Roll out some responses to Chinas Hong Kong law as the showdown with twitter gets escalated around the minneapolis protests oil near 33, the focus is squarely on twitter and this rule violation that the president s account got slapped with, and then the white house account, the official white house account retweets were all kind of confused, as marc benioff, who is against this obscure regulation that gives these companies an exception todo this, many are confused it seems President Trump wants to create his own enemy with if you start regulating these Companies Rather than having the exception, theyre always going to have to put a counter to what President Trump wants. I think what he may not understand is free speech is nasty. What he had until this was a great run of things. Its going to make it tough for him to be aggressive on twitter. He doesnt have press conferences that work because of all the displeasure he had with regular reporters. Hes disintermediating himself from the public. If he becomes regulated, if its journalism, its a nightmare for him. Yes, if, in fact, he is held to a standard of truth and fact, that could be somewhat difficult. Now, theres a lot of interpretation that goes on in that theres sort of two separate things going on here the executive order from yesterday, people trying to understand and interpret what is behind that, and what that would allow for. And then theres still the consternation that you have had for quite some time that comes from Mark Zuckerbergs interview yesterday with andrew sorkin, just in general the idea that facebook continues to say its not our issue as to whether you lie on the platform, whether you spread lies. Im A Barron Sacha Cohen fan, when he gave his speech about how facebook would take be willing to take advertisers from ge gerbils, mentioning world war ii, but facebook agrees with President Trump that anything goes anything goes is expensive can you imagine the thousands of pages, every second produced on facebook that someone would have to sort through them like they have to do with the New York Times its almost impossible i get the dilemma. When we look at this situation, theres 1 out of 4 people unemployed we may run out of stimulus, were debating jack dorsey putting a caveat to the president. It almost seems surreal, doesnt it youre suggesting its another exercise in distraction . I dont know if its a distraction or a fit or temper we have a major problem on our hands. We have a Health Care Problem thats turned into a financial problem. Lets get people jobs, thats what i would be focused on its like 1932 33 if president roosevelt focused on the fact that someone criticized him for something he did as he was secretary of navy and hes now giving money to the navy we have to focus on this miller tayback is out with a comment. We will talk about twitter, its a public company, it gets attention. The Hong Kong Response that we expect from the white house today they argue is much more important. The president moments ago tweeted one word, china. They did vow a response to this Hong Kong Security bill. Theres a general in china who suggested they could attack taiwan in a last ditch effort to keep them from gutting full independence and then jpmorgan last night saying theyre dialing back their positive outlook on stocks because a full breakdown of u. S. china relations would justify Equities Trading drastically lower. When Peter Navarro was on last, i asked becky to ask him about taiwan he was not willing to go there thats the hottest of hot buttons. This 26 Million People, they only had 7 deaths of covid they got some things down. Yeah, chinas no side show we have the best stocks, they have been the technology stocks. Yes, facebook has no china, alphabet has no china, netflix has no china china has not let these companies in, they have mimicking companies. China is big the president is taking us to a 1947 soviet versus the United States posture its about containing china, containing china militarily. Weve been cold warriors again to ignore that is to ignore history. At the time in 1947, russia was much more powerful than they are now. But yeah, here we are. Back in an era where waiting for the berlin wall, the equivalent we have a wall that china built but yeah, im concerned. Im concerned about unemployment at the same time having a big war with china ive been the least on air favorite of the prc. I dont know you have to solve the employment problem first. A lot of people looking for jobs having a deepened economic war with china certainly not going to do that the unexpected consequences of a pandemic, i think we will continue to see. If i told you at the beginning of this that wearing facings would face masks would be a part season issue and that it would deepen the hostility between china and the u. S. , well hear from jay powell later this morning in terms of the economic consequences that he continues to monitor as a result of the pandemic china has to be at the top, i would think, of at least risks yesterday the market was flying it looked like a great day as we got closer to the dead lynn whdeadline when the president said it would be big, when were like what if he does something huge and china says apple, were down youre doing huawei, were doing this or that you mentioned the mask this is important. People have to read the costco Conference Call. They decided to go all mask. If you come in, you have to have a mask if you work there, you have to have a mask. Its protection for the associates and customers they think most people will want to shop at a place with wide aisles and masks because they dont want to get sick when they go to the store. I think costco is one of the most intelligent companies in the word thats where this is going they only have one store in china but they can put up many people have to recognize the 52 Million People who are club members want to see masks on people its as divisive as ive seen. Just divisive. I wear a mask. Im aware you wear a mask as i did when i was in home depot the other day. One gentleman was not, which was interesting. I dont know that home depot would be happy with that yeah. I was surprised but everyone else was Wearing Masks in this part of the country, thats more the rule than the exception. Parts of the country that have reopened and have not seen a significant amount of the virus, carl, are taking a different approach thats sort of where were looking to see how things go as well as our economies come back to almost sort of full levels, not quite. Yeah putting the reopening headlines in perspective we had disney. U. S. Virgin islands will start reopening for tourism. Southwest will start renewing flights to mexico. English premier league in europe apple stores Texas Governor abbott saying professional sports spectators could return talking about dallas cowboy stadium, maybe 25 capacity, but davids right. The states that have had loosening of restrictions just by about any measure have not seen the dramatic escalation in cases that we feared we have a stock, draftkings had them on last week. Draft kings is a measure of how much betting there can be. You need sports to bet on. As you see that stock go up, thats a lead indicator that well have regular seasons but the big issue is what happens to the fans and who we could have a, b, c classes are they going to give us our money back i already paid for my season tickets for the eagles draft kings is a sign of reopening. Theres two countries right now. A part of the country where i cant have a table and chair in front of my bar. Then another part of the country where theyre packed and this is just i cannot believe the parts of the country, how different they are. But we all there are many people who were skeptical if they open things up, other than wisconsin im not seeing a noticeable tick up we have to be aware of that. But also be aware that 48 of the people who died were in nursing homes. Yeah. Heres a hopeful thought its possible that if all goes well we could have basketball, baseball, hockey and football all still going at the same time if youre a knicks fan, a jets fan and a mets fan, why is that hope for you . Whats hopeful if youre a mets fan was there much hope in the first place . If youre a jets fan, the season hasnt started net. If youre a knicks fan, understood understood no hope. You may not have hope for years. I like to give you a heads up you know okay. Yeah okay. Lets take a quick break here. We have to get our way through williamssonoma, jim mentioned costco, nordstrom and Jerome Powell coming up with allen blinder, thats at 11 00 a. M. Eastern time stay tuned for that. Where will you go first . Will it be familiar streets . Or perhaps unknown roads . Wherever you may go, lexus will welcome you back with exceptional offers. Find a lexus for every road at lexus. Com. No payments for up to 90 days on all 2020 lexus models. Experience amazing at your lexus dealer. Thanks for sharing your savage moves, and especially your awkward ones. Thanks for sharing your cute kids. And your adorable pets. Now its our turn to share. With the geico giveback. A 15 credit on car and motorcycle policies for both current and new customers. And because were committed for the long haul, the credit lasts your full policy term. So thanks again. One good share deserves another. The face of retail fundamentally changing in a discontinue woous manner and mo more and more to online kind of ecommerce, really accelerating two to five years from the secular trend it was already on. That is dan schulman on mad money last night talking about the fundamental shift in ecommerce jim, its being reflected in names like williamssonoma today. What a great quarter. You always try to think where did they get those home offices that