Transcripts For CNBC Squawk On The Street 20240711

Million. And beyond meat, those shares are down sharply amid slowing sales, while mcdonalds launches a new plantbased product line carl well get to that later, guys first, jim, a lot to unpack with the covid cases, pfizer news, lilly news today, azar on squawk saying the timeline for a vaccine delivery is getting pretty specific now. Right look, were back in that same world and i listened to the fund manager speak on squawk, got to buy value and sell growth where were they yesterday whenle have you went from being okay to being overvalued in about a threehour session i find that when i look at some of the stocks that i like in the industrials, they have gone so far that i think now everything has to happen right and these arent going to happen righting. They are hostage to earnings Cloud Computing stocks, they have a lot of room to go down because theyre so high. When you look at faang, for instance, does it make it so alphabet is worth less the principle method of how alphabet makes its money is advertising and where it makes its money is in travel and leisure advertising. Thats come back i know were all etfd in case by case. But there is a lot of companies that yesterday went from being cheap to being overvalued, in a half hour. It is important not to get caught on the what i regard the quick sand that some of these moves have been made on. Equal weighted s p ov outperformed the russell very strong yesterday. You think the rally ends then in terms of these stocks that were talking about, not the ones that have led this market for so long, but these one day leaders . The industrials have been going up, up, up, since the quarter. I find them suspect. The bank stocks, david, we went what is the tenyear doing . It is still below 1. I think like 1. 25 and 1. 5 to justify some of the bank stock moves. Where as at the same time, i look at lets say some of the Software Service stocks, i wonder whether they really are too high, simply because they im trying to out the ones that were hiding it, and, carl, find ones like mcdonalds, which i think have done substantive things that are not expensive and could take over the world given the fact that theyre doing so many things right yeah. Were going to hear from chris later on in the hour and then throughout the morning to your point, a lot of the trends that got developed before covid and then accelerated during covid talking about digital delivery, drive through, he sees melding into a picture where you dont talk about digital as a thing it is all one thing. Well get to that and comments about mcplant and beyond meat and the rest. That is so right. We realize that you have if you can digitize, then what you really are doing is becoming more efficient i look at chipotle, what do i see about chipotle, they got religion on tech, i can say, they found a way to be able to have which i pochipotle, they cn do delivery, supply chain that is terrific. Why do i have to Sell Companies that got better during this period why cant i Sell Companies that didnt improve and have run up i dont know. Why cant you . I think you can okay. Then you think you should. Youre right. It was rhetorical. I appreciate that not looking for endorsement, i was looking for recognition i answered you ask me, you use my name, im, like, whoop, hello, yes, what can i do for you . What are you, scoobydoo . Yeah, kind of. You look at citi, okay, lets say citi it is so far below book value. Yes that you have to say, this represents somewhat of a bargain. What level do we decide the back value is worth something Morgan Stanley downgraded today. It was downgraded. What is that about Morgan Stanley, that guy developed a bank that, that guy, can he call me gorman, that guy, that guy with that other guy. Gorman is so you know the guy. Hes, like, sir james, his bank is at nine times earnings oh, yeah, thats where i want to take that thing off thats a dangerous stock no case by case it is but i mean you cant fault investors for thinking a oneday a rally like the banks had yesterday should potentially be sold given the performance of the sector overall. Ten year going to 1 , whoo bank of america can be sold citi i dont know what to do how about a quandary wells, youre not a buyer. Wells stagecoach. Wells has a fundamental problem. It is not good thats carl sometimes, carl, just that simple, it is not good. It is not good. Carl, i think we have to get into very serious mumbo jumbo of wall street. Wells is not good. Not good. Jim, there is still this narrative that the Economic News is going to get worse before it gets better. You had Scott Gottlieb on with schweppe last night saying covid cases are going to explode hospitalizations in ohio, the governor said, are happening at an unprecedented rate. Morgue capacity in texas, west texas is very tough. And then de blasio in new york city saying we have one last chance to avoid the kinds of measures that we had to take in the spring is the market prime for that i dont think you can look through my travel trust sold tjx yesterday. Everybody got very excited the stock went up, i dont know, 20 . Why . Because it looks like theyre going to make it, and then you think about it, wait a second, you have to go through two quarters of abysmal reports before you get to the Promised Land i think that the numbers that were hearing made me feel like megs incredibly good reporting with david ricks says, okay, maybe we get something that is therapeutic, but, david, we might be out of hospital beds to help the people in therapeutic. Right what we want is therapeutics available like lillys and others and, of course, we want a vaccine as soon as possible to be widely available. Carl, i know you retweeted this, alex azar, hhs, on squawk, he did say Vaccines Available to everyone march, april, did i read that properly his line was, end of january, all First Responders and senior citizens, this is in response to joes questions about vaccine delivery at a retail level, and then by the end of march, early april, quote, every american who wants a vaccine. Well see what that number is. Wow thats thats a lot sooner than many people expect, certainly. Yeah, much, much. Yesterday and everybody is weighing in on this, but most people still talking about the summer as being a real time. But, again, as he pointed out and carl points out, it is everyone who wants one, that gets back to this key question as to how many people are going to be resistant, hopefully that will change. Right now it seems there will be a significant percentage that is resistant to taking a vaccine, initially, again, that may and hopefully will change over time. I wish we knew, do we know distribution yet cvs is in the mix, but i look, i was frantically calling doctors yesterday and feel like i have, you know, fortunate enough to give a lot of charity to some of the hospitals in new york i would say i didnt get any comfort that im going to get it im not trying to pull strings. Listen, take my call i didnt get any comfort for february some comfort for april april seemed like it is within reach, david, which then, carl, means that we have got two bad quarters ahead of us and i dont know when we we could be excited about pfizer, and then a number gets reported, you think the analysts will cut numbers or raise numbers thats exactly what i think it was cap who said this morning we have to get through the next two quarters, what it comes down to it has been a busy morning of news, you saw lilly at the top of the full screen, meg tirrell has more on what david ricks told us this morning good morning, meg. Good morning, carl. We talked with david ricks after last night, the fda granted emergency use authorization to its antibody drug for covid19 patients just diagnosed with the disease. This is for people who have mild to moderate covid19, not people who are in the hospital. Remember, this drug did not work in patients who were sick enough to already be in the hospital, failed in that nih trial thats who it is indicated for it is administered as a single iv infusion. And it will be specifically for high risk patients how do you define high risk . A couple of measures that are included in this eua from the fda. One is obesity, bmi over 35. Another is if you have another disorder like kidney disease, diabetes or immunosuppressive disease. The other is age, over 65. There are other stipulations included as well and david ricks telling us that doctors will have some discretion here who should get the drugs but a key question is what will the infrastructure look like to administer these drugs theyre iv infusions, but supposed to be given as soon as possible after patients are diagnosed. Thats when they work the best here is what he told us about that were working with the government to make as broad a footprint as broad a set of choices to get this iv infusion as possible. Including potentially in nursing homes, in outpatient centers, or even popup facilities that could happen as we did with testing, so that people can come in without having to go inside of a hospital where if you have newly diagnosed covid19, mostly the signs on the door say dont come in. So were working on that solution now and, guys, just as we were talking about yesterday with pfizer and biontechs vaccine, they will have 1 million doses by 2020, one dose is one treatment, enough to treat 1 Million People, but thats for the entire globe they say as of today, theyre shipping 88,000 doses. But thats why this is designated for high risk groups right now. We have to prioritize who will get this drug, who can be most helped by it the hope is if people are diagnosed and get the drug early and high risk for severe disease, this could keep them out of the hospital. So seen as an important tool in the tool belt in this pandemic, guys i dont want to be critical, this is all good news, and it is not critical of you, your reporting is unbelievable, but no one seem to be ready for the actual good work that science has done here. I feel i deal with high level doctors, no one has a clue about that is happening. Is it going to government, it is embarrassing, frankly. We have scientists who have done amazing things, at lilly, and at pfizer, and a country that has not a clue about what to do with it when i deal with the doctors, i cant get the thing, im going to protect the class, i cant get the thing. I mean, like, hey, jim, april, meg, who is in charge . What is the plan . The federal government is in charge, operation warp speed has a Distribution Plan that involves the military. But at the same time, you know, states have to have their own plans for distributing vaccines and they have to submit them to the cdc and to work with the federal government to have those. But theyre still getting in place. Jim, you know, thinking with this antibody drug too, Scott Gottlieb on this morning talking about how he thinks it would have been better if we had a system for Home Infusion of the antibody drug because the people are sick theyre vulnerable and you dont want sick Vulnerable People going to places with other sick Vulnerable People. This is a contagious disease it is a catch22. I want to go to the hospital, they wont let me go to the hospital i want to do it at home, there is no Home Infusion. You mentioned the plant. You mentioned the federal government, thats all go ahead, carl meg, thanks, as always. Busy week for our meg tirrell. Well take a break as we said, few moments ago, later on this morning, an exclusive with mcdonalds ceo Chris Kempczinski, talking about mcplant, breakfast, the elecon ana t re dont go anywhere. 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. Its time you make the rules. So join the 2 Million People who have switched to xfinity mobile. You can choose from the latest phones or bring your own device and choose the amount of data thats right for you to save even more. And youll get 5g at no extra cost. All on the most reliable network. So choose a data option thats right for you. Get 5g included and save up to 400 dollars a year on the network rated 1 in customer satisfaction. Its your wireless. Your rules. Only with xfinity mobile. Crossed 130,000 yesterday for the very first time. The Restaurant Industry is on the lookout for signs of new restrictions we talked to mcdonalds ceo Chris Kempczinski yesterday about that Pfizer Vaccine news, and what it means for mcdonalds, the industry, and america. As we worked through this strategy, we always assumed that there would be an effective vaccine out there. For us, it has been focused on what are are the changes in Consumer Behavior that we think are going to be enduring and certainly one of the or a few of the enduring changes are about more of consumer interaction happening digitally, happening contactless, and then also the prevalence of delivery. So it doesnt affect our strategy as much, but it is a great announcement for humanity as pfizer said and certainly something we were counting on as we were developing our plan. Yeah. I guess the good news, jim, is that the news appears to be falling into Corporate Americas base case, you certainly would not have wanted to see something that fell to the downside of that. No. I mean, look mcdonalds is showing its true colors here, which is it is a great execution machine. Theyll go with what the consumer wants, slightly ahead of the consumer, dont want to get too far ahead of the consumer more trustworthy now than ever this is a group after some management turmoil that really is kind of extraordinary they dont miss a lot of beats there. Not like they have they had a couple of bizarre shakeups, all that happens is people keep going there and do a good job. I salute this team i think theyre very strong. Yeah. Digital is now 20 of sales. I know youre a fan of Loyalty Programs in general. Theyre work on that interestingly they will alter their marketing. Chris said, to where as we have seen in many examples, mcdonalds takes a stand on certain issues they believe the corporate facing relationship and the customer facing relationship are beginning to blend and that if you dont take a stand on a variety of issues, Diversity Inclusion is one example, the customer thinks of the company differently in a way that in this case mcdonalds doesnt want. Think about that. Think about how forward that is. They are a national look, international company, but nationally divided nation. But they think that there are certain issues that cross the divide, and theyre not doing it in order to sell more burgers. If anything theyre taking a risk the risk, carl, is were patriots, were real good and we are doing the right thing. Carl, it is hard to disagree with them, i think yeah. Well talk more next hour about beyond meat and what exactly is going on with the plant which well probably see next year in the meantime, quick break here, a lot to get to with numbers, of course, out of dr horton, the eu charge on amazon, disney furloughs, american, new Common Shares out in a moment. Dont go away. That came from me. Really. My first idea was in one quarter of an hour, your savings will tower. Over you. Figuratively speaking. But thats not catchy, is it . Thats not going to swim about in your brain. So i thought, what about. 15 minutes. 15 percent. Serendipity. 15 minutes could save you 15 or more on car insurance. And look, it feels like im just wasting time. Thats why Td Ameritrade designed a firstofitskind, personalized education center. Oh. Their awardwinning content is tailored to fit your investing goals and interests. And it learns with you, so as you become smarter, so do its recommendations. So its like my streaming service. 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And this is when you issue 38. 5 million shares at the price of 13 and you may say, well, thats a bargain. Because it was up yesterday, a lot. A lot. Or say, oh, geez, are you kidding me you have an up day and you smack us in the face with this dead fish but i do think that thats what you should do if youre American Airlines, i mean, it is a it is a reflection of what is certainly going to be continued difficulty in the industry even with the vaccine coming well, is 130,000 people, you then get back into that reactionary world of i dont know, i was thinking about flying. 130,000, referring to new cases in the United States. Yes but there is a substantial part of the people in the country who think it is a flu. It is not david would that it were. There you go again. You keep insisting on the facts. Im telling you,im reading my twitter. Thankfully for some it is a flu or less, but for others, it is a lot more serious. It is out of control right but, david, that depends on control. Im just playing devils advocate. Okay. Depends on control. Right. Right im telling you it is in control. But it is not but it is but its not. Weve only got a couple more months though and then we can get to the other side. And, you know, the 130,000 cases, and how much does david ricks have enough to cover us today no. No. Today he cant cover us. But it is under control. Did you see Sacha Baron Cohen . I didnt. No it is under control. Under control yeah. Im tired of if you go into my twitter file and tell me it is under control and it is just a flu, im going to block you forever. I have a particular set of skills that is a nightmare for people to say that a lot more squawk on the street coming right back. Jim, as you and david were at the wall there, talking about americans new Common Shares, carnival files to sell up to another 1. 5 billion of stock, 67 million shares through jpm and goldman. So everybody is taking advantage of the bounce. Look, i think this is great except if youre a shareholder shareholder, bought yesterday, i think you got to rethink i expect some retailers to be doing this, Real Estate Investment trusts. I felt that stock at 15 was inexpensive at 20, it is kind of expensive again. He said you got to tell people not to buy this thing at 20. It is just not going to get through 20 but it was after the show, and it aint getting through 20 anytime soon, david. These companies are being very prudent. They are. Thats the thing you can criticize them in some way, but theyre doing what they feel they have to do make sure they have enough money to survive, in survival mode for seven months, able to navigate this so far, despite what is an enormous lack of revenues, and, you know, you can at least to start to see light at the end of the tunnel here, but probably need more money to get there, make sure you have enough. When you make reservations, you know the pentup demand will be incredible for a lot of Different Things so when do you play this mexican standoff game . I book tickets yesterday for the month of august to go to italy why . Because the levels were half of what they were last year and theyre refundable i dont understand why i think you got to make a determination whether you want to take norwegian cruise in august and if you do, i this i you probably have to make your move now. You do you could ask the same question about whether if you want to live in new york city, do you sign a twoyear lease today or i mean, it could get a lot worse if you wait too long. Yeah. I think that talking to lisa, my wife, we got open the bar in march, shes, like, are you out of your mind what is that maybe it is 160,000 per day. Maybe you can give people shots of tequila and a vaccine hes not a vaccine. Got to do infusions got to call borla. A margarita infusion. Get it all. Get it all the opening bell, of course. Guys, yeah, well see how it fills in you were watching ultra strategic partnership, 100 stores, you compared it to what jcp did with sephora. The smartest thing sephora ever did target