of stuff isnt still . Andrew, the things are longer lead times have been a bit more challenging, and then from time to time, youll see a community thats got an increase in cases and you see more stock up behavior again in general, things are Getting Better week to week, were shipping more than were selling lately that was not always the case, and were seeing things improve. If i could change one thing about our business its a higher instock level weve still got recovery to do and then the other thing i just wanted to add, doug, the only other thing i wanted to ask you was, you know, clearly youre capturing business or at least some business that had been going to amazon, and you know, amazon obviously one of your biggest competitors, i imagine, but there are things that they couldnt ship, and i think people started to look to you, and to look to target in ways that they didnt before the question is do you think that those are new customers that are sustainable customers or do you think that a post pandemic world or a world where the supply chain is complete again, that things revert. And how do you keep them yeah, throughout this year and even before, we were seeing store traffic, kind of our core Customer Business be strong, and we were starting to attract a lot of new customers because of new services we offer. Customers want to save time. They love the pickup business, theyre taking advantage in an a increasing way of delivery centers, in addition to ecommerce fulfillment centers. We have a nice mix of customers that have come our way and some before, and we hope of course to retain them. The experience that they have, the value they find. That will dictate it the walmart plus membership is also one tactic that we have to try to build some loyalty and solidify that relationship and make it easier for you to shop its no mystery what people want, what customers and families want. They want an incredibly broad assortment of high quality merchandise at a terrific value, and they want the experience to be as frictionless, simple and easy as it can be, and whether its us or our competition, if we keep them top of mind and do everything we can to make those things happen better than anybody else, well be able to keep the new customers and thats what were focused on. You guys have to continue to do things differently because of covid, and i know that black friday is going to look quite a bit different this year than years past, there are not going to be the door busters of lines of people trying to get in how are you managing it this year were spreading it out, we want to keep people safe, thats our priority this year our associates safe, our customers safe one way to do that is move more of the items to online only but we will have some in stores as well, and hopefully we do a good job of kpcommunicating to customers whats what. We have broken it through three events staged throughout the month of november, beginning, middle and end of the month. There will be a feeling for those that want to come into our stores, have a black friday experience, it will be with fewer items and well manage from a safety point of view things differently given covid as we have been all year ppe, facial coverings, social distancing, we use our parking lots more for pickup you know what i think customers are going to like, i think theyre going to find great values at walmart. I think theyre going to find it more convenient, and for some of them and for us, that one big spike wasnt the best way to run the business we had to do it because thats what customers want to experience its a tradition to go out on that weekend, and well still have some of that, but the idea of smoothing this out may be something that sticks and lasts post pandemic, because people find that they enjoy it even more hey, doug, i want to go back to andrews question about the supply chain if theres one thing you would change, you would have much more supply at this point where are the problems where are the real crunch spots and why is it so tough to get things still its really widespread. Its not just one category demand is just high for things that people are needing at home. We still have stocks in things related to the home categories consumables have gotten better, the paper categories has improved, hand sanitizers have improved, facial coverings good recovery in grocery not really worrying about whats happening in Fresh Grocery we have been strong in fruit and veg all the way through. Protein categories are in good shape. Its sporadic across the store, you may find were not as instock on crafts and fabrics. Toys were out of stock on those are the things that disappoint us. Were working on them. If you walk through a store, you would feel better than you would have a month or two ago, but we would be able to point to an item here or there thats not fully back in stock. At the business round table, you all surveyed, i think, 150 of the ceos in the Biggest Companies in america to see how theyre feeling right now in terms of confidence, i think theyre feeling a little more confident than they had been but youre talking about incredibly low level, about the lowest levels in a decade, is that accurate theres still a lot of uncertainty. I think thats how people are feeling and thats what showed up its hard to call, you know, a number of Companies Including ours have withdrawn our forecast looking forward because of that lack of certainty. So were all kind of managing this situation week to week, month to month, and not quite as long term in some ways as we would normally be. I think as visibility starts to improve, hopefully with progress on the convenience avaccines anr things, we can have more confidence i do think some level of stimulus now and maybe even in the future thats really targeted, sensible, practical, may be needed to address what i described earlier which is this separation in our economy. You have encouraged the congressional leaders and the administration to come back to the table. It does seem like treasury secretary mnuchin has been making some broader offers on that, but it does not look like they are any closer to a deal. Treasury secretary mnuchin says he and nancy pelosi are still very far apart when it comes to this we have him joining us later this morning what message would you give to him, and what message would you give to nancy pelosi i think for both sides, they need to keep in mind there are americans that need them that dont really care about whats happening in politics, arent completely tied up in this election, and they just need some help these Small Businesses need help, and so if they could get something done that would help those groups, that would be fantastic and much needed and if something needs to be done in the future, we can come back and talk about that. But doing nothing is not the first and best option. The ceos that you surveyed also think that the longer this goes on, the more permanent damage there is to the United States do you have any way of measuring that of kind of showing that how do you all come to that conclusion, and how would you present that information to those in washington who are making these decisions right now . I think small and Medium Business in particular is why were feeling that way there are companies that have resources, companies that have have been able to weather the storm better than others, but those that have suffered, the mom and Pop Restaurants of the country that were really worried about, and they drive is much of the economy. We need them we need them as customers, we all need them just from a societal point of view thats part of what we love about living in this country is how vital Small Business is, and so thats where that comes from. Nancy pelosi has said that she would like to wait and see more, and we have had senators that have accused her of not wanting to do anything before the election i think treasury secretary mnuchin has implied the same thing, said the same thing, would you want them to wait for the perfect or want them to just get this out and get something done its better to get something done and come back and make adjustments. You know, were going to be trying to solve these problems beyond just these next few months and next year, so making steps, collaborating, working together, reaching some middle ground on some of these issues and then evaluating watching the data that makes more sense, you know, if i were running, think of this like running a business, thats the way we would approach it you make decisions that are clearly the best decisions they may not be completely to where you need to get to, but you come back later, recalibrate, make another decision i think thats the way that i would recommend that they approach it. There has been so much drama surrounding the tiktok deal with you and oracle, walmart expected to get a 7 1 2 stake of this, you going on the board, but there has been so much drama and so many politics inserted around that, where do things stand and do you even know at this point it has received a lot of coverage i think maybe what i should start with is why would we be interested the digital front end of retail of commerce is changing. And you know, we participate with a digital front end with our own app, but we also exist on facebook and instagram, and Google Search and all of these things are ways to reach customers and be part of someones life, and sell things, which is what we do as a business, and social commerce which has taken off even more in china is a really interesting new dimension of retail. Its a discovery opportunity if youre watching a tiktok video and somebodys got a piece of apparel or item on it that you really like. What if you could just quickly purchase that item thats what were seeing happening in countries around the world. Its intriguing to us, and we would like to be part of it. Our focuses and conversations with bite dance are around that, ecommerce, fulfillment services. If you click on the garment you want to buy, and it takes two weeks to get there, thats not a good experience. How could we help with a supply chain, a back end that makes the whole experience, not just the moment you buy the item and how all of it goes fu fulfillment, payment, maybe as a service, along with just selling things to our first party and Third Party Marketplace is the idea thats the partnership we want to reach obviously all National Security concerns from governments have to be addressed. Were not in those conversations so like you, were watching to see what happens there but should there be a path where that can be taken care of and people are satisfied, we think we can delight customers with front end, back end experience, partnering with bite dance those conversations continue dont have any update beyond that. Doug, thank you for your time today. Its really great to see you, and we appreciate it. Thank you, all. By the way, we should mention that doug is being honored tonight at the executive Leadership Councils virtual gala hell be receiving their 2020 corporate Leadership Award there tonight. Joe . Thanks, becky. Coming up, Quarterly Results from Morgan Stanley. As we go to break, lets check out the shares of walgreens, th company reporting 1. 