look so nice . It turns out a lot of them are not going to williamssonoma but williamssonoma. Com why . All the stores were closed for half the quarter she still delivered. Pottery barn children did quite well thats just a person who is a visionary. She has seen a lot of this coming but it accelerated because of covid19. Ulta, they have got both terrific club and a dotcom its saving them nordstrom talking much more about their dotcom that is going to keep a bid underneath that stock. If you dont have one. If youre not omni channel youre off your game paypal fantastic dan schulman had his best day ever may 1st were in a weird moment where im surrounded by companies with a great omni channel or bad. The one that is most positive that no one talks about is costco, which had very good numbers but people are concerned that they spent so much money on converting their place to a less to a place that defends against covid. I like costco here some of these retailers are so clever you have to hand it to them. They adjusted quickly. Yeah. There is a thought that companies are making investments now or doing those things, even bigger things if theyre in an advantage position they have the cover to do it they can go do the Big Investments that they might have held off on for fear that people were too that investors were focused on every penny of eps. This gives them more leeway. The pandemic, the willingness of investors to take whatever they get. This is a great point salesforcec benioff, he was tele this is a moment he said well spend an crush everybody. This is our chance because theres such disarray. A lot of people are disappointed in the guidance he gave. He took a billion off what he thought he would make. Marc is not going to charge customers as much as he would have, this is a share take moment and hes taking no prisoners. David, you have to look into the at t deal. Hes saying at t is being run by touch point, theyre integrating and its all salesforce. They wont clean up initially. I like someone who says this is 2008 09, and it is my chance to take advantage of the disarray of everybody else but i wont make as much money the next quarter. Thats intelligent it will hurt him because of the shorttermism on wall treat. Th street. They want it now if you were close to it, carl asked me yesterday, he said theyre not that good. Theyre forbearing paypal is forbearing, too. As you pointed out, the company did guide what is thought to be conservatively for the back end of the year lets listen i am actually incredibly optimistic and encouraged because my belief very strongly is that if you can navigate through the last 90 days, you can navigate through anything. This was a quarter of trust. This is where we had our values on our sleeve. Values on our sleeve. There is a concern or question as to do they see a second wave . Is that part of their back end concern . Is that why they guided so conservatively mark is convinced unless you do contact trace, unless you have a plan for the reawakening that includes the notion that we could have a w recovery, that the disease is not going to go away, youre going to get hurt he has said by the way, Rhode Islands governor was integral in setting this up with marc there are a lot of states going his way. I think that he is becoming a a closet government about how to reopen work. Com, if people want to know more about that. Again, its a longterm thing. David, longterm, its out of fashion. I like it. Well take another quick break here a lot to get to as we await powell at 11 00 a. M. Well talk about month end here. Watch for signs of reallocation. Back in a minute usaa was made for right now. And right now, is a time for action. So, for a second time were giving members a credit on their auto insurance. Because its the right thing to do. Were also giving Payment Relief options to eligible members so they can take care of things like groceries before they worry about their insurance or credit card bills. Right now is the time to take care of what matters most. Like weve done together, so many times before. Discover all the ways were helping members at usaa. Com coronavirus discover all the ways were helping members at mercedesbenz, nothing service will do. Class thats why were expanding your range of choices. Many dealers now offer optional pickup delivery and athome maintenance, as well as Online Shopping with Home Delivery and special finance arrangements. So, whether you visit your local dealer or prefer the comfort of home you can count on the very highest level of service. Get 0 apr financing up to 36 months on most models, and 90day firstpayment deferral on any model. Truly transformative sleep. So, no more tossing and turning. Because only tempurpedic adapts and responds to your body. So you get deep, uninterrupted sleep. During the tempurpedic summer of sleep, all tempurpedic mattresses are on sale coming off the s ps first decline in four sessions futures are weak again on this final day of the month as we await powell and the president on china and maybe more. Werba ia mee ckn mont. More important than ever. Togeths at t is committed to keeping you connected. So you can keep your patients cared for. Your customers served. Your students inspired. And your employees closer than ever. Our network is resilient. Our people are strong. Our job is to keep your business connected. Its what weve always done. Its what well always do. Birthdays arent cancelled. Hope isnt quarantined. First words arent delayed. Caring isnt postponed. Courage isnt on hold. And love hasnt stopped. U. S. Bank thanks you for keeping all of our spirits strong. Weve donated millions to those in need and are always here for our customers and employees. Welcome back lets get in a mad dash. Not a good morning for Canopy Growth shares. No, theres been a rally in the cannabis stocks. A lot of them are keying off of this one best capitalized and it reported a number that was sub optimal, including revenues down 13 , primarily driven by lower canadian recreational revenue in other words, a lack of demand they have a ready to drink beverage that sounds intriguing, but its not selling well. I find this is the one that everyone keys off of so youre going to see the whole group come down. All i can tell you is that this stock ran into the quarter and no one could figure out why other than the fact they felt maybe constellation, which owns a big piece of it and the ceo of canopy comes from constellation, there was Something Big happening. There was, a slowing in demand i think it took some people by surprise jim, it just occurs to me, given how many states will be under significant pressure in terms of their budgets because of short falls and revenues, any chance we get a wave of legalization in the states yeah. Not to mention legalization of gambling too . Anything that would raise revenues now you have to assume states are looking at. Totally on board. Think it can happen. There are Profitable Companies in this country already. Yes. I think its i would put this there, theres enough illegal trade where you want to get the taxes. Soda taxes, plastic bag taxes, anything the shortfalls will be humongous. Speaker pelosi is worried about the states the republicans want to hold off. But that is going to make it so its a state scramble. Some states like illinois have been good at profiting, massachusetts not so good. You have to have your game on. Have you have to have stores ready and not regulated by municipalities because they get in the way david . I thought carl might chime in there. I was thinking exactly what us were thinking, especially given some of the comments from Governor Cuomo new york had some close brushes with getting this past the state legislature, same with new jersey maybe this is the thing that gets that over the hill. If youre cuomo, you are looking for any opportunity. New york state and new york city will be enormous, and some other states, too, some red states, not pure blue. What is the likelihood that either the 3 trillion bill comes out of the house and advances in the senate or you get something that does aid the states you have to concern yourself with the possibility of significant municipal layoffs as the states struggle to balance their budgets. Its all in secretary mnuchins plate. He seems to have indicated no real interest now. Thats the biggest worry thats where the v falls through the floor. Its go the to happen. Theres numbers that are unfathomable here. Were tweeting theres the opening bell. Well watch closely here on the broad market, what a run weve had in the month of may. Now youre at the end of the month. To what degree will we watchllig into fixed income . Theres some great opportunities in fixed income. You can get some with the fed backing them up. Its really attractive a lot of people are switching because the income is so great im glad you mentioned that. Theres tremendous opportunities. Then the recession stocks have decent yields. How far can you take Carnival Cruise you already have a double. Royal caribbean. Some of these stocks have doubled, doubled, doubled. We start thinking wow, how much is the consumer really ready to book a cruise in nearterm yes, next year the prices will be unbelievable. I saw some prices on norwegian cruise that would intrigue david. We could go to alaska together, we could be in the haven section, that beautiful solarium have you seen that no. If i get those antibodies, first thing im doing is going to italy. You can fly to milan. Take the Arab Emirates flight at 10 00 tonight. Youll be there tomorrow morning at 9 30. Youll have the time of your lif life im waiting you have herd immunity in that airport carl, you mentioned or jim mentioned, marco from jpmorgan who surprisingly, because he has not been particularly