Get started here this morning. Look, i think that we are actually experiencing something that we havent lately which is that the analysts are almost entirely positive, and yet there is an underlying current both from the unemployment claims, which they are never going to be good until we get a vaccine. And also a general on wee that we dont have it under control, there i am talking about covid19 so why own anything . I think that thats an incorrect view there were many many piece this is morning that talk about what i can only say i am going to borrow a term from larry kudlow, green shoouts. There is much thats good in the economy. It is just not where we thought it was going to be, david. It is not all encompassing, but there are some areas that are very strong. All right so go over those and explain to me why they are not what we thought they would be. I think we thought travel and leisure would come back. That cruiseships would come back, that there would be Corporate Travel only one person was talking about it this morning, phil lebe lebeau he was talking about demand for cars, even used cars it is incredible what happened is mass transit has been discredited people want to go by car car pooling, discredited by the cdc. So you have to own your own car. So we were going to go from an era where we were trying to be more mass transit oriented in order to protect the environment to an era where we have all got drive again because we dont want the disease thats a fundamental change thats going to drive a lot of Different Companies in the quarter. Interesting yeah and lot a lot of used teslas out there at this point. The carbon output during the downturn was way down. We are coming back thats yet another way to sort of measure the resurgence of the u. S. Economy, jim. I know. Look i am out at the pool last night. Oh, i have a pool. I am talking about twitter i am out at the pool with my buddy haley, a fox balks by. This is an urban area. Wildlife came back but wildlife does not understand the notion that mass transit is no longer something people will take if we figure out a vaccine ask. Car pooling which had been a hov way to do things, gone you can say goodbye to the foxes. Thats too bad. What is that we have a screen, david, that shows flashing numbers. Yeah. I like the foxes the numbers are going by very quickly there. I know. I guess we are showing that futures turned lower there we go. See . Amazing what we can do on television. The market. The Early Morning futures have been indicative of absolutely nothing. Sound and fury, signifying nothing. What we do is see start seeing tesla going up after a little bit of down because there are good things. Then z scaler goes up because it has been filing Morgan Stanley next thing, cloud stocks going up next thing, shoppify goes up and kroger even though it is down is going to turn up because same stores will drive it. Tesla me david tesla me. Tesla you the jeffrey piece on tesla. They were looking 650. Why not go to 1,200. How do you do this david when you get up in the morning do you say you know, i have been too negative on tesla, 1,200. I am feeling 1,200. It tells like a nice number to me. 1,350 how does this work. They are using a cash flow analysis you go out to 2074, you discount back to a reasonable rate. Given where rates are obviously not that much and thats what you get the. It is called a long term view you and i dont have it. We are too shortterm. We are thinking about the next decade not the next century. What can i tell you . Therefore we are missing a lot of the gains. We are. And thats d you know, mossa thinks about the next century, the next 200, 300 years. See what thats done for him so far. I am not being facetious. Jack ma did go. You see people using 2025, 2028 german gran tottenham was on he had a great term, the division of a bubble or something. The fed is providing a lot of liquidity. The money is coming in, the funds that believe in this kind of analysis so stocks go higher. You can say it is one big joke but you know what, cash out if you think it is a big joke kaching, kaching no one is keeping you in draftkings, right . No one is forcing you to own lululemon. The fed you say the fed. A lot of liquidity a lot probably doesnt cover it, does it jim . No. I am sure in every conversation that you have, at least the ones that i have when you ask and ask and ask those who allocate capital why do we keep going occupy, what are your thoughts, it always comes back to that. Well there is nowhere else for people to put their money. There is a lot of money that has been taken out in terms of equity and the fed has got your back in every possible way therefore how can you not own stocks. Royalty pharma goes public a couple days ago. 28, goes to 5. I want that. I want to catch that german granham maybe hes so rich he doesnt need it. Our viewers dont want to be talk out of getting Royalty Pharma because our view remembers actual autoly trying to make money. They are not sitting back and saying thats not real money, thats the feds money jay powell may look like a distinguished banker but hes a complete wild man. No i want that money for our viewers. Our viewers have every right to capture that money despite many people coming on and saying no, it is a bubble why cant our viewers make money . They cannot just buy they can sell, too, but the really smart people come on our network and say everything is a bubble they refuse to understand that you know what, the real mccoy bubble, then you can sell. You dont have to just sit there. If you have got big gains, you can sell i resent the notion of rich people coming on look, i have a lot of money you want to call me rich, fine used to be no sin. You can say that i have no right to tell people that they should have any right to make that money. But isnt that our job is our job to sit here and say no, dont buy that, no, dont buy that, no, thats a bubble, you cant do that. I am going to asterisk that, no the bank doesnt take that no, you are going to stay poor no, you are in your chains what is this angles . It is marty an goelz as far as im concerned. You and i have different jobs your job is to potentially do that my job is to report and present what the facts make in certain situations and let people decide. I want them to make money. I know you do, jim. At the same time you and i did we did live through the mid to late 90s i sat there every, mo, we talk with joe concernan and mark haines talking about the absurdity that was going on that went on for years in terms of the valuation of companies that had no underlying business or no prospect for future profits and yet watched their stock go up. We are nowhere near that level of speculation right now but we are seeing some and it oftentimes ends in tears for the very people you are talking about. There is both. You want people to do well you want to make recommendations that are going to be strong ones and that are going to be followed and result in profits but you dont want people being stupid. Absolutely. No and i went to encourage people to sell. What i am saying is when you go to the racetrack which i used to love the ponies. When you go to the casino and you are playing blackjack and you just accumulated a great deal and you understanded there was a lot of face cards at the ends of the six pack deck, i chutely had that ability you decide i am going leave, imgoing to buy that cashmere sweater my mom always told me i should get i think it is vital that people leave the table at a certain point. I will call it a table if you are going to insult it as being the real mccoy of bubbling i am going to associate it with. Gaibling table then leave it. No one says you cant go to the casino because you cant make money. I am saying you can buy and you can sell and the up sult that i hear rich people coming on is to think that once you bought you are going to buy and hollywood to the poor house because everybody says buy and hold. I say buy and make money buy and you can lose money. Yes, you can. But the propensity of every ipo so far has been to make money. I like people to capture. One particular in the speculation this market, not nicola it is hurts. Hertz. A bankrupt. Perhaps if things had changed more quickly in terms of used car provides prices, maybe they could have sold equity before filing carl icahn might not have seen the need to sell the stocks at 72 cents but they did they have a plan to potentially try and sell equity even though they are bankrupt. On friday they were in the Bankruptcy Court where the nyc said okay we have no problem with them selling 500 million worth of stock the scc, mr. Mazza was there he was quoted as saying it is up to the company to comply with the disclosure requirements. We are not taking a position and we will continue to monitor. The sec isndidnt have a proble with it. Hertz was moving along with their plan starting on monday to sell stock to raise money. Conceivable if they were able t do it, another shelf, another 500 they might have been in the position to be more solvent. Then yesterday jim, you may have been watching, jay clayton was bob pisanis guest