Transcripts For CNBC Squawk Box 20240712

To get things started off. The dow is down by 17 points but the s p and the nasdaq is there. Nasdaq is indicated up by 47 points this is after a strong month of july for all three of the averages the dow up by 2. 4 for the month. The s p saw its best july by ten years. It was up by 5. 5 . Thats nothing compared to the nasdaq today is the first trade ding d of august. Thats out at 10 00 a. M. Eastern time today also take a look at treasury yields you did see yields under extreme pressure or ten year closing at its lowest level since all the way back to march 9th. Right now it is a little bit higher 0. 546 stimulus talks in congress. Trump administrations officials and House Speaker nancy pelosi are set to resume negotiations today on their competing visions of a bill. The Sticking Point continues to be a boost set at 600 per week in march that lapsed on friday he and Speaker Pelosi are on the same page about the need of direct Cash Payments of 1,200 to most americans. Andrew. And big corporate story thank you. Over the weekend and continuing well see where this goes. And microsoft said it will keep working with the u. S. Government on a deal. Giving the companies 45 days to workout a deal we want to get straight to beijing where eunice joins us with the latest from there what is the take out on all of this. Theres a lot of back and forth here first ill update you on what they said because it has been able to confirm a couple of developments on its own. The founder of the company spoke to the staff confirming a couple of things. A u. S. Review determined that tiktoks u. S. Operations, the company was in talks with a certain Technology Company for a cooperation plan though it didnt name microsoft or say exactly what the plan was. It also added that dybyte dancei still exploring possibilities. Theres reports that it preferred an independent spin off. The Company Issued a statement and it believes that its a victim of a very intense political environment. Also underhanded tactics by facebook its chief rival in the u. S. Also weighed in as you would expect opposes any u. S. Action that discriminates against Chinese Company. China has been accused and does block and discriminate against a lot of American Technology companies. But what i think was interesting is the reaction on social media. Because unlike with Telecom Giant huawei where we saw an up swell of nationalism around the company, the reaction toward bytedances situation is very different. People have been calling the founder a trader, attacking him because he has, in the past, praised america a lot for its values, for its resilience, and so now people are asking oh, well, how do you feel now about that a lot of that is because the company made such an effort to try to present itself as a Global Company and so its being called a traitor for cutting off its ties with china a couple of questions one of the things that youre seeing happening on tik tok is influencers and people that use tik tok are telling people go find me somewhere else go find me on instagram or sign up and follow me elsewhere how concerned is byte dance and microsoft that the Value Proposition could disappear by september 15th which is the date that microsoft says its going to hopefully have a transaction by or at least continue. Yeah, bytedance has said anything about that. But from my understanding, the company is quite concerned about the survival of tik tok and made sure that in some way, shape, and form it will be able to operate. They havent said anything. We have been looking at this simply from the u. S. Perspective on things, what u. S. Regulators are doing. This is ruffled feathers in china. Chinese Officials Say no you cant sell this to a u. S. Company. Theres a fear of that. Theres two ways that people have been talking about this theyre pointing out the fact that here in china, a lot of companies that would be seen as tit for tat such as twitter or facebook are actually already not allowed in china what actually could china do and because of that there is concern that somehow china would take out its frustrations with what it sees as unfair and discriminatory policies by washington on other American Companies here. Eunice the other question i had relates to how china used microsoft as a potential acquirer as opposed to a potential spin off independently. If you were getting it picked off by google or some other company that i think china has a lesser view of, does it matter well, microsoft actually doesnt have a Bad Reputation here they do operate bing which is one of the few companies, one of the few Search Engines that i can use here whenever i want so we have some business here and arent necessarily seen as a bad actor but its right now, the focus on the Chinese Government reaction has either been a lot of criticism about the Trump Administration and its policies or on state media calling the u. S. Hypocritical or theres been a lot of focus on state media and its mainly motivated because they think that the us. Is concerned about a rise in chinas prominens in the hightech world and this is a disruption they have thats actually what washington is disrupted by. The reason i asked is because obviously peter navaro on television over the weekend suggesting that microsoft was in bed with the chinese already and that that didnt necessarily solve any of the situation and frankly to beckys point, i wonder if youre an apple on a day like today whether you view this and look at this and think that effectively if the chinese were to want to retaliate effectively against American Companies that dont do business what would happen to an apple if the chinese leadership were to say, you know what, you want to do this to tik tok, were going to do this to you. Any high profile American Company especially in the tech sector would be very, very concerned about what theyre saying its what they have been seeing built up over the past couple of years at this stage. So i would damage people over an apple or any other Technology Firm would be taking this into consideration about the possible reaction that they could get here in china but at the same time its not necessarily directed at them its probably something that they would be adding into their calculus. Always great to see you great to get all the perspective on the ground. We got a lot more on this story throughout the morning we should tell you, 8 30 a. M. Eastern time andrew, what do you think about the story in going back and forth and its an impressive maneuver that he was able to kind of talk to President Trump and figure through what might be a window but it still seems to me like there are a lot of potential risks. It would be great for microsoft if they can do this. If they can pull this off but i do think about Chinese Administration feel like they are getting shown up and looking for some way to go around and say no you cant you cant sell and you cant move the servers to the United States. My take is mixed. It could work for microsoft. It could be a great thing for microsoft. They could turn themselves into a consumer juggernaut and if they could leverage the xbox brand and minecraft and other things and make it work. Its not clear that they will be able to make it work they also had some failure in the consumer space being an example. The acquisition of nokia they have done a remarkable job working and having a core and a focus on the Business Enterprise customer and one of my worries is that owning a social media platform in this day and age requires a lot of attention. Washington and all sorts of things so what type of attention is that going to take in terms of management on the flip side, if theyre able to succeed, it creates competition to facebook and google and others. So many Different Directions i can see this go. Both in very positive directions but also i can see the challenges ahead as well again we will continue to talk more about the story throughout the morning i want to bring this story to you. Spacex returned to nasa astronauts safely yesterday afternoon. It marked the return of the United States capability to launch its own astronauts from its own soil they plan to launch astronauts every few months Going Forward paying an estimated 55 million per seat but this was kind of cool guys. It reminded me so much of i dream of jeanie, right it was amazing to watch its like back to the future or maybe the future i just thought it was pretty cool yeah. Me as well the pictures were pretty cool. Speaks volumes i think it creates a halo effect there elon musk now with spacex is in talks i believe with tom what am i missing, my brain is Going Mission impossible to do a movie actually in space tom cruise. Tom cruise. To do a movie in space which would be amazing an actual movie in space like tom cruise goes to space on a spacex like and its filmed in space. And like coming very soon. See i couldnt remember his name. I feel like a complete dope. Its early. Its early the brain needs time. Its early. This is old hat for you guys. Its true i have no excuse. All right lets move on to the next story. To alphabets google unit and security provider have struck a Partnership Deal that deal will combine googles nest hardware with adt installation and service and monitoring and will invest in a stake in adt each company will commit 150 million for marketing and product development. Adt will begin offering nest devices to its customers this year and expand its offerings in 2021. All right when we come back, dr. Scott gotlieb will join us to weigh in on the stunning surge of covid cases in july. Gold was up 9 in the month of july thats the best monthly gain since 2016 its also seeing the best five month winning streak since 2010. vo since our beginning, our business has been people. And their financial wellbeing. Its evident in good times, with decisions focused on the longterm. And crucial when circumstances become difficult. That continued emphasis on people our advisors, associates, clients and communities gives us purpose, strength and a way forward. Today. And always. You say the customers maklets talk data. S. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept. 5g, everybody is talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item, corner offices for everyone. We just have to make more corners in this building. Chad . Your wireless, your rules. Only with Xfinity Mobile. Now thats simple, easy, awesome. Switch to Xfinity Mobile and save up to four hundred dollars a year on your wireless bill. Plus, get two hundred dollars off when you buy an eligible phone. Welcome back to squawk box this morning coronavirus cases in the United States surging by 1. 9 million in july and thats more than double the number of cases in any other month. Yesterday the pandemic had reached a new stage in the United States and its much more widespread than ever to one that is both rural and urban and schools and areas where cases are surging to use Distance Learning instead of in person education. After young people piled into beach bars and authorities and others have been cracking down on parties as parties in bars and clubs remain closed. Theyre now reprimanding young people were ignoring young people and risking the lives of vulnerable populations and joining us as he always does is scott on the boards of pfizer and alumina and theres been a bit of a shift at least the interview with the doctor over the weekend about schools and so many businesses focused on the issue squarely of schools given its economic ramifications, doctor. What do you think is happening here. Yeah. A little shift in the tone i think it was an acknowledgment that in places where the epidemic is out of control where you have widespread transmission and really dont have control over the spread within a local community its going to be hard to open the schools against the backdrop again the situation where your local hospitals are overwhelmed and new cases are accruing on a daily basis. Thats a very difficult backdrop to open the schools against because the schools are going to contribute to some extent to the spread in the local community so the first thing that you need to do is get some control over this in the local community the challenge with the schools is that theres anecdotes on both sides of the debate some schools are opened it successfully the netherlands and germany and the schools dont seem to have been a low distance spread in the countries. Very strict measures in the schools in the outbreak and documented recently where there was a very dense outbreak. You have the situation in israel where they opened the schools and the schools did experience large outbreaks and became a focal point ofspread we need to look at these situations and try to figure out what went right and what went wrong in different situations and settings and one thing is when schools did open and they opened successfully, they implemented pretty strict measures in those institutio institutions. Let me ask you, maybe im asking a selfish question because its close to home, a major city being new york city but it looks like the northeast was doing a bit better at this point in the ball game the question is whether that can last when and if schools reopen and everybody really gets back to work if thats what we think is going to happen are you surprised. Not surprised at whats taking place over the past couple of weeks and months now in places like new york city where there is Public Transportation the reason i ask is people are starting to think more about the Public Transportation issue and surprising to me to some degree people Wearing Masks even on public transport seems to be working. Not that surprised. We have been talking about this a lot. Time for introduction is about ten weeks and once new york got their virus counts down very low and crushed the infection or connecticut did, there was going to be a period of time where it was going to be relative we thought that july and august would be in the northeast but the question is can they hold on to it or are they being heavily seeded and we dont know it and youll see the consequence of that sometime in september i think by and large these states have put in place good testing and good tracking and tracing so theyre going to be able to hold on to the gains and the bottom line question is the combination is targeted mitigation so you close certain High Risk Congress you try to move activities on the one hand so you do do target mitigationcombined with universal masking. Is that enough to keep the virus at bay it seems to be working in the sunbelt in terms of allowing him to get control over the end dpie manage epidemics. Can it keep it at bay. We may have found a happy medium between the lock downs and just spread. There was a raging debate on twitter