02 a arshe. Raising its dividend stocks up 2 1 2 well be right back. Before we talk about taxsmart investing, whats new . Audreys expecting. Twins wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. Lookentertainmentour experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Time now for todays aflac trivia question. Which billionaire ceo cocreated an app called synapse media player the answer when squawk box continues. Are all the cab rides to my physical therapy. And aflac paid me directly to help. Aflac. What he said. And this unexpected bill is from. The twothousanddollar specialist. Thanks. Aflac. When youre sick or injured, aflac is there. We can help with Expenses Health insurance doesnt cover. Get to know us at aflac dot com. To a world that must keep turning. The world cant stop, so neither can we. Because the things we make, help make the world go round. They make it cleaner, healthier, and more connected. Its what we build that keeps things moving forward. So with every turn, well keep building a world that works. Now, the answer to todays aflac trivia question, which billionaire ceo cocreated an app called synapse media player . The answer, mark zuckerberg. Both microsoft and aol approached zuckerberg to buy the app. But he turned them down and posted that Technology Online for free welcome back to squawk box this morning apple unveiling the iphone 12 this week. The companys first 5g iphone and declared that the era of 5g has begun. Does that mean its time for all of us to rush out and get a 5g iphone thats the question of the morning, and jon fortt joins us with answers on the other hand its october, which means its pastime for apple to tell us we need to spend a new thousand dollars on a new iphone, and the excuse this year is 5g. This one has 5g, faster internet my 4 glte signal keeps dropping in my neighborhood, eight years after the first 4g iphone came out. Can we fix that. I bought a new phone this year, iphone se because i specifically knew i do not need a 5g iphone, and im a tech guy were in a pandemic. Life is short, moneys tight 5g is going to take years to get to a good level of coverage, and high level speeds. You dont need to be online tomorrow preordering a 5g iphone youre better off buying a 5g phone when the hype buys down and the practicality dials up. Okay. Thats one take. I get it if a lot of people think like you, apple is going to have a hard time, though, selling the iphone 12 tomorrow is that whats going to happen well, on the other hand, did you see apples presentation on tuesday . I mean, i have been bagging on 5g a bit, networks arent ready, and verizon ceo got on stage with tim cook, and said the era of 5g is here. People keep their phones for three or four years now. We dont upgrade every year, if you need a new phone now, you might as well buy the 5g, in two years, youll be wishing your friends have 5g. The question is shouldnt you buy a phone you dont need of course not, but if youre going to buy a phone, it would be irresponsible at a moment like this not to buy one with 5g and a great camera, i guess. So hold on, jon, you know, i like this game because i get to hear both sides. But theres part of me that actually wants to hear what you actually are going to do so what is the fortt family doing on the phone front i really did buy an iphone se earlier this year because i dont need a 5g iphone and my coverage is bad around my house. There are people that arent in my exact situation, who only buy one every three or four years, and a 5g iphone probably makes sense for them especially if cameras are important, et cetera, you might as well future proof your purchase so youre not in a position where youre spending all over again. Are you future proofing yourself because it seems to me that, yes, these are 5g phones but whatever comes next year and the year after that, especially as the networks get better and they figure out how to manage Battery Power better, one of the things theyre going to be doing is throttling you from using 5g at certain points to 4 g to save battery life dont you think in a year or two theyre going to figure out a lot more. Always, andrew. But when were buying a car we dont do this. I need a car now but im going to wait until next year, you know, when theres better digital dash board in the package. You buy a car now. Maybe you try to live with it or upgrade it or add whatever apps you can later. Thats the mode we have to get into practically, do you need a phone now, if so, consider the best option for you, what is available right now. I mean, if youre just shopping for fun, thats a whole different issue. Okay. And then final, prediction for the investor class out there is this going to be a super cycle or not i think theres a good chance it will be, andrew i think the question is in the major markets where 5g is supposed to be active, where verizon and at t in particular, and tmobile is that dark horse, i have been saying weve got good 5g, when the reviewers go out there and do their speed test, is it going to be better than 4 g and in enough places where people are thats the case people are going to make for, well, hey, i want faster speeds and if in my particular area its good, ill go ahead and buy it. Okay. Jon fortt, thanks. Weve got breaking news we have to get to we have to get to wolf on Morgan Stanley results. Just crossing as we speak, and revenue a nice beat, 11. 7 billion the forecast was for 10. 7 eps, come in at 166 the forecast was 128 a pretty clear beat on both lines, perhaps not quite to the scale on the headline numbers as the Goldman Sachs beat, and thats largely because the Asset Management was such a big beat lets go through the individual lines. Investment banks, 1. 7 billion, in line with expectations, trading a little better than expected 1. 9 in fixed income. 2. 3 billion in equities, both a little ahead of expectations and i think puts in equities, which is important to them slightly ahead of Goldman Sachs. Goldman sachs was 2. 1, they have 2. 3 billion. Global Wealth Management which is a core driver for Morgan Stanley now, 4. 6 billion the forecast is 4. 5. Fantastic print either way goldmans print on Asset Management was a big beat. Morgan stanley has a different Business Model thachlt don an area they talked about with goldman, valued up perhaps we could have expected that difference in terms of scale of beat, nonetheless a strong number in investment management, 1. 1 billion. The forecast for 855 looks like compensation expense, fraction above expectation, and noncompensation expense, largely in line of what was expected the shares up fractionally in the premarket other banks are down in the premarket its a relative slight outperformance and week to date, Morgan Stanley up. Holding on to their out performance for the week so far. Thanks very much. Well see you soon. When we come back, an article in todays New York Times shining a light on the early days of the pandemic the white house response and the market selloff we have the details straight ahead. Plus, new Jersey Governor Phil Murphy on rising covid cases in his state, and much more. And later, at T Communications ceo on the rollout of apples iphone and the companys network. Plus, treasury secretary Steven Mnuchin will join us for the latest on stimulus talks squawk box will be right back. vo im a verizon engineer and today, were turning on 5g across the country. With the coverage of 5g nationwide. And, in more and more cities, the unprecedented performance of ultra wideband. The fastest 5g in the world. It will change your phone and how businesses do everything. Im proud, because we didnt build it the easy way, we built it right. This is the 5g americas been waiting for. Only from verizon. Lets get you caught up with this mornings top stock stories. Well, well, Frank Holland joins us now frankcnbc you know why i like that, frank, because you dont need to put your last name in there. Youre frank and thats all anyone needs to know, and same with mine. Joe squawk, and you know what else, when people get mad, they put frankholland and you dont get the nasty stuff. People dont know my twitter and i like it that way. I dont think people are as mad as me at they are generally you, so i dont have the same issue. Dow component, walgreens up more than 2 after reporting adjusted quarterly profit, beating estimates by 0. 06 and a 2. 