made a deal with cvs. They dont mind having total pros coming in and taking over areas of their real estate and Brian Cornell has been very smart. They have not done that as well in cosmetics as they should. It is skin care that people want this is that mask issue. You listen to what estee lauder, for a long time it was about cosmetics. It is about zoom we havent written off zoom yet. People are takie ining zoom cals unless you use a tremendous amount of clinique or something, you just it is unavoidable, the pimples are unavoidable. Are you wearing a mask you dont have a single pimple. I am wearing a mask, yeah. For clinique . What do you use when you get home nothing nothing. No i havent ive gotten a couple use clearasil i havent used anything, no i take my mask off, i just, you know, wipe my face, call it a day. Dont you wish you were him everything he does is oh, right, oh, yeah thats i go shopping, i have to what everything goes your way. It is true. You know what is not going peoples way this morning, guys . Beyond meat. Im sure that you spoke to mr. Kempczinski about the mcplant. That was a strange announcement yesterday in terms of timing because we got the mcplant announcement from mcdonalds, unclear who is the provider, then learned it was beyond meat, but it doesnt appear it is going to be with beyond meat branding and ill leave it to carl and that interview to understand more. Im mentioning beyond because then the stock went up, after it was clear that it was beyond, and then it is collapsing because, jim, the revenues were horrific. Xhen tocommentary was so hore ethan, ethan is a hes an evangelist, okay, he literally made you say, look, we got gone smacked, saw a big slowdown, we also are not benefiting from it looks like today they announced they got a pizza hut deal, you can have their sausage came out now, im breaking that news, but, carl, i did not like and im having ethan on, the confusion over mcdonalds, because as far as im i can tell, mcdonalds is not as keen on beyond meat as as beyond meat as saying they are. Little bit of a difference of opinion. Yeah. Jim, we tried on this one, mcdonalds will tell you that beyond meat was their testing partner for the plantbased burger in canada, that they have not announced which suppliers they will work with on mcplant, we tried to pin down Chris Kempczinski on this issue when we talked to him earlieearlier. This is what he said. We see plantbased as being something that is here to stay the question of when mcdonalds would get into it is the only question it was never a question of if, and we did a variety of consumer testing as we always do at mcdonalds about a whole bunch of names, and then came out of that came mcplant. So pretty straightforward name, but what it worked for was consumers had a clear understanding of what it was all about. And it was a product that was a name that was flexible enough to work on burgers, to work on chicken substitute products, something we perhaps would bring into breakfast, so a very versatile trademark, and then how it gets deployed is going to be up to each market. Can i pin you down on beyond meats involvement, what are they doing, if anything . We are fortunate at mcdonalds, we have a great group of suppliers that we work with, and in many cases we work with a couple of different suppliers in product categories. As you referenced, we have a relationship with beyond meat, where they supported us in our canadian test market, we havent made a decision about how were going to be and which suppliers are going to be supporting our global role out there. I dont want to comment on that. So, jim, your point is exactly right. Meantime, jpm stays under weight near term visibility, they say, on beyond meat approaches zero it has been a long time since a food company missed like this. Look, the i like ethan very much and had tremendous i had great dinner with him, which included all beyond meat the issue here is that he says he missed, and he was upset and he realized that there had been pantry stocking of his product, but i think it was most quizzical that about his Conference Call was when he goes, look, i cant specify or speak for mcdonalds to how we may interplay with mcplant burger, but we think it would be in everybodys interest, best interest, to use our brand an i would resist efforts to not use it it is not the mcbeyond, carl it is the mcplant. And it sounds to me that ethan wanted it to be, you go to the board and you say, i would like a beyond meat burger and it doesnt sound like mcdonalds is willing to play that game. Yeah. It sounds like pizza hut is. Absolutely. I love the new i already said, please, send me the beyond Italian Sausage pizza and the great beyond pizza i cannot wait for this yum is pretty big. And pizza hut is big i tell you, ive always loved sausage. I would love it to be beyond meat i had some beyond meat meatballs the other day. How were they darn good ive been cooking, my wife is away, ive been cooking all the beyond stuff i like it. It tastes like you know what it tastes like it tastes like meat. Who would have thought who would have thought . A bunch of things i want to try to get to this morning yesterday we watched Simon Property group, the trial in michigan going to Begin Next Week in terms of that contested deal which, they say they dont have to complete to require taubman, taubman says otherwise. Did you notice yesterday on the Conference Call, david simon talking about making significant progress in addressing collections, but also talking still about having some unresolved amounts with certain Larger National tenants who unfortunately, im quoting here, are refusing to pay their contractual rent, even though theyre open and operating all the u. S. Properties in they only have one mall in el paso, getting hit very hard right now that is closed it is interesting, theyre still not getting paid, 78 collections for the second quarter, running about higher than that now, but still not getting paid by some national tenants. Theyre lower than theyre lower than a lot of the other guys. Yeah. Lower than i am, you know, 72 of the net build rent for the second quarter, i mean, would you want to be on the other side of the room with david simon . No, hes a tough guy. Who are these people doing . Hiding are they hiding . I dont know. I dont know. I wouldnt be on the other side i know. I think that he is hes been forgiving. Yeah. But at this point, he wants the cash flow as much as anybody. Hes paid 33 billion in dividends sns he sta s since he company. Suddenly that pact is being broken and im not sure what to do if i were david. Yeah, we watched yesterday, of course, it is hard to see there, given the stock is still down 50 for the year. It was up 27 at one point yesterday. Guys, on the subject of deals that dont seem to be likely to happen, i got a couple of entrants this morning. I wanted to first talk about can city southern. They updated their Capital Allocation policy this morning, ksu, you may remember there was reports about interest there from gip, Global Infrastructure partners thats not going to happen that has been abandoned. They moved on. They couldnt get there. But it is interesting to note ksu approving a new 3 billion share purchase program, increasing the Quarterly Dividend as well and doing a number of things on the Capital Allocation front in terms of what theyre telling us, 40 to 50 of will go to Capital Projects and Strategic Investments in terms of available cash and another 50 to 60 to Share Repurchases and dividends. One thing you can say or i can tell you is, it is not going to involve a sale of the company. Another name that has come to the fore, reporting yesterday from reuters, the utility that had next tara having made a bid, thats true. That bid was made a long time ago, perhaps as long ago as last may and they have not been talking and in fact the may bid happened and nextera tried to move on to buy duke or made a bid, or made their interest known that didnt really advance very far we told you that is also fallen by the way side. And the same is what im understanding with evergy, what im hearing, they were surprised by the story elliott, large owner of evergy, has said, hey, there is interest, you should try to sell yourself now remember, evergy did entertain some offers last spring into the summer and, again, im told, the last bid from next door was may but then sort of abandoned that and been committed to staying independent, that was early august or so when we got reports on that. So couple of deals that dont appear likely to happen worth mentioning i thought you included another one, which is lowes not in talks to buy hd supply. And yet hd supply stock is up. Who is in talks . I dont know. I did notice that. Lowes saying not us, nope, no thank you. How does that happen . We get a story, i guess we got of a lot of apologies from the writer, right . No. There has to be jim, i know your occidental petroleum, your favorite company, out with earnings youre happy about that, im sure. That was a good deal. Anadarko. Adjusted loss of 783 million. Trades like a pot stock today. Trades like tilray pot stocks tilray is a pot stock. Got it. Cannabis. Cannabis guys, nasdaq is down a full percent and thats dragging some of the s p down with it. Lets get to bob pisani. Hey, bob. Yeah, mixed open. Industrials Still Holding up a little bit better. Definitely megacap tech a little weaker i called this a mixed open here with energy up slightly. Healthcare and banks again doing a little better after a terrific rally yesterday in the banks sector tech is down slightly. Communication services largely because you have alphabet and that particular group. If you look at the megacaps, all down here, led by fact, down about 2 , about 4 or 5 minutes ago, somewhere around there, apple turned positive, thats interesting, negative at the