bearish, put out a note getting attention and david kostin as well mentions the complete breakdown of supply chains, International Trade primarily between u. S. And china as a real risk for taking equities lower and then david kostin, who i know, carl, you follow closely as well also out with less than positive comments this morning, saying how weve reached his targets for year end thats true though on the flip side this week, guys, you had bank of america looking at positioning, jim, which sometimes is the only thing people are curious about and they point out Asset Managers are not very long, leverage funds are the biggest net short s p since 2016 and if we get any kind of dry powder in money markets. If you get a summer rally, the catch up trade will be something to work. If secretary mnuchin were to call on this line right now which is highly unlikely, saying we have to come back with a stek par second part then i think the move is justified. We need to keep money in peoples mock k pockets. Zebra technologies came on and said my business is good, and then went up 80 straight points. He is moving out of china going to malaysia, vietnam andtrying to diversify hp was not able to do that and got nailed dell took a huge amount of share away from hp cisco did manage their supply chain. Supply chain is what you have to ask. David always wants to ask capex. The next thing you ask is how much have you moved out of china . Those who moved a lot out of china are having betterthanexpected numbers because theyre avoiding the tariffs. We didnt talk hpq yesterday after you had that ceo on the night before it was down sharply. Not doing much of anything today. Do you think part of it was share taking from dell speaking of dell, the ceo will join us later. Michael dell crushed it, vmware crushed it. The dell quarter, a lot part of the dell was not that great. What mattered is they went all in office, the home office, and they owned it. It was michael dell being his competitive best thats what we know about michael. Michael is a nice man. But when he decides to take share, he kills it just magnificent he took it out of a lot of different people that dell deserves to trade like it is. Good quarter i urge people to look at that quarter. When i say urge people to look at it, when youre over the weekend, when youre trying to figure out what to do saturday night because theres nothing to do, the dell quarter, the costco quarter, these are monumental. Theres nothing to do during the pandemic no, there is theres some the ulta Conference Call. I recommend that to you on saturday i cant wait. Carl, i dont know about you ive been keeping those Conference Call transcripts aside so i can enjoy them on saturday i dont want to get too them too quickly. I want to look forward to it its better than netflix. You know what . It goes on and on and on in the end they dont get the narcos guys win in these Conference Calls who won in the ulta Conference Call . David, their omni channel was fabulous it saved them. Omni channel is when you can shop pretty much anywhere. I know you dont how do you buy those clothes . I dont do anything i dont. They just get delivered to me. Tjx has an okay online. Burlington will come back with a vengeance. The dollar tree you guys had philbin. David, is your dollar tree as good as mine i got these these were part of a package you can get five for 5 if you dont like them big deal try doing that with raybans im not going to. Guys, we have been tracking this performancebased payout for elon musk at tesla it does seem now according to the proxy statement that elon that earned the first tranche, this is for options that would allow for the purchase of 1. 7 million shares at 350, worth just shy of 800 million. So, this is for keeping the companys market cap at 100 billion or more on a 30day and sixmonth moving average stock is up 93 for the year. Its incredible, the shorts were coming in saying, jimmy chill, have you seen theres actually i think theres discounts. Theres discounts. I was saying, oh, stop bothering me its elon musk its technology. Dont hit me with these discounts. And obviously others agree it continues to go higher. Only 11 short would have thought there was more short particularly because, as you said, there are maximum short positions for a lot of companies. This is a china comeback story people have to start thinking of it like that everyone has noted in their quarters that china has been the star tesla, its going to be the star i went to a lamborghini factor i dropped a tic tac, you can eat it off the floor tesla will crush that highend market he deserves everything we have to watch the launch this weekend, right is there any risk that he elon is asked to choose in terms of allegiance between the United States and china wow whoo. Geez. I dont know wow. I guess the president obviously could tweet that would that dorsey wouldnt have a response if he tweeted that thats a great one thats a puzzle. Its like a jumble yeah. I have to work on that carl, i think at this point we dont know when the president is expected to speak today as we have been led to believe with the press conference on china. You mentioned the oneword tweet, china but thats all we got so far theres going to be a lot of focus on that when he speaks because of the tone, tenor of it will be important in terms of trying to gauge how bad things are. We dont know when the press conference is. Its up in the air i think a lot of people trying to possession short ahead of it so when he says whatever he is going to say i continue to think its the major story other than the fact that one out of every four people are unemployed in the country. We dont want a replay of a hoover economics picture you never want to take your cue from hoovers economic game plan suboptimal personal income was up a shocking amount. One off is what many are saying. Yeah. I think through santelli and ste steve, it threw them for a loop. 89. 6 monthonmonth jump from the governor spending down 13. 6 and we saw consumption yesterday. All your concerns about the consumer are well founded. Im sure powell will be asked about that i dont know if you saw this times story that google is rescinding offers to several thousand who agreed to work there as temporary or contract workers. So we tend to pay a lot of attention to googles actions given their visibility and familiarity with things like pandemics, things that go viral. This is the opposite of what some of the marc benioff has been pledging to keep everybody. A lot of this is temporary the rescinding is something we dont talk enough about. I think theres going to it be a wave of unemployed when school is over. Typically they would get jobs, it reminds me that you need ccc, conservation corp. People to plant trees. We have to start thinking new deal here. The new deal playbook has to be dusted off not the twitter playbook but the new deal playbook. Its time to go over what worked with fdr i know that sounds dire. Can we accept the fact that its unacceptable for a great nation to have 1 in 4 unemployed . This is a great nation lets hope that that number changes for the better in the coming quarters. Quick break here a few minutes into the trade on this final day of may. More with powell on deck in about an hour and 20 minutes dont go away. Ever since weve gone mobile on the now platform, somethings gotten into the office. I hear you. Feels like theres no barriers between departments now. Servicenow. The smarter way to workflow. Its a thirteenhour flight, tfifteen minutes until we board. Oh yeah, we gotta take off. You downloaded the Td Ameritrade mobile app so you can quickly check the markets . Yeah, actually im taking one last look at my dashboard before we board. Excellent. And you have thinkorswim mobile so i can finish analyzing the risk on this position. You two are all set. Have a great flight. Thanks. Well see ya. Ah, theyre getting so smart. Choose the app that fits your investing style. I am totally blind. And non24 can make me show up too early. Or too late. Or make me feel like im not really there. Talk to your doctor, and call 8442342424. Another big day of data, well get the chicago pmi right now. Lets get to Rick Santelli were expecting our main read on chicago pmi last week excuse me, last month, 35. 4, the weakest since 09. This one lower than that 32. 3 we are expecting the number higher this is definitely nothing good to look at when was the last time we were at these levels . You have to go back to march of 09. Were covering that whole thing. To give you context, 20. 