2 increase to its Quarterly Dividend fastly plunging more than 28 . The company lowered its Third Quarter guidance, saying usage of the fastly platform did not meet expectations because of Geopolitical Uncertainty the customer previously disclosed to be tiktok, accounting for 12 of revenue. Turning to alcoa, the company was helped by stronger prices for key products and improving demand from the auto sector, warning the aluminum business could face challenges this quarter. Lets get over to phil lebeau which has more on united earnings which reported after the bell yesterday. Shares of united under a little bit of pressure this morning after reporting earnings after the bell yesterday those earnings coming in with a wider atlan wider than expected loss of 8. 06 a share. 1. 8 billion of revenue falling, 78 , but the key metric everybody is focused on, what happened with cash burn. For a point of reference, they were burning as much as 50 million a day in march that came down to 40 million in the Second Quarter 25 million last quarter. 21 million a day when you strip out severance and debt payments. The Earnings Report also getting some attention because there was no guidance given in terms of break even in other words, when did they get down to zero cash burn on a daily basis. However, you can bet that will likely be a question that comes up later on during the united Conference Call with analysts, and speaking of something to watch a little bit later on this morning. Do not miss our exclusive coming up at 8 40 well be talking with united ceo, scott kirby well talk about the numbers, getting to break even, a lot of things on the tap to talk about with scott kirby joe, back to you. Phil, looking forward to that coming up in the 8 30 hour great. Wall street trying to avoid a trifecta, a 3day slide. Thats whats going to happen if we stay where we are right now, mike santoli, i dont know what the prospects are. Someone needs to use the s word, weve got mnuchin on, maybe well hear the s word, maybe that will help santoli or stimulus i do think right now the market has set that aside in terms of the abosolute imminent, maybe thats one of the things weighing on the market we were up four days in a row. Its pay back mode right now the s p 500 etf right here showing you a little less than a 1 decline at the moment on monday, i was pointing out that we had a very similar dynamic to what we saw in june, when you came sharply off a multimonth high and broke out of it. You do see it kind of chopped around we broke out of this im not predicting it. What were seeing is not incompatible with the market trying to turn a consolidate, and have some of the real overheated winning groups cool off a little bit yesterday they did it was growth in tech pulling back and some of the value names had one of their days in the sun. Take a look at one of the cloud etfs this is one of the Leadership Groups within tech, and what you see is almost exactly, you know, matching the high from back in late august, Early September fastly, obviously the victim of the day was about a 2 to 3 wading in this particular etf. I do wonder if the fastly news is causing people to rethink their exposure to a lot of momentum growth tech in the same area and even if they dont have the same fundamentals a lot of the same people own the same stocks one down 25 maybe its time to step back i think thats one of the drivers today, becky. I know were looking more at technical things and some of the reasons behind it. Theres always this drive to try and say, oh, heres the one reason the market is down today. I can give you three at this point. One would be the stimulus talks that joe just mentioned. One would be the resurgence in cases in the eu and some of the european lock downs they are potentially facing this weekend, and the third is the Financial Times story talking about a couple of European Countries on board with european regulatory efforts to try and do things to Big Tech Companies, potentially break them up. Would you point at any of those three as a reason for todays down move . I would say, i dont believe that the lack of stimulus is something fresh enough at this point that its going to be the mover and, by the way, thats not going to impact mostly the big growth stocks. The other two items, absolutely, if theres going to be an aggressive regulatory push, one more reason to lighten up on the crowd. The resurgence reinforces were in hunker down mode. Might not get help on fiscal we might see more restrictions popping up and again, just good excuses to step back on risk after we had a good run over the course of three weeks up Something Like 8 i think its about when the market is ready to focus on the potential negatives or risks because of where the market got to, and i think thats where we are this week. Great mike, thank you. Good to see you. When we come up, new Jersey Governor Phil Murphy is going to join us for the lastn e ats battle against covid much more, too squawk box will be right back. Welcome back to squawk box, a story in the New York Times this morning getting a lot of attention it is titled quote as the virus spread, reports of Trump Administration private briefings fueled selloff the piece looks at a february 24th tweet from President Trump that said the coronavirus threat was very much under control and stock market starting to look very good to me. Earlier that same day, members of the president s Economic Team were privately addressing Board Members of the Hoover Institution sounded a lot less confident and the next day, documents obtained by the times learned larry kudlow learned the virus was contained in the u. S. To date, but now we just dont know that was different than the rosier message that he had shared on cnbc earlier that day. Now, the times article is based on a document written by a Hedge Fund Consultant that attended the threeday gathering. The point was wealthy republican donors were getting an Early Warning on a dangerous situation at a time when the president was being publicly optimistic that there was no covid threat. The times says the consultants memo spread among investors showing how elite traders got access to information, and then as a result had a financial advantage. The article says that david tepper was among some of the traders that received the consultants memo but responding to the New York Times piece, t tepper told us that we were concerned about the virus in january, and went on cnbc on february 3rd with a public warning. The information from the hoover meeting meant little to us by the 24th, and it is true that the New York Times story did say that tepper had been concerned about the virus earlier in february. Lots of information flying back and forth. How about paul jones in dabos, what was that, january 22nd it was like keep an eye on this, because this could be big, and he told us, and we went wow. And i asked trump on the 22nd, i think it was, and really no one was talking about it at that point. In fact, the day before the ccp, the Chinese Communist party said theres no humantohuman transmission or i think they broached the possibility there could be humantohuman transmission and one person arrived in Washington State that morning when i interviewed President Trump and said what about this, its totally under control. Paul tudor jones, a really smart guy, he brought that up to us and remember that was the first we heard of it. There were a lot of smart people that came on the air and talked about this earlier. You had members of the administration and the president himself publicly saying one thing and members of the administration saying something less than that on what seems like the same day. But kudlow is saying its contained right now but in the future we dont know, i dont know, that doesnt seem like a smoking gun to me. I understand the thrust of the piece. Right anyway, becky. Thanks. When we return, new Jersey Governor Phil Murphy is joining us. And later well hear from trashy secretary Steven Mnuchin on stimulus talks and much more. Squawk box will be right back. Sales are down 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. As the stimulus talks continue in d. C. , the garden state announcing its plan to boost economic growth. Lets welcome Governor Phil Murphy of new jersey, nine ceos from around the state of new jersey, merck, johnson and john, veriz johnson johnson. Governor, thank you for joining us, youre looking well, chipper this morning. Thank you, joe, so are you. Thap tha thanks for having me. So do you well get to another initiative in a second, its longterm, but the issue of the day, were still, were like this whose fault is it, were still like this, governor, and people could use something, the markets would probably take solace in that jay powell, chairman of the fed has begged for it. And we seem so close do you expect something to happen before the election i hope so, joe. I mean, we sure need it, and there was a narrative six months ago that this was a blue state thing or a legacy state thing, and thank god, unfortunately, the Silver Lining of this awful pandemic is its an every state thing. We all need help and its the smart thing to do it keeps people in jobs. It delivers services that are desperately needed in our hour of need. So im an eternal optimist, it feels like its gotten close im a huge believer in Speaker Pelosi i have had a lot of exchanges with her, a fair amount of exchanges with the treasury secretary. We need not just any deal, though, we need the right deal, and it has to go to the needs that are the most from the people who are suffering the most in this again, im an optimist, and i hope we get something soon. Were going to have mnuchin on a little bit later, the treasury secretary, governor, and just to drill down on whats happening. The gap has narrowed and there is a narrative from the white house and othersthatt the speaker doesnt want to give the president a win before election day, but i saw the speaker get really animated with wolf blitzer, whos like a pretty friendly guy, i think, normally to the cause, and it was just weird. It seems like both sides are getting