over the weekend just talking about or i get spurned by an epidemiologist and doctor at Johns Hopkins suggesting we should allow people to start using the vaccines even before they go on phase three testing what are your thoughts on this we disagree we need to put these through proper trials. The bottom line is people are only going to be able to get one vaccine per season if they end uptaking a vaccine that wouldnt have been as effective, that would be a negative Public Health outcome theres going to be enormous pressure around the vaccines there could be a circumstance where one gets approved outside of the us. First theres pressure to do the same here in the United States and we need to complete the large pivot a, l trials and figure out which works best and which patients make sure that theyre safe. This isnt the long time to wait we should be able to turn over the data these trials should enroll fairly quickly given all the infection here in the United States and we should be able to get a read out earlier than we thought because there will be a lot of people that get infected. In the october and november time frame. Thats not a long time to wait on whether the vaccines are safe and effective and whether theyre working. Im wondering what you make of Major League Baseball and once we start to get back to reopening schools and things like that. Youre seeing increased outbreaks relative to whats happening in other sports. Major League Baseball is not whats your take from what you see. My take is this is highly infectious and youre right, Major League Baseball didnt do it the nba did. And the players and the players families for that matter especially when this gets to the clubhouse in close proximity it spreads quickly. It is a warning of what could potentially happen if were not very careful with the schools and the question is going to become when do you close the school were going to see outbreaks in the school and the question is what are local districts going to do when that happens . What youll see is unfortunately a lot of schools open and theres going to b unfortunately outbreaks in the settings youll see a lot of schools closed and its going to be hard to get them reopen we need to address that careful carefully. Theyll try to keep them open as long as possible i know that you have an oped in the wall street journal today laying that out. What are the odds that you think that we get National Guidance on Something Like that . If you were setting the rules, what would you say whats an acceptable way of dealing with it . Well, i dont know that were going to get any guidance thats better than what we have already gotten there needs to be specificity around the circumstances that would cause the school to close. Its a brief period of time. And do a testing of the School Population and reopen the school that hasnt been delineated. Theyre on their own trying to figure this out. They could come up with a circumstance where if you have Testing Available and reopen the schools. If you have a lot of spread in the community its going to be hard to open against the backdr backdrop make sure to give access to testing if there is a case in the school or hand full of cases you can test your way out of it. Theres more Testing Available for professional sports teams than there are schools certainly. Theyre playing the music but very briefly, on the vaccine front a number of scientists were concerned that the administration or washington is going to try to move too quickly on the vaccines themselves related to the election. How concerned are you about that particular issue and would you be one of the first to take the vaccine . If a vaccine went throughout a regulatory process i have confidence there will be pressure and its important that the fda layed out a real clear line about what the vaccine would be they did that two or three weeks ago. If its approved you take it the vaccine goes through a regulatory process its one of those Companies Developing the vaccine trying to come through the regulatory process. Well talk a lot more about this i hope that we get an opportunity to see you tomorrow. Thanks a lot. Coming up extra Unemployment Benefits for tens of millions of Americans Last week. The next risk, eviction. An update on the exploration of a four month moritorium. Heres a look at the biggest year to date gainers in the nasdaq 100 you should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. But inside. Theres advanced research, modeling and refinement. Constructing funds that dont simply follow an index. But explore new terrain. Helping you fill portfolio gaps. Connect to client goals. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Millions of americans are at risk of eviction diana joins us with more. Good morning, the federal eviction expired and extra Unemployment Benefits are over that was a significant factor in rent payments over the last several months now close to 30 million tenants are in danger of being evicted by the end of the year that according to research by the aspen institute. Renters tend to be on the lower end of the scale and seeing the higher job losses. Looking locally, these are the states with the highest percentage of renter households that said they were unable to pay rent and therefore at risk of eviction as of july 29th. In some states you can see that half of all households the risk is even more stark. In california and texas, thats more than a million households over the next four months and close to a million in new york now in the democrats latest relief proposal thats an extension of the uniform national moretorium. They want an extension on rental properties with government backed loans but that only represents about 28 of the nearly 44 million rental units in this country thats according to the urban institute. So this is a big problem Going Forward and really starting today. Big problem not only for the folks that are in these homes and the economy at large and how this will all ripple through the economy at the worst time. Absolutely. I mean, first and foremost this is shelter at a time when that is our greatest protection against the pandemic but when you look at the real estate behind this. Theyre paying rent to land lords and land lords have to pay their mortgages and property taxes and then their buildings go into foreclosure and that goes into the entire Real Estate Market both the large multifamily buildings and also the Single Family homes which is really more than 40 of the rental market so that goes to the entire real estate economy if there isnt some kind of relief for the renters and the land lords. Lets hope that we get something. Thank you very much. Thats diana reporting for us today, andrew. Thanks, scott so much more ahead is your portfolio prepared for august thats the question were all asking and the major averages all coming off their fourth straight month of gains. Well talk about the amazing rise in tech stocks ahead and ipo news as we head to a break reuters reporting that u. S. Prescription drug price marketplace, 2. 8 billion in payment at number 20 on the 2020 disruptor list well talk about it when we return 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. It was a strong month of july you saw the s p had its best year in ten years. It was up by 5. 5 but the nasdaq blew things out of the water this continues the gains that we have seen with technology. After the Earnings Report that we got last week especially from the big four, you could call it an enforcement of technology and you advise people to pile into the stocks. What did you think of the numbers that you got. Yeah. Its first of all, i guess the way i conceptualize is its the continuation of a trend that began well before the covid contraction. Probably the best way to think about it is what was going on in productive in 2018 and 2019. Productive had been growing at 1 through the entire recovery last decade and then it jumped to 1. 8 in 2018 and 1. 9 in 2019 and it was actually negative to the Manufacturing Sector in 2019 what i think was going on is softwaremoving it to the cloud had really accelerated to the point where it was changing broader productive trends. Maybe the viewers the best way and one good way to conceptualize this anyway and think about what happened at starbucks and the delivery of restaurant and retail product. Starbucks comps were flat and they were struggling as they invested in software and were able to drive people so they went in and picked up their coffee, starbucks console accelerated 4 or 5 . They sort of solved their Assembly Line problem and things really accelerated and so it really did turbo charge that trend of using software to deliver Consumer Products and health care. Health care has been the single biggest drag on s p 500 margins for 30 years they have been following. So they have turned up they had a long way to go to stop being such a dead weight on society in general having prices fall or rise faster than overall prices outcomes not necessarily being better so all of these things, thats a big, broad macro trend but what i think is going to happen through the decade is im not telling people to get out of tech stocks or reduce your way to it yet. I think if those benefits will start to shift from the producers. To the Health Care Products and Consumer Product companies so broader use of that technology would be a benefit for Industrial Companies and Financial Companies and the like i do think theyre going to broaden out but for now, the trends were so persuasive and strong but in the environment that youre just talking about and youd have to stick with the companies regardless of how expensive they are that doesnt change my view that the markets could struggle a little bit from here but those companies in particular, those trends are so strong its hard to just want to at this point. Lets talk about what happens to the markets and the economy in the shortterm. Most people are looking at washington and whats going to happen probably a lot of people surprised that theres not been some sort of agreement that they hammered out between the two sides at this point. How important is that. So i described the recovery as a why recovery because i try to be fillapant about this when you look at retail sales or housing or autos today its going to look like that on the chart but were where things start to slow and part of it is the policy reaction to the resurgence and whats going on in the labor market and its pretty clear that theres jobs that wont come back right away. Thats what the 600 bebait is about. If their job becomes available that doesnt make a heck of a lot of sense because you cant get Unemployment Benefits if youre unwilling to accept your old job. But now were talking about people that have actually lost their job and theyre trying to set that number to the level where it incentivizes them to go out and look for jobs. Its crucial 2014 was the best year of the labor market recovery. So getting that number right is crucial and hopefully theyll get a deal republicans dont want to be the ones to not provide any further benefits given all of those restrictions that exist in places like california and new york to an extent. I think that there will be a deal for sure but the recovery is going to get rockier from this point forward and coming into election season s you know, were coming into volatility season if you will and theres a seasonality to that and i think it will be tougher going because, you know, i have been recommending cutting risks some what here. Not necessarily trying to shift from, you know, early stage cyclical sectors to defensive sectors but just to take your risk levels down and raise a bit of cash because we should struggle for the next couple of months. If youre suggesting raise a bit of cash that sounds like if we were to take a downturn youd say go ahead and jump back in at that point i would if you recall back in april i was really strongly advocating buying the market, getting along because this is the beginning of a new Business Cycle the debate about whether were still in a recession, last week in the survey he asked when do you think the recession is over and there was no option to say it was already over because for investors from my perspective it was over on march 23rd when the market bottomed. Were at the beginning of a new Business Cycle so you want to be positioned because the returns are best early in the new Business Cycle so id say we got a pull back of 8 or so, youre supposed to add money to the market at that point but, you know, this next couple of months could be very difficult for sure thanks a lot. Its good to see you and we will talk to you soon. Thanks, becky scott becky, thank you so much. We have news from clorox this morning beyond the companies Earnings Report. Naming a new ceo its president is being named as the new ceo. The 17 year veteran of the Company Looking at the release well assume that role on september 14th of this year. Going to continue serving as the boards executive chair but that is news from clorox this morning. Youd expect the results guys to be good. Obviously since most of us have been scrubbing endlessly our homes for the last few months. The stock is up about 2 theyre providing fiscal year 2021 outlook theyre looking for flat to low single digit increase in sales and mid single digit increase and earnings per share so its wide range the company says that its important to talk about it recognizing that theres significant uncertainty about impacts because of all of this thanks, by the way, by my math i think that would make her now the 38th female ceo of a fortune 500 company. 38 may not sound like a lot but its a lot more than where we were frankly even 12 months ago. Meantime, a lot more on squawk much more on the potential deal between microsoft and tik tok and later you dont want to miss our exclusive interview with the former ceo well talk to him about that and the reopening of the nba and new numbers he has on covid and what it means for the country were back in just a moment. The ambiguity. This moment calls for more. And Northern Trust delivers more. With specialized expertise. Proven strategies rooted in data and analytics. And insights borne from over 130 years of successfully navigating economic turbulence. Giving you new clarity. Inspiring confidence. And helping you uncover new paths forward. Northern trust. Wealth management. Not letting the pandemic kill your vibe. I wanted to be able to provide a space for people, to spread the love and to support our community. At this point, peoples livelihoods are at risk. What can we do to support each other . Theres no room for competition. Were so much stronger than if we were to stand on our own. [ engine rumbling ] [ beeping ] [ engine revs ] uh, you know theres a 30minute limit, right . Tell that to the rain. [ beeping ] for those who were born to ride, theres progressive. Breaking news this morning on an antibody treatment for covid19 starting alate stage Clinical Trial of this medicine in an interesting setting and longterm care facilities or Nursing Homes to try to prevent disease in high risk settings. Theyre doing this in partnership with the National Institute of allergy and Infectious Diseases. Its an antibody derived from somebody that recovered from covid19 one of the first u. S. Patients its designed to prevent and possibly treat disease now this largest trial that theyre running will enroll up to 2,400 people, both residents and staff at these Nursing Homes and theyre deploying a mobile fleet of rvs to get around the country. The goal is to find places that have covid19 and preventively treat people to try to keep them from getting sick. So quite an interesting study were looking at here. Scott back over to at. Scott, back over to you. Meg tirrell we appreciate that. Microsoft moving forward with talks to buy tiktok potentially leading to a blockbuster deal between the Software Giant and the chinese owned social app wall street journal says tiktok has 100 million users with revenues of 100 billion this year and 6 billion next year. That comes amid President Trump trying to ban the app. Ed lee is the New York Times media reporter and cnbc contributor. Good to see you both this morning. Mark, i begin with you what are your thoughts on this possible deal . I think its an interesting deal may not be happening for the reasons people think i think everyone thinks microsoft is interested in social network my opinion is theyre interested in bolstering microsoft azure. Tiktok would be a proof point that they can host at the scale of amazon aws. So i think theres a lot of that in the logic behind this deal also interesting ed, do you agree with that assessme assessment whats in it for microsoft what would they do with tiktok i think it is the key question in terms of one of the broader themes here. I think having sort of a builtin, you know, cloud customer certainly is a helpful thing. I do think the data is going to be an important thing for microsoft, not just in terms of this sort of political maneuvering in terms of whats happening with the white house but really the data is the thing that could help microsoft with Everything Else in this lineup, whether its how linkedin works better or how their Cloud Services work better youtube which is essentially googles social network, it may lose money but the data that youtube generates for the rest of googles businesses in terms of helping it figure out its advertising and that sort of thing is incredibly important. I do think the nuance in terms of the why, yes, data is going to be an important thing i think microsoft wants to be back into the consumer game as well i think they want to have something that, you know, competes with facebook and youtube, twitter, snap because thats where growth can come from if those projections are to be believed, going from a billion to 6 billion, thats not a bad thing to have from a Balance Sheet perspective. Right mark, you move past microsofts sort of footprint in professional social media landscape, if you will, with linkedin. It does give you more of a consumerfacing presence to better compete with facebook and just where broader tech seems to be going from a social media standpoint. Yeah. I mean, the competing in the social network game, its a tough field to be in and so i think the data perspective is interesting its not the highest quality data the users on tiktok are not really expressing what theyre interested, what they want, things like that, but the scale is interesting for microsoft this is not the first time they tried to acquire social network. They tried to acquire facebook quite a while ago, like 10 to 12 years ago they tried to acquire facebook i think just like right now when you look at where the company is the reason i really have this perspective on azure is its consistent with their strategy theyve won the big federal government deal. Theyve pursued the strategy of getting big customers to beef up that division so they can compete with the credibility of aws which has netflix as the largest customer and kaiind of thats really where the big profits are. To pick up the Fastest Growing social Media Companies, its a bonus, no doubt. Without the hosting piece, im not sure microsoft would be as interested what is your take in terms of the challenges though of running a social Media Company in this day and age given the politics of it, given the attention on it how much attention is someone like Satya Nadella going to have to refocus from the core Enterprise Business customer, which is clearly profit annual to, you know, potentially having to testify in front of Congress Like the four others did just last week given all of those sort of hot emotions around social media and politics. Well, when i was watching the testimony the absence in microsoft was noticeable i thought, wow, has microsoft fallen that much that theyre not even considered one of the top tech firms so, i mean, theyre buying in in one sense they dodged a bullet in another sense they need to stay in that top tier in order to grow all of their other Business Units as well as grow tiktok if they wind up acquiring it. I think, andrew, youre asking the key question in terms of why theyd want to what it means for them to own it you know, facebook i think they spend tons of money trying to monitor all of the stuff thats happening on their network its probably not enough they dont have enough people sort of monitoring it because theyre talking about, you know, whatever it is 90 or 99 on occasion that theyre capturing the bad content, however theyre defining it. Even 1 when you have that much activity is huge so to be honest, its a bit of a question mark for me, right . When you look at it in terms of that framing i dont know what satya is thinking yes, its nice to have a consumer facing network. Its not a profitable business at this moment if you are going to grow it, you have to spend more so it may not be profitable next year or the year after. Its interesting were in a lot more trouble as a sales account. Forgive me, go ahead. Words get you in a lot more trouble than video does. So when people express words, a lot mormon torque is required. When they just post videos, youtube kind of dodges that bullet they dont get as much scrutiny over the videos people post versus a tweet that someone posts. So microsoft is signing in is potentially signing up for that, but not at the level of facebook and twitter. That kind of eases this is more like a new generation youtube than it is a new generation twitter or facebook put tiktok as an app. I think just to be clear i dont think theres any less controversial activity on youtube. Its just less noticed it doesnt mean it cant be held liable its just a matter of when the political powers that be catch up to it let me ask you quickly if i could, mark, before we go, just given your experience in cyber security, you did run that at eharmony the genesis of this whole thing to begin with, im wondering your reaction to the administrations take of the security concerns that exist with tiktok here in the United States and whether you think theyre founded at all i think theyre well founded. Having your data as a u. S. Citizen or citizen of the e. U. Or any country around the world and having access to it in a country that has the government of china, its not a sleight to china, but i think most people would be uncomfortable with it, i certainly am uncomfortable with it. So with tiktok to grow with the scrutiny of the e. U. , the United States government, i think this is inevitable. It has to move out of china and everyones data has to be, you know, basically localized to the country they live in so its inevitable and i think its a very valid concern. Guys, appreciate it appreciate the conversation very much mark and ed, have a good day talk to you soon becky. Thanks, scott. Still to come this morning, more on the markets ahead of the first trading day of the month take a look at some of the s p 500 names that are leading the way this morning clorox on the list we just got those earnings well talk more about atth in a minute too squawk box will be right back. I hear you. Feels like theres no barriers between departments now. Do you think everyone appreciates it . I do. Huh. Forgot my glasses. Serivcenow. The smarter way to workflow. 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. Good morning microsoft confirming it is in talks to buy tiktoks u. S. Operations just days after President Trump threatens to ban the popular app. Deadlock in d. C. The white house and democrats will resume stimulus talks today after failing to reach a deal on unemployment plus, the cost of the pandemic continues to climb. Two more wellknown retailers filing for bankruptcy. The second hour of squawk box begins right now. Good morning, welcome to squawk box. Becky quick and scott wapner joe is off welcome, scott meantime, u. S. Equity futures are in the green call it marginally for now moving to three digits in terms of for the dow up 96 points. S p 500 up 16 points nasdaq up about 96 points. Want to get straight to the top story of the morning and that is the future of tiktok heard a lot about it over the weekend. Microsoft saying the ceo Satya Nadella has officially spoken with President Trump about its interest in buying the social media apps u. S. Operations. I want to get straight to eamon javers with what is a business story and also a political and policy story eamon . Reporter yeah, absolutely, andrew you talk about microsoft and its decision here to jump into this bidding for tiktok its a fascinating moment for microsoft because its a company that hasnt been in the social media space but now because of the political window opening up in washington, d. C. , you are seeing some opportunity here for microsoft to step in and strike a deal the president had suggested that he might ban tiktok altogether, but of course theres this committee in washington called the sifius, which is the committee on Foreign Investments in the United States it controls whether they can buy u. S. Assets. That gives the u. S. Leverage microsoft sensing an opportunity. Cifius really controlling the deal flow as all of the parties circle the situation and it seems like, andrew, the solution could be having a u. S. Entity, such as microsoft, own its company. Its 100 million users data would be protected in the United States that would alleviate the security concerns and it would also solve a problem in terms of limiting social media competition. You saw the antitrust hearings on capitol hill with the big social media giants. This would keep tiktok as a viable competitor to facebook, youtube, some of the other entities out there some of the senators over the weekend were saying, this looks like a winwin now the question is whats the price going to be. Hey, eamon, the other question i had related to whether we think any other business could jump in as a potential bidder is the white house committed to microsoft as the only bidder i could imagine Media Companies in the United States might want to own a tiktok . Reporter yeah. So far weve seen that phone call from Satya Nadella to the president over the weekend microsoft confirming that in a statement, that whatever decision they make here, ultimately the data will be kept in the United States to alleviate the president s concerns theyve been on the front foot in terms of making that phone call and putting themselves forward here the question is, whats the fair value of tiktok. Its 100 million users fashion is fickle. A lot of teenage users and tween users could move onto the next big fad s. This a flash in the pan or is this a permanent new competitor on the social media landscape . We just dont know the other question is, the political element here is that pushing the price down does it push the price down far enough that there are a lot more entities that could be out there as bidders one other question for you before you go, eamon, which is talking about the fickleness not just of the fashion of the next two or three years but the next month. Given the comments the president made, there are a lot of people on tiktok trying to send their fellow jeks to the next. Now theyre out out saying tiktok is here and will remain. Reporter tiktok wants them to say that. The divisions are between a camp that wants the sale which will have to be as quick as possible and another camp suggesting what they want to do really is punish china and shut down tiktok altogether thats sort of the Peter Navarro. You saw the president embracing that language and maneuvering over the weekend by treasury secretary mnuchin keeping the sale viable. There are some folks who want to keep this company out there as a viable competitor. As you point out, weve got to do that quicker that be slower 100 million users in the United States, that is an enormous number eamon javers in washington, d. C. , thank you so very much well have a lot more on this story throughout the program our newsmaker of the day, former microsoft ceo Steve Ballmer will be joining us at 83506789 a. M. Live this morning. Scott . Great timing to get mr. Ballmer for sure now back to the markets. The major average is wrapping up july with solid gains driven by big performance from big tech. As the market enters a seasonally tough time of year, what is next mike santoli joins us with more. Hey, mike. Reporter no denying the fact that history says august begins a pretty tough stretch for the months were at some extremes were at gold and the nasdaq near record highs. We have the dollar and treasury yields near record lows or thereabouts. Heres the s p 500 at the u. S. It dollar. Theres no consistent relationships. The risk seeking you see in the s p 500 is evident with the euro doing very well against the dollar the dollar looks like it wants to bounce. Another relationship you mentioned, obviously the real story has been the megacap Growth Stocks that have carried the rest of the market its been true globally. It explains the global relationships. If you look at the nasdaq 100 etf, the qqq against the s p, everything in the s p except for tech, everything in the s p except for tech looks like this which is all stock markets outside the u. S. U. S. Exceptionalism in returns is pretty much all about our tech and Growth Stocks then the question for august is is this trend going to shift is this going to be the trend is your friend and you stick with it, andrew mike, appreciate it stay with us i want to add another voice into this conversation this morning Eugene Profit is with us i dont know