open amazon, microsoft, alphabet, you see here, all to the downside. I think the most interesting thing is to look at how fast these cyclical sectors have moved. I noted yesterday, particularly industrials, we hit a lot of new highs yesterday and again today, big names, caterpillar, illinois tool works, honeywell, sherwin williams, deere, johnson controls, sherwin williams, packer, cummins, a long list of industrials at new highs what concerns me is the multiples, were pricing in perfection here. These stocks do not normally honeywell doesnt trade at 25 times forward earnings these are all at the highest levels in more than ten years at this point honeywell trades 15 to 20 times forward earnings what is the street saying . Well, you know you get an extended multiple and thats exactly what we are getting, but these numbers are really frothy. They are really well out there so were going to have to have one heck of a recovery here and also, at some point, a much greater push up in earnings than are currently being anticipated. Not quite the same, but getting there, with the banks. They have they havent rallied to the extent that the others have regional banks are trading at higher multiples than they have in the last several years. This is not the only metric you use but useful way to look at things fifth third, pnc, up, starting to get a little elevated here. My point here is that the street is starting to price in a normalization of the economy in 2021 you see it here, look at these earnings estimates for the s p 500, the whole s p, 2019, 162, this year we go to 136 2021, we have 168. It is back to normal again not only back to normal, were above where we were in 2019. The street believes suddenly everything is going to sort of go back to 2019. Well, i hope that happens. But there is an awful lot of hope priced into that particular estimate, when you look at things like industrials. Yes, airlines, definitely have a lot of room to go, energy does, but a lot of these groups starting to get a little tough the guys mentioned American Airlines here, doing that 38. 5 million share stock offering, so that will increase the flow by 7 , 8 , who could blame them, just remind everyone of the catastrophe, of what happened to the airline industry, 2019, we were talking 45 billion in revenues in american, today, 17 billion. And in 2021, what everybody cares about, were essentially back to, well, all right, a little better than half of what it was in 2019 that is a catastrophe. Now, here you dont have the same concerns about prices having been pushed up. We can go a long way, right here here going back here, look at this, we were 25, 26, back in february, on americans, were still half of that thats what happens when your revenues get cut by twothirds and youre still expecting to be half your revenues in 2021 a lot of room to move on airline stocks, but industrials and banks, getting tighter carl, back to you to. Bob, yeah, a lot of good information. Were watching a lot of fed speak today. Tenyear yield cant quite get to one lets get to Rick Santelli there needs to be a lot of fed speak today. Week ago is the election now were talking virus. Interest rates moving higher fed is going to have to pay a whole lot of attention to the moves that may be coming down the road with regard to higher rates. Not only here, but in europe consider this, just a couple of days ago we were at 17 plus trillion of negative yield in debt yesterday, alone, shaved 1. 2 trillion off of that were now, like, 16. 8. Central banks are going to have an issue when we start to get on the other side of covid. I call it ad, after distribution of virus, pharmaceuticals and, of course, vaccines. Look at intraday of 10s. We have been up to well, here we are, high yield of the day at 96 yesterday, you see on the twoday chart, high yield was 97, 176 for 30s. We want to watch if we can leapfrog over the highs from yesterday and do keep in mind we have 41 billion of 10s today yesterday, nine corporate deals, Bristol Squibb meyer was the biggie, gobbling up myocardia today, verizon 5s, 10s, 20s, 30s, 40s, Long Duration deal, i dont have a number on it but it is big and the spreads are coming in. So, yeah, that Bristolmyers Squibb deal was the highlight yesterday, verizon today going back to march, were at the highest yield since march. A chart of bunds since march, at eightweek high yields, opportunity there. Finally, 10s minus 2s at 78, steepest since october 2017. If you look at a july 1st chart, we havent made new established lows against the august late lows, that is a positive, maybe a very small positive. Carl, jim, david, back to you. All right, rick, well talk to you later, Rick Santelli. A much more balanced picture than we had this time yesterday. You got energy industrials up half a percent banks and tech are weighing on the overall index. S p is down 18 before money, people traded goods. Tools, cattle, grain, even shells represented value. Then currency came along. They made it out of copper, gold, silver, wampum. Soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. Thats why its time for Digital Currency and your investment in the grayscale funds. Go digital. Go grayscale. Hey frank, our workers comp insurance is expiring, should we just renew it . Yeah, sure. Hey there, Small Business owner. Pie insurance here with some sweet advice to stop you from overpaying on workers comp. Try pie instead and save up to 30 . Thirty percent . Really . Get a quote in 3 minutes at easyaspie. Com. Wow, that is easy. So, need another reminder . No, no no, im good. Uh, yes please. Oh. Ho ho ho, yeah need workers comp insurance . Get a quote in 3 minutes at easyaspie. Com. Eu regulators taking aim at amazon, charging the company with bra breaching the blocs antitrust rules and second investigation into ecommerce practices. Margaret vestagier says it reached the conclusion amazon illegally abused its dominant position as a Marketplace Service provider in germany and france and may have used Sensitive Data to big scale to compete against smaller retailers. The Company Faces a possible fine of up to 10 of its annual worldwide revenue. Amazon says it disagrees with the preliminary assertions made by the commission. They had been, jim, much more aggressive on antitrust and in general in the e aah and ahead of us in a number of other areas as well, privacy being one of them, too. Is this important for amazon i think it will be interesting to yes t is, to see what happens under president elect biden, whether there wont be an America First image and maybe these things can be settled with the president helping rather than antagonizing could be interesting because i think that a lot of the ceos i deal with suddenly felt if we do more business, put more plants in europe, or mexico, we will not be criticized, so maybe amazon can make it right with the help of our president. By the way, david speaking of deals, post mates clear, uber post mates a lot of good things happening with uber. True. When it comes to amazon, carl, no favor to the president , given mr. Bezos ownership of the washington post. Thats right. Yep, thats true and hasnt had a true handle since november 3rd and still 50 bucks if it goes lower wel ke bak resquawk on the street in a moment at fidelity, youll work with an advisor to help you build a flexible wealth plan. Youll have access to taxsmart investing strategies, and with brokerage accounts online trades are commission free. Personalized advice. Unmatched value. At fidelity, you can have both. In an era of rapid Tech Advances and demographic change, how do Legacy Companies adapt, innovate and evolve . Cnbc evolve features Iconic Companies and executives who were embracing change, transforming for the future, honeywell and more, you can register now at cnbcevents. Com evolve. Were back in a moment dont settle for silver 1 for diabetic dry skin 1 for psoriasis symptom relief and 1 for eczema symptom relief gold bond champion your skin gold bond music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. Lets get to jim and stop trading. I interviewed the amazing ceo to honeywell stock looks expensive, 2 of earnings power, and 30 billion war chest. You can imagine before thinking this stock is expensive, remember the optionality that darius has and become much more of a software company. Just because the stock is up a lot doesnt mean the company hasnt changed its stripes i dont think its that expensive. You got to hand it to the bookers who have been working on this evolved conference, jim, its quite a list of names well see today. Lars is a great businessperson he figured out you want to do concerts, what is lars ulrich doing up there ive had dinner with him several times, remarkable businessperson, the most interesting of all hes very smart. Whats up tonight i got beyond meat, going to maybe get to the bottom of mcdonalds, beyond meat did not have a good quarter but yum pizza could be great mark klouse, salute to service and pantry and whether people will have campbells soup and drink drinks and eat snacks. The answer is they will but well hear from mark himself were saluting the troops. Yes, happy birthday to the marine corps, semper fi. See you tonight. Mad money 6 00 p. M. Eastern time thank you welcome to squawk on the street. Im Carl Quintanilla with qualify qualify and kayla tausche. More of a split picture on markets after yesterdays blowout rally dow adding another half a percent, s p is down about 8 our road map starts with what you just mentioned, a mixed morning for wall street after we hit new records yesterday. The dow holding on to gains, but the rotation out of the big tech stocks has continued and hopes for a cure, a new reason for covid optimism, pfizers covid19 vaccine and eli lillys antibody treatment giving investors renewed hopes for a possible return to normalcy, as coronavirus cases