the s. E. C. Chairman. And i asked him about hertz in particular surprisingly, this is what he had to say is the s. E. C. Even in a position to stop a potential sale of stock within a company if you have issues with it . Look, there are a number of powers that we have. But we do have to follow due process here, david. And in a new issue situation like we have where there is new stock one of the processes we have is to review the disclosure for the new issuance and we have let the company know that we have comments on that disclosure. Thats where we stand today jim. We cant say what the likelihood is, but it would certainly seem to be less likely that hertz is going to be able to move ahead with that plan we should know today where things stand. Eye am not jay clayton but i know what the 33 act i didnt well in the class but i know what the 3 act is it would have been fair for him to come on our air and say listen, this is a joke it is a farce. It is a pt barnum situation. We have a number of disclosure, disinequity iffing to go with the brandeis thing but to say we cant and this and that you can do whatever you want no one is going to call his mom and say, jay, you cant say that jay could have said, this is ridiculous, and i dont think its good, and that would be it. You dont have to hide behind the 33 act nobody tells you that you cant just say it like it is i mean, are you afraid of getting fired . If you are afraid of getting fired, dont take the job. Yeah. Well, i think he came as close as he could within the boundaries of the law and their place in it. And sort of saying hey instead of saying who is this guy, got me some hertz. Then hertz said we wont sell stock until we answer these disclosures. To be fair in their disclosure they said listen this could be a worthless piece of paper it wasnt stopping the people you were talking about from buying it. I said dont buy it i think it is stupid to buy it mr. Clayton can come on mad money and explain why he said it his way i said it is a losser for you but it could help save jobs. It is a ppp program. Hertz had its own ppp program. You dont get money back maybe thats what the treasury will have. A suckers point every minute. Speaking of jobs, the new jobless claims jim, 1. 5. In that may be weighing on the market a bit we have been up the last few days as you know as well so we are looking at a lower open when we get started with trade being 15 minutes from now. 1. 508. The estimate had been for 1. 3 million. Of course it is down from prior weeks, but still numbers the likes of which we have rarely, if ever seen we have got a lot more squawk on the street forouomg ghback y cin to lock away deb ris and absorb wet messes, all in one disposable pad. Just vacuum, spray mop, and toss. The shark vacmop, a complete clean all in one pad. Wherever you make go, lexus will welcome you back with exceptional offers. Get zero percent financing and make no payments for up to 90 days on all 2020 lexus models. Experience amazing at your lexus dealer. A lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. And tailored recommendations. Johnson johnson scientists are working 24 7mask to develop a covid19 vaccine. The clock never stops and neither do we. All right. We have got earnings from carnival this morning. Second quarter, 2020 summary, it is preliminary, u. S. Gap necessary lot of 4. 4 billion. 6. 07 diluted eps for the company. Total reference, well, they were . 7 billion lower than the 4. 8 billion from the year ago. Yeah. You can see what carnival is doing. You talked a lot about the cruiselines of course and made the argument that well, they are not really cruising how can you actually buy them . But there are cohorts of what do you want to call them, serious neophytes radically wrong professionals, i dont know what to call them because they get so upset who are playing this group because they think it is the group, when it is green light economy, buy carnival green light buyers buy carnival. I think it is more difficult than that. These companies burn a considerable amount of cash. Do they have to come back to the equity market . Lets say if i were carnival and i did a big deal at 8, how about a bigger deal at 17 . Right i know maybe they have to by the way, to that point, and i just want to make sure i get it right here, jim. We are talking about they have 7. 6 billion of available liquidity right now. Right. They expect to further enhance further liquid it including for refinanced amounts. And customer deposits, 2. 9 billion. I see 2. 9 billion. If you burn 4. 4 this quarter. They had some revenue come in. And you have got 7. 6 billion of available liquidity may i suggest that you do a deal because you do want to stay in business for more than a quarter and a and a half to it why not . To your point. I dont know. If hertz can now, they are probably not going to be allowed to do it but if hertz with issue stock in bankruptcy why cant carnival sell at 18 . It is time. Carnival should announce it rye now on our show. Price it at 16, get it done. Maybe price it at 18 by that point, maybe moderna have they sold any stock today at moderna i havent looked at. You get a vaccine. We havent talked about the virus it self, jim, and or where we stand u. S. Cases 2. 136 million deaths, 117,000. Arizona i think had more new cases yesterday than the entire northeast. There is some concern out there, jim. Its not about grit you are not tougher than we are. Okay thats not why we got it its not a matter of it is a matter of contagion. It is tag, you are it, with this disease. Yep and continued concern as well about florida. Again these are coming off thankful lee low levels, as we pointed out. The death rate as a result of advances made in treating covid19 have helped there but these are not insignificant numbers. No. Jim, we will get a mad dash for you. We are getting ready for the opening bell you get ready for that and well be right back. Just over a year ago, i was drowning in credit card debt. Sofi helped me pay off twentythree thousand dollars of credit card debt. They helped me consolidate all of that into one low monthly payment. 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S p was down about 3. 63 for the year going into trading today. Looks like we are going to start at least even lower on the year. We are back with the mad dash after this need better sleep . Try natures bounty sleep3, a unique trilayer supplement that calms you, helps you fall asleep faster and stay asleep longer great sleep comes naturally with sleep3. Only from natures bounty. Announcer the opening bell is brought to you by nuveen. Leader in income, alternatives, and responsible investing. All right welcome back time for a mad dash as we get ready for the opening belfour minutes from now the letter x, the name, United States steel corporation, thats big, but the market cap is awfully small, jim. David, we are bigger than u. S. Steel yes. Heymann rolfe said that. And you know what, everybody is bigger than u. S. Steel now it is no longer a good comparison 50 million shares being offed. Looks like it might come between 8 and 8. 5. They say they need it in order to complete a acquisition. They also say it is the trough heres the deal. People say somebody isnt me that it is a real mccoy bubble i am not going to encourage people to be in this because i dont think u. S. Steel doing well but this is what can be done during a jay powell inflated euro there are ten stocks able to help liquid it of companies. This is one of them. U. S. Steel has been a terrible investment for several years and this time you get an even bigger chunk and hope it goes up, you hope you buy high i mean highing meaning this stock was actually lower not that long ago, and sell higher anyway, 50 million shares coming at you yeah. Thats a big number. As a percentage of the overall market value of the company, jim. I mean we are talking 429 million for what was a 1. 6 billion market cap prior to the fall that we are going to see this morning. You want to own a steel company, new core with a 3 yield, best steel in the World Company that makes money consistently it would be fabulous if we get an infrastructure bill if you like u. S. Steel, i think you will like nucor. Heymann will say we are bigger than nucor. Jeff bezos could buy u. S. Steel 140 times over. No one is bigger. Apple. Sit around and play monopoly, yound la on apple, it is like one of the green properties. Like pennsylvania. I know. I have only played monopoly once during this entire pandemic. I thought we would be playing more i did. Thats what people do and they sing songs. Siri, play john denver, Rocky Mountain high. Actually, if they are teenagers they just look at toik all day long you dont have teens at least teenage girls toik all day long and do dance moves. Thats what they do, period. You and i could do dance moves. Toik to me is the most important thing right now in the world. And it is controlled boy our buddies at the prc. Well, dance they are thinking about if they can get out of china they have a new ceo. Kevin mayer. There is a lot of good money in the company that owns toik, including one who did Royalty Pharma. When toik goes public we are going to spend a lot of time talking about it you heard the opening bells, everybody, of course, as we get started with trading here this morning at the nyc and the nasdaq i should point out, the nasdaq comp up 2. 