if you saw, theres some pretty interesting notes over the weekend just about where we are with tech stocks and how its leveling everything up im curious where you stand and what you would do right now . Good morning, andrew, yes glad to be with you. I am a value sensitive growth investor when i look at the Big Technology names and how much theyve run over the past year, especially during the covid pandemic, naturally i would think they were somewhat expensive. They have been, the majority of the returns in the s p 500 however. When you dig down deeper in it, take google as a case in point you have a company with 170 a share in cash on the Balance Sheet, its trading 20 times forward earnings the market overall is trading at 22 times forward earnings pe so in that case googles not expensive. If you look at microsoft, which weve talked about quite a bit this morning, you see that Cloud Services with microsoft and amazon, its benefitted from the stay at home trade and its benefitted from where technology is essentially going i think these Technology Companies can continue to grow even though i do agree, august has been the worst performing month in the stock market for the past 40 years. Even though i am cautious, im optimistic in the Technology Space because the valuations just arent as stretched as they might be on first glance. Mike, you saw that seth garmon note he was selling into the Second Quarter, he said it made no sense, then effectively went after the fed saying the fed was basically propping up all of this and treating all of us like children i get the sentiment. The question though is if the fed is treating everybody like a child, maybe youre supposed to put your hand in the candy jar, right . Yeah. Supposed to act like that . I mean, the feds mandate is full employment and something close to a 2 inflation. So what you have right now is a massive employment crisis that came all at once the other piece is, if its all the fed, what are we saying, theyre buying longer term securities, treasury securities, mortgages. Participating in the Corporate Bond market. Fine why is that not floating all boats . Why is it the best, most profit annual, highest margins that is the preponderance of the gains you are thinking, yes, you are keeping a lot of other companies from going under those stocks are not necessarily driving what this market is up to so theres a little bit of logical inconsistency in that point, but i do think, you know, the broader sense out there that this is the game right now, it will last as long as it lasts. The fed has told you they are going to be erring on the side of being more supportive than the least. Eugene, how critical is the stimulus how critical are the 600 checks and whatever stimulus we may or may not get in the future . I think from an expectation standpoint, the stimulus is absolutely critical. I think a lot of Revenue Growth in the first quarter, Second Quarter was the result of people having a lot more money in their paychecks but i see another issue, andrew, if i might. I think going back all the way to 99 when microsoft and intel joined the Dow Jones Industrial and in 2000 when microsoft was the only company that gained, very similar to where we are now. But the surprising thing to some extent, at the same time Eastman Kodak five months later came out of the Dow Jones Industrial average. They were teetering on bankruptcy and is given a humongous life line, i see this situation with tiktok the same way. I think there are geopolitical concerns that are happening with securities that are outside the purview of investors that are doing normalized valuations, right . I think the more that this happens, the more troubling it is to me because i dont know how to discount when you have a situation where the president can weigh in and a company goes up for sale regardless of what the price ends up happening. I can say any stock in the s p 500 that could happen to and thats generally not a situation you have to deal with in the u. S. Stock market. So hopefully that calms down a little bit, but i would say that were kind of in unchartered territories to some extent its not surprising me that Large Technology conditions have played the best but i think investors should take an extra dose of caution in looking at this market overall and over an extended period of time. I am optimistic in a twoyear time period we will be fine, but as long as there is fear of the pandemic, revenues will not be what they have been and you are almost investing almost to some extent from a guessing framework, which is not normally what we do okay. Eugene and mike, appreciate your time, your perspective as always thank you both becky . Thanks, andrew still to come, as washington debates another round of stimulus, we are looking at a state of the real economy and businesses first though as we head to a break, check out this mornings biggest premarket winners and losers leading the way right now, Marathon Petroleum is there. Its up by about 8 this morning on news of the sale of its gas stations talk more about that and others. Squawk box will be right back. Some Companies Still have hr stuck between employees and their data. Entering data. Changing data. More and more sensitive, personal data. And it doesnt just drag hr down. It drags the entire business down with inefficiency, errors and waste. Its ridiculous. So ridiculous. With paycom, employees enter and manage their own data in a single, easy to use software. Visit paycom. Com, and schedule your demo today. Number of members of congress and the senate the effort led by former starbucks owner Howard Schultz doug macmillan, sharyl sanberg and the Business Roundtable as well signed it the letter calling for federally guaranteed loans at favorable terms that will enable Small Businesses to transform and sustain themselves in 2020 and well into 2021 they say support must last for longer than the next two or three months these are big Company Executives asking for money not for themselves but for Small Businesses its an interesting letter and a programming note Howard Schultz will be joining us tomorrow to talk about that letter becky . Andrew, is this something these are federally provided loans but different than the ppp. These loans would not be forgiven in some cases they would be forgiven in fact, part of the letter talks about the need to make some of these loans forgiven this is all part of, you know, whats on the docket or not on the docket in terms of the next measures of stimulus this is really some of the biggest businesses in america saying, look, youve got to help the Small Businesses and not just for the next two or three months we have to figure out a longer term strategy to get through, maybe even get to a vaccine and in certain cases where the most needy of the businesses out there, restaurants and the like, we may need to be more for giving and actually do forgive those loans. Thats the push that the letter writers in this instance are making this morning. We have the perfect guest to talk about just that joining us right now on the topic of Small Business and what hes seeing is Cameron Mitchell. Hes the founder and ceo of Cameron Mitchell restaurants with 60 establishments across the United States. Cameron, its great to see you its been a while since weve spoken. Good morning, becky its a pleasure to be back with you today. So the first time we talked with you were in the midst of the shutdown when all of your restaurants had been closed down the last time we talked to you things were looking pretty good. Business was back and booming. Whats happening right now becky, the best way i can equate it to is were in a hurricane and the first landfall of the hurricane was back march 15th as detrimental as it was and terrible as it was we ended up getting the ppp money, we were able to get out, get open. It was a life line we would not be here today if it wasnt for the original ppp loan june came and sales were doing pretty good. We were about 75 of last years sales. Feeling very optimistic. What i came to realize is we were just in the eye of the storm. Then july, beginning of july hit and the case counts rising across the country and metropolitan areas rolling back Opening Guidelines and further restrictions on our Business Sales fell down to now 50 of last year and that is just not sustainable. So here we are today, august 2nd and i feel just as nervous about the future as i did back in the beginning of march when coronavirus was coming over the horizon. Were looking for a second round of ppp to help us get through the other side and help us sustain for the future the thing were hearing mostly in congress is about the stimulus checks, the unemployment, but there are thousands and thousands of businesses like ours out there in the country that are hurting terribly 50 decline, 40 decline in sales, we cannot survive were losing between 500,000 and 1 million a month and we need additional ppp dollars in a terrible way and, you know, the current proposal is for a 2 million cap on that, which last time was 10 million. So for a company like ours and many others, that reduction of 8 million when we need it the most is very difficult for us. Cameron, is the decline m your business coming mostly because states or local municipalities have forced you to not open as much, to close things down or how much of the decline is coming from people who are afraid to go out how would you measure that, the difference well, its both clearly when you have a reduction in capacity for municipality, for example, beverly hills, we are closed all restaurants in California Closed for Indoor Dining new york city we were not allowed to open our restaurant that was just for the patio. Philadelphia were not allowed to open that got rolled back from august 1st to september 1st so some of our businesses are not even open yet. But the main driver of that reduction of sales is the increased case count even though theres no science dates that says inherently restaurants, covid outbreaks have been driven by restaurants seating indoor and outdoor seating. Cameron, what are you doing in terms of your relationship with your landlords, particularly in some of those places where the restaurants havent even reopened yet . Are you getting a forgiveness or any easing from them thats the thing, becky, we had almost all o or another. Not all, but some or most, i should say, but that money is just a simple deferral so we have addition 23458 million we got deferred in rent ai april, may, june thats just Additional Debt on the Balance Sheet. We come out of this without ppp. One of the things cameron restaurants, we build three or four restaurants a year, if we are saddled with millions of dollars of debt, i dont see us building and aiding the economic rebound if were saddled with all of this debt what have you heard from the senators youve spoken with on this ive spoken personally to both our senators in the state of ohio and they understand our plight but i think all of the negotiation right now is over the 600 a week stimulus for Unemployment Benefits. I dont think its getting much attention that it needs right now. I hope by the time we get the bill in some sort of agreement between both parties in the bill that we can get this ppp round 2 stimulus with 192 billion earmarked for it, which would be more than enough for the companies that passed the stress test, that show they actually need it, to keep the original ppp levels as ppp money. Cameron, i want to thank you for the update we hope to check in with you soon, but we appreciate your time and wish you good luck. Thank you, becky. Thank you very much. Thank you by the way, folks, next wednesday, august 12th you can join the cnbc Small Business playbook Virtual Summit with facebooks sharyl sandberg, Goldman Sachs margaret anadou and kevin oleary and gary van ner chuck. Its all about providing Small Business owners with resources to provide a path forward to slief. You can go to cnbcevents. Com smallbusinessplay book to register scott . Just slightly north of 40 a barrel nat gas ticking hiergh stay tuned youre watching squawk box right here on cnbc come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. We have a lot more coming on squawk box. Mohamed el erian will beer he. Stay tuned, youre watching squawk on cnbc what happens when a wireless carrier puts its customers in charge . Well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with Xfinity Mobile. Call, click or visit a store today. Welcome back, everybody. The u. S. Economy shrank at the fastest rate on record in the Second Quarter estimates for the Third Quarter are all over the map Steve Liesman joins us with the story. Steve, good to see you reporter good morning, becky. After the historic gdp plunge in q2, we see an equal q3 surge theyre not united take a look at the numbers 5 decline in q1 and 32. 9 fall in q2. That leaves them looking for a 21 q3 gain. After that growth is forecast by 7 and 5 for the full year the gdp is seen declining by 5 . Thats all the way on the righthand part of the screen. The range is large almost a 15point gap from the most optimistic to the most pessimistic. The swing factors are what happens with the virus and the debate over government assistance in washington, whether or not checks are, indeed, sent barclays writes the july data are a reminder that down side risks remain and that the economy has not yet transitioned to a selfsustaining Virtuous Cycle of rising household spending, increased production and gains in employment. For now the economy remains dependent on policy. Indeed a strong june number got the Third Quarter off to a strong start mathematically july and august can be flat and gdp will grow robustly the high gdp turned flat to negative goldman beginning to worry about the job market they wrote this over the weekend, quote, our trackers suggest that current Household Employment has fallen by roughly 1 million since the june survey week and that as of july 15th the Unemployment Rate had risen back up to 11. 5 after falling to 10. 