continue to rise across the u. S. And finally, mrk do lly mcd joins squawk on the street to talk about the outlook, the election impact and coronavirus headwinds and more do not miss the cnbc exclusive coming up later on this hour well start with the new wave of record covid cases of the u. S. Printing 130,000 cases for the first time, and along with good news for lilly on the emergency use front, meg tirrell has more on that good morning again, meg. Hey, carl as the cases mount in the United States, we are not going to have a vaccine available for some time, even though we got that great news yesterday but what we do now have available this new drug from eli lilly, the fda granting emergency use authorization for the first antibody drug to treat covid19 for people recently diagnosed with the disease who are at high risk of severe disease or hospitalization and its administered as a single iv infusion how do they determine high risk . They have a few criteria that they use, one is obesity with a bmi of 35 or more, another is other disorders, kidney disease, diabetes, immunosuppressive disease and other disorders listed in the fda emergency use authorization as well and another one is age, 65plus. But you know, there isnt going to be enough of this drug necessarily. We did talk with eli lillys Ceo David Ricks this morning about how helpful it could be. Heres what he said. Prevaccine, prebroad vaccination, obviously we need to reduce the hospitalization in this country where i am in the midwest, were filling up hospitals now were almost at a critical juncture, so reducing the rate of hospitalization, which is what this drug does by 70 is a critical need, and that of course will persist until we get Something Like herd immunity so guice, you see where that drug could fit in here but there wont be enough of it. Lilly says 1 million doses by the end of this year, one dose is one course of treatment, but thats Global Supply lilly says now theyre shipping 88,000 doses so far. The u. S. Has a supply agreement so this will start to get distributed and there are other Companies Working on antibody drugs as well. Regeneron filed for emergency use authorization, you can see the stock down 3 today. Astrazeneca and vir farther behind because the supply is limited all will be needed just like vaccines back over to you meg, you note there will be 1 million doses available by the end of the year globally do we know how many people fit the description that you just laid out of who will qualify for getting this drug . Yes, i talked with monce moncep salawi, the chief adviser to operation warp speed about this last week and he was saying maybe 30,000 to 50,000 people in the United States a week would qualify for that high risk group, so that gives you a sort of sense about how much of this well need, up to 200,000 doses per month for the highrisk folks in the united tates, so million by the end of the year for the entire globe, supply is going to be constrained and rationed meg tirrell, thank you, as always turning to the markets, stocks are mixed, after the dow, s p and nasdaq hit intraday record highs yesterday, though failing to close there the dow posting its best day since june you can see that rotation out of tech continues with the nasdaq falling 1. 25 . Joining us is lisa challotte of Morgan Stanley Wealth Management and kristen bitterley at citi private bank. Kristen, where dung the market trajectory goes from you know until americans are vaccinated yesterday it was the hope markets were trading on the future valuation expecting that we might eventually get there. Weve been talking to our clients essentially about what were calling the trifecta thats going to drive markets from here until the end of the year, and into 2021, and so essentially this trifecta is really three things. The conclusion of the election, the market wanted certainty around that, and just for it to be over, quite honestly. The second is around the trajectory of the virus and so we believe that in 2021, the virus will abate we obviously got the great news from pfizer. We got the positive news from eli lilly about treatments, so this is about vaccines, more efficacious treatments as well as more prolific testing and the last part, which is really important as well, that the market cannot ignore is fiscal stimulus, and so one thing that were keeping a close eye on is really the fact that we got this positive news on a vaccine on more efficacious treatment, we still need the fiscal stimulus to bridge the gap. [ dog barking ] clearly fido wants some stimulus, as we hear, lisa, a lot has to happen between that and the 2021 time frame kristen laid out there im curious what you think happens to the Small Business outlook between now and then Goldman Sachs has been canvassing hundreds of Small Businesses since this spring and put out numbers this morning showing 60 of respondents believe theyll definitively survive to see another day, after the pandemic thats worse than april. April, 68 of the Small Businesses thought they would make it. Clearly the outlook is dimming on main street where can these businesses look for help what happens to the economy if they cant get it . Yes, so look, our perspective is that this comes down to fiscal stimulus for the Small Businesses its unfortunate that we dont have clarity on the election, we dont have clarity about the timing or size of what the fiscal stimulus bill will look like, and the unfortunate part is that it does seem like people in washington continue to be consumed by politics, and that may be the case during this lame duck session as opposed to focusing on the economy and focusing on the people of the United States and thats an unfortunate thing. Now, ultimately, we do think that its a pause and not a loss, but the people who will feel it the most will be the Small Businesses so were hopeful that ultimately we do get that stimulus by january at the latest, but that is i think the single biggest question for markets right now is size and timing of fiscal kristen, you talk about the market wanting the election to be over, but i mean yesterday brought a slew of incremental developments from the doj, from leader mcconnell, state ags, even some state legislatures who were working hard to contest or at least fare it out alleged instances of voting fraud. Do you think the market is not discounting the possibility of this turning ugly enough so the market definitely wants the election to be over, but i think ultimately what the markets looking for is what is true regardless of the outcome of the election, and so could that introduce some volatility over the next couple of weeks, absolutely do we think its going to influence the outcome . No i think the most important thing we saw yesterday going back to the news about pfizer and the vaccine, we saw one of the most violent rotations that weve ever seen, and if you used the s p 500 equal weighted versus the s p 500 market capitalization weighted as a proxy, that was the biggest disparity that i think weve seen throughout history, and so what the markets reacting to, more than anything else, is covids in the drivers seat, and so understanding that now that we can see this light at the end of the tunnel, with covid, that there is a potential vaccine and not just one, but several. Theres better treatments. Thats why were starting to see this very strong rotation into what we call the covid cyclical sectors thats everything from financials to real estate to airlines, travel and leisure that have been so severely impacted by this exogenous shock and we believe thats going to continue and advising our clients to continue with that rotation kristen, how permanent is this rotation . Sure, financials will benefit from higher yields, sure, they will benefit from a stronger consumer and they could potentially release some of those reserves theyve been setting aside to cover bad loans but can you call this a full rotation out of tech when zoom is down but its still up 441 this year . Theres still a lot of People Holding that stock and you should, right, because ultimately the risk off trade has been the inflows into what we call the covid defensive sectors, which are technology, ecommerce, et cetera, and so having that exposure in your portfolio is smart its part of a diversified strategy the question is how much higher, how much more can these companies run, and when you start to see that, because remember, the markets looking out not only one to two months the market is looking out six months and saying if we do see an end to this pandemic, then which are these sectors that have really been crushed over the past several months. Theres still room to grow and so i think that this is just simply the beginning of this rotation it is definitely not the end and were going to see as we get more positive news on the abatement of the pandemic, were going to continue to see these flows into these heavily impacted sectors although i hope for everyones sake that it is a when and not an if we see an end of the pandemic. For now, well leave it there. Lisa and kristen, our thanks to you both for an important conversation dow adding to gains up 260 we have a great hour ahead, mcdonalds chief Chris Kempczinski joins us exclusively, the election impact, the chicken sandwich wars and more and after the break, investors get a batch of good news from pfizer, biotech obviously yesterday. Today its lilly well break down details when ckonhetrtomee ces ba at fidelity, youll work with an advisor to help you build a flexible wealth plan. Youll have access to taxsmart investing strategies, and with brokerage accounts online trades are commission free. Personalized advice. Unmatched value. At fidelity, you can have both. As the u. S. Passes 10 million coronavirus cases, news the pfizers coming vaccine and eli lillys antibody treatment yesterday restored some help for a return to normal but scientists are reminding us this is the first step in what could be a long process for approvals and distribution joining us is fred hassan, sits on the board of am gen, formerly the ceo of shearing plough good to have you always. Give me your take on how we should go about thinking about distribution of this promising vaccine that we assume will get emergency use approval hopefully very soon. How would you go about sort of apportioning distribution at least knowing what you do right now, about how that might go in the u. S. So thank you very much. This is a major breakthrough, this product this is like columbus 1492 because its the first time an mrna vaccine has come on the landscape and happens to be fantastically effective, 90 this needs to get out there because the Front Line Health Care workers need access to this vaccine, and so do the highrisk populations, very, very soon the vaccine has this peculiarity of being stored at minus 70 degrees celsius or 94 degrees fahrenheit, minus 94 degrees fahrenheit, thats very low temperatures, very few bases, hospitals, clinics, very few places have the facilities to have it. Also, it doesnt last more than five days in the fridge. So it really has to be handled with great care. Fortunately, operation warp speed had been planning for this for a while and pfizer is very much on top of it. The one thing they are going to do is theyre going to send special containers to the sites where the vaccinations will be occurring, get the containers back, so there will be no containers going through wholesalers or any other intermediary points. Thats a great idea. Eventually theyll crack the code on how to get the mass distribution right, but its fantastic news right now it is, and nobody is disputing that, but you point out some of the logistical challenges that will be involved in getting it to people as quickly as possible, particularly those who need it everybody potentially does, but that leads to my next question, fred, which is there appear to be many people in this country not going to be ready to take a vaccine. Is that a concern for you, and how do you overcome their hesitancy . This is a real challenge. Even with the flu vaccine, only about 50 of the people take it, and i personally think its a social irresponsibility not to take vaccines, because they can go on to infect other people in this case, its been caught up in Election Year politics, and people are going around saying well, im not going to take this trump vaccine. Its got nothing to do with a politician its a good piece of science, a good vaccine in my opinion, some very important symbolical moves might make a big difference. The first person to be vaccinated should be dr. Fauci, the most respected name in households in america. The president and the Vice President should publicly get vaccinated, and then in my opinion, the health care, the Front Line Health Care workers who will be the first people who should get the vaccine, should become passionate advocates to get the word out a, this vaccine is good for you, it is good for society, please take it, and by the way, this vaccine has a piece of dna it doesnt have a piece of the covid virus in it. Just a piece of dna, so it wont hurt you we are going to watch it, of course, over the next year toor looks unlikely there are major problems with this vaccine fred, unfortunately i think if you were to vaccinate dr. Fauci first, that because of the partisan rancor in this country that might lead some people to not get the vaccine, but i want to ask about the money behind this, because operation warp speed has a current budget of 10 billion, and one thing that both sides of the aisle will agree on is that future Vaccine Development and deployment should be funded in order to get the economy back on track, but president elect joe biden has said that 25 billion is needed. From your vantage point, what is the dollar figure that you think we need in this country to actually get these candidates across the finish line, and get them to Retail Locations where americans can get them i would say that these are very large numbers, were not accustomed to looking at these numbers, but look at the price t the economy is paying for what we have. It is costing our economy 3 billion a day, and then on top of that, look at the psychosocial distress on our system so i would say at 25 billion number does not look very large. We have to go after this, and get it done. Its incredibly fantastic, the science has risen to the challenge of covid in less than one year this would have been not thought of to happen in less than five or ten years, just a few years ago. So in that part, the product is now available. Getting it out in a proper manner, fair manner, sophisticated manner is a big challenge. Fortunately, theyve been planning for this at operation warp speed and the funding should be made available if that is not enough im all for making it 25 fred, as we talk about prioritizing who gets this first, we talked about Health Care Workers obviously azar this morning talked about senior citizens. Rosengran, a fed official talks about what he called the imbalanced human toll of workers who have just regular service facing jobs, postal workers in retail how does that get folded into the argument if i should be getting this earlier than others i think this is the honest debate and this is maybe where this biden task force can probably go and take a look at this this to me is the ethical allocation of a very valuable good here. I can absolutely sympathize with those who are in the front lines working and helping people who are feeling vulnerable and exposed, and they may not be Health Care Workers but theyre still out there. I can see why they also should be early people who should get acsets cess to this vaccine fortunately it looks like the technology is such that it can be scaled up very fast and pfizer has talked about 1. 3 billion doses so hopefully there will be a lot available, but in the short term, there will be a scarcity of product, because there will be a lot of people asking for it, and it has to be worked out in a very careful, very fair manner and also, the republican and democratic governors have to be involved in this process, because this is for society. Its not politics should not be entering this conversation. We can certainly hope that will be the case fred, thank you. Fred hassan joining us thank you very much now lets get to our etf spotlight, the Consumer Discretionary select spdr fund, the ticker is xly, up over 20 since january. Of course its got names like amazon, which continue to see increased demand touring the pandemic, amazon down a bit today in part because its being hit with antitrust charges from the eu over the use of merchant data on its platforms. European Commission Opening a second investigation into amazons ecommerce practices, that includes the role of their prime program that so Many Americans take advantage of. Squawk on the street will be ayitusnus. O mite st wh were committed to making college more accessibley, by making it more affordable, thats why were keeping our tuition the same through the year 2021. I knew snhu was the place for me when i saw how affordable it was. I ran to my husband with my computer and i said, look, we can do this. [narrator] take advantage of some of the lowest online tuition rates in the nation. Find your degree at snhu. Edu. Time for a news update with sue herera heres whats happening the justice departments top election crime investigator has resigned this after reading attorney general barrs new directive authorizing investigations into specific allegations of voter fraud, although so far it appears there has not been any evidence to support President Trumps assertion the election was stolen from him. Losses from crypto crime are down this year a new report says losses through the first ten months of the year totalled 1. 8 billion, thats down from 4. 5 billion in 2019 researchers say security measures have improved significantly. And the vaticans longawaited report on excardinal mccarrick found a series of bishops, cardinals and popes dismissed or downplayed reports of his sexual abuse. The report largely cleared pope francis but said Pope John Paul ii knew about misconduct allegations against mccarrick before naming him archbishop of washington, d. C. You are up to date thats the news update, carl see you again in an hour okay, sue, thank you very much when we come back, mcdonalds ceo Chris Kempczinski exclusively talking about the power of digital and drivethru, taking on chickfila, working with a new white house, and whether breakfast all day ever comes back, in a moment. E investing is hard. If youre concerned about the environment and climate change, how do you find companies that are driving the right outcomes . If you care about economic equality and social justice, which firms are addressing it in their workplaces and their communities . For nearly 40 years, calvert has delivered competitive returns by investing in Companies Making a difference because we see value in doing good. Talk to your Financial Advisor about investing responsibly with calvert. Mcon donalds rolling out a growth strategy, digital drivethrus, some big celebrity endorsements and chicken sandwiches and plantbased meat. We talked with the ceo yesterday. We asked him about the ongoing covid headwind and whether theres reason for optimism regarding vaccines we were certainly expecting and counting on having a vaccine that could be deployed in 2021, so the fact that pfizer was able to make this announcement was great. For us, it doesnt change the picture that much, because as weve worked through this strategy, weve always assumed that there would be an effective vaccine out there. For us, its been focused on what are the changes in Consumer Behavior