7 from june of 80 was the alltime low on the series going back to 1967 but well continue to watch the pmis and ultimately university of michigan coming up to see if we turned the corner carl, jim, david, back to you. Rick, well see you in a few moments. Lets get over to meg tirrell who has a special guest. Good morning, meg. Good morning, carl. The Worlds Largest Cancer Research conference kicks off today, and this year it is virtual. Were joined by Bristolmyers Squibb ceo, Giovanni Caforio thank you for being with us. Its a different format for the meeting this year. All of the information just being posted online. Help us sort through, from your perspective, what is the most important update from bristolmyers at this meeting . Meg, thanks for having me it is an important conference. It is my 15th, and the first time we have had a virtual meeting. Its really important to have this meeting we know that the Oncology Community has been impacted significantly by the covid pandemic we know that over 50 of patients have challenges accessing health care today. So bringing together scientists and researchers to continue to advance the science that patients need at this time is really important for us, its an important meeting because were showing the breadth and depth of our pipeline were presenting a lot of really exciting data. Immunooncology with lung cancer, cell therapy, an area where are planning on being the leader we have important data presentations there. And then a lot about the future of our pipeline and early releases for potential advancements i want to ask you about the lung cancer space. Just a few days ago the fda approved your drug, optivo with limited chemotherapy in a certain setting with small cell lung cancer. How would you say the data positioned you in the race against Mercks Keytruda first of all, whats important to remember is patients with lung cancer need new treatment options. Theres still a need in a competitive space, but physicians are looking for new options and patients need new treatment options. Im pleased with the fact we received two approvals in less than two weeks remember that this combination has already shown the ability to prolong survival in four tumor types, and now in firstline lung cancer. Well present the data and the issue here is really the opportunity to provide longterm survival to patients what we are hearing is that there are many patients that want a chemotherapyfree option which is possible, and now the opportunity of limited cycles of chemotherapy i think we have an Important Role to play in lung cancer. I want to talk about eliquis. A few years ago when my father was dying, the doctor said we have this new drug, eliquis, its so much better than others, we think it could give your father a few more years. I keep seeing it i never hear about how important this drug is could you have 100 of this market at one point . Its one of our most important medicines. We are already the leader globally in terms of anticoagulants. Theres a significant opportunity to continue to grow. Some patients are still receiving warfarin and many patients have not been treated or diagnosed yet eliquis is already the leading medicine in the world in this field. Full page ad ive been seeing bristol previous to you made some claims including full page ads and also tv ads that brought some criticism as overstating what it could do when i see the full page ads, i get concerned some people will get too much hope. They do you do those why are they necessary first, let me say were making great progress. It was ten years ago we presented the very first data on oncology, and we were discussing increasing survival by a few months ten years later were discussing the potential for longterm survival we are very focussed on educating patients on the potential options available to them we believe it is important, and clearly, we work with physicians and Patient Advocacy programs to make sure the value of our medicines are understood you will notice in our ads, we always thank patients and researchers thapar tis pate in our research, and we believe its important to continue to focus on education doctor, its david faber. My question is specific to your plans to resubmit an application for a drug after the fda filed a refusal to file letter can you update us . Its been a couple weeks since you last commented on that do you still expect youll resubmit by the end of july at the latest yes let me first say i am confident in the clinical profile of the drug, and well present updating data which shows the transformative potential of the medicine the fda asked for more information. We dont need to conduct any new trial to address the information. We are working on submitting no later than july, and were very much on track. And you are actually, i think, your chief medical officer indicated the issues had to do with chemistry can you give us a sense as to what the fdas problem was its really about the level of information required by the fda. It has to do with parts of the application. It has to do with the manufacturing process. It is not about clinical data. And it really is about the level of detail that the fda wants us to include in the submission so its data we have we are working on it, and were going to be resubmitting before the end of july. I want to ask about the situation with covid19. One of the things the pandemic has really exposed is the reliance of the supply chain for medicines on china and india now there is such a push in the United States to have medicines sourced and made in america. How would this effect Bristol Meyers is it possible to make your drugs in america in a relatively short period of time and change the supply chains . Its critical to be thoughtful about this. From our perspective, our supply chain is in the United States and europe, and throughout the pandemic weve actually never really stopped working weve continued to deliver medicines to patients without disrupti disruption from our perspective, weve worked really well through the challenges of the pandemic weve continued to supply medicines with no interruption i want to every time youre on, i ask about cel gene. Its such an exciting company. We only end up talking about 6 price increase, i know, but im more interested in the ancillaries. You know, the performance continues to be very strong. We had a great First Quarter as a company and it was part of the growth of our business we received recently a new indication, approval for a new indication in lymphoma its the backbone of therapy in multiple milo ma were working on developing the next generation of medicines that will continue to improve the outcomes for patients. Its an important part of our company. And things are going well. Theyre going well across the board with celgene and its progressing very well im even more optimistic about our company than i was before we closed, and ive seen rapid progress of integration over the last few weeks i want to as my last question, i want to bring it back to the industrys role in this pandemic and, of course, you being the chairman of the Pharma Industry group. There is, of course, a major antivaccine push. How is the industry approaching that as a risk to if it does bring a successful vaccine forward, this pandemic, to people taking it we are continuing on focusing on advancing science the level of progress im seeing across the industry working with the fda, nih, is absolutely unprecedented. We are stepping out to the challenge of solving this Health Crisis for us as a company thats 100 focussed on innovation and transformative medicines. Were continuing to work on advancing our pipeline, which is the strongest its ever been the companys really well positioned today its well positioned for the future i think we have a real opportunity as a leader in health care to continue to play an Important Role going forward. All right thank you for joining us today thank you meg, thank you for that. Well take a quick break here. Market holding 3025. But financials, energy, industrials all lag with the declines of more than 1 ter my , i wondered. Could another come around the corner. Or could it play out differently . I wanted to help protect myself. My doctor recommended eliquis. Eliquis is proven to treat and help prevent another dvt or pe blood clot. Almost 98 of patients on eliquis didnt experience another. And eliquis has significantly less major bleeding than the standard treatment. Eliquis is fdaapproved and has both. Dont stop eliquis unless your doctor tells you to. Eliquis can cause serious and in rare cases fatal bleeding. Dont take eliquis if you have an artificial heart valve or abnormal bleeding. If you had a spinal injection while on eliquis call your doctor right away if you have tingling numbness or muscle weakness. While taking eliquis, you may bruise more easily. And it may take longer than usual for bleeding to stop. Seek immediate medical care for sudden signs of bleeding like unusual bruising. Eliquis may increase your bleeding risk if you take certain medicines. Tell your doctor about all planed medical or dental procedures. Whats around the corner could be your moment. Ask your doctor about eliquis. But when allergies and congestion strike, take allegrad. A nondrowsy antihistamine plus a powerful decongestant. So you can always say yes to putting your true colors on display. Say yes to allegrad. One more mad money before we get to recharge we have fastly. We have elf. Theres a proxy fight im sure youre following and zscaler they help people to work at home these are all companies that are fast growers or in the news. Its these weeks are amazing. Yeah. This one was only four days. Certainly felt like more than that, jim. Thanks good weekend well see you monday and tonight. Conference calls are every bit as good as netflix every bit as good. Yes jim, well see you tonight welcome back to squawk on the street. Im Carl Quintanilla with david faber, sara eisen coming to you live from separate locations big day for data Consumer Sentiment right now lets get to rick. Yes university of michigan, our may final read 73. 7 replaces it with 72. 3 72. 3 of course, these numbers are basically the weakest going back to 2011, and lets go through some of the internals. Current conditions, move from 83 to 8 2. 3 on expectations, 67. 7, down to 65. 9 on the inflation outlooks, 3. 2 on the oneyear. Five to tenyear, 5. 