really defensive i just wish we could all get along. How far apart are we now were not that far apart does it have to be perfect dont you think Speaker Pelosi should maybe not, or both, you know, i dont want to just focus on her, but the other side, both should be able to compromise on 300, whatever the difference is now . It doesnt have to be perfect, but it needs to be better than it is, and ill let the treasury secretary ive known for 35 years speak for himself. Listen, the speaker put the exact right bill on the table months ago so i dont in any way, shape, or form accept shes the one at fault here or shes trying to prevent something from happening before election day. This is politics from the other side with all due respect, joe, on this one. Now that just sounds like the other side that doesnt help us move forward. Im calling balls and strikes, making my observations based on the facts she put this out in early summer. Theres nothing in there that you might have a problem with if you were a republican because its not involved with the matter at hand and it is a big number at this point, there shouldnt be things in there that arent just front and center for trying to deal with the crisis. And you dont think there are. Youre saying there arent any things. I have not read into every detail i know new jersey needs state aid. Every state does extension of unemployment benefits, spamall businesses, especially in restaurant and hospitality. Theres a whole range of needs i was saying this in august, and the president has now been saying over the past few days. In august, Something Like this, you go big or go home, history will not be unkind if you over shoot. It will be if you under shoot. I couldnt believe it, but the Republican Senate went home instead of going big now is the time to go big. It was the time earlier this summer its not too late. But folks are desperate, and something has to get done, joe, and we have to stop playing politics and get this done. A potential future new jersey resident would like to get in now, govern. Oh, please. Hey, governor, its andrew here im curious about one of the other big sticking points, and we want to talk to treasury secretary mnuchin about this later. Pelosis office saying this idea of a National Testing strategy is still up for grabs. If thats really where theres a big debate and im curious as somebody who leads a state who may want to do it your own way, which is why i think one of the reasons why theres such a disparity here on this issue how you think about a National Strategy versus a state strategy andrew, the welcome mat and the welcome gift basket is ready for you when youre ready to get to jersey, by the way. Listen, testing has been a challenge from day one, and we have found consistently Common Ground with the administration including recently on this binax instant turn around test for achieving that Common Ground on a whole range of areas, ill be forever grateful, but we have lacked in national strategies, National Face coverings, national masking i do think a National Testing framework is still not just relevant its still needed. Again, the secretary of the trashy can speak for himself, but listen, i think his heart has been in the right place, and i think hes trying to get a deal done as well, i believe the politics is getting played largely on the senate side right now. Is that it, andrew . Tell me, governor, the latest on whether you see some of the troubling signs that were seeing around the world, really. I mean, paris, in london, parts of t of the United States and elsewhere, is new jersey susceptible to a problem in the fall that we have been worried about with the flu coming . We have come a long way, joe, but our numbers are up theres no question about it over the past several weeks, you know, were regularly 700 to just under a thousand cases, new positives every day. There are hot spot, so i cant say that its everywhere but theres a fair amount of community spread, and theres a developing consensus, and ill quote bob redfield at the cdc that the town square is actually in reasonably good shape in the sense that in public when folks are going out, whether its to dining or gatherings, that for the most part, folks are doing the right thing. Its in homes, in our private lives, in congregant living, frat houses, youre inside and off lot of People Living close to each other, and some amount of fatigue setting in. We have got to stay on the bull horn of social distancing, face coverings, washing your hands with soap and water, and if youre either not feeling well or you know you have been exposed to somebody, take yourself off the field and selfquarantine, and get tested. Becky w. H. O. Has come out and said that the governments really should be using shut downs as a first line of defense anymore. Do you think we will go back to shut downs of schools, shut downs of businesses, shut downs of restaurants and bars again even in isolated places of the state. I hope not. I think were less likely and please god that this is the case, were less likely to use blunt instruments that we used in march and april when we shut the garage doors down and everything, and much more likely to use a scalpel and go into a particular community or a particular, for instance, Higher Education has been a challenge so weve plussed up contact tracers, testing capacities into some communities, into the higher ed community. So i sure as heck hope if were taking action that its that scalpel as opposed to the blunt instruments we were using in the spring. Tell me about the council and the plans that we talked about right at the top, the ceo council, governor. Yeah, joe, this is really exciting weve had a restart, Recovery Commission for many months shirley tillman, former president of princeton, ken frasier, ceo of merck have led that great group of folks out of that has spun a ceo council as you rightfully pointed out thats grown to Nine Companies, cochaired by ken and charlie lowry, ceo of prudential in this group of their own, will came up is said you know what, we want to make a commitment to hiring a certain amount of folks by the end of this decade who we otherwise would not have hired and have developed relationships with vendors to the tune of a big number with vendors that we otherwise would not have been doing business with. And in each case, its a focus on hiring underserved communities, particularly community of color as well as diverse vendors, and its a continuation, joe, of the theme we have talked about here before, the pandemic didnt create the inequities, but its laid them bare and so this ceo council has stepped up with this commitment and if that werent enough, theyre actually now encouraging other companies to come in and hire an additional pool. So those Nine Companies have committed to 30,000 hires at the end of the decade, beyond what they would have done with the focus on under served communities, they are encouragi encouraging other companies to come in beyond 30,000 beyond what they would have hired as well as that vendor commitment which ends up to be a half billion dollars of increment taal relationships with diverse suppliers. Its an exciting initiative. I take any hat off to these leaders and were thrilled to unveil it today. Thats awesome, great news, and quite a list, sorkin, not for nothing, but new jersey has obviously got something going for it think if we had all of those guests on on any given day, the ceos, if that was our squawk lineup, i mean, governor they see something in the garden state, do they not, some people may not appreciate no question about it. I mean, its a whos who, and i cant say enough good things about them each and every one of them listen, we think of ourselves as the best place in america to raise a family number one Public Education system in america. Best location in America Best Health care, outstanding infrastructure quality of life. Families get that and Companies Get that we work every day. We wear their presence as a badge of honor, work every day to earn their presence and earn their commitment and investment in our state governor, thank you you know, ive tried you know, ive stopped wasting my breath. Becky gets it. But ive tried but thank you. Oh, yeah right, well continue to make the case but good to see you today, governor, thanks and good luck good to see you, joe. Tough year. Good luck. Amen. Thanks, joe. Weve got some stories to tell you about. A lot of investors going to be talking about today, treasury secretary Steven Mnuchin say he and nancy pelosi remain far apart on a covid19 relief package. A deal would be hard to reach before the november 3rd elections but mnuchin said he would keep trying. The treasury secretary is going to join us live at 8 30 eastern time, a conversation you dont want to miss Morgan Stanley, beating analyst estimates on the top and bottom lines, helped by an 11 jump in investment banks revenue. Morgan stanley completes the Quarterly Results for wall streets biggest banks we have seen mostly beats on analyst earnings and revenue estimates since tuesday and sticking with the bank theme, wells fargo, not a great headline they have fired 140 employees, alleging they defrauded the Small Business Association Economic Injury Disaster Loan Program set up to help Small Businesses throughout the pandemic shares of wells fargo, well show you rightnow, on that naew this morning as we flip the board around we have talked about the culture and reation arouputation around for some time. Apples iphone 12 launch bringing 5g mobile service to the forefront this week. There are questions that remain over how fast the next Generation Networks will actually be as well as the time line for a widespread u. S. Rollout. Joining us right now to talk about what 5g will mean for american wireless customers is jeff mcelfresh, thanks for being here today its good to see you, particularly given how much news