that we think are going to be enduring and certainly one of the or a few of the enduring changes are about more of consumer interaction happening digitally, happening contactless, and also the prevalence of delivery so it doesnt affect our strategy as much, but it is a great announcement obviously for humanity as pfizer said, and certainly something we were counting on as we were developing a plan. How do you incorporate it into your planning, i mean, digital now, i think i saw onefifth of sales, which is amazing, you talk about delivery, you had some headlines about Indoor Dining maybe coming back if conditions are appropriate. Sounds like youre saying very little of that goes in reverse yes, i think as weve looked at our strategies all about being the leading omni channel restaurant brand in the world, and what that means is it means that however you want to experience mcdonalds, we will make sure that were able to do that that could be through the drivethru, through delivery, could be dinein, it could be take afternoon had way our whole plan is built around making sure that however you want to experience mcdonalds that were able to give you that experience in a great fast and safe way what youre referring to is the percent of the mix and that varies market to market, but i think for us to be focused on omni channel, it gives us the flexibility so whichever direction the customer goes, were going to be well set up for that we rarely, we dont like to talk about competitors too much with ceos but sounds like youre assembling your arsenal to take on chickfila we face a globally a lot of chicken competitors. Chickfila is one in the u. S. , internationally, you know, we face some significant chicken competitors there. For us, you know, our focus is about meeting the needs of customers and making sure that we do it in a way that is better than anybody else, and so when i talked to the team about and we talk about internally is lets play our game. Lets make sure that were delivering to the customers the very best products that we can do in a great experience and if we do that, were going to be successful no matter who were going up against so thats our focus. On marketing, it does sound like the strategy is going to change a bit i read that you said this morning the line between the corporate and the consumer facing brand of mcdonalds is blurring and you said were taking a stand on issues because if we dont, it will impact the way consumers view mcdonalds. What do you mean i think you guys at cnbc have been covering this, which is esg and the focus from investors on this whole topic, its because the consumer out there is much more attuned to the values of the company that im supporting, aligned with my values, and when the values of a company do not align with consumer values, those businesses, those brands tend to be punished, and so what we were talking about today is being very specific, very purposeful about where we believe mcdonalds can make a difference, thats namely in serving communities. We were very clear about the four areas from a global standpoint that were going to be spending our time and Energy Supporting communities particularly in times of need around local sourcing of food, around plan initiatives, certainly sustainability and around creating jobs and opportunities. So i think for all of us, when you have a brand like mcdonalds that is so wellknown and so beloved, in this day and age, to make sure everybody understands where we come down on these issues, i think thats the expectation and thats why i had the conversation and outlined the things i did finally on the election, over the weekend, chris, we heard from the Financial Services forum, the business roundtable, the u. S. Chamber of commerce, congratulating the president elect, including some individual congratulations from the likes of the ceo of ibm. What is mcdonalds assistance, how are you reading the election knowing the uncertain outcome and the president s stance on the transition well, this was an historic election and i was i think really exsilecited to see the turnout in the country, the fact that we had close to 140 Million People make their voice known in this election was important, and i think just speaks to the vitality of our democracy. Certainly we recognize and want to congratulate president elect biden and president elect or Vice President elect Kamala Harris for their win there i think for us now, the thing that we are looking for, one of our values here at mcdonalds is we talk about, we get better together, and our hope and expectation is that as weve now moved from the election that we can turn our sights toward working together and solving some big issues that we still as a country face, certainly coronavirus is one of those issues we need a stimulus measure i think that is very clear, and we have some longterm issues like climate change, how do we make sure jobs and education are still providing pathways to opportunity for everybody, so theres a lot of stuff to do, and that only can happen if we can come together as a nation, and certainly the election and the degree of enthusiasm for that makes me optimistic that we do have that opportunity do you see the Business Community playing defense at all on areas like Corporate Tax or maybe the minimum wage or some sort of workplace regulation things that had been done away with under the president that, given say a tied senate might be reversed i certainly think there were things that the Trump Administration proposed and supported that we found very helpful and that align with our beliefs. My expectation around things like for example joint employer that those will not change with the new administration i think those are important for Small Business owners, which are what our franchisees represent i dont think that will change the other topics minimum wage weve been pretty clear for a while now that we are not against a conversation on the minimum wage we work in 120 markets around the world with wage rates all over the place, everywhere from over 20 to less than that so were not opposed to a conversation around the minimum wage our focus has just been lets make sure that as changes are introduced that we do it in a logical way, that balances the needs of certainly people but also balances the needs of business owners. So i think again, if were all around the table and having these conversations, there are solutions to all of these issues pretty interesting conversation with Chris Kempczinski. David, we talked about day parts. Breakfast is high margin and big tell on employment levels in the country. Its done pretty well actually, they said in september and october, but no promises on returning to all day as for the shares, david, we talk about mcdonalds as a macro indicator. Its pretty much tracked the s p for the year they are only a couple points apart, 9 for the s p, 7. 5 for mcdonalds its getting a sense much where macro trends, economic trends, labor trends are going in the country. A lot of other things, esg he mentioned kindly that weve been following closely, carl, and its interesting to see it reflected in so many of these companies in terms of becoming more and more of a priority. Yes and kayla, in terms of the administration well see how many of these Companies Take up firmer stance. I saw the Hedge Fund Association yesterday issue congratulations to the president elect, the chamber of commerce sent a note out last night applauding them on their efforts to fight the covid pandemic, so well monitor the way in which Corporate America weighs in on the still uncertain election outcome yes, and interesting to hear kempczinski talk directly about that, and about being open to the conversation on minimum wage, because mcdonalds has found itself under attack by name from people like senator Bernie Sanders in the fight for 15 he said mcdonalds is giving billions of dollars to shareholders, it can afford to pay its employees more than the less than 10 an hour they were making so mcdonalds by name has frequently come under attack for that policy, and of course, the Biden Sanders Unity Task Force has backed a federal 15 minimum wage Important Note for mcdonalds, the bulk of that cost would be borne by the franchisees, not the corporate entity so im sure they would have something to say about that as well, but as he rightly points out, a lot will be decided on the economy and that policy after january 5th, when we know what the Georgia Senate picture will look like Steve Liesman is also joining us to talk about what a biden economy will look like under the forthcoming administration and steve, a lot of that does hang on the composition of the senate, but what do we know outside of that . Well first of all, all of that is correct, kayla good morning president elect joe biden inherits an economy recovering from the pandemic faster than expected and promising vaccine on the horizon but its still in a deep hole, has a long way to go and faces serious challenges from a resurgent pandemic. Biden could urng moge more lock and consumers possibly deciding to avoid high contact activities while the virus continues to rage on the immediate policy front a lame duck relief bill highly uncertain. The size of the bill depends on the makeup of congress as kayla suggested. Michael gapen of barclay says if republicans retain control of the senate, we expect it would most likely emphasize fiscal restraint. The more progressive parts of the democratic agenda seem far less likely. Heres a look at what could happen in tax policy, he Needs Congress for major changes but there is some scope for the executive branch to interpret the tax code itself on regulation congress is needed for major changes, but again, the executive can interpret things like enforcement, also bidens indicated hell reenter the Paris Climate Accord trade policy, we all