10 this year. I always mention the s p is up as you can see, it starts the morning down. Can you imagine where if we werent in a depression where it would be where would it be. Infinity. The nasdaq has nothing to do about the place that got the ppp. And when it runs out, closes, the nasdaq has to do with zoom video and how people are not traveling. Zoom videos that crushed the travel industry. Crushed. Zoom video has changed the nature of work as well now, i am hearing more often than not people during the course of the day who are sick of their zoom one after another, their eyes are glazing over they are getting tired of zooming all day long, jim. We are tired of everything. The zoom shiva the zoom boozy brunch has worn off on me. But the problem is, david, it is what the world is. Wait until we get the nfl season and you are not able to go you are a jet fan. It might be okay but there are lots of different parts of our lives that will be gone until we get the vaccine. You need the vaccine. Thats true. We report on it every day i know, david, if you want to be in the first round i wanted to be in a trial of the vaccine because i just feel like we have got to get moving. Right. But my doctor said are you out of your mind i mean geez the first round could be dangerous thats listen, when it comes to the vaccine, as we reported, meg tirrell and her great coverage of course, there is 100 Different Things being tested. Right. Jim, the good news is, you know, again, speaking of the handful of people who i know who are very knowledgeable in these areas, there had been concerns that the animal trials in many of these things as it was for sars would not go well. Right. Would cause would cause bad things to happen that didnt happen in fact, they were the Animal Studies are strong so thats encouraging a lot of people but to your point, when it comes to a vaccine that you are going administer to potentially billions of people, most of whom tonight have anything wrong with them to begin with, you have got to make sure it is really safe you want have people potentially getting lupus or you name it whatever you want to think of. You cant allow that you are giving something to somebody who is not sick you have got to make sure they dont get sick and protects them from the virus. Thats typically why when people say they have a vaccine you dont automatically get it you want to try it for a year. Then you have a sample bigger than 30 or 40,000 people enthis you can see what the numbers are and you dont kill children in the philippines as we saw from one vaccine. It is prudent. But there are people who think we have to suspend our prudence because we are in a war. The war is not just about the economy. No, it is not i continue to focus on these oral antivirals that may be available or in trials now and the hope there is that it will be a lot more important than remdesivir or that starero we were talking about the other day because it would be given very early onion set. That handicapped the list regeneron 5 2. Gilead, 9 1. J j 4 1. I think it is regeneron coming down the stretch i think gilead is we will see merck also licensed that one that i have been following closely. Right. And is on it. We will see, jim but it may be that that gives us the bridge to the vaccine. But everybody has got to keep Wearing Masks, i think, that doesnt seem to be happening. I am a big mask believer. I spoke to kroger. A good quarter they encourage masks and all staff have to wear masks a good number. Obviously the stock has run substantially. Sarah, who is from cincinnati will have more but i do think that kroger has done some remarkable things forward to make it so that the store is relevant in a day when the super margaret hasnt really fared well hats off to warren buffet. There are some day traders who think that his best days are behind him when you are 89, thats arguably kind of a statistic. But krogers quarter was a good one. And it just the stock is up 11 for the year maybe thats just too much but they did a lot of things right. Their own brand is good. They have done a lot of contact with they have done very well with the idea that you dont have to go in the store if you dont want to, which is crucial, right . A lot of people dont want to go into the store. It is i have a pot company on tonight. One of the things that they do great is that you dont have to go in the store. Right you dont have to go into the store and you dont want to go into the office potentially at this point and thats why everybody is zooming Goldman Sachs is bringing people back monday. Solomon and wall draughn has been there most of the time at 200 west street. But they are going to start bringing people back the question will be for Many Companies, new york specific, how many choose to have some portion of their work force working remotely all the time. Now that there is no stigma attached to it now that you know you can do it and potentially save money as a result it raises questions in terms of the future of work and how Companies View it. I hear so Many Companies say maybe we dont need to be here in this high tax place maybe we can move half of our work force to a lower tax place. Why not . Facebook, there they want to pay people less if you work in a lower tax rate jurisdiction. It will be fascinating to see the long term implications of everything we have been dealing with. Katrina lake laying people off. San francisco hiring more people in lower tax areas around the country. Including minneapolis. Yeah. If you want to read the best essay on it, go to nikesha aurora, he has a threepage memo about how people should have the right to choose. If they want to work at home i think thats the wave of the future there are days when you want to catch your kids game. You can do that and you will be a better parent and you wont regret it all your life. As i did at the championship game when i got the call not to go. I missed the championship game i will regret it the rest of my life and i dont remember what the dow did that day. That was a mistake. I am paying for it. I pay for it all the time bass i listened the my boss who told me, listen, you have got to be there. I cannot recall what the market did that day i do know my daughter had a great game i didnt see it. Therefore, my life was less better for it. Already some positives that we can potentially take out of this it is time to forgive yourself, jim. Time to. Time to forgive yourself. I am deeply flawed. I never contested that. We know that. You didnt have to agree with it. One of the casualties of of course of this current deal as you well know, there havent been a lot of new deals. Grub hub one exception how is that taughtman lawson deal going. You know where i am going taughtman said we are out of here with simon. We followed it when it happened last week. And and this morning or late yesterday in the same state sort where simon officially filed we get the counterclaim from taubman. Here are a couple of excerpts. They say this is a classic case of buyers remorse the simon parties agreed with a series of merger transactions with the taubman parties 5250 was the deal price, all cash they were well aware of the risk of the coronavirus at that time they say the parties contracted to al data kate the risk of the Global Pandemic to simon knowing full well there was a pandemic raging in the world and simon accepted this risk they make arguments including the impacts at strip malls and malls the likes of which, very high end that taubman owns people who reviewed simons original complaint who i rely on tell me it was a weak complaint in their opinion but it doesnt mean it wont succeed. We will see what the judge says in the case. It might be expedited so we may know sooner than otherwise thought where it stands. Whether it was specific performance, meaning simon would be forced to buy on the terms agreed to or whether there would be damages some of those things are unclear at this early time, jim. But simon, i have to tell you, as well responds this morning. They say the following the merger agreement explicitly provides that a pandemic that has disproportionately this was an important point they were making in their complaint, disproportionately affected taubman compared to others in the Real Estate Industry give simon to terminate, which is precisely what happened. They cited nowhere in the finding from taubman that we just got that it was disproportionately impacted. Thats what it could come down to, jim. To reiterate well, you file a lawsuit maybe you give it a shot you argue disproportionate impact and whats the worst thing that happens . You have got buy the company anyway so david, you know the deal is structured so that taubman would be integral to management. Can you imagine what those board meetings would be like holy cow. I know, its true. Horrible. Well yeah. It would taubman only has about 400 employ yes, sir i am told. It is not as though it is that large in terms of the management of the company. We have had better numbers as we have begun along at a lot of Taubman Center retailers that doesnt matter . It is astatic snapshot i dont know. Not necessarily. A lot of it is reflected in the stock price. If a lot of investors didnt believe taubman had a chance of success here the stock would be lower. Thats what i agree with. It won be anywhere near 37. Well below the 52. 