2 theyre hotter than the last looks. It makes me think a second that ultimately it seems as though deflation has been the talk. But theres obviously a whiff of inflation in various areas of the economy and potentially down the road something to Pay Attention to. Sara back to you. The taking on social media a day after signing the executive order with twitter slapping a warning label on one of his tweets we have more reporter good morning. That battle between trump and twitter escalated overnight and into the Morning Hours after the executive order was signed by the president. Twitter took action flagging another one of the president s tweets this one about george floyd and the protests in minneapolis. Twitter hid the tweet saying the president s comments violated the rules on glorifying violence but its in the Public Interest to remain on the platform though with limited visibility. This morning the president hit back at twitter claiming it has a double standard and calling for Tech Companies to be strict on their special liability protections. He wrote, twitter is going nothing at all about the lies and propaganda being put out by china or the radical Left Democratic Party theyve targeted the president of the United States and conservatives. Section 230 should be revoked by congress until then, it will be regulated. In addition to asking the fcc to write new rules around content moderation that executive order also directs the doj to draft proposed legislation to give to Congress Also the white house says its looking into potential litigation but while all of that is going on, trump and twitter are still engaged in a game of whack a mole the official white house twitter account reposted that flagged tweet from the president , clearly they were daring twitter to make yet another move and carl, the company has now hidden that tweet as well back over to you truly remarkable, elon. Probably the first time weve seen anything like that. Well talk about it before ylan, thank you. Most facebook and google were quick to respond to the executive order from yesterday facebook said it will restrict more speech online, not less google saying the move would hurt americas economy and the Global Leadership on internet freedom. We are joined by an analyst. Heather, happy friday. Its great to see you again. Great to see you, carl. Thank you. Its hard to have any discussion without directly addressing the showdown between dorsey and the president. How much of this is truly profound for your coverage, if much well, look, it is always something thats interesting to watch. Youre right i dont have coverage of twitter. It would be my colleague but in regard to facebook and google, and i think you mentioned some of the commentary they had yesterday, i mean, the real thing comes down to do we want the who should be the person thats the arbiter of what gets said on the internet government, the companies. Mark zuckerberg has been clear about the approach hed like to see taken. But its going to come down to when does this become a priority or does it become a priority for congress to potentially act here and decide whether or not we should get treated as publishers and there could obviously be repercussions from that. Its also a question of then does it impact how people are spending their ad dollars . Thats what we care about mostly right so lets take two of those things the policy response from either the courts or congress whats your playbook or expectations on that front and then what do advertisers think . To what degree does this become a stigma to have your ads placed against the content that gets more controversial so those are great questions. We have a political strategist at Goldman Sachs we rely on him to give us that input on what the potential policy ramifications are in regard to how advertisers feel about this, every conversation weve had, and ive heard david talking to jim just before about omnichannel and being able to basically purchase, interact with your customers anywhere, thats what the advertisers seem more focussed on right now than anything on the policy side. In fact, we see whats going on as really acceleratiing shift from traditional media we see this happening even faster for some of the reasons you talked about earlier heather, its david what are your expectations as to how this is going to evolve . I think a lot of people think it could end up in the courts obviously, the executive order somewhat unclear in terms of the path here. What are you telling clients when they ask you what to think about what to expect so we typically would rely since thats not my area of expertise on the policy side, rely on outside experts or our internal political experts on this area. And look, this is always a fear. Even experts 12, 18 months ago, there was less concern the companies would get broken up, but the big unknown was whether or not they could get regulated as publishers and be held liable i think its not something that clients are asking about in increasing amounts. This week, even in light of the executive order that you just mentioned, but i do think something, it is something that were going to have to pay a lot of attention to, and i think its look, its one of the things thats been impacting the multiples of the stocks. Whether its doj or ftc concerns where now its going to be how this plays out so i think its a great question it impacts the multiples hard to say. Right it would seem to be. Let me ask one thats more based on the news involving alphabet since we have you. The idea theyre not going to be hiring some people they thought they said on the Conference Call they were cutting cap ex it seemed to have more to do with office space or buildings investors like to see the efficiencies whats your take so i would say when i listen to the Conference Call and the cfo comments, i felt like i was listening back into the Conference Calls we might have been on with microsoft during the Global Financial crisis back in 08 and 09 the similarity is that when i listen to what they were saying, it sounded like they were focussed on efficiency and that they were going to try to learn from this and become a more Efficient Company and that means something people have worried about at alphabet has been margins people might not think of microsoft this way now, but if you go to the Global Financial crisis, there was a period where microsoft, people would say they were spending maybe too aggressively and going after some of the moon shot bets that werent going to pay off they got a lot of discipline coming out of that theyve take than forward. Thats the sense that i got listening to that alphabet Conference Call. Thats what were on the cusp of to wrap it up, are you putting view on stocks like facebook or google in light of regulation are you changing your view, given the increased calls on both sides of the aisle for regulation increased chatter around section 230 does it influence what youre telling investors to do with the stock . It doesnt, because its so first and foremost, i would say both companies have been living under these regulatory overhangs since really Cambridge Analytica if you go back to facebook when this started to become even louder for them. Theres been concerns over what type of sanctions they could put on them. Further descent decrees or if they were trying to break them up those have been overhangs. This has been lingering. Its back to the forefront theres probably a little less talk of people calling in talking about the potential for breakups so i would say theyre kind of all ongoing themes that have impacted the multiples when you see how thats impacted how we value the stocks, its resorted into lower multiples. At the same time, again, theyre the two engines for Digital Commerce that the Global Economy has. On that front, youve done a lot of good work on not just the how ecommerce plays into this how also how the workplace is getting more distributed. Were living examples of that even as we speak and sales force is a good way to put it through a lens. How much opportunity is there while at the same time allowing clients to defer payments because theyre under pressure its the right thing to do. You had marc benioff mention it last night these companies are doing what they should be doing when you sign up for a sales force or workday and other staff businesses like this, youre becoming a customer for the next 15 to 20 years and if you have to take less payment up front for one year potentially, but youre going to make that up over the next 14 or 19 years, its the absolute tradeoff i think making sure people stand by their customers and employees will show up and whether its better Employee Satisfaction or markets where theres a fierce demand or talent or ultimately in these companies thinking about their lifetime values and customers. Its the right thing to do at one point we will all get through this for now, i think theyre taking the appropriate steps. Yeah. I mean, its remarkable how much change just ten weeks and our worlds are turned upside down a lot of the stocks reflect that heather, thanks. Its great to talk to you. Thank you have a great weekend you too. Still to come, it is the last trading day of the month how should you be positioning your portfolio amid the volatility entering the month of june and later, powell in a web cast. Well take you there live. Big show still ahead dont go anywhere. A slice. A piece. A portion. A chunk. With dollarbased trading you can spend what you want, even on just a slice of a share. The final trading day in the month of may stocks are under pressure following yesterdays losses lets bring in jpmorgans chair of Global Research and citi private banks global chief investment strategist. Good morning to both of you. Steven, we have jay powell in the next hour. We have an anticipated press conference from President Trump as it relates to china what do you think investors are most focussed on after this nice runup weve seen i think we probably will get more news out of President Trump than jay powell. Powell is doing Everything Possible right now for the economy, and what were thinking about some of the policy options theyre talking of, these are hypotheticals. And eventually, after youve taken a lot of steps, you run out of things to say, i think thats not going to be a Market Driver this is