there is around 5g right now. Its great to join you this morning, and i agree, this week has been an exciting week with apples announcement on tuesday. Its an iconic moment, a milestone for our industry, and it comes at a really great time for at t our customers and our network, which has never been stronger. Im really pleased to share that uklas speed test has rated at ts nationwide 5g network ths fastest and im proud of the engineers and the folks that have been hard in the trenches investing heavily in the infrastructure in this country and in nthis network as im sure you know, theres been a whole lot of noise this week that announcement certainly generated posturing from some of our competitors. We saw in the case of verizon in very dramatic fashion announced their nationwide 5g network, and i think if were counting, that might be the third of three such networks in the u. S. And it neigh be frmay be from a tmobie network, still second to at ts 5g network theres a lot of confusion for consumers about what this means, and i think the real winner this week is the consumer its the at t customer, becky, and for us at at t, you know, were very pleased to announce that we introduced a very aggressive offer and something that is far superior to any of that of our pierce in the industry, giving access to deals for both existing customers as well as new customers. Its a week where the consumer wins and at at t, its pretty simple, you get the nations fastest 5g network on the best device at a very affordable applies, and that comes at an important time in our economy. Jeff, obviously, just given some of the trash talk this morning, this is a big deal for all of the carriers involved in whats happening here. There have been some questions raised on wall street, though. I think craig mofette had a note he put out on tuesday saying he thinks its a race to the bottom trying to win customers, and these are big give aways verizon said they are offering a free phone to new customers coming in. Your offer is better, allowing a trade in for existing ones, new customers coming in for some of these things mofette just says the promotions are so big that these are rather steep, 600 a phone. Is that something that at t can afford right now i think if you Pay Attention to what consumers want, theyre looking for access to high Quality Networks and value in offer, and i remind you, this is a competitive marketplace and the dynamics that have played out over the past several quarters this year have proven that its a very competitive market, and as we at at t have a priority focus on establishing market momentum in our wireless franchise, were bullish on this we see this as a longterm value play weve got a lot of loyal iphone customers. We launched the first iphone in the industry many moons ago and so were actually in service of our customers creating a high quality experience and value that we think plays out in the long run so its okay to spend the money now because you figure its a longterm play for the customers and you need to have them there with these phones yeah, thats correct. Jeff, i know youve spent the majority of your career building and designing a lot of these communications networks. You were there when we went to 2 g, 3 g, 4 g, and now 5g, but theres a lot of confusion from consumers. Jon fortt was making the case for and against getting an iphone part of the problem is in his neighborhood, he cant get the 4g lte, i have similar problems in my neighborhood what does that mean . Am i going to be able to get 5g everywhere it sounds like the iphone will use it for some applications and not others. Thats a great point. If you think about how the industry has evolved its not a light switch its not overnight as a network cover. 100 of every square mile in the world, its a constant investment, and improvement quarter over quarter and, weve got many customers today that are on 3g Technology Consumers take their opportunity to upgrade to the next and greatest device along the journey, and we think this will take some time we dont think this is going to be an overnight event and were at the very beginning of what we believe to be an important upgrade cycle in the industry, noting that theres a lot of uncertainty in the economy, and how consumers feel about investing in other wireless service. We believe weve got a strong, compelling offer to help our local customers and any customer in the industry that would like to join the at t family to ease them into the transition into a 5g experience. Youre not going to have a 5g experience everywhere, but good news is at at t, weve got the nations fastest 4g network. The speeds we offer our consumers are pretty impressive across the board. Help us understand this, this goes to arthrotomiening inthrot. In large part because of the battery life were not talking about the coverage issue unto itself how many years do you think we are away from phones using 5g consistently and persistently, and how much of that is going to be a function of the Network Coverage versus frankly, the power thats required . Andrew, good morning, its a good question. I think as weve learned in many of these technology upgrades, it takes an ecosystem of partners and providers, vendors, handset vendors, and it takes a cycle or two to perfect the software, improve battery life and to improve accessing all of the capabilities of the network. We have capabilities like carrier aggregation, which gives us the potential to access multiple bands at the same time. And that, of course, does take a bit more of the battery life from the device, but as the engineers and Software Developers perfect those algorithms, we find extending of battery lives usually follow pretty quickly after major device launches. To answer your question specifically, i dont believe its going to be too far out in the future youll see a lot more pervasive 5g Network Access and pretty impressive battery lives for the consumer. Jeff, thanks for joining us, and we would like to check in with you again, see how things are going as the phones get out and we start seeing orders. That would be great, becky, thanks for having me. Thank you im going to be getting a phone. I know jon fortt may not but i am coming up on the other side of this break, three more big news making interviews, we have the president of shopify we have treasury secretary Steven Mnuchin, straight off weekly jobless claims, and United Airline Ceo Scott Kirby, posting a 1. 8 billion net loss for the Third Quarter. United is positioning itself for a long downturn in air travel due to the pandemic. Stay tuned youre watching squawk box on cnbc we want to put money aside for them, so. Change in plans. Alright, lets see what we can adjust. Wed be closer to the twins. Change in plans. Okay. Mom, are you painting again . You could sell these. Lemme guess, change in plans . At fidelity, a change in plans is always part of the plan. Lemme guess, change in plans . vo im a verizon engineer and today, were turning on 5g across the country. With the coverage of 5g nationwide. And, in more and more cities, the unprecedented performance of ultra wideband. The fastest 5g in the world. It will change your phone and how businesses do everything. Im proud, because we didnt build it the easy way, we built it right. This is the 5g americas been waiting for. Only from verizon. Welcome back to squawk box, take a look at the futures right now. We are in the red. Things have gotten worse at this point. You had red arrows across the board in europe where theres continued questions about whether theres going to be lock downs again. Joe. Andrew, thank you. Online shopping events like amazons prime day, which just wrapped up and big sales from walmart, target, and other retailers have helped ecommerces fast growth. Thats been especially true during the pandemic. Theres another company thats reaping big benefits from the continued move towards Online Shopping shopify. It powers Online Stores for staples, heinz i cant get to all of them, harley, theres a million other businesses, im at four. This could take a while. Its fared very well in the past seven months stock is up 200 since the market lows in march joining us president of shopify, and i mean, i hesitate to say lemonade out of lemons, but the world is insane how it works and the pandemic has accelerated a move that was already underway and i think that we just described how thats affected your great company. Thanks. Thats absolutely right, joe its been amazing to watch whats happening here. It feels like the center of gravity from a retail perspective has shifted in store with an add on web site, to online, with multiple channels like retail, google, instagram, facebook marketplaces like walmart, and connected by the retail system, shopify and Online Retail has nearly offset the 3. 