50 price bute would be no potential teal. Sigh mop has outdoor. Tanger is a good outfit. They also lowered their price target on Simon Property from 145 to 90. Which is a little bit brutal look, it is Shopping Centers its alls. These are not doing well i dont think it is nothing reveal tory about that. No, there suspect si money was it simon that sued starbucks to pay them sued gap. Gap thank you. Starbucks is basically trying to make deals. Thank god for your memory. Thats all right. Starbucks and whichchipotle are saying they want that second lane the world is going to be begging kevin johnson. Kevin johnson is a guy, ceo of starbucks who has the velvet fist saying listen we are not going to pay the rates that you want we are going to pay the rates that we want yeah. It is interesting though that simon chose to sue one of its tenants for breach, and then is trying to do the same on its deal. Look at the gap cash position they have a lot cash i dont blame thats not a simple simple simon david has paid 33 billion in distributions and he will tell you that before he shakes your hand e no, thats again, it is probably a pam maybe thats why. Nobody is shaking anybodys hand yeah nobody is shaking anybodys hand. Yeah. Maybe ever depend. Maybe ever again. It is a meaningless gesture that gets you sick. Exactly it would be one of the good outcomes potentially we will figure out another way of fwreeting each other. Do you know that President Trump doesnt like to shake peoples hand. I do know that. Because he is a germophobe. I do remember. The mask thing. He is a germophobe. He wont wear a mask. Wont wear a mask. No. And there is a big rally coming up, david, the tulsa, rally. In tulsa, oklahoma where they have 1918 war bonds drive this philadelphia go birds yeah. Jim, dish, a company i follow closely as you know is up about 3 yesterday in the filing something well i should have told mee people because we knew it was coming, they are going to close the boost acquisition. It was under the Consent Decree that tmobile and sprint agreed to to get their deal approved by the doj. They were selling boost to dish. Dish is trying to create a 5g wireless nationwide network. Very important because it is supposed to represent a competitive element to the likes of the three carriers we now have in this country and the stock is up. They are going the close it july 1. It was not really in doubt although i guess there was some reporting out there that was questioning it but not certainly what i was hearing from various people who were familiar with it. The question will be when are we going to hear from charlie in a more specific way about the various efforts they are making, much money dish is going to need, partners and the like. Thats a important moment for them one the market can be waiting to hear about shares responding favorably. Look at tmobile, which always seems to have big sellers and no one seems to care tmobile is just a big one. Next week there is going to be a huge sale of stock. Huge. Market seems ready to take it. This is not like carnival where the stock just got crushed and crushed and crushed. As i mentioned we have a lot of the nasdaq stocks related to 5g going up again we have got the fabulous ring central and z scale, injure cloud stocks doing great today service now oh, my god service now has just crushed it. Ever since bill mcd got in there. The stocks tend to go up very early on a down day because they represent great growth watch out, here they come. The nasdaq comp is up and the s p really well off the lows preat one quarter of one percent. Recue is up into the three. Cord cut something to cord cutting has quickened dramatically during this period where there is no sports down 5 every quarter. Now potentially down 7 . The Traditional Media Companies ads are not as bad as people worried. But cord cutting is, horrible. I have got get to Rick Santelli. I want to check in on the bond market this morning. Rick good morning, david yesterday we had the second 20 year option, the metrics of the second auction were even better than the first a lot of deals, high yield and Investment Grade get gobbled up. With some of the volatility of late in the equity markets and space of sovereigns and fixed income securities, corporates are really hot as you look at a three day chart of tens realize last couple of sessions 72 basis points has been the floor we are lower today and acting soft if you open the chart up month to date you can see what i am talking about. We had a foray that was in the 90 basis boints. Never made to it 1 . Flattening out again looking a the dollar index, a similar pattern this starts in february it had some good starts and last week we had a bounce off a threemonth low but it really isnt going anywhere it is unchanged on the week. The point of the matter is whether it is the central bank trying to continue to keep rates at a certain place volatility in general seems to be dampening a bit both in the dollar index and in the fixed income space. Finally, bank of england met they didnt come up with anything new stimulus wise and they are lagging behind some of their pierce the pound versus dollar, pound given up some ground pound versus euroy a three month low in favor of the euro not the pound. Something to Pay Attention to especially after integration issues post brexit continue to be a mosquito bite for both countries. We will take a quick break here on squawk on the street. Well be right back. vo at audi, we design cars that exhilarate with versatility, whether on the track, or the everyday drive. Today, that philosophy extends to how we connect with you. We call it, audi at your door. Whether a remote test drive, shopping, tradein, or even service pickup, audi at your door can do this and more at participating dealers. The premium audi dealership experience, on your terms. Audi at your door. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Talk to your financial professional or consultant Johnson Johnson scientists are working 24 7mask to develop a covid19 vaccine. The clock never stops and neither do we. Welcome back on the list of things that dont happen the way they used to, annual meetings. Delta had one today. It was virtual and phil joins us to tell us what happened phil . During the q and a session somebody said whats the impact of covid19 on delta and the ceo said we have had approximately 500 employees who have had coronavirus theyve contracted it. Did not give a timeline on it. Ten of the employees died after getting covid19 so the important thing to keep in mind here, the numbers will get a lot of attention, people saying were they pilots, flight attendants, ticket agents . Who was this its more questions than answers at this point. Its unclear the jobs the employees held at delta. Were they front line or back office its unclear when the employees got sick deltas total work force, 93,000 you have 500 out of 93,000 the other piece of news that came out today as you look at shares of delta over the last three months, the june cash burn rate continues to come down. Their guidance previously was 40 million a day in june. Now its 30 million a day and the ceo says the airline expects to break even sometime around next spring as you look at shares of the Airline Stocks today, one other note, it came out from jet blue, they are adding 30 new routes including resuming service to 9 cities where they suspended operations over the last several months what you have, guys, is this continuing addition of flights, and so as i send it back to you, keep in mind most of these are to places where you need sunscreen so you dont end up looking like a tomato after youve been on the beach or wherever you go. Phil, i got to tell you, i listened to that, and i wonder, and its so important to find out about where the delta people were because i would imagine most skyscrapers have the same ratio. The air is the same. The air is actually better on a plane. It would behoove delta to say where so we can say this is not as dangerous as you think. Right now 500. Anyway, love to you. Yeah. Well tell you if they let us know weve asked. Great thank you. Phil, thank you. The latest on delta and the airlines a quick break. Well have jims stop trading as we keep an eye on the markets. Nasdaq is up wee ckghy. Litl rba after this. What do you look for when you trade . I want free access to research. Yep, td ameritrades got that. Free access to every platform. Mhm, yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. Now offering zero commissions on online trades. We charge you less so you have more to invest. Heres a look at the s p laggards b