going to be an excuse for profit taking. Theres going to be some new twist here it will probably come out of the risk of an escalation of u. S. , china conflict is it surprising, joyce, that largely investors have brushed off some of the escalating tensions between the u. S. And china up to this point were heading for our second week in a row of gains with more than 35 off the march lows. Is that the right reaction here . I think the u. S. china story is a long story were going to be watching for a long time through the cycle. So i think this is one thats just beginning to heat up. Youve had just numerous actions that have taken place over the past couple weeks. The reparation bills or the comments from pompeo on his assessment of hong kong and questioning whether it remains an autonomous region weve also had just the on the u. S. Content side, huawei. Weve had more questions as well on delisting of companies. So this is something where i think the market probably is not pricing in the premium right now because its been focussed on the pmi numbers and the manufacturing numbers. And the fact that some of the First Quarter earnings actually did surprise on the up side for about a third of the companies yeah. It feels like the reopening talk has really been front and center joyce, whats the worst Case Scenario here for investors as it relates to hong kong and some of the other risks you outlined between the u. S. And china well, i think that right now what were seeing is the concerns about transparency on covid19 have overtaken the phase one trade concerns that had been in focus in 2019. First, i think phase one, it is going to be difficult to meet the targets. I think youll see just more noise not just from the white house, but you see it in congress you see it in Public Opinion polls as well on where the u. S. china relationship is going. And china has been i think careful right now. I mean, what weve seen in the past is they have often moved the currency in response or done something more retaliatory theyve been pretty careful to leave the tech and financial arena out of this right now. I think thats what the market is waiting on, is this going to begin to hurt some of the financial in tech arena or is it going to stay more focussed on the democracy and the human rights issues and the phase one trade zbreemagreement . Thats an interesting point, joyce. Im just thinking about this. Joyce mentioned a long run issue here and if you think about where both economies are right now, covid has collapsed the trade sectors of both economies. So if you think about a resumption of tariffs, for example, what impact will that have when both of the economies at the moment, again, have really beaten down trade sectors and the types of steps that have been taken so far, at least, again, are relatively modest in terms of the scale of the economic downturn and the likely rebound were getting in both economies . And i dont think you can ignore the fact that in china, for example, youve seen auto sales at new highs for the year. Highest since 2019 in the u. S. , were seeing driving data that suggests were going in our view to have a 30 rebound in u. S. Gdp for the Third Quarter following a 40 drop the scale of the shutdowns and reopenings are very big factors. All of this, again, might dent confidence it might be an excuse for profit taking but these steps are nothing compared to whats divided up markets around covid around the world on the geo politics im curious the other developed economies when theyre watching the back and forth take germany we had a joint statement this morning theyre investing 2 billion in chinese electric vehicle makers is the sense that theyre going to side with us or china or try to split the bet well, what weve seen surveys with our clients, 10 have said were thinking about moving our supply chain but 10 to 20 say theyre expanding their businesses in china. Were in an integrated Global Economy. Some of the rhetoric isnt going to weigh out, but it could weigh on market sentiment. Thats not priced at this stage. The china Growth Outlook is very important to emerging markets in particular so our estimate is that every 1 percentage point chinas growth drops takes about half a percent off the global growth. Its nearly 1 to 1 for some of the emerging markets, a commodity exporter this can have broad reaching effects beyond trying to as well given how this dialogue goes, but the focus has been very much on the may and the june manufacturing numbers, the fact that the earnings were not as feared as poor as some feared in the u. S. , but i do think what you have is as you go into the Fourth Quarter and the end of the year, were going to have more of a discussion as the Elections Come up on u. S. china and also the drag that has come from providing this much fiscal stimulus and what the consequences are of building up the debt burden as well. Right now the focus is on earnings it is on the pmi manufacturing numbers. Its on the reopening, but i think youre going to have these longerterm issues column toward the end of the year. Finally, steven, your expectation of a q3 bounce j is it highly depending on getting a fifth stimulus package out of congress i dont think the q 3 is. I think were longer term the recovery can be over the course of the rest of the year into 2021 depends on it and things like the solvency of small businesses, how long the economy shuts down will have a big effect again, it could magnify it in both directions. We think there will be as much money as needed on the fiscal side for the u. S and, again, we will not run out of emergency unemployment insurance. They will go back and pay that again as needed. But i think, again, the bounceback effects we have to understand if you wanted to have a record decline in retail sales, shut down the stores if you want it to come back, you open them. That people havent realized that this has been an engineered collapse in the economy to the extent that we have. There are lingering negative effects. Real estate, transport, tourism, Southern Europe is going to have an extremely difficult time Getting International tourists before theres a vaccine, but theres still a very big bounceback effect. Theres no other way we had the largest employment decline by ten times the magnitude of any in history if not for the shutdowns. So that part of this, i think is baked in the cake were coming back yeah. Certainly market seems to see that dynamic and im sure powell will be asked about it in about 40 minutes steve and joyce, always good to get your takes thank you very much. Thank you speaking of which, well take a break here and we are awaiting the fed chair with allen blinder in a virtual discussion on covid19, the economy. Their tool box and a host of other issues coming up at the top of the hour. At leaf blowers. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Welcome back im sue herera in minneapolis a Police Precinct and other building were set on fire as protests escalated over the death of george floyd while in police custody. The mayor condemned the violent protests and looting there is a lot of pain and anger right now in our city. I understand that. Our entire city recognizes that. What we have seen over the past several hours and the past couple of nights in terms of looting is unacceptable. In louisville, at least seven people were shot overnight protests are ongoing over the shooting of a black woman by three White Police Officers in march. You can see protesters attacking an ambulance and rocking it back and forth. And in russia, they have now reported 232 new deaths from covid19 it is the highest daily death toll since that pandemic began you can go to cnbc. Com for the latest on the coronavirus hot spots around the world you are up to date david, back to you thank you, sue well, it has been called part of the reopening trade. Im talking about zillow shares of which arent doing much this morning. Were going to talk to the companys ceo richard barton, coming up. This moment. This moment right now. This is our commencement. No, well not get a diploma or a degree of any kind. But we are entering a new chapter in our lives. Our confidence is shaken; our hearts cracked. The kind of a crack that comes from the loss of a job; from life plans falling apart. We didnt ask for it. But we are rising to meet it. And how far weve come isnt even close to how far we can go. We just have to remember how patient we were. How strong we can be. how strong you can be. and remember this; theres a crack in everything for a reason. How else can the light get in . Tomorrow starts today. Mortgage rates hovering near record lows. Is it too late for people to take advantage we have the story. Good morning. Definitely not too late. Probably also a little easier now that be it was a month ago the Mortgage Market is a big part of what is driving this faster than expected recovery in housing. Record low rates give buyers more purchasing power. Thats especially important because the supply of homes is also at a record low and thats keeping home prices high buyers may be rushing in now to take advantage of rates while theyre this low its only really in the past month that the Mortgage Market has recovered itself rates had popped up in march when the pandemic hit, they then began falling. Following bond yields. But not as low as you might have expected rates were bumping up against risk risks spiked when millions of borrows initially flooded into the governments bailout program. The details were not clear at first and servicers worried theyd be wiped out having to pay their bondholders. It was unclear how borrowers would make up lost payments. In the last few weeks the number of new requests for the bailout has slowed to a trickle all according