2 decline in brick and mortar spend, so what were seeing here is an absolute boom in digitalization around commerce the other thing i dont think people are talking about is applications for new businesses in the Third Quarter in the United States is the highest they have been on record since four so we are seeing entrepreneurship as a way to survive and maybe thrive during the uncertainty, and were doing everything we can at shopify to help empower more independent entrepreneurs to be really successful, and i think as we enter the Holiday Shopping season, thats never been more true. How does it look overall. For you, its obviously great, but, you know, on a scale of one to ten, consumers, consumer confidence, everybody is dolieag with this in different ways. Its not great for a lot of people its by fifurcated. It is a tale of two retail worlds you have the resistant retailers that have not pivoted or adapted. You have so many of these resilient retailers that have done an amazing job. Early signs, at least according to what were seeing indicate that consumers are still very much shopping this Holiday Season, and that sales will last longer than ever before. We know that 77 of shoppers are planning to participate in the black friday cyber monday weekend, and theyre going to spend the same or more than they did in 2019. We know that 55 of shoppers say they are only going to shop online during the black friday, cyber monday season. Thats what the consumers are going to do. From a Holiday Shopping season perspective, black friday, cyber monday is no longer a season ening i think what is happening is they are purchasing with purpose. They are transcending deal buster culture, trying to get great deals. They want to buy from companies and brands whose values align with theirs. They want to buy pjs from lounge and clothing from gym shark, and consumers are choosing to support black owned businesses, local merchants and socially and environmentally conscious brands and thats leading to a boon for independent brands and businesses. Harley, if i bought your stock two or three years ago, why shouldnt i sell it right now because it just cant get any better well, look, im not going to give you stock advice, escrow, but what i will tell you shopify was viewed as an Online Store Builder and people are realizing for the million and more stores on shopify, we are their work, their business, their retail operating system they come to us because they know that if you use shopify, they can compete against the biggest retailers in the world, capital, shipping providers, fulfillment providers. We make it easy for them to compete with the Biggest Companies. Shopify is an aggregate. Instead of keeping the economies to scale for ourselves like a retailer would, we distribute them and that allows us to level the Playing Field for entrepreneurs and thats making it easier for them to be really successful now. Females, too. You know, were looking for ways of getting everybody involved in owning businesses and running businesses, and youve got some real bragging rights there for maybe people that in the past hadnt been represented quite as much thats right. Absolutely its been for a long time, entrepreneurship was out of touch, and frankly was out of the realm of possibilities for so many people, too expensive or too complicated were trying to democratize entrepreneurship, everyone can do it and use it, and its going to create jobs, economic prosperity, and more equality were proud of the were doing at shopify. Do you just do more are you just going to do more to double the stock from here or are you going to maybe you should get into a with, s or somethi aws. Can you keep doing more or do you have to do other things . The relationship that shopify has with those million and more stores is more than just a software provider. Again, what i mentioned earlier, when they go to work or home office and open their laptop, where they spend their time is in the shopify dashboard, operating system were trying to find pain points for entrepreneur ship. Capital was a large one. For a long time, capital loans, cash advances, it wasnt available to so many Small Businesses we have given up more than a billion dollars of loans and cash advances. Were doing the same thing on the fulfillment side we want to democratize that as well were trying to find the pain points of entrepreneur ship, and reduce that barrier, and level the Playing Field so they can compete with the Biggest Companies and the best part about it is on the demand side, the consumers are agreeing thats how they want to buy. They want to buy from companies that have purpose, that have value, that have great quality product asks thats the reason why were all Walking Around wearing tommy john underwear and bombas socks and amazing brands that were started and grown on shopify. I heard a boot and i see the university of ottawa coming out. Anyway, it was good to have you on you are psyched about this company and what you do. Its good to see and its exciting for entrepreneurs, its not just about you, so its good. Thank you. Thank you, joe. Youre welcome, well see you again. Becky. When we come back, treasury steak Steven Mnuchin brings us the latest on the state of the stimulus talks in washington is there a deal to be had or not . Right now, though, as we head to a break, take a look at the companies resuming their dividends after suspending them earlier this year. Just this week, william sonoma, marathon oil, and car max all restarted their dividends. Stay tuned squawk box will be right back. Ah come on lets hide in the attic. No. In the basement. Why cant we just get in the running car . Are you crazy . Lets hide behind the chainsaws. Smart. Yeah. Ok. If youre in a horror movie, you make poor decisions. Its what you do. This was a good idea. Shhhh. Im being quiet. Youre breathing on me if you want to save fifteen percent or more on car insurance, you switch to geico. Its what you do. Lets go to the cemetery coming up, breaking jobless claims data, instanteaio rctn from the treasury secretary, Steven Mnuchin stay tuned, squawk box coming right back welcome back to squawk box, we are just seconds away from initial jobless games plus new manufacturing data and the latest read on import prices we have been watching the futures this morning its been two down days in a row for the markets after four up days in a row. The futures this morning are under quite a bit of pressure, dow futures, nasdaq futures down by 165 the s p down by 38 Rick Santelli is standing by, and what are you seeing . Are the numbers out . Initial jobless claims moving higher but it is the 7th in a row in the 800,000 camp. 898,000, so only by 2,000 do we escape a new handle of 900,000 on continuing claims, some better news, we move from 10,976,000, to 10,018,000. That indeed is an improvement just like last week was an improvement. If we look at the other data points that are coming down, we see that 10. 5 is the new read on empire thats an october read that follows the read of 17 and if we want to know what highest read is since covid hit with regard to that, well, 17. 2 was it so you could see that we are backing away from some of our better reads now, lets go to philly fed, also an october number zoom, zoom, zoom, 32. 3 that is multiples of the 15 we are expecting and that, indeed, is the best level going way back to february where it was a little bit over 36 now, lets look at import prices on the month over month, up 3 10 exactly as expected. Petroleum up 7 10. Hotter than expected and if we look at year over year, minus 1. 1. Thats very important to understand the nearby deferred, its going to be the same way with regard to Inflation Expectations down the road, and export prices up 6 10, double expectations so to summarize, jobless claims, initial not as good as we were expecting. Continuing claims, a nice improvement. Andrew, back to you. Rick, thank you for that. Meantime earlier on the show we spoke with Walmart Ceo Doug Mcmillon i do think some level of stimulus now and maybe even in the future thats really targeted, sensible, pragt cactil may be needed to address the separation in the economy. There are americans that need them that dont care about whats happening in politics, arent completely tied up in this election, and they just need some help. Joining us right now on the squawk news line is treasury secretary mr. Steven mnuchin, we appreciate you joining us this morning. You heard what Doug Mcmillon had to say, we listened to the comments you made yesterday about the idea that no deal is likely before the election what do you say to the taxpayers and citizens that dont care about politics, they care about putting money in their pocket at a time of such challenge let me first clarify. What i said was that a deal would be hard to get done before the election, but were going to keep trying. I dont want to say that its not likely its just there are significant issues i couldnt agree more with doug. Doug just said what we need now is targeted, insensible approach, and really our first choice is theres 300 billion of money left from the last c. A. R. E. S funding. Our priority is to spend that money immediately, 130 billion in the ppe program with congressional approval, we could send second payments to Small Businesses that were hurt that have declining revenues the Airline Industry was forced into major layoffs at no fault of their own because of covid. We have money leftover that could do more payroll support so the airlines could hire those people back. We would have passed with a bipartisan overwhelming approval, Airlines Deal, ppe deal, the speaker has refused to do that. Her all or nothing approach doesnt make sense for the American Public and politics are getting in the way but the president and i are determined to keep working on a larger, comprehensive deal. Mr. Secretary, one of the comments that we have heard from the speaker or issues on the table that seems to be a problem or challenge on both sides is a National Testing strategy. Can you speak to whats happening here it sounds like the democrats are asking for 75 billion, republicans, 45 billion, i think theres more to this. That issue is getting overblown. We have agreed to 178 billion overall for health its an extraordinary amount of money. We agreed with the democrats 75 billion going to testing, ka contact tracing. I think quite frankly, we wont need to spend that money, were happy to take the money, and 25 billion for vaccines and distribution, which is important to continue our project warp speed. What we have been focused on is the language around testing. We had proposed a bipartisan bill that has the support in the senate and house to go forward with testing but quite frankly when i speak to pelosi today im going to tell her that were not going to let the testing issue stand in the way well fundamentally agree with their testing language subject to minor issues. This issue is being overblown. We need to get money to the American