biogen is leading on the loss column 5 were back in a minute it started with a few smaller bills. Ftdollars here. Eighty dollars. A hundred dollars. I had good health insurance. Why isnt this covered . Well, then they started getting bigger. Eighthundred dollars. Eighteen hundred dollars. I saved for this. But not that much. Im glad i had aflac. They gave me money when i needed it most. Thats why aflac is here, to help with the Expenses Health insurance doesnt cover. I love that aflac duck. Aflac get to know us at aflac. Com 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. Jim, only enough time for you show us whats on the show tonight. Amc, will we be able to go to the movies thats what were going to find out. And green thumb. Thats interesting. Not an easy road there for adam. See you tomorrow. Yep okay. Lets get over to sara now to start the 10 00 of squawk on the street. Lets do it good morning david and jim, and everyone. Welcome to squawk on the street here with david faber and mike carl has the morning off look at stocks this morning. We are taking a bit of a step back here. The dow is down 147 points s p also saw to the tune of a quarter of 1 . The nasdaq is flat we saw stocks losing steam into the close yesterday. Lei, leading Economic Indicators crossing the tape. Lets get to Rick Santelli for the numbers in chicago rick were awaiting the may number, were expecting it up 2. 4 . The worth month was minus 7. 4 in march of this year thats the alltime low. 2. 8 up 2. 8 . Down close to expectations and, of course, it is the first positive number since january. So this really is a Good Development in terms of interest rates. We continue to hover just below 70 basis points in a tenyear. Thats two basis points below the last two sessions. Low yield at 72 and unchanged on the week sara, back to you. Rick santelli. Rick, thank you. And thats the theme of the day, mike were trying to digest the Economic Data and find out what it means for markets same people say were seeing jobless claims moving in the right direction, not as high as they were a few weeks ago, but still another, what, 1. 5 Million People filed for unemployment claims last week the continues claims continue to show millions of americans out of work. I mean, way more than anything that would be normal even during a normal recession, a recession like we had during the financial crisis, and it just makes me wonder whats going to happen at the end of july when the bonus and Unemployment Benefits runs out and the administration doesnt want to renew it thats the question and the question at that point is if the administration doesnt want to renew it or come up with fiscal support package, continuing claims i think is really in the foreground right now. Did not really improve much at all week to week you know, markets are going to be impatient i think to see some improvement at these levels where the index has traded, its not necessarily fixated at all times on the official economic numbers just because we have all these alternative ways of look agent the pace of the reopening. Right now the market seems to be in a stall after last weeks pullback its another day when bond yields are sluggish so its a big Growth Stocks that are Holding Things together. Thats the way it went yesterday as well as the average stock was down, you saw things like the nasdaq managing to nudge higher. Wheres sara . Is sara gone . David, i thought you wanted to Say Something are you talked out no. Usually i wait for you to sort of come back to mike, set the stage and then usually david, and then ill chime in thats what i was waiting for. I was really eager to hear your take. No, i mean, look, youve got the Economic Data. It maybe shows some improvement but also a lot of pain out there. You have the rising case numbers and rising hospitalizations which i think are more important than the case numbers which do in part reflect the abundance of testing out there. I think the question is going to be are these young people that have been going out . I talked to Scott Gottlieb last night on our special he was saying a lot of the hospitalizations were seeing in the hot spots are younger people who just for whatever reason are going to bars, not Wearing Masks or practicing social distancing because they dont feel theyre at risk. The older population knows the risk and if thats the case, are we going to see lower mortality numbers and not this case in new york where the hospitals were overwhelmed and you would see shutdowns of states. I think that continues to be a discussion point and a question were going to wait for the data to show in the next few weeks. Yeah. Dr. Gottlieb was concerned, wasnt he . I mean, there was more concern perhaps than hes shown in some time that there could be outbreaks of great significance in places like florida and potentially arizona as well. For sure. The question is how much we can tolerate as a country. Were obviously not china and they do things completely differently. With 137 cases in that country, theyve closed schools theyve shut down airlines and theyve also shut down communities. So big stark difference in terms of how theyre approaching this. Lets continue our conversation with what it all means for investors with our market panel today. We have mark vintner good morning to both of you. Mark, how should we think about the jobless numbers today and what they signify about the economy and the markets . I think were seeing a slowdown in the rate of initial improvement. When you saw activity fall hard in april and you go from being 100 of restaurants to 85 of restaurants being closed, that gives you a callback of workers. The improvement from there seems to be slowing. Ive been to a number of restaurants recently, and some do it very well in terms of being able to social distance. If theyre able to seat people outdoors, they can do it fairly well others have limited capacity so i think that maybe the ease ye iest reopenings are behind us. Joseph are you surprised to see the market in all the resilience weve asked this a number of times but even today, the dow is down 90 points were cutting our losses on the continued questions about surges in america in terms of cases and millions of americans unemployed. I think the larger cap quality names have come back dramatically since the lows months ago that reflects the sense that weve bottomed out from an economic standpoint. Its been a pretty remarkable bountback. At the same time, if you look at the dispersion between the march cap and the u. S. Versus small cap in the u. S. , its still quite a dramatic dispersion. Look at the russell 2000 value, its down 25 so far this year, whereas this s p which is a lot of the focus of all of us, but the s p is only down modestly. As it relates to the economic pickup, i mean, were trying to balance the speed of the reopening has gotten folks very enthusiastic, but we dont want to mistake the speed of the reopening with the strength of the recovery were focussed on the strength of the recovery as what will determine ultimately the fundamental values of equity markets. Joe, you mentioned the big variance between the old growth stock led indexes like the s p and things like russell 2000 value or other cyclical indicators do you take that as a message from the markets that it wont be as strong a recovery or do you view it as an opportunity to play the narrowing of the gap . I think the markets still a very skeptical as to the improvement in the economy and how quickly it will occur. I think cyclicals will start to work, and there is probably a powerful rotation over the course of the next number of months but i think you need to see some different elements you need to see clear pathways on reduction in the Health Crisis that we have and the rate of growth of virus cases in a minimalization of some of the clusters of Additional Health issues weve seen crop up over the short period of time i think there is going to be a point in time to make that rotation right now we would still stick with quality because theres a fair amount of head winds and we see choppiness through the second half of this year and one point of choppiness people are looking autoto, which i referenced earlier is the timing of when the bonus Unemployment Benefits runs out at the end of july what kind of income shock is that going to be well, that would be a big income shock, but i dont know that its just going to flat out expire i mean, maybe theres an impasse and they cant correct for this inconsistency right now where so many of the job losses have been in the hospitality industry. With the bonus payments for many, it doesnt make sense to go back to work when particularly for tipped employees. Their income is not going to match with the bonus Unemployment Insurance is. Maybe they can reposition that so its some sort of income support. I dont know if logistically if congress can do that its been surprising at how quickly theyve moved so far so maybe they can do that. If they did that, i think we would continue to see gains. A good part of the job losses are kons tralted in a hand full of industries. The Restaurant Industry