5. Thats not the consensus for this friday which looks for job growth but its a reminder of the potential risk and that the 21 gdp rebound may not be all what it appears to be. Scott . Yeah, steve its interesting youre going to get the jobs number this week and here were watching the stock market and it sounds like youre telling me we could be reminded or at least goldmans saying that we could be reminded of this great disconnect that weve been reporting on for the last several months, a really struggling economy and a stock market thats been going in the opposite direction ive never seen a market care less about the market fundamentals whatever else is going on from the liquidity side to believing and really sort of i dont know, scott. You know this better than i do it seems to pivot to a future rebound very quickly oh, you mean its not going to happen in august oh, september. Not september . Then january 2021. It doesnt seem to mind what has not really been debated, i think, discussed is what goldman calls scarring and other people call structural unemployment, that that could be what happens, that there is really, scott, a recession that will follow this recovery that if we come back from 11 down to 6 unemployment, were still 3 points over and thats equal to the 2001 recession or even the 08 recession yeah. You make a good point. Its when is the market going to lose its patience with the pace of the recovery. For more, thank you, steve well bring in Mohamed El Erian to talk about the markets. Good to see you this morning welcome back. Thank you, scott. On that notion that steve was just talking about, its so uneven and the data steve was talking about and the expectations are so uneven, how patient is the market going to be with the recovery the market has been incredibly patient and will continue to be patient because it feels that its back is covered by the fed it feels that theres massive liquidity available. Having said that, scott, the big test, and i hope we dont get it, the big test is if you have bankruptcies if you have capital impairments. If you have what steve just called structural issues, scars. At that point the market would be tested in a big way well, we already have bankruptcies and were likely to get more its hard to imagine an environment that doesnt have some scarring, right oh, youre going to definitely get economic scarring the question for the marketplace is how much of that is translated into outright defaults and, therefore, loss of capitol in a way that the fed cannot save you. I worry about this, but the marketplace has been quite curious and you heard from mike. Put the big tech theme aside basically its a stalemate on the one hand, concerns about the fiscal policy. On the other hand, because of the fed and retail investors, thats the balance thats in play as long as you have the fed engaged to the degree in which it is, thats not going away any time soon, we can both agree on that, here we are on the cusp of what is a new stimulus package as long as that remains in place, why wouldnt that remain in a similar place those are the two most important forces. Correct the question is not whether you have a stimulus package or what i call a relief package rather than stimulus package. You will the question is whats happening to peoples willingness to spend and its going to be really interesting. When people get the 1200 checks this time around, will they wash out like they did last time and sfend . Or will they be more cautious because this virus has lasted a lot longer the reason why economists are so divided as steve pointed out is because there is no agreement on how the household sector would react and thats going to be a real test, scott, in the weks ahead. Its about willingness and not just ability well, since were talking about dollars, lets talk about the dollar, which has been weakening. Its been the trend and thats helped Commodity Prices and its probably been a catalyst for the overall stock market is there any reason to believe that the weakening dollar trend wont continue just given how uneven the recovery is at this point, mohamed it is most likely to continue and to continue for three reasons. For now we have lost our edge of economic outperformance visavis europe secondly, there is no doubt how loose the fed is going to be its now loser aoser and loosero other banks. Lastly Portfolio Investments are most likely to leave the u. S i want to stress, its a cyclical pattern its good for the markets. Its good for the economy. I worry less about those who say we are going to lose our role as a reserve currency we wont are you suggesting theres better value now in overseas markets . I have people coming on our show at noon suggesting now is the time to invest in emerging markets or europe, that theres better value to be had there relative to where our stock market is and relative to where their recoveries are in relation to ours . Put the tech names aside because i do think they are a special situation. You have heard me for a very, very long time say dont fapt the u. S. , dont faint the u. S. I have stopped saying that in the last four to six weeks i think some reallocation in favor of europe, not the emerging world some reallocation towards europe makes sense. The asian markets unfortunately are having their own worries i think its too early to fade the u. S. In favor of e. M. Thats Mohamed El Erian joining us this morning. Thank you. Andrew. Coming up when we return, the costs of the pandemic continues to climb two more wellknown retailers filing for bankruptcy. Well talk about the details of that on the screen lord and taylors check out the shares of adt this morning. They are soaring youre looking at that stock up 85 . Why . Well, alphabets google unit is going to be investing 450 million in the company for a 6. 6 stake in adt. They will offer googles nest smart home devices to customers with all of that technology in there plus the adt service on top of it. Each company will commit 150 million to expand product and service offerings. Qukig he chg ure watin saw rhteron cnbc. When we started carvana, they told us that selling cars 100 online wouldnt work. But we went to work. Building an experience that lets you shop over 17,000 cars from home. Creating a coast to Coast Network to deliver your car as soon as tomorrow. Recruiting an army of customer advocates to make your experience incredible. And putting you in control of the whole thing with powerful technology. Thats why weve become the nations Fastest Growing retailer. Because our customers love it. See for yourself, at carvana. Com. 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. Welcome back, everybody. Retailer lord and taylor filed for bankruptcy yesterday it was founded all the way back in 1826. It was acquired last year by fashion rental startup le tote 75 million. Le tote backers include Google Ventures mens wearhouse owner taylor brand says that it also filed for chapter 11 its also entered into a Restructuring Agreement with more than 75 of the senior lenders that could reduce the debt load by 630 million. In the filing the Company Listed assets and liabilities in the range of 1 to 10 billion. The new filings join other household names that have find for bankruptcy this year including j. Crew, jcpenney and nieman marcus. Scott . Wow, becky. You look at that wall that we had right there and you dont realize the number of companies that have filed for bankruptcy until you see them all laid out like weve done there on the wall we named some names here and there, but look at that collection of wellknown brands that everybody knows, becky. I think the big question is going to be which ones of them go the way of chapter 13, which ones go chapter 11 how does this go from here which one of these can actually restructure and come out stronger thats what the close thing is going to be to watch. Coming up, survey monkey ceo, perhaps nobody knows better than zander lurie what people are thinking about hell be with us to discuss. Next hour, our newsmaker of the morning, good one of that, former microsoft ceo steve bameis wllr ith us stay tuned, youre watching squawk box on cnbc welcome back, everybody. Tech giants apple, amazon, alphabet and facebook is worth 1 5 of the market. Joining us is survey monkey ceo za zander lurie nice to be here. We know congress cant agree on much of anything, but they do agree that big tech is too big what did you find when you surveyed the American Public about that question . Thanks, becky we have interviewed 1. 7 million americans since covid broke out in early march, and we asked questions about big tech and what we have found is americans love their big Tech Services so while theres not necessarily a lot of trust about how their data is used by the big five, they understand there is an inherent tradeoff. Over 53 of americans said they would favor none of those companies being broken up and not a single one of those companies have more than 27 folks advocating for breakup what we have found is americans love these services. Nobody is arguing to have aws unhooked from amazon or instagram data operations unhooked from facebook they understand there is an inherent tradeoff but nobody is leaving these services when you run surveys a lot of times its how you ask the question that matters. What type of questions were you asking people. So we asked a whole bunch of questions. We have over 3 Million People taking surveys that allows us to use that massive river sample to get a representative cohort of respondents. Each week were asking different questions about how your data is used, whether youre likely to advocate for the services, recommend for a friend, shopping more, using instagram. We found there is natural tension around how folks data is being used but the favorability for amazon is at a full 85 . Microsoft is above 80 ironic were talking about microsoft buying tiktok. Thats a conversation 20 years ago microsoft would not have been in a position to do i think some of the numbers where you saw the highest negatives, more positives than negatives, was around facebook and whether or not people trust that company, correct . Yes facebook does have some trust issues and those have been well played out on the news even last week with, you know, four of the richest americans in a zoom box, congressional grillings make for good tv americans are talking about health care crisis, keeping their high paying jobs and Racial Injustice theyre not talking about antitrust. Zander, i know you have been surveying people about going back to school and mask usage in this pandemic time what have you found . Has there been a shift in attitudes or are people standing pretty steady . I know youve been talking about going back to school on twitter as well, becky i love the vigor you bring to the fight. This is a highly politicized and charged issue. Were just a few minutes away from a likely start date 16 of americans say they take a mask out of the house whenever they go shopping, walking, exercising, you name it. The numbers dont tell that story. 48 of republicans do while full 87 of democrats do. So somehow the mask has become the most politicized and charged symbol in america today. If you go into any Given Community in america, it matters less how bad of a breakout there is in covid19 in terms of how many people it matters of the political are you serious teachers are more concerned than the average worker in america about going back to school they view this much more of a Health Crisis than economic crisis our teachers are at the heart of our ability to get back to school safely. What do you find when you ask people about going back to school just i know that people want their kids going back to school. How does that break down with being concerned about whether theyll be safe when theyre there or whether they bring something home i think like you, were all doing the research and wondering who is it who is responsible for telling us its safe for our kids to go back to school . So we listen to the doctors in cdc, the immu noll low bests theres obviously a lot less likely of kids passing it to each other or adults as of now there doesnt seem to be a nationwide plan for getting our kids back to school. Its being fought at the state level, local level i think every parent is reading the update from their school district, but the budgets are not there for 6 foot spacing and for the kind of cleanliness that were all advocating out in the working world. There seems to be a lot more budget for how do we return to our offices and all of the nuances than how do we get our first graders and fifth graders back in the classroom. Yeah. Zander, i know you have an announcement today of some Big Companies that are joining a new initiative slack, zoom, intuit and event bright theyre doing something where theyre going to be tracking demographics for the vendors they use can you explain that yeah. So im really excited to share today that we are launching our Vendor Diversity Initiative with 15 others. Zoom, tinder, event bright, we are proud of what we are announcing today in early may i came on the show with my friend john hoep bryant and theyre advocating for Racial Injustice washington is not coming to save us this is an issue we know is a problem. We have under representation of minorities today in the workplace. That is on us. Its on ceos to hold our vendors accountable. All of us are doing the work to improve our own Diversity Hiring practices, to bring in more training, to drive more inclusivity but also we spent tens of millions of dollars in survey monkey. Some partners spent billions and what we are doing is going to be pushing for how our vendors, our suppliers, our Cloud Services, marketing agencies, banks, law firms, how are they improving diversity. Every ceo in america has sat in a board room, six white dudes come in, two or three wearing blue shirts, weve never had the data to know is this a vendor we want to deal with. This vendor diversity issue is asking a standard set of questions to ask people who have big budgets, especially tech companies, allocate those dollars in a way to promote diversity, equality and inclusion in our community. The one thing ill say is Technology Companies themselves have an awfully long way to go many of them have been tracking some of these diversity issues for a while and they dont rate well they probably rate much less well than their vendors do. 100 . We are not alone in this journey. We have got a lot of work to do. I am super proud of some of the statistics we put out some diversity goals, one year and five year gold. And we have two black women on part of our board. Our Management Team does not reflect the diversity i want to see. Our numbers have a long way to go and were better than the vast majority of other Technology Companies we cannot wait until were perfect to make progress this is not about us telling other vendors this is what you need to do, youre accountable to do x, y, z, its merely to collect the data john dorr wrote a book when we put product goals and sales goals out there,hit it this is about putting defining goals out there and collecting the data so we can evaluate, are these the kinds of vendors we want to do business with zander, in a larger more philosophical sense of this issue, you have a lot of ceos saying they want to step up or are trying to step up. Theres a view ceos are doing this because customers and employees are pushing them theres a void of leadership in washington the question is whether ceos should be doing this themselves, whether