learned from President Trump just how much authority a president has when it comes to trade authority. David bailene and steven witing write u. S. Foreign policy will enter a more predictable phase without escalating tariff threats. In contrast the fate of regulation for large firms remains wide firm. Less fiscal pressure could put pressure on the fed do what its doing for longer and questions what happens to several fed key emergency programs that expire after december one final thing its a good bet a Biden Administration will benefit from easy fed policy for at least the first couple years. Ill have a chance, guys, to talk about all this with mary daly from the San Francisco fed coming up at about 11 10 this morning on squawk alley. Carl steve, yes, we see a lot of headlines from fed officials this morning in the meantime, dow session high was plus 275. Weve lost almost all of that. Well keep an eye, dow is up 18 and our cnbc evolve summit is live today you can register at cnbcevents. Com evolve. Dont go away. Vaccine optimism aside, find out onwhy tradingnation. Cnbc. Com more squawk on the street coming up. Well come back to squawk on the street. Im dominic chu. Stocks at session lows this morning with the s p weighed down by the two biggest sectors out there, technology and Communications Services among them but one of the relative bright spots is the industrial sector, 1 gain so far, and within that group, we see that many of its row space and defense related stocks are extending their gains from yesterday. You got names like halmet, formerly known rconic and boeing up 20 both stocks price target boosted at jpmorgan chase. Aerospace names in general down for the year as the industry grapples with the pandemics impact on demand but keep an eye on those defense and Aerospace Stocks i will send it back over to you, david faber, here on squawk on the street. As we head to break, look at shares of air lease, the stock is lower today its down more than 25 year to date, and consumers continue to avoid travel during the pandemic the ceo will join us after the break to discuss the quarter and his outlook for the sector stay with us at fidelity, you get personalized Wealth Planning and unmatched overall value. Together with a dedicated advisor, youll make a plan that can adjust as your life changes, with access to taxsmart investing strategies that help you keep more of what you earn. And with brokerage accounts, you see what youll pay before you trade. Personalized advice. Unmatched value. At fidelity, you can have both. More than this welcome back lets go to phil lebeau with a cnbc exclusive for us. Thank you, john pluger, ceo of air lease corp. , coming off of Third Quarter earnings. Well talk about that in a little bit, john first give me perspective in terms of what youre hearing back from airline ceos over the next six months. How rough is it going to be before they hope to see improvement as a vaccine potentially gets out there yes well certainly most airline ceo customers of ours are relating a difficult picture for the next six months having said that, the domestic recovery in many areas is looming strong from china to russia, even recently in brazil, mexico, and the United States a couple of ceos told us in the past week that the christmas bookings again for domestic travel, the Holiday Season travel seems to be up, but certainly over the next couple of quarters despite the great news on the vaccine yesterday, which i think has bolstered a lot of confidence on the airline side, hopefully the consumer side, they see it as a difficult next couple quarters typically for airlines in the northern hemisphere, the winter season is a lower season for traffic anyway were going to watch carefully it still looks challenging for the next couple of quarters. John, you posted Third Quarter earnings of 1. 02 per share. Down 24 bhut y but when you look at your customers, nearly all of the customers asked for some form of rent deferral or rent payment being put off. When does that bottom out . When do you have your customers saying, okay, were ready to make our payments. Does that happen six months from now . A year from now . When do you see that happening actually, we think it bottomed out several months ago. Theres been no increase in the percentage of our customers, about 58 , 59 that asked for a deferral in the deferrals we granted today, 30 have been repaid. So the rate of repayments far exceeds the rate of increase deferral request for further request. So so far, looking to day, the peak of the referral requests is a couple months behind us. Well be hearing from the faa likely in the next couple weeks. Ungrounding the 737 max. That is the expectation. When you talk with boeing, when you look at the airplanes that you have in your order book, are you ready to say okay, lets start bringing in more maxes here or do you look at this and say its a challenging environment. And my customers are not clambering for this plane yet . Actually, we are ready to take the maxes we do have great confidence that the airplane is going through very rigorous analysis and scrutiny so were ready to move forward so we said in our call yesterday we think were going to take the first delivery of a max to our customer probably some time in early january. Built we but were ready i think the confidence level in the airplane is significantly higher and so our customers for the maxes by and large are ready to take them. John, how much of a discount, if somebody wanted to go out to boeing or air bus and they say, look, im interested in placing an order for new aircraft, obviously these never sell at the list price for either of these manufacturers. But how much of a discount relative to historically speaking are you able to get right now on a new aircraft if you place a large order . Phil, we dont disclose that information. Lets just say weve been doing this for a long time weve been buying and selling airplanes, leasing them for decades. So were happy with our pricing levels probably would not be fair to say how much of a discount im getting. Lets just say in everything that we have going forward, were very happy with our pricing level. Weve been in cooperative discussions both with boeing and air bus in campaigns so were happy with our pricing where it sits. Last question, john what area of the world right now in terms of air travel worries you the most certainly europe right now with the resurgence of the covid19 virus, looks like that traffic is tempering so very, very closeful watchful eye on europe. China and even now parts of south america and including mexico, brazil, even the United States is recovering but we need to watch the resurgence because the travel restrictions country to country are the single biggest impediment to recovery today john pluger, thank you very much for joining us today. Guys, you heard it there from john he wont tell us how much of a discount hes getting, but you can bet if youre in the fwoiz buy a new aircraft right now this is the time to place the call to boeing and airbus. Phil, thank you phil lebeau with that interview for us take a look at shares of alibaba this morning of course, we watched it last week off in part because of the postponement which could be a long postponement of the financial ipo. Remember bob owns 33 . This is not that this is carl and cayla, articles overnight seemingly involving increased regulation of the inthe net i ininti internet by chinese authorities. Can you go down the Chinese Internet Companies the largest here, ten cent, does not. And you can see, guys, theyre all getting hit substantially. Alley b ollie b alibaba, 11 11, they have singles day, enormous sales. But the stock right now suffering a great deal as revolt again and carl well try find more here. But in articles in terms of increased regulation of the internet okay. Peloton we didnt get to today stock lower big reversal on the vaccine news beyonce signed a multiyear content partnership that will involve various forms of class curation she said shes been in a statement a peloton member for several years. And by the way, bared today names the stock one of the positive fresh picks, david. They said that compelling buying opportunity and that the model benefits in their view are irreversible because the acceleration and the Business Model is happening even as membership at gyms has been recovering so thats the bullish case out of bared on peloton. We saw zoom earlier also down around 8 . Netflix though, interestingly, theyre benefiting today after or i should say up to day after getting creamed yesterday. Again, it was sort of the very simple buy the out of home plays and sell the ones that benefited so much. Peloton, to carls point, up 309 this year well, the fact that, you know, you had the rotation out of some of those out of home plays combined with the expectation that netflix is going to be raising prices, those two issues dove tailing. You know, it is interesting, carl, to see peloton selling off with such a blockbuster announcement its akin to the oprah Weight Watchers partnership on the flip side of the coin there. Yeah, i wanted to come with the fan in front of you that blows your hair the way that beyonces hair always looks so perfectly but i think that will be that will be quite an amazing experience despite the stock selloff for whoefrn ver is ableo get on the rides carl. Indeed. In the meantime, biggest two day slide now for the nasdaq since september 4th and 8th, right around Labor Day Weekend well take a break here. It will be a good hour of squawk alley when we return. An exclusive with n cisafransco fed president mary daly which you do not want to miss. Dont go away. 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. Good morning, its 11 00 a. M. At eli lilly headquarters in indianapolis. It its 11 00 a. M. On wall street and squawk alley is live