accounts for such a large proportion of the job losses we saw a lot in the Health Care Sector in that part of the economy, things seem to be coming back more consistently. Were seeing doctors and dentists are reopening i think 20 of the job gains in may for dentist offices and we only recovered about a third of the jobs we lost at dentist offices. Joe, its david you have kind of a unique view given the different managers you have with their own strategies and their own client bases, typically High Net Worth what are you seeing in terms of peoples willingness to take risks . Are they happy to be in the equity markets are they pulling out this experience is different than past crises in 08 we saw panic on individual investors and worrying about the Systemic Risk in the Financial System and wanting to significantly reduce risk here we saw very little panic and many of our clients hung in even during the challenging periods in march when you saw quite a significant drawdown theyve remained relatively fully invested theyve recaptured it. Typically people have pulled out at the wrong time and missed the bounceback how do you view the cash thats still on the sidelines . A lot of people focusing on money market funds, for instance, and just the overwhelming caution do you see that ultimately as a tail wind for stocks as the money is put into the market i wouldnt say theres overwhelming i think positioning is modest. You dont see the positioning indicators you typically see at a market top whether its hedge fund exposures or Institutional Investor exposures moving away from the individual exposure, we see institutions as being modest in their positioning and not worrysome. And equity markets, you know, tend to swing in both directions this weve seen a correction over the course of the couple weeks youll see more of that over the course of the fall as clarity is still not there yet as it relates to the Health Crisis and then you also have as we have to remind ourselves sometimes, an election in november and that election i think is going to be important in the determination of things like regulatory policy and tax policies which could have an impact on markets as well. Thats another segment for another day. Joseph, thank you. Thank you and mark, thank you thank you. Coming up, inside krogers quarter and the impact of covid19 on the countrys largest grocer thats next. Stay with us [narrator] the shark vacmop combines powerful suction with spray mopping to lock away debris and absorb wet messes, all in one disposable pad. Just vacuum, spray mop, and toss. The shark vacmop, a complete clean all in one pad. I geh. Common bird. E. Ooh look over here something much better. There it is. Peacock, included with xfinity x1. Remarkable. Fascinating. Very. It streams tons of your favorite shows and movies, plus the latest in sports news and. Huh run the newest streaming app has landed on xfinity x1. Now thats. Simple. Easy. Awesome. Xfinity x1 just got even better with peacock premium included at no additional cost. No strings attached. Just say peacock into your voice remote to start watching today. A very important ruling we got this morning from the Supreme Court of the United States involving the socalled dreamers lets get to eamon for the details. Thats right. The decision from the Supreme Court coming down on daca, the deferred action on childhood arrivals or daca program that began under president obama back in 2012. It would allow about 70000 people who arrived in the United States as children who were immigrants to stay and work in the country. The president , President Trump, had sought to end that program taking it all the way to the Supreme Court arguing that president obama did not have the authority to put that in place the Supreme Court not buying the Trump Administration argument here today and moving to block his effort to shut down the daca program. That means those socalled dreamers, the children who came of the United States and are grown up will have the opportunity to stay in the United States. Its a big immigration defeat for the president. A big win for immigration advocates and the dreamers themselves who have argued they dont know any other life. They came to the United States as small children. It would be unfair to send them back to countries they know nothing about and have no experience with. David, a big immigration decision here from the Supreme Court this morning and it was chief Justice Roberts i believe to sided with the 54, with the remaining well, the other four justices. Correct . Right and what were seeing here is chief Justice Roberts taking interesting positions that dont necessarily square sort of with conservative ideology. A lot of the dreamers said in the runup to this they thought a conservative court that had a number of Trump Administration picks on it would not necessarily rule for the dreamers thats not what happened today so maybe in some senses, a surprise for some of the dreamers as they wake up to the news around the country and figure out what it means for their futures. Were not seeing the Supreme Court here between the gay rights decision we saw last week in terms of workplaces and now this dreamers decision thats necessarily huing to a conservative majority as you might see, a social conservative would want the outcomes to be. A fascinating nuance here in terms of the argument that Trump Administration said obama simply didnt have the legislative and Legal Authority to put this program into place in the first place. The Supreme Court not buying that argument today. Yeah. Second one in a week as you mentioned, thank you. Now ill thank you you bet i want to draw your attention to shares of kroger. Falling despite what was a big beat on earnings Comp Store Sales for kroger surging 19 with revenue exceeding wall streets estimates. They updated the guidance for the year after raising it in april saying it will come in above the previous guidance. Just the beat on sales that 19 , kroger before the crisis, was used to comping sales around 1 to 2 . This is obviously a huge beneficiary of the eat at home stay at home economy that weve all been accustomed to and the question for kroger shareholders at this point and for the business at large is how much of it sticks . How much of Consumer Behavior as the Company Expects it to do, will change as people discover eating breakfast at home which they hadnt been doing and as people continue to sort of cycle through the work from home economy, mike . How much do they want to stay at the Grocery Stores the pattern is familiar where the beneficiaries, the food stocks report very strong earnings, very strong sales and sell off and part of it is its already been reflected in the stock. This stock is up more than 30 over the last 12 months. Its been remarkably resilient in the face of the earlier market downturn. A lot of it was factored in. The only consumer staple thats done better over the last year has been clorox, also a dekt beneficiary of the pandemic. Its a little more sustainable in terms of a longerterm behavioral change with clorox. The market is saying for kroger even if there is a little more help in terms of more stay at home down the road, its as good as it gets in terms of rate of change in the Current Quarter they just reported its interesting, because the stock really still looks fairly cheap on current projected earnings, but the market is effectively saying you cant extrapolate that out much more than the next couple quarters. Right and if you look at the two biggest competitors, its amazon and walmart. And those guys have ecommerce figured out in the eyes of investors. David, you remember when there were more publicly traded Stores Safeway and anp. Now its all kroger. Even whole foods is inside amazon now a lot of those were leveraged buyouts, but the sponsors like the predictable cash flows we may see albertsons back on the market in some fashion speaking of retail, as states begin to reopen and americans slowly start to leave their homes, where and what consumers are buying and stocking up on has shifted a bit. Courtney reagan will look at it in our american at home or america at not american, america at home series courtney americans are home in america, both works. In some cases the covid19 crisis compressed growth in some areas of retail that might have happened over several years. Instead it happened over several months online sales have been growing by double digits annually. They surged during the pandemic. And have stayed elevated and some of that surge is actually from firsttime Online Shoppers yes, there are many of them out there. 