politicians, elected officials should be requiring it, creating their own regulations so there are rules to the road and everybody does it whether this should effectively i dont want to claim a philanthropic effort but that everyone is doing it in their own idiosyncratic way. What do you think is the right answer here . Great question, andrew. We have to stop talking about diversity and inclusion as if its something you do off the side of your desk. Nobody could go to their board and say, we did our best on our sales goals and its hard out there. Thats the answer we have lived with for too long in terms of pipeline problems. This is all about how do you put diversity, equity, inclusion at the center of the conversation, put goals around it. This is about ceo sz and boards of directors taking action we can do better, i know it. Ive been on the same listening journey that all of the other ceos have been on since the killing of george floyd and others this is how do we put more money and time in making definable improvement in terms of diversity numbers, dollars are allocated in the ecosystem were crazy if we want to wait for washington we have to own it. We have a lot of ability and control to make progress in this area. Zander, great to see you as always take care. Take care, becky. See ya, andrew. See ya. When we meacco bk, former microsoft ceo Steve Ballmer on that companys push to buy the u. S. Operations of tiktok. Stay tuned during that time, we handed out millions of dollars to thousands of contestants. And i thought, what if we paid the contestants their winnings in gold instead of cash and prizes . Back in 1976, we had a wonderful contestant named lee whose threeday winnings were valued at 12,850, and you know what . That was a pretty big haul back in 1976. So i wondered, what would have happened if lee had put 12,850 in cash and then put 12,850 in gold in a safe, just sitting there sidebyside from 1976 until now . Well, i went back and i ran the numbers, and what i found was amazing. We all know that 12,850 in cash would still be sitting there, but it would be worth a whole lot less than it was in 1976. But that 12,850 in gold, safely stored away, its worth 135,000 as of the taping of this commercial. Now, thats more than 10 times the original amount. And thats why ive been putting my money in Precious Metals for years, and i dont see any reason to stop now. [announcer] if youve bought gold in the past, or would like to learn more about why physical gold should be an important part of your portfolio, pick up the phone and call to receive the complete guide to buying gold, which will provide you important, neverseenbefore facts and information you should know about making gold, silver, and platinum purchases. If you call right now, you can also receive a copy of our new u. S. Gold report for 2020. Inside, youll find the top 25 reasons why you need to start owning gold today. With nearly two decades in business, over a billion dollars in transactions, and more than a half a million clients worldwide, u. S. Money reserve is one of the most dependable gold distributors in america. Good morning welcome to august. Were on the first trading day of the month futures are pointing higher. The s p 500 coming off the best july in years. Tiktok on the clock. Microsoft gets the blessing from the government to go after the business well be talking about that with the former ceo of microsoft, Steve Ballmer is with us well get his take on the reopening of the economy, measuring virus hot spots and the return of the nba. The final hour of squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc im becky quick with Andrew Ross Sorkin and scott wapner. Joe is off today u. S. Futures have been picking up steadily. If you take a look, the dow is indicated up by 145 points s p futures up by 18, nasdaq up by 87. This comes after a very strong month of july of trading for all three of these averages. For july the dow was up 2. 4 as scott mentioned, the s p had its best july in ten years it was up by 5. 5 . Then the nasdaq outperforming again. It was up by 6. 8 last month last week we were talking about how the yields were seeing so much pressure. 10year is yielding 0. 558 scott . Yeah, becky were following two big stories as you know this morning stalled stimulus talks in washington as temporary benefits helping millions of americans through the coronavirus have now expired. News of a late stage antibody treatment trial from drug maker eli lilly. Well get details on both of those. Lets start with the lilly news. Weturn to meg tirrell. Hi, meg. Reporter hi, scott this drug advancing through Clinical Trials. Now a late stage study being started by eli lilly with an antibody drug for covid19 its a prevention trial where theyre targeting places like Nursing Homes that have had outbreaks. This is in partnership with the National Institute of allergy and Infectious Diseases and aims to see if they can use the drug to prevent infection in the highrisk settings what it is, its an antibody derived from one of the first u. S. Patients to recover from covid19 its designed to treat and prevent the disease. Early stage results show that it is safe. We do not yet have data on its efficacy whats really interesting about the trial is how theyre running it theyre going to enroll up to 2400 residents and staff at these Nursing Homes that have had a case of covid19 theyre going to deploy a mobile fleet of rvs and trailer trucks to prevent more cases in Nursing Homes that have already had one. Here lilly is joining regeneron to try to prevent disease. Theyre testing them for treatment so moving pretty quickly along this road. Were seeing eli lilly up 2 premarket. Back over to you hey, meg, i think this ones particularly interesting because theyre going after the older people, the old jericho hort that almost always gets left out from these phase 1, phase 2, phase 3 trials most of them focus on people 18 to 55 years old. One of the huge questions about any vaccination or any of these situations has been its not effective in older people, its harder to generate the reaction that youre hoping to get when youre dealing with an older population, but that also happens to be the very people who are most at risk. You hit the nail on the head there, becky these late stage vaccine trials that started last week, while the earlier ones did not include older people, the later ones are going to because as you pointed out, they are the most vulnerable to severe covid19. Vaccines dont work as well in older folks. There is a hope that the antibody drugs can do possibly what vaccines might not be able to do. Were going to have to see all of that in Clinical Trials certainly an important way to test these drugs thats huge thanks, meg. Thank you, meg. Well get over now to eamon javers to talk about the stalled stimulus talks in washington how stalled are they, eamon . Reporter theyre pretty stalled, andrew. We have this real change in tone over the weekend on saturday you heard people talking about some Real Progress being made in the behind of closed doors negotiations but by sunday, by the time the Administration Officials and capitol hill leaders went on the sunday talk shows, it seemed like it was back to a stalemate. Steven mnuchin was on cnbc expressing his frustration we proposed a one week extension at 600 so that while we negotiate a longer term solution, at least all of those people dont lose their money and im surprised the democrats wont agree on that. They insist on having this as part of a larger deal. Reporter for her part speaker of the house nancy pelosi said she wants a larger deal, not a skinny, narrow oneweek extension of the 600 bonus unemployment she said that number of 600 is nonnegotiable for now. Heres what she said amount of money that is given as an enhancement for Unemployment Insurance should relate to the rate of unemployment so as that goes down, you can consider less but in this agreement, its 600 reporter pelosi saying it has to be 600 here but shes open to the idea of lowering that 600 bonus payout if the Unemployment Rate comes down and people are able to go out and look for work because theres work available thats where we are. Negotiations will continue throughout the day today guys, i continue to go back to this idea that the incentives for both sides are to get a deal, particularly for the president whos going into a reelect here. You do not want to remove that kind of support economically from a large number of voters just before an election in november this is not a traditional president , but he is, you would think, subject to some of the same political incentives. I think the pressure is on here to get to a deal in the coming days back over to you eamon, thank you for that were going to continue talking about the potential to reach a deal we want to bring in representative Hakeem Jeffries chair of the cgrsi caucus you heard that report. Would you be willing to do some form of a skinnier deal . Good morning. Thanks for having me on. This is an extraordinary crisis. More than 150,000 americans have died more than 4 million americans are infected by the coronavirus. More than 5 million americans have lost their employerbased Health Insurance more than 100,000 Small Businesses have permanently closed and of course more than 50 million americans have lost their employment this is not a piece meal pandemic we should not have a piecemeal response so i support the speakers position that we need to negotiate a broad, comprehensive and transformative congressional intervention in order to meet the moment. Congressman though, lets talk about the 600. Does 600 make sense to you . Look, i feel like i can hardly sit here as somebody whos working and is able to work to say that 600 is too much but at the same time there are people who are getting more than they were being paid before this pandemic began well, that, in fact, is the case then people need to reevaluate the amount of compensation that we are providing to the American People and there may be certain instances in certain parts of the country where you have individuals who arent working at a living wage prior to this pandemic half the American People reported that they couldnt afford a sudden unexpected 400 expense. This is in the wealthiest country in the history of the world. Maybe thats a broader question moving forward but in terms of the 600 a week emergency Unemployment Insurance benefit, there is no Empirical Data which suggests that that is disincentivizing people from going back to work in fact, when the Unemployment Rate is incredibly high, what jobs are they going back to . There was a Jail University study saying that there is no data to suggest that the 600 payment is a disincentive to work. What do you say to those who criticize the democrats and say they have the leverage for a variety of reasons, controlling the house, the president s poll numbers arent good and so theyre playing politics with peoples livelihoods by not agreeing to at least a oneweek extension . How do you answer that well, we acted in may, 2 1 2 months ago, so were not playing politics it was a 3 trillion interventi intervention it extended the Unemployment Insurance benefit into the early part of next year. Thats appropriate it provided another round of direct stimulus payment to the American People as a way to help out Everyday Americans who are struggling it provided approximately 1 trillion assistance to state and local governments so that these budgets which have been devastated wont result in dramatic, draconian results. This is moving forward, right . This is looking forward. Were talking about moving forward. People who are struggling. Correct we acted 2 1 2 months ago. Whats the problem with one week why is one week such a big deal . Okay. Ill try and answer it the same way i did in response to your first question, which is that this is not a piece meal pandemic we shouldnt have a piecemeal response and the Republican Senate bill which drops the emergency Unemployment Insurance benefit to 200 per week we believe is inadequate to meet the moment so if we are agreeing to a oneweek extension only to have to negotiate with people who have a wildly inadequate response in terms of the nature of the Unemployment Insurance benefit, then that doesnt benefit the American Worker in any meaningful way i think what scott is trying to point out though is that in the meantime, the people who you are proclaiming to help are going without anything so forget the 200 theyre getting nothing in the meantime you may have just gone from having the upper hand in the politics on this to losing it. Yeah, its my assumption that any agreement that is arrived at will retroactively provide the p prorata share. Thats unfortunate. First of all, thats an assumption second of all, peoples rents are due on august 1st. I agree and we support and in the heroes act we extend the moratorium and we also provide 175 billion in assistance to renters and to homeowners for that very reason unfortunately, the Senate Republican bill has exactly zero dollars for renters and for homeowners who are struggling. That is part of the challenge that we have because the values that the two sides have in terms of the type of intervention necessary is very different. Congressman, before we go, just a final question. What do you think the upper limit on the countrys debt should or can ever be . Well, jerome powell, the charp of the fed has said to us repeatedly throughout this crisis, that we need to think by in order to meet the moment. Yes, there is an extraordinary level of borrowing that is taking place but that at this particular moment because of the dramatic nature of the crisis, both a Public Health crisis as well as an economic crisis, that we have to help the country make it through and given the low levels of the Interest Rate that makes borrowing currently available at rates that we may never see again, that we have to continue to think big. Responsibly, but think big okay. We will continue this conversation i am sure, congressman, well have you back to talk about the progress, hopefully, thats made on this very issue thank you for joining us this morning. Thank you coming up, our exclusive interview with former microsoft ceo Steve Ballmer. Lots to talk about including the spread of covid19 and the economic recovery. Last weeks high profile tech hearing in washington, d. C. , and of course microsofts potential acquisition of tiktok. Right now as we head to a break, check out shares of apple. Were keeping our eye on the stock as it shot up 10 following a blockbuster Earnings Report this morning that stock is up again another 1. 