to black knight and the rules were changed lowering lender and borrower risks. Look at the applicants to purchase a home. A v. And Mortgage Rates hit a new record low this week and could be headed even lower thank you our next guests company is slowly starting to reopen after pausing home buying in multiple markets due to the coronavirus zillows ceo is joining us in a cnbc exclusive nice to have you this morning. I mentioned during a tease that youre part of the reopening give us a run down on market activity the level of activity, and in what markets it turns out we in the shelter business are really lucky. We didnt know when this first hit, and the fog was thick, where this was going to go we didnt know if the Real Estate Market would seize up like an engine without oil and so we were scared and took really quick protective actions to protect the enterprise, to protect our investors and partners and employees and so we took those actions and it put in a good position. What weve seen since the beginning of this thing is that people spending all this time at home seems to have driven this large amount of demand and restlessness that first manifested itself in heavy shopping behavior. Were seeing shoppers to for sale homes on the zillow sites which get 200 million unique users a month. Weve seeing shopping for the homes go up 50 year over year in the midst of the peak fear, i guess, demand went way down. And weve seen a slow steady climb back to what i would say is an abnormal market now. With people interested in moving do you see them following through . Is it your expectation they will i know youve opened your own home buying in phoenix, tucson, arizona and parts of North Carolina as well is this just a lot of looking or does it result in your experience in what will be a sale. Were seeing shopping is at the top and the transaction at the bottom, clearly history shows that shopping leads to transactions thats what weve seen week by week weve seen the transactions come up they dropped to about 45 below what we would have expected. In late march and april. And they are back up 50 off of that now that may be an exaggeration. Thats only 25 net. But effectively, way up from that certainly not back up to normal levels and we see a slow but steady, our Economist Team sees a slow but steady return of transactions toward the end of the year to what they estimate is just over 90 of what normal would have been by december. That is what we are seeing it could be different, though, david. I have this theory that im calling the great reshuffling. Ive seen you in your home most every day. I think youre working out of your living room or dining room. And clearly there are no kids running around im in my bedroom because i have kids running around. I see that. Mine are older able to keep them upstairs well, you look really good for having older kids, david thank you mine are running around im in my bedroom, and this typifies, you know, i want a home office. Maybe you do too it doesnt look like youre in an office. My dad had a home office i never saw the need for one in the modern day, but i do now i think its that kind of thinking where people want to reconstruct their homes where theyre spending so much time, this home, this home for family and this home and shelter, if you think about the hierarchy of needs, i dont know if Business School or people out there remember that, but the top of the pyramid is selfactualization the bottom is the basis. Its food, and shelter and it turns out we are really together, all of us right know, focussed on food and shelter that could be a decent proxy for jims covid index whats in that bottom run of the hierarchy of needs thats driving a whole bunch of agitation to move, to get a second place if i hadnt had one. The people that didnt buy a second home are regretting not having a second home right new and this is the economic whoa that is upon us and is going to play out in the next several quarters in the unploemployment its a terrible sad thing. Thats going to cause movement as well. Maybe not for happy reasons. Maybe for sad reasons but all of that is going to cause movement. Its sara also, in my bedroom. Also cant escape the two little kids running around unlike david with his older kids. Question on new york city. Once red hot Real Estate Market. Is it going to look different in terms of the recovery than the rest of the country because its so densely populated, because we got hit so much harder than most places around the world . Whats your prognosis for prices and inventory and the overall market in new york the wounds are a lot deeper in new york city and the psychological shock has been much greater in new york city than elsewhere and so yes, its going to take a while. Im a big believer im very impressed, again, were very lucky at zillow and you are at cnbc you can conduct business remotely youve adapted and in many ways weve discovered things that are better when were working remotely and all on a flat Playing Field than who lives closest to the boss. So Companies Like zillow, we got ahead early in thinking about all right, what is the modern coast covid workplace going to look like . How can we change our culture and overturn our biases about being in the office to being more modern and sourcing talent with the talent we currently have can live where they want and feel like theyre on a level Playing Field as everyone else were working really hard on this kind of dynamic Work Environment right now. So this is a long winded way of saying i think its going to change the calculus for the traditional highrise elevator based dense packed city workplace, at least. Im not quite sure about residents yet. Were all searching for data to confirm our bias or our theory that people are moving out of the city and a lot of people have kind of thrown that one out there without a lot of dat datao support it we see the shopping data were not really seeing that yet. What were seeing is lots more activity and a lot of di satisfaction with where people are living right now, but i cant point my finger or economic steam cant point their finger at an overriding pattern. Weve discovered the people who are working from home because of covid19 who were not working at home prior to that are very happy working at home and want to continue doing that twothirds of them after this, if we asked them to take after covid what do you want to do. Twothirds of them would say theyd love the flexibility of either working from home fulltime or having to only come into the office two or three days a week. This is really going to change the dynamics of commercial real estate yeah. Rich, well keep a close eye on that urban to suburban question, certainly. Finally, what about the agents i know you talked a lot about your ability now to use 3d technology to give people a good feel for a house without having to go in it. How are they changing their approach from the agents side and their ability to get in a home and interact with their customers in this new environment . Theyre adapting like we are. Weve been zillow has the largest r d budget in the industry weve been working on these electronic Document Technologies and 3d home mapping and virtual touring for quite some time. We had a hard time getting uptake of that prior to covid of course, probably five years of adoption is being compressed down into five months now. But the agents are adapting. We have stories of people who dont want to go into somebodys house because theyre scared thats for sale. They might drive up to the outside of it while the agent goes in and with a Video Conference technology, walks through the house and they take a virtual tour we have that happening hundreds or thousands of times, sufficiestuff like that, every day i think it adapts the role of the agent and the agent just like in all business, the ones who are aggressive about embracing the new technology and platforms are going to succeed in the future. Yes i think well see video of an agent doing just that. Appreciate the updates on so many fronts. Look forward to seeing you soon. Thanks, david we got the dow down a little more than 150 points coming up later on the closing bel bell. Noted emerging market and fund manager mark mobius joins us to talk about the u. S. china tensions ahead of the president s news conference. And then jay powell coming up at the top of the hour. Hes going to be in discussion well take it live for you stay with us on squawk on the street. But a slice is just right. Thats why fidelity offers dollarbased trading. Buy what you want based upon how much you want to spend, even if its just a slice of a share. Buy what you want based upon how much you want to spend, iits not acceptable oor nothing. And its definitely not close enough or nothing. Mercedesbenz suvs were engineered with only one mission in mind. To be the best. In the category, in the industry, in the world. Now, get 0 apr financing up to 36 months on most models and 90day firstpayment deferral on any model. Mercedesbenz. The best or nothing. Truly transformative sleep. So, no more tossing and turning. Because only tempurpedic adapts and responds to your body. So you get deep, uninterrupted sleep. During the tempurpedic summer of sleep, all tempurpedic mattresses are on sale the biggest opportunity could also be the biggest risk. We discuss it on cnbc. Com tradingnation. Tempurpedics mission is to give you truly transformative sleep. So, no more tossing and turning. Because only tempurpedic adapts and responds to your body. So you get deep, uninterrupted sleep. During the tempurpedic summer of sleep, all tempurpedic mattresses are on sale welcome back to squawk on the street. Time for our etf spotlight were looking at the s p retail etf, xrt its lower by about a quarter of a percent. Its up 10 so far for the month. Its been a tale of winners and losers in retail where you have names like Tractor Supply and dollar tree. Nordstrom is weighing down the index today. The dow down a little more than 150 points the nasdaq was positive. It has just dipped into negative territory. S p down half a percent. Looking at gains for the week. Well see if we can hang on for a second week in a row squawk on the street will be right back there are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. If youre looking for names that are truly back to precovid levels, watch vm ware. Were going to talk to the ceo in a few moments on squawk on the street. Dont go away. Lets get right to our jon fortt who is alongside vmware ceo patrick gelsinger. Good morning, jon. Good morning, sara. And good morning, pat. How are you . Hey, jon. Great to be with you and the show this morning and its been a while since we chatted but just so happy to be back with you and trust youre well and healthy in this environment. I trust you are well also good to see you. Wall street certainly reacting to your quarter this morning the stock up more than 6. 