43 of u. S. Consumers said they never or rarely shopped online before march since then, 90 say theyve bought something online. This is according to adobe we get interesting looks at who the buyers might be. They did an analysis of online receipts and it looks like weve got a lot of Older Americans and lower income americans that are falling into this group. In the 65 and older age group, their share of new buyers outweighed their share of all buyers 13 out of 15 retail categories the lower side of the income bracket making more online purchasers shoppers with Household Incomes under 50,000 a year made up 55 of new Online Shoppers but only 40 of all shoppers. Online grocery, a huge surge but the performance and the permanence of this is in question 38 of Online Grocery store shoppers started it for the first time adobe says Online Grocery sales fell 14 in may from april now, the hybrid shopping model is gaining steam a survey shows that 32 of americans used buy online, pick up in store during the pandemic. And 35 will continue doing it store traffic fell 83 its still down about 45 with the partial reopening. And they predict up to 25,000 stores will close this year. That is double the original estimate from core site for the stores well see shudder in 2020 interesting data. I wonder if the older shoppers that are discovering ecommerce for the first time, will stick with it. You know now that states have been reopened i guess thats one of the key questions the retailers are asking definitely. I think it could go back to everything with our fist time and how good the experience is if its difficult and cumbersome if they didnt get exactly what they wanted, maybe they wont. For many as long as it worked out okay and if they have an easy reorder button, which i know was popular with my mother, i think it could stick well, yeah, and also as long as we continue to have a pandemic in this country you know, that theyre better off at home. Courtney, thank you. Time for our etf spotlight today ticker xme moving lower. Down more than 25 for the year. One name thats dragging down the group is u. S. Steel. Tumbling after raising more than 400 million in a new common Stock Offering disappointing quarterly guidance also is weighing on x u. S. Steel down 12 which has fallen more than 25 for the year. Were going to take a quick commercial break stay with us on squawk on the street as we look at stocks that are mostly lower. Big cap tech was holding up. The nasdaq went negative the dow is down 70 points. E arofheoun about double that at thstt t hr. Well be right back. A lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. And tailored recommendations. 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. Its totally not the same without you. We miss your lets do this look and cant wait to get you back, so weve added temp checks, face coverings, social distancing and extra sanitizing to get the good times going again. Were finally back. And cant wait until you are too. Welcome back, everybody. Im sue herera heres your update at this hour. The chief scientist of the World Health Organization says she hopes there will be 2 billion doses of a Coronavirus Vaccine by the end of next year. She says they should be reserved for at risk people, including the eld ler and key workers. Hong kong disney land reopened visitors are required to wear masks and have their temperatures checked on squawk box this morning Scott Gottlieb said new outbreaks in parts of the south and west are, quote, on the cusp of getting out of control, end quote. Go online to see the interview and jean kennedy died she received the medal of freedom in 2011. She was 92 years old you are up to date ill see you next hour squawk on the street continues after a quick break. When the world gets complicated, a lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. According to a study investors would rather leave money on the table than invest in a minorityowned fund leslie picker breaks down the findings its not just a racism issue but a if i dish yar. They think they may miss out on returns by undervaluing black Fund Managers and overvaluing those led by white men bias was discovered on a study by Stanford University the researchers ask them to evaluate and they found at the highest levels al cay or thes gave black managers lower ratings than white managers of similar qualities. Its unlikely theyd actually invest in a weaker fund regardless of race the researchers say the results of their study suggest that in addition to Racial Disparities in the pipeline for Fund Managers there exists, quote, systemic Racial Disparities in how investors allocate money and invest in funds. When i hear arguments around diversity or excellence, paying attention to manager excellence or performance that lets me know theres Something Else at play this is not about performance. This is about Something Else, and unfortunately, that Something Else is racism theres a long way to go to close the gap here currently of the 69 trillion in hedge funds, mutual funds and private equity, just over 1 is managed by women and people of color. David . Leslie, stick with us for now. I want to bring in our next guest who was part of the study, managing director at alumun capital. Give us a sense to your reaction and what youve seen from your own work as well so as a managing director, were a private equity fund of fund we work on Evidence Based Research to reduce implicit bias and unlock returns i think the big question we ask is over the last 30 years of emerging manager programs that have been touted as one of the ways the industries can succeed, were at 1. 3 . Its a dismal failure. So part of what we ask is whats happening that is preventing this number from moving . Its over 52 years since dr. King was killed, and for tieing together these pieces of Economic Justice and economic optimality, and people are willing essentially because of their biases as our thesis points out, to accept lower returns due to their unconscious bias thats the key, and if we can reduce that, if we can make that a part of processes, then we can unlock returns right i mean, you would assume they want to generate as high a return as they can how do you make them conscious of their bias if theyre unconsciously making these decisions based on race . The first thing is prove as we did in the paper and collaboration with a lot of the leading stanford professors in the world on implicit bias, social psychology and portfolio allocati allocation, we look at those strategies and then we really dig in to helping them understand we use measurement in every field of finance its not new we know what a normal curve is we know what we should be looking at in terms of the most talented people in the world within the most talented Asset Allocation portfolios. We help them realize if they arent proactively look agent that audience of Top Performing managers, theyve really kind of missed the boat. Typically over the last 20 years people have thought this is a pipeline problem and there are issues with the pipeline however, what we prove second down even if you solve the pipeline problem, systematic bias at the Asset Allocation level will consistently overlook and underestimate the Top Performing managers. As was mentioned before, it was kind of a big stain on peoples desire to achieve their fiduciary duty for endowments and for their foundations endowments and for Pension Funds and sovereign wealth funds in the finance industry have you personally experienced this. I pitched 500 times over the last couple years. I experience it every day. And youre also in addition to being in charge of a fund of funds, youre on the board of ben and jerrys. They made a lot of news for putting out a long and pointed statement around the issue of White Supremacy, around the issue of social justice and the protests were seeing. What do you see as their responsibility of Corporate America in this issue, especially as it relates to some of the key things that the protesters are calling for yes as we look at ben and jerrys statement, the independent board of directors im a part of is a unique creature under the unilever umbrella. Part of what we are responsible for is executing on the social economic and quality missions of the company. And thats an incredibly Important Role to align around what were going to do to rise to meet the call of our values around Racial Equity injustice, and were currently in that process as a board of studying lots of parameters and targets and collaboration with the Management Team in order to route out Structural Racism and White Supremacy within the country itself thats not a journey we began yesterday or three weeks ago its a journey that four years ago the company was publicly in support of black lives matter and even before that has done a lot of things since its founding to continue this movement and be supportive of those on the front lines at really taking on these issues of White Supremacy across the entire business, and communities in which we operate. Were in 35 plus countries around the world this is not simply a u. S. Problem. And it needs not only protests but it also needs proactively building toward a better and united world that includes having things like black suppliers for supplier diversity and systematically thinking across every at pekt aspect a company, how we route out the issues and over look the humanity of so many people and human beings on the manager selection issue, again, some public Pension Funds, union Pension Funds seem to have either requirements or incentives to look at diversity of managers as part of their selection process. Are those programs not effective . Are they part of the solution . Yeah. Typically one of the things that we have in Asset Management is something called a sleeve theres a partial thing that sometimes allows a little bit of capital to flow. And what we focus on here is the main spigot, not the tributary of the river but the main river. And the main river is at 1. 