6 stay tedun, you are watching squawk box right here on cnbc. T and im here with nicole and miles and were out to find the top looks for day one back to school at Dicks Sporting Goods and so we want to find something thats going to grab everyones attention the variety and selection is crazy bucket hat bucket hat this would be a fire first day fit. Definitely making a statement with that. Go dicks. Whether youre going back to School Online or inperson, get the brands that make a statement. Day one starts here. Inpwhat happens whenands puts its customers in charge . Well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with Xfinity Mobile. Call, click or visit a store today. Coming up, how much did the Coronavirus Impact the banner auto sales return of basketball as well as microsoft. Tiktok stay tuned welcome back july typically one of the busiest months for auto sales. The coronavirus slowing the price of it. Phil lebeau joining us reporter scott, theres still demand out there its not like were seeing a complete dropoff in auto sales like we did in the beginning of april but relative to the pace of sales that weve seen over the last five years, which by the way, best five years ever for the Auto Industry. If you look at this chart here, youre seeing we were over 17 million over the last several years. 15. 5 million is the estimate many people believe, the expectation is that july is going to come in at about 14. 2 million. When you look at july, three things stand out one, steady demand its down relative to expectations, anywhere between 8 and 10 . High incentives. Theyre still there. Looking for 0 financing you can find it. Pickups, they continue to pull in the buyers. Take a look at gm, ford, Fiat Chrysler they do not report monthly sales. They do it on a quarterly basis. All of them have seen Strong Demands particularly for the pickup trucks and suvs when you take a look at the dealer stocks, this is where the action has been for investors, autonation, group one, penske auto group, theyve all had a nice move over the last 30 days. Then one last thing, guys, we had news of another spac in the auto space this involves lords town motors lords town in a merger with diamond peak the spac is valued at 1. 6 billion. Theyre going to trade on the nasdaq under the ticker symbolr. The money for spacs is there, particularly when it comes to electric vehicles. Lords town will be building electric pickup trucks first one expected to go into production next year guys, back to you. Phil, does this break down at all geographically are there parts of the country there is stronger demand or everywhere there is strong consumer demand . Reporter its pretty much everywhere right now initially when covid19 hit you saw a huge dropoff in sales in the northeast, the chicago area, also in california when it initially shut down. It was basically the sunbelt that was holding the sales now its pretty much everywhere. Even though youre seeing a surge of cases in the sunbelt, youre still seeing relatively Strong Demand down there phil, thank you good to see you. You, too. Lets bring in an expert voice to talk about the health of the Auto Industry joining us now for that is mark fields he is Senior Advisor at tpg capital. Former president and ceo of ford mark, good to see you. Thanks for joining us. Hey, becky. How are you doing . Good. What do you think of these numbers . Im surprised when we talk about all of the issues in the economy, auto sales tend to really be hanging in there, particularly if you consider the shutdowns and what people have had to deal with yeah. Im actually ive been more bullish on the market than some of the Industry Experts over the last couple of months. I think phil is exactly right. I think were going to see the fourth month in a row of the industry selling rate being higher and i think that bodes well because phil touched on it a little bit, but this is actually going to be the month of july inventory is tight in the industry, particularly for manufacturers like gm that were recovering from their strike from last year so youre going to see another month of Industry Sales strengthening on an annual basis and an inventory situation thats kind of tight you have some flairups, places like florida and texas, but we havent seen, you know, the slowdown in sales because those states have been locked down i think it bodes well for the resiliency of the marketplace Going Forward. And the reason im bullish is i think cars are going to be viewed almost like personal Protection Equipment all you have to do is look at new york city. The traffic is backed up but, you know, all the workers arent back because i think people are avoiding mass transit. I think the economy is going to do better than expected, particularly around housing which is important for trucks for the detroit three, and then if you look at the age of the car park or the inventory of cars out there, new report came out last week and said 11. 9 years, which is old. Its the oldest its ever been trucks are even older. I think that will benefit the detroit big three. If you have tight inventory, that probably means Pricing Power is pretty good for the auto manufacturers yeah. If you look at the earnings that came out last week, they were better than feared they were better than the industry, the oems guided. A lot had to do with the fact to your point that there is a lot of pricing incentives were moderated. Their cost controls started to take hold. At the same token, their startup in production coming back bringing the system back up from covid stock went better than expected and of course a better mix of vehicles. More trucks and suvs, more retail, less fleet so i think that pricing discipline will hold for a period of time as the automakers rebuild their stocks. Mark, ford came in with a profit of 1. 1 billion gm reported a profit or a loss it was a narrower than expected loss but it was still a loss how do you kind of compare and contrast the two i think you have to look at the footprints of the two companies. Gms biggest market is china and china recovered in the Second Quarter. Fords foot print is much smaller so they didnt get the benefit of that. Ford has a big business in europe which took the brunt of the covid impact in the Second Quarter. Gm does not have operations there. So i think you have to look at the footprints of the two companies. Here in north america i think ford is getting into a sweet spot of launching a lot of new vehicles theres costs associated with that so i think you have to look at those factors that, you know, really tell the difference between the two performances you mentioned some people are looking at a car as personal protective equipment at this point. They dont want to take mass transit. How much of that do you think is fueling sales at this point . Well, i do think its a certain degree listen, you have a lot of puts and takes here on the pros side of it, you have more people going to take less mass transit, theyre going to be less likely to get on a plane. Theyre going to want a vehicle. They want a newer vehicle that will not break down so i think that will bode well. People are driving less if theyre working from home. If you keep accumulating les miles on your vehicle, youre going to deep a little longer. But i do think stepping back some of the big mac crow trends around the age of the inventory, the fact that people are going to be more sensitized to taking mass transit versus having their own personal vehicle that they can feel safer in, i think that will provide, you know, a little bit of puts and takes. At the end of the day i think im more bullish on the market than others are. Mark, thank you for your time this morning its good to see you and well check back in with you and see if that bullish outlook proofs true it has so far. Thank you. Very good thanks andrew . Okay a lot more to come this morning. Steve ballmer is going to join us live and exclusively right here on squawk box. That interview just a few minutes away first, check out shares of Marathon Petroleum jumping on shares it will be selling the speedway gas company to 7eleven the price tag, 21 billion in cash stayun, quk xetns after this rur now you can trade stocks and etfs for any amount you choose instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. Stocks by the slice from fidelity. What happens when puts its customers in charge . Well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with Xfinity Mobile. Call, click or visit a store today. Coming up, former microsoft c ceo Steve Ballmer joins us live. Tracking americas coronavirus hot spots and whether his former company, microsoft, should pull the trigger and buy tiktok as we head to break, check out shares of pinterest this morning up 2 in the market. Thats after fridays Second Quarter results and 36 spike helping to power that jump nearly 40 perfecti year over y. Dont miss the ceo of pinterest on mad money with jim cramer stay tuned, youre watching squawk box right here on cnbc. Welcome back to squawk box this morning the tech news of the morning, microsoft moving ahead with plans to buy tiktok in the United States. China owned short video app is a smash hit among younger social media users. Theres a concern over the security of your data after speaking with Satya Nadella, President Trump giving that company 45 days to get a deal done joining us to discuss this is so much more key data points in the coronavirus pandemic and of course basketball is Steve Ballmer, former microsoft ceo. Chairman of the Los Angeles Clippers there is so much to get to you with, steve. And i want to talk about u. S. A. Facts because youre doing a Real Public Service on important covid numbers and an important project which i do want to talk about. Ive got to get your thoughts, if we could, on this potential transaction between microsoft and tiktok if you were running microsoft today, would you want to buy the company . I think its an exciting i say this as a shareholder at this stage i think its an exciting proposition for microsoft. Obviously depends on the price price is important as well as whatever restrictions come with it from the government perspective, but i think its an exciting avenue for microsoft to really increase its Consumer Base let me ask you as somebody who has bought consumer businesses before, microsoft has i think its fair to say a mixed mixed record on some of the consumer businesses its been on. On the other end, xbox has been a wild success mine craft has been a wild success. How do you see this playing out for microsoft which has done so well recently by focusing, frankly, on the Business Enterprise consumer . Well, i think as you point out theres successes and failures in the consumer business, and i think its important to remember, youve got to keep trying new things in order to build new businesses. Microsofts legacy, actually, is in the consumer business and built an Enterprise Business skype acquisition went really well little bit there that missed the zoom wave and the work from home wave, but here we are. Were doing skype today. So i think theres nothing systemic in microsoft. Theres an important position with revenue perspective. Finally, how do you think though as a manager about running a business like this, you know, if youre running a social Media Company today, you are in the cross hairs of washington in an entirely different way. Microsoft was not at that meeting or virtual meeting, i should say, last week. Mark zuckerberg spends an enormous amount of his time and attention dealing with various political issues which come up on the platform, and the same types of issues, frankly, that washington is worried when it comes to tiktok and the presence of china involved in it. Well, you cant be in any business i know this from personal experience on our antitrust matters. You cant be in any business of size and not have to think about regulatory issues and political issues even on the Enterprise Business theres always issues of national sovereignty, where do you share where do you store data and the like. This would be a continuation of the theme. I think microsoft has a real sophistication of that born of history and a track record of having to work with governments and understanding that government is part of the fabric of everything. Hey, steve, i just want to say, man, you go you are the largest shareholder in microsoft and, boy, do you look smart at this Point Holding on to all of these shares and watching that stock rise i just wonder, as youve seen the stock climb, we were looking at the last ten years and the stock taking off, have you thought about selling anymore shares do you like being the biggest shareholder in microsoft i think its been a pretty good investment as you highlight, and im not ive got all ill ever need to live on and so mostly what you can say is were managing money for our philanthropic giving, for foundation and so in a sense why . Why sell why, you know, absorb Capital Gains taxes . I love microsoft i love it as an entity i love what it stands for. And i have certain loyalty no, i dont expect to sell anymore shares now if our philanthropic needs get big enough, ill have to take a look at it. I feel pretty good right now. As you should steve, its scott. Nice to see you. I wanted to go back to the tiktok conversation if i may and ask you for your reaction to what Peter Navarro said. Tiktok was too close to the chinese party. I think hes referring back to your tenure as ceo is there something to worry about microsofts relationship with china is it too close and cozy i think its really hard to say that if microsoft was tight and cozy with the Chinese Government, microsofts business would be bigger in china. Certainly it wasnt when i left, and as good as Earnings Growth has been over the last several years, if the Chinese Market was as piracy free as the rest of the world, if the Chinese Market was as accepting of microsofts Enterprise Services as the rest of the world, microsoft would be really, i think, quite a bit bigger you know, i dont i cant peer inside the numbers, but i feel pretty confident in what im saying want to talk about what youre doing with u. S. A. Facts if you were a company like apple or another American Company that does a lot of business in china, by the way, microsoft is one of them as well to some degree, would you be worried about a backlash hard to predict really hard to predict i think in general the way things are going between the u. S. And china, you can you can predict some level of friction whether this happens or doesnt happen certainly weve seen what happened with huawei and this has some elements of that, but i think at the end of the day youre going to have a big Chinese Company that wants to take good care of this asset and whether that is selling to microsoft or one of the other options they have, you know, i think the acquisition can be a good one at the right price but i dont and i dont really know whats going on i cant say that ive got any real information but as a shareholder, as i said, id be excit excited. Steve, i want to talk about u. S. A. Facts because as i said, youve been doing a Public Service with this website really putting a lot of numbers together youve now created a new recovery hub thats really looking at the covid19 pandemic that were living through but also trying to take that and really add the numbers and crunch them together whats the Biggest Surprise that youve noticed in terms of the data thus far . Well, im going to list a couple things. Everybody knows the stimulus is large. Most people dont recognize we have already spent 1 4 as much just on the stimulus as we spent in our entire Government Spending last year we spent about 4. 