Public now, the people nasc that are most hurting. You have been reticent to really blame the other side in terms of calling this politics this is really i think one of the first times we have heard you use those words. Others have and you havent in large part because youre negotiating. Does that suggest the talks are breaking down that may be worse than we understand no, i wouldnt interpret that, let me put this in perspective. First of all, we had congress act in an unprecedented way with 3 trillion of funding i mean, if you look at that relative to gdp on a global basis, our response was extraordinary, and i have to say i couldnt be more proud of the fact that we had complete support in the senate, 960, 100and passed in the house to overwhelming support people put politics aside, we got this done and executed and thats why the economy is coming back today it was really an extraordinary act of everybody coming together i think unfortunately politics has gotten in the way now. We have been negotiating for over two months with the speaker and senator schumer. We do need bipartisan support. We cant do this alone, so i will continue to negotiate until we can get a deal done that makes sense. But as i said, i dont see any logical reason at this point with three weeks to the election why we cant move forward and agree on the 300 billion that we have left its sitting in the Treasury Bank account, ready to go. It was money that was appropriated last time so i guess the only explanation is that you know, she is holding out for an all or nothing. Whether you want to call that politics or something else, its unfortunate, but were going to keep trying. Mr. Secretary, it does sound like you are willing to give on a lot of things that the democrats have asked for but Mitch Mcconnell is not in the room Speaker Pelosi is there. Chuck schumer is there does Mitch Mcconnell have his party on wing, his senators able to sign off on some of the things that you have said that you would be willing to concede or is this going to have to be very heavily done with the democrats in the senate with just a few republicans coming along . Well, let me be very clear. Mark meadows and i are speaking to the president daily, and im not communicating anything to the speaker without having the president and mark meadows on board. We are also speaking to Kevin Mccarthy and Mitch Mcconnell on a regular basis. Mark and i had a twohour Conference Call with the Senate Republicans over the weekend i think there are certain areas where theres complete agreement on the senate side i think you know what we call the targeted bill had overwhelming support that is the priority of the senate mitch agreed that hell bring the ppe back to the floor to try to get that done hopefully the democrats wont hold that up but we are moving forward and we are seeking input from everybody. Mr. Secretary, i also wanted to ask you, i just wanted to come back to this testing question i know youre saying this its not a deal breaker would the administration be willing to support a stand alone National Testing strategy bill in the same way that you would for the airline, for example, or some of the other issues i think we would combine that with ppe deal and an Airlines Deal so again, we wouldnt move forward with testing without getting money for Small Business i think you know thats virtually half of the private payroll. And these Small Businesses, no fault of their own, and by the way, let me just say, we have a National Testing strategy at the moment the National Testing strategy and mark meadows has been enormously involved in this, working throughout the administration i think you know we have over 150 million of the buy next now tests that we have at 5 a test, incredibly economic. We are distributing those to Nursing Homes in schools were getting those out. We signed another Major Contract with a company that has a 98 rating from the mayo clinic that will be, again, tests that can be done in 20 iminutes. Well be using those in conjunction with binex now also, the administration moved forward with an extraordinary project warp speed on vaccines weve funded manufacturing of seven different vaccines so we still have money for testing, money for vaccines, we would like more but the president has executed through us, you know, dramatic spending on vaccines and testing. And by the way, 60 days ago, the technology was not there for a 5 rapid test. Mr. Secretary, i wanted to ask you about a headline in the news today, the New York Times reporting that members of the administration, including larry kudlow had spoken to some donors and other investors through the Hoover Institution about the state of play. This is back on february 24th. And apparently made clear their own concerns about covid in a way that was different than the way the president had made his concerns public, virtually on the same day, clearly from the memos that seemed to go back and forth, certainly people took from that away that there were going to be problems and went ahead and made different Investment Decisions are you concerned about that well, let me first say, i saw the headline this morning. This is the first ive seen of it it wouldnt be the first time ive seen a headline out of the New York Times that exaggerated things or puts them in a wrong perspective. I have had my own personal attacks from the New York Times doing this to me. You know, i cant imagine this occurred by the way, there were plenty of investors who had their own views of what was going on at the time and were very concerned, rightfully so, quite frankly, had we not gone through the with the c. A. R. E. S package, you wouldnt have seen a Market Recovery instability. At the time, i think as you know, we were expecting Companies Like boeing having to borrow from the government is really the fact that we were able to stand up with the fed 13 different facilities to support the market most of them didnt need to be used, that helped with the rebound. But my guess is this is another exaggeration out of the New York Times. Mr. Secretary, the wells fargo news today, i mean, i guess its, you know, im glad they made that movie casablanca, because we use it all the time, that were shocked, shocked that something is going on. It looks like there was some fraudulent activity in some of the relief funds designed for the pandemic and thats always going to happen. Do you think this is what we saw at wells fargo, tip of the iceberg or common and could you do you have an idea about what percentage of the funds that went out were, you know, not used as effectively as they would have been or actually fraudulently obtained . Well, i dont think its the tip of the iceberg, and quite frankly, i was surprised as well by the number of people involved in warells fargo im glad the doj got to the bottom of this quickly i assume wells fargos management cooperated and thats why they were able to quickly review this and get rid of these people it is quite unfortunate. I will say we are working with the sba on the Audit Program i think as you know, weve committed on all loans of 2 million and higher they will go through a Third Party Review sba has hired a contractor to do this, and this process is starting to make sure that all of the people that took the money used it properly, provided the proper documentation, and then on loans below 2 million, it will go through a statistical review theres some ai intelligence were using to look for fraud prevention, but similar to how the irs audits, so unfortunately in any program that you get out quickly, theres some add actors out there, and i think well catch them. So if you believe what some people believe, and you kind of referenced it, and that is that the democrats will not give this administration a win before election day on stimulus, do you feel like youre on a fools errand are you doing it for why keep trying do you ever just say im going home im not going to do this anymore or do you really think its possible that they would give a win to you let me be very clear, president and i and mark meadows and the entire administration are not giving up on the hard working American Public. There are too many people that lost their jobs because of covid. I think weve made a remarkable economic recovery, unemployment is way down. But its still too high, and the president has made very clear to us, until we get every Single Person back to work, our job is not done, and no, we wont give up fighting for the American Public who has been hurt by this i hope the democrats seriously consider letting us spend the 300 billion i can literally get the money out the door this week, and by the way, you know, if they would approve stand alone checks, which is mostly direct deposits, we could get that money out quickly as well. So no, the president and i and others are not giving up okay. Mr. Treasury secretary, we appreciate you joining us this morning as always, and we will watch and look forward to your progress and hope to talk to you again very very soon. Terrific. Thank you. Thank you lets get jim cramers take on all of this, over at cnbc headquarters jim, what do you think what was the most important point that the secretary just made well, i mean, if theres 300 billion, and i know there is, i mean, thats just, one, just get that out right now i have been analogizing theres four lanes to this highway three of them are fantastic. The fourth is bumpy, and people are getting in wrecks and its got potholes, and we know what business theyre in, the hospitality, restaurants, target that money take the 300 and target that money. And get those people to have food on the table. And then lets negotiate something big. But this shouldnt be held up. The 300 billion should just be sent targeted to people whom Everybody Knows needs it something bigger, okay, if you want to weigh in after the election, thats fine. There are a lot of people who as