3 after people have made lots of efforts over the last 30 years, and then even before that to kind of try to solve this problem. So something is fundamentally broken in that that number stays so low when wed expect the brilliance among the portfolio to be 50 or higher paced on the brilliance we know is present in the society. Many argue theres a pipeline issue, but the issue we see is a black high performing manager right in front of the face of the asset allocatoor will not ge a fair shake, and the higher they perform, the less likely they are to be invested in you mentioned you pitched 500 times and experienced racism, i guess, in some way, you feel almost every day in that sense i mean, what when you follow up, when youve not gotten a mandate, what is the typical answer you get, then, when you ask why . You know, so one of the common disconceptions of our strategy is people will ask us to train them. And implicit bias reduction. Because they know that it might lead to outperformance in our thesis, but were not a Training Firm were an Asset Management firm, and a way to be a part of the journey of understanding ones bias is to commit like our Fund Managers do to ten years of work, and we work quarterly over a tenyear process with our Fund Managers to undo the processes that all of us have around implicit bias as we take on the challenges that we seek when we seek to create alpha generating returns. For those that love alpha generation, i think they kind of get it sometimes, but a common disconception is that they can train which many people have done over many years, and ways that are not kind of evidencebased and think that theyre finished without moving their assets so the scoreboard is 1. 3 , moving to 50 . And you cant get there just by training you have to move assets. Understood. Appreciate you taking time with us this morning. Thank y really appreciate it. Have a great morning later today on the closing bell, anthony noto, his company at number on the disrupter 50 list dont miss that interview at 4 00 p. M squawk on the street will return in two minutes. Energy financials and materials going strong well be right back. Top investor sees opportunity in energy and industrials. Find out why on trading nation more squawk on the street coming up. When you walk into an amazon fulfillment center, its like walking into the Chocolate Factory and you won a golden ticket. All of these are face masks. This looks like a bottle of vodka. But when we first got these, we were like whoa [laughing] my threeyearold, when we get a box delivered, screams mommys work mommys work. With this pandemic, safety is even more important to make sure we go home safe every single day. Still to come rick caruso joins us his take on reopening as hospitalizations in his home statofe california continue to rise were back in two minutes. Where will you go first . Wherever you may go, lexus will welcome you back with exceptional offers on exceptional vehicles. Get zero percent financing and make no payments for up to 90 days on all 2020 lexus models. Experience amazing at your lexus dealer. A lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Take a look at where we stand on the markets weve gone positive. Weve been all over the map. Dow up 18 points boeing is the big winner of the day to far energy, financials and materials lead health care and utilities lag. Dont go anywhere. Opck caruso joins us next on reening in california. Well be right back. As business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will you can rely on the people and the network of at t. To help keep your business connected. Yeah yyeah yeah hey, hey were talking about the challenges of reopening as covid19 cases spike in Northern California rick is joining us now rick good to have you withing cases, the number of cases in the l. A. Area. How do you think about the reopening and whether or not it is in reopening. We put together and i think we talked about it some very strict protocols on safety for cleaning our roperties. We are reminding people to stay six feet apart is it a concern . Ochk it is because our number one priority is keeping people safe people were waiting in line. But it was working and even in our outdoor parts we have circles that indicate where people sit i think there is an attitude that everybody wants to make this work. Theyre regulating themselves, their helping them, but i hope we dont see a big spike, we cant really afford to you have a little look at what track looks like overall and what the expectations are for the shops. Traffic is down about 20 , but were seeing the Conversion Rate coming inside so we have some retailers that are actually have sale thats are prelowture sales in terms of volume were very expanded. We have restaurants that pounced back to preclosure volumes as you know that sunlight is the best disinfectant for this virus. I think people feel very comfortable on our properties and theyre coming back to shop and dine with us were very happy about it. What we have to do is wait over the next 30 days and see how it comes up that will be the limiting fac r factor yeah, rick, it is david as you point out outdoors is so important, but indoors is more problematic. Whats the sense of your retail tenants ability to withstand what is coming at them if it cant be a level of traffic they have experienced in the past how many didnt pay rent in april or may how are you gauging their health fortunately our properties unlike they are staying 100 occupie occupied retailers are experiencing brpgs. We dont have a lot of that yet. It is not across the board i think were going to weather it well. I think the overall retail community. I think do a michael survived . Nordstrom, sephora, lululemon. Those are our staple tenants the smaller properties we have abated or deferred rent. We want to get them back into business so they can be healthy again. So i look at it as an ego system our predix on growth, were going to about 70 of our receivables, that is good. Were down about 30 on the closures so it is coming back. So were not getting the push back to go back to full run. Were paying the rent it will be across the country especially if youre allowing bigger boxes that went into this crisis struggling we have been watching that and of course, that would be very unfortunate. Interestingly rick, youre also amazons largest retailer. We have seen amazon books. What do you think about their ability to pay no, we like amazon as a tenant not justbecause of their financial strength, but because theyre one of the brick and mortar spaces, but the thing about retail that i love is it is really populated with people that have a tie degree of ingenuity and theyre creative they pivoted if they changed their omnichannel presence theyre reaching customer where the customer will be i think the retailers that are doing the same old thing all of us have a higher expectation of what is going on now. We are closed in and we want a great experience we see them doing business and doing showbiz and the same thing. Going back to severe restrictions is there thresholds for some of the metrics now that you think could change that equation i was at a call yesterday i was on the call with them. Some of the counties are seeing some spikes and what you do about it i cant speak for the governor i do not predict and i certainly hope that we dont have a closure again. What i think might happen is they might have more restrictions it seems to be from the science that the best thing we can be doing is physical distancing and wearing a mask were all in this together in is a shared responsibility. And i would recommend to the governor mandated across the state is just part of what we have to do in order to survive this and get through this and keep businesses open because second closure is just going to be a dramatic negative impact as all of you know. I dont know how many businesses could sustain that some younger people dont wear masks in this country whose responsibility is it is it the retailer i think so. We have ambassadors going around, we have hand sanitizers, we have masks, we have really strict protocols on our property and i think the stricter they are the better the business will be the consumer will gravitate to where they feel safe, comfortable, and can spend time. I recommend every business follow the rules, have strict protocols, and you will be rewarded for that. I think that every government and county needs to mandate that you wear a maskt we should take it very seriously if is life and death stuff thank you, keep us posted on the progress with the market now bouncing into positive territory, it looks different from where we started the hour, over to you to pick it up good thursday morning im john fort with Morgan Brennan and mike