4 trillion. This year so far as a country weve already by august 1 spent 5 trillion. Its really remarkable now maybe not surprising, but if you put it in context you can go, whoa, that really blows my head back. And yet theres still things we dont know we dont get this is a lament for mind about Government Data we dont get real time Government Data from our state and local governments. One of the debates in the next stimulus package is how much support, if any, do those entities need . Sorry, i wouldnt know how to form an opinion, and as a citizen id like to form an opinion based on the data. If you take a look at whats going on in peoples lifestyle, the truth of the matter is that spending is up sorry, income is up by about 5 . Spending is down about 8 . Now thats remarkable because what it says is the savings rate of our country is going from 8 to 19 over this period of time. Wow quite remarkable and yet we still dont know for whom life has changed. Sorry. But i was just going to ask, the take away on the distinction between those two numbers, almost contrarian in terms of what we would have thought initially, what does that say about, for example, the 600 stimulus plan or 600 a week Unemployment Insurance plan that is now back on the table do you think we need it . Do you think we dont need it . What is the take away from the lessons . As i said, want to be able to dive deeper. My intuition in looking at the numbers should be targeted in who gets 600, who does not if we had the i. T. Systems in place what wed really want to do, i think, is target people at the lower numbers of the income spectrum it might get them above their earnings but were talking about people for whom this might represent just above subsistence level if they were provided the money. Right steve, as somebody whos now spent a lot of time looking at data and actually working the data behind the scenes because youre crunching it and taking it from various different sources. How much would it cost us to get good data . Part of the problem as you keep mentioning, we have bad data this is a testing issue for covid. We have bad testing so we dont have good numbers, therefore, we cant do good tracing. What do you think the costs im not talking about the costs necessarily of testing per se, but to get the right kind of data that youre looking for so we can make educated decisions is i think there is a whole lot of improvement that is just about free i think if the purpose of our statistical agencies was actually to help Decision Makers make decisions as opposed to just provide economists massive data for analysis, i actually think we could make incredible progress for essentially nothing. Second step would be to make the i. T. Work harder i dont think this stuff is necessarily as well automated and, number three, would be to publish it in a much more understandable form. Then on top of that im sure theres money maybe that needs to be added in, but, you know, like any businessman, lets go get the low hanging fruit. Might get us 80 of the way to where we need to be. Steve, i wanted to get your opinion on what we saw last week on capitol hill with big tech, you know, testifying and ask you a question this way. If you were still running microsoft, one of these gigantic Technology Companies that have done so well, which of the others would keep you up at night as a competitor . Would it be apple . Would it be google would it be amazon would it be facebook and why . Well, from where microsoft is today, it would clearly to me be amazon amazons aws product and moef s microsofts azure and office 365 products, they actually compete so that would be the one that kept me up at night. Now in terms of the frontier of consumer competition, thats a whole different thing, if you will you know, the promise of what you dont have probably feels less competitive than the opportunity and the battle youre in right now. I would certainly pick amazon and azure. Hey, steve, you look at whats happening with Major League Baseball and just the, wow, what the heck happened . Because clearly have a better plan with basketball so far so good. I think our league has done a very good job. This whole notion of having a bubble i was down in orlando last week. I dont get to go in the bubble. Theres a separate owners bubble, if you will, and those are kept well apart. Yeah let me say, managing partners. The word owner is offensive. Managing partners bubble, it is separate we actually behind glass with no contact, were allowed to, you know, many rows up, were allowed to watch games, but i think it is incrediblywell done i mean, last week alone i had four covid tests and our players, as you know, are having the opportunity to stay healthy to get tested more people are being fined, players are being fined for not Wearing Masks. Super thorough super good job super well actually from the use of i. T. And so so far so good. Things have worked out tremendously well. The broadcasts have shown innovation virtual fans through microsoft teams, that kind of got me a little excited i have to say and i think in general the broadcast looks awfully good so i just you know, a lot of praise to the nba and a lot of praise to the teams. The teams came back ready to play we had close games weve seen people play really well theres our guy Kawhi Leonard stuffing it home so i think things have been pretty good. Hey, steve, what do you think of the tenday quarantine for lou williams in terms of and the penalties that hes gotten fair unfair what does it do for the team i think you have to look at it this is not about penalties or anything else. Its about health. And i think the league said lou had put himself in a position where potentially he had touched more people than the league would have wanted under the quarantine rules people can take a look and talk about the rest of it, but, you know, lous a great man in addition to being a great player and, you know, he has to go through this quarantine process. The rest is for society to have its own opinion but, you know, i i am grad were going to get lou back for the next game, let him have a chance to play and know that hes taken care of his contact issue potential contact issues with people that are sick. You just mentioned something really interesting, you yourself had four covid tests last week what do you say, steve, to those believe me, im the biggest sports fan in the world and happy as anybody that sports are back in the magnitude that they are and working out well for the most part. What do you say to those who suggest that our priorities are messed up. Here is an nfl majority partner whos gotten four tests last week i still cant get a test if i even do get a test i have to wait seven to ten days if not longer to get the results. How do you answer that well, what i would say is this first of all, nba, not nfl very different practices there, scott, sorry to say. But, the rules laid down by government allows this testing and given thats the case, the league is going to add and i think thats sensible. We talked about government earlier, talked about usa facts and government and regulation. This is an area if government wanted to do things differently, it certainly could i also do think that society wants some sense of normalcy society wants sports sports rallies people. It brings people together. Even now particularly with the issues of black lives matter and racial equity, i think its important to actually get sport going and let our players speak out on these important issues. Hey, steve, on that point, you know, it was remarkable to see all the players taking that knee its been something to see black lives matter written across the court. As you know, when Colin Kaepernick first took the knee and questions of nba players should take the knee and the answer was it was against the policy and find other outlets for them to talk about these issues do you think that was appropriate in retrospect . I think at the time its important to have these things really discussed between the league and our partner which is the Players Association i mean, essentially, we split revenue 50 50. Were locked on the same issues. It was part of our collective Bargaining Agreement at the time and the league and the Players Association worked out something in addition to allow our players to express themself, which i think is fantastic i think now is a time when things have to happen on the racial equality sense whether its Police Reform or improvements in education and others and, you know, was that a mistake at the time . No that was the rules that both the Players Association and the league had put in place. We changed them for good reasons. And then, finally, before you go and this relates really to china talking about going back in time. You know, steve kerr said that he thought he made a mistake in terms of his comments, if you remember, at the time around what was happening with china and what the league had done in reaction to china. What is your take now on all of that i think our whole situation with china is incredibly complex. We have an extensive and deep business relationship. Its clear that the principle for our society is do not do any business in china. If youre going to do some business in china, then youre in the country and you have to operate by rules that are appropriate in china but, we have free speech in this country, but we see civil rights issues i think its all nuanced and cant say there was anything else to expect there will be people in the United States who were upset with what the league did there are people in the United States who will support. There is a need for Good Business collaboration i think almost anything the league would have done would have brought with it a bit of controversy as most things with china does okay. Fair enough. Steve ballmer always a privilege to spend time with you we appreciate you joining us especially on a newsy importanting like today. Check out usa facts to get those facts to make your own decisions about whats happening in this country. We appreciate it and hope to talk to you again very soon, steve. Thanks thank you you bet of course. Becky . Thanks, andrew when we come back, jim cramer will join us and get his first take on a big week ahead for ayrkets and economic data. St tuned youre watching squawk box right here on cnbc. So when they got a little surprise. Two . They didnt panic. They got a bigger car for their soontobebigger family. After shopping around for insurance, they called usaa who helped find the right coverage for them and even some muchneeded savings. That was the easy part. Usaa insurance is made the way liz and mike need it easy. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. At 5 a slice, you could own Ten Companies for 50 instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. All right. Lets get to cnbc headquarters jim cramer joins us right now. Jim, good morning. Good to see you. We just talked to Steve Ballmer and as the number one shareholder in microsoft a great deal for the company to get tiktok if they can do it at the right price. You think they can get a fire sale. Some in the white house who think this is a bad idea because they think microsoft is compromised. I dont know how far that will go and looks like the president likes it but a terrific deal because of how much advertising is out there i have pinterest tonight and its not controversial and tiktok is really controversial, although it can be something so, i think it is worth talking to ben about that deal i thought ballmer was subdued. I remember when i talked with h him, you have to be diversified. He was right i do think that the steve that i wanted, the fired up steve was not there and the question by whopner how they get all their tests and have to wait seven to ten days was only trumped by how good wapners house looked that was his first try but he learned from so many others, becky, that he just hit it out of the park with that one. That was incredible. I hope he does his show from the souvenir room. Oh, theres scott. Hes holding out on us, jim wait until he does it he has more Sports Illustrated covers than anyone in the world. Ive seen all the shots by everyone else and i took extra special care into preparing my shot for squawk today. I want to see the jordans and signed jerseys please, scott, go to the souvenir room. Do the show from the souvenir room no, we cant do that. Thats tmi thats tmi jim, well see you in a little bit. It is a great show. Thank you. Great to see you. Well see you in a few minutes and well watch tonight. Pinterest. To talk about the monday morning markets were joined by Richard Bernstein. Lets get his take ceo of Richard Bernstein advisors which just passed 10 billion in assets congratulation good to see you. Great moment for the firm you know, 10 billion in ten years, were thrilled. Very thankful for our inesthavers. Big tech is in the rear view. What do you watch most importantly this week . Well have some earnings coming through and i think volatility will not go away. I think the market may trend up, but its not going to go up in a straight line. I think people still want to play whatever volatility they want they want to keep it in their portfolio. Reminded of the great disconnect that exists between the economy and the stock market we might. But its not quite as disconnected i think as some people think remember, money growth is running at 24 25 year. Think of only a quarter of that growth gets into the economy that is 6 nominal growth. We havent had that since 2006 so, maybe its not such a huge disconnect all right well see. Rich bernstein, thank you. Congrats on the pimilestone. Well talk to you soon squawk on the street is coming up next. Good monday morning. Welcome to squawk on the secretes im Carl Quintanilla futures on green out on pmis out of europe today and microsoft, tiktok another busy week of earnings on tap. Oil is a bit soft as some watch for a possible resumption of opec production. Jim, were poised to get another open above the record close and what a week of