soon as it gets cold and i talk to a lot of restaurants, associates of restaurants because im in it, and its going to get cold in about three weeks, so all of these great efforts to be outside, which are around the concernuntry, by the, those can be shut down, and thats when youre going to need the money, and theres just this kind of unrealistic, both sides, really, unrealistic i think of how weve got to get the money to the people. Secretary mnuchin whos pushing for Small Business could easily, easily persuade people on this one side because i guess the big deal is not going to happen. Doesnt impact the market if its small but it does impact peoples lives compassionate use. Right exactly we are seeing the markets down, third day in a row if this continues, and by the way, we were down all morning but took another leg down after the initial jobless games were higher than anticipated. What do you think is driving this the stimulus stuff may be nothing new in that. There are a lot of other headlines people are watching. Theres this one stock that typifies this market, and its called fastly, and fastly is a company that involves fast internet and preannounced a difficult neurological a lot of that might have been tiktok, i think it makes people pause, maybe were paying too much for tech stocks i dont think thats true. Tech is going to be fairly valued and its going to be a great opportunity to buy i totally understand that, look, it is just nervous ahead of the election and none of the Bank Earnings, as usual, becky, made anyone field well, which is ridiculous goldmans quarter was great. Morgan stanleys quarter was great. I could argue that jp morgan did a good job bank of america was fine its not enough. Heres schaub with a decent quarter, walgreens with a decent quarter. Thats supposed to happen when a meteor hits the United States, and i just see a lot of good, but i say let it come down, and do some buying i have been bearish but this is not the sometime to get wholesale negative its just not. A lot of good in the Bank Earnings. Yeah. A lot of good in the Bank Earnings and other things were hearing too, but earnings at this point are backward looking, everyone is worried about what happens right now and in the next three weeks, six weeks, twelve weeks, i think its hard. Becky, some of these guys change their models so much that they just are not a day to day business goldman isnt day to day Morgan Stanley isnt but they are viewed as if they are some sort of bad community banks. And it is just it is very unnerving to watch all the changes that gorman put through and solomon put through. It Means Nothing these are value ridiculous theyre ridiculously valued. Goldman should not be im saying, you got to buy this stock. Goldman and Morgan Stanley, they are not the same companies that they were three years ago. Jim, thank you. Absolutely. Great to talk to you see you in a few minutes. Thank you. You too when we come back, the squawk box exclusive with United Airlines Ceo Scott Kirby. Dont go initiate. Well be right back. Hey, dad hey, son no dad, its a video call. 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. United airlines, wider than expected loss for the Third Quarter. Over to phil lebeau who joins us now with a special guest lets bring in united Ceo Scott Kirby joining us from the united club at the phoenix airport. Scott, i know it is Early Morning there, but you had a chance to get a sense of where the state of the business is over the last three months what is your sense as we head into what might be a second wave of covid19 building around the country . Yeah, well, good morning, phil thank you for having me. From the beginning of this crisis, united focused on being realistic about the outlook, going all the way back to the end of february. We thought the possible course the trajectory of the virus would play out like it has. And that helped us prepare and went through the Second Quarter and the Third Quarter and proud of the united team we led the industry in all the revenue metrics,smallest decline in best increase in cargo revenue, smallest decline in loyalty now were kind of at this point where we think we can see the light at the end of the tunnel it is a long tunnel. It is going to have ups and downs. It is going to take widely available vaccine, probably the end of next year, but we have now turned the corner. We have gotten through the initial phase of the crisis. And we think we have turned the corner and can see it. It is still a long way off were going to see continued recovery in demand wont get back anywhere close to normal until there is a widely available vaccine. But we see the path through to the end. So lets bring up the question of getting back to break even you all in, burning 25 million a day at the end of the Third Quarter. When do you get to zero . What do you get to break even . So it really depends on the recovery and demand. And that is anyones guess what i can say with confidence, though, is on an apples to applappl s basis, im confident well continue to lead in each quarter. Were going to be the first to return to cash flow positive im not sure when that will happen we tended to be a little more conservative, perhaps, but it turned out to be more realist i on the forecast of demand. Our real forecast would be a little to the right of where some others are. But what i am confident about is that an apples to apples basis well be the first and i think the bigger point is, cash burn is a metric we use to start looking at can airlines or other companies survive, do you have enough liquidity . As were turning the corner, cash burn is probably not the right metric to be looking at. Were really able to now start focusing on the recovery, which is in 2022 and beyond. We look forward to getting back to cash flow positive at some point next year. Scott, im not sure if you heard the treasury secretary right before you, he was talking about the need for passing some type of a stimulus package, including another 25 billion in payroll support for the airlines you furloughed 13,000 workers, if some type of a bill comes through, lets say in the next three weeks, a month, whatever it is, will you then bring those 13,000 back on to the payroll . Yeah, i did hear secretary mnuchin and i have spoken to him several times in last couple of months as well as Speaker Pelosi it is amazing. There is strong bipartisan support, house, senate, white house, across the board, for a second round for airlines, c. A. R. E. S. 2 for airlines. It is important for us, for our employees, and also important for the economy and the ultimate rebound and the ultimate recovery in the economy. And we hope that something passes at some point, i recognize it is three weeks before an election, so politics makes it difficult in the shortterm we hope something passes and we will absolutely look forward to bringing those 13,000 employees back earlier than we were otherwise going to be able to. Scott, were running up against the top of the hour. We got to wrap up the interview. Your thoughts on southwest saying it plans to add flights at ohare and down at houston international, those are your two of your on them saying they want to take you on. New point to Point Service to florida, four new destinations in ind wia and africa, we have been working hard behind the scenes, and we have great network, Great Customer service, Great Customer loyalty at ohare and intercontinental and the biggest disadvantage we had before the pandemic against southwest was change fees and we have eliminated change fees permanently for domestic travel. I feel really good about our ability to compete at those two airports and scott, one last question here just it reiterate, a second wave of covid cases seems to be building around the country. If we see more quarantines and lockdowns, how much does that weigh on business as you head into the Holiday Season . Well, quarantines and lockdowns are certainly harmful. We do see an increase in cases i hope that as a country, as a society, as a world, will use masks in particular. There are a lot of things we can do and can do safely, including lots of information out today on the safety of flying on airplanes. A lot of things we can do safely finding ways to use testing. Today we Start Testing for flights to hawaii, first flights to hawaii. Using testing as a way to open up parts of the economy that would otherwise continue to be closed, because there are as secretary mnuchin said, parts of the economy really hurting now and they need help we can do it safely, particularly if we use testing to open up parts of the economy. Scott kirby, ceo of United Airlines joining us exclusively this morning from phoenix and the united club there. You heard it theyre not giving a commitment in terms of when they get back to break even, but they believe that they will be there perhaps a little more conservative than what we hear from other airlines saying in the spring. Lots to a lot still up in the air. A lot still up in the air, phil, in pun intended. None of us know what the future is going to bring, which is not a very profound statement. Thank you, phil. A quick the futures, looks like down is it out i dont know Third Straight day of downward movement in the dow. 320 is well see what happens to the rest of the session down 175 on the nasdaq and oil is down, so it is kind of across the board. Guys, well see you tomorrow guys and gals. Becky, i like the purple, purple is good. Squawk on the street is next good thursday morning, welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber it is risk off this morning. Stocks on track for the first three dayloss since midseptember as daily global covid cases hit a new record europe introduces new lockdowns. Hospitalizations in this country near a twomonth high. And stimulus hopes remain thin, jobless claims go the wrong direction up 53 k. Road map begins with stimulus hope