5 . Strong results for the quarter that you reported and you also gave guidance, growth in the midsingle digits for the fiscal year but you expect possibly doubledigit growth in fiscal 2022 as economies around the world recover and youve also said that tech is stronger than gdp, software and cloud stronger than tech overall, whats giving you confidence if you can give detail on what youre seeing from customers that gives you confidence thats going to continue. Yeah, thank you, jon. It was a good quarter, im very proud of my teams execution and we call it grit. Just to be able to fight through the current environment and continue to see growth as we said were sort of a swoosh company, right. We see q2 and q3 being the toughest quarters and q4 and q1 next year being a level of recovery is how we modeled our outlook. You know, in this environment, jon, digital foundation, Digital Transformation is more important than ever. If you think about it, most companies a few percentage, we were 20 of our employees were work from home before this, now 97 . Given the length and challenges that people face, this doesnt go away. Were going to be here for the next two years that the majority of workforces or substantial portions will be work from home, distribute the workforce, and in the face of that, i. T. , technology is more important, not less were seeing what i said, sometimes it takes a decade to make a week of progress, sometimes a week gives you a decade of progress all of a sudden education, health care, work from home are making huge steps forward and thats what gives us this view long term tech is going to be stronger and software and cloud will be stronger yet than the Overall Economic environment. I want to ask you about that. You pensionmentioned on the calr products benefitsing from the workfromhome trend and i believe you said things have gone from a 10 to 20 workfromhome situation where that percentage of the workforce is either completely or sometimes working from home to twice that what sorts of adjustments are you making in that environment you also said that the challenge now is to generate new business in this environment, versus just closing what was already in the pipeline. Yeah. Clearly for vmware we were 20 work from home i expect as we continue in this environment were sort of going to end up in the 50 to 60 over time i dont think were atypical were doubling and tripling the amount of work from home when you think about that distributed workforce, you go from maybe 100 or 200 sites depending on the size of your company to 10 or 20,000 sites and when you think about every home becoming a new work site, right, they need to be managed, connected and productive, work space one, they need to be secured, carbon black, good quality and bandwidth and cloud and capacity and thats vmware cloud and we said is our Business Continuity focus for the future, but we dont see ourselves as atypical here this is the new normal if you would and were excited to see these transformations happening across the industry and were making Good Progress with customers around the globe as we said, we used to generate new projects with pocs and being face to face with customers, the salesmen always like to shoulder up with the potential customers and those are new muscles we have to [ inaudible ]. Right. [ inaudible ] as a new pipeline thats part of what we give a more modest view of the q2 and q3 of this year, generate those new products and every cio is adjusting their priorities to the radical shift of the distributed workforce and new demands being placed on them. Let me ask you about vmware, where work from home is concerned. By my calculation, correct me if im wrong here, your palo alto headquarters accounts for roughly 25 of your total Global Office footprint and you guys, its a really expensive place to be and you guys have the technology that enables work from home. I think you just indicated that going forward, you expect more than half of your workforce to be distributed versus 20 today. Do you think palo alto and Silicon Valley is going to continue to represent a quarter of your office space given that future and do you think that workfromhome scenario is kind of temporary based on adjusting to postcovid or permanent i believe its permanent. Ill start there you will be doing this for two years. Every cio and ive talked to hundreds over the last couple of months, and everyone has said boy, were doing pretty good this way in fact, i was on the phone with a major financial cio yesterday and he said, every metric is equal or better in terms of productivity and efficiency in this environment your productivity is good, your efficiency is good, it improves the quality of life for your employees. You dont need to fight that traffic every day. One day a week is fine or one week a month well bring you into the campus. That drives how we are reconsidering and call it work 2. 0 and palo alto as you highlighted an expensive but beautiful place, this will move from being a hotel for offices to a collaboration hub i expect our footprint will largely stay the same but redesign it significantly because this is where were going to gather to innovate and build community to reestablish culture and connections with people its not going to be a hotel, but its going to be a place where we gather. A lot of the small sites were going to close them because we want people to come together in these ways when working together, but generally work from home will be part of the new normal and we see this transforming industries, health care, telemedicine, education, brick and mortar going away. Not just in the Tech Companies like us but across every industry well be changed as a result mr. Gelsinger, its david faber. I find myself somewhat shocked by those numbers youre sharing, 50 to 60 . Many of the ceos that ive spoken with, 10, 20 perhaps could imagine that in terms of their overall workforce. Is it something very specific to your business, understanding obviously what you do and the expe expertise you have or is it going to be more widespread and what about culture and how you on board people what about just the idea of people congregating in an office and coalescing around certain ideas and the culture of a corporation doesnt that get lost . I say first is, i think this happens to every business, every industry, and if youre a Manufacturing Company with 50 of your people being in factories and locations, obviously youre not going to get to the numbers that were viewing for our business, but we do think banks, you know, how many people need to be together versus how many have been working remotely insurance and industry by industry saying we can go to much higher percentages and even in manufacturing or other supply Chain Industries all the gna functions, the Development Functions all of those are amenable to a workfromhome environment and improves your access to talent all of a sudden i dont need you to relocate to the expensive bay area you become part of my workforce remotely and have work from home and shared jobs and diversity in the workplace and less carbon footprint. These are powerful can you develop culture this way . Can you innovate together . Were all going to have to learn new muscles here and, you know, like i am zoom bombing all of my Team Meetings around the world on friday of last week i was in australia, brazil, germany, uk, and west coast and east coast, all of those events that i could participate in virtually were going to have to learn some new aspects of what it means to build culture and team and what the new norms are and what those tribal understandings of your team are were optimistic this can and will occur and will be better as we come to the other side of it. That is a bold prediction a Strong Quarter that we can see your stock reacting to as well as a steady guidance that seems to be cheering investors thanks for being with us Pat Gelsinger, ceo of vmware thank you, jon. Zoom bombed by the boss jon fortt, thank you for that interview. A quick mention Pat Gelsinger will be taking part in cnbcs next virtual event, cnbc at work june 18th. Request an invitation at cnbcevents. Com carl, back over to you all right. Well see you this afternoon david, a good weekend to you good morning welcome to squawk alley. Im Carl Quintanilla with jon fortt who you saw with the head of vmware and morgan brennan, coming to you live from separate locations on the final trading day of may markets trying to hold on to the 3 handle on the s p. Watching u. S. And china tensions, expecting to hear from the president on that. All but two dow stocks are red