Looking to open off 37 points. The 10year note stands at a point. We are looking at. 672 melissa lee in the house that was a major move we are back up towards those highs right now. We saw lots of ramifications in the market looking at how quickly it moves higher. Im trying to watch whatever information i have is about 12 seconds old we are all in a house somewhere. Just not together. It is good to see you although i cant see you now. Im looking at the board from 15 seconds ago. We are going to power through this well up an update on why we are all doing this new case numbers have been declining across the country but testing shortages are calling those numbers into request the average number of covid cases down 19 from july 28 but testing has declined over the same time period amc to reopen u. S. Theaters august 20 and hopes to have twothirds of theaters open. Says all staff and customers must wear masks. That is the change from comments in june that mask wearing would be encouraged but not mandatory. More on the return opening of disney world in florida. Actors concerned about a return to work. Opened to the public july 11 with social distancing and other safety measurements in place a sample of frozen chicken wingsfrom brazil has tested positive in china. They said it found the virus on packaging from shrimp shipped from ecuador as well watching shares of lyft. Reporting a 61 drop of revenue in the quarter monthly rides increased 78 in july compared to april year over year saying the company may need to suspend operations in california if a court doesnt overturn a ruling calling drivers employees. Rarely for several months in california if that ruling isnt overturned i dont know, andrew what would you do . Hitchhiking is dangerous the debate between mobility and labor and employees that will come into question at the same time, theyve done an enormous amount into companies that didnt even have it. It is creating jobs how do you create the right balance . Is this the right time . Well see where that heads. But i think that will get worse before it gets better. How that gets subsidized. We should be able to figure out a price per mile that is worth something. What is it we really want . Right you raise rates and maybe cant provide those to areas slightly underserved. Thus far, it has been subsidized in large part and to some degree the employee there is some question whether that employee would have a job oth otherwise . And how much more is the premium over taxi cabs and by the way, they put a lot of taxi Cab Companies out of business right and you have to be okay with pulsed pricing people are like wait a minute, you are gouching me just read an economy book. You layer in selfdrividrivings and tacos on top of it that is tough to navigate. The people at uber and lyft have a challenge it has been a challenging moment for quite some time. In the meantime, another tech startup, they do come out of Silicon Valley palantir planning to go public late september means the company would begin trading publicly without raising capital. We have seen a number of other companies do this. Current investors wouldnt have to wait for a lock up period to expire before selling. Data Analysis Software used by Large Companies and the governments started in large part to help with intelligence after 9 11 mike pompeo says President Trumps executive order against tiktok and wechat could be broader. Saying, quote, well make sure american data does not end up in hands of adversaries like the chinese. He made that speech in prague. Playing down the order saying they didnt believe they had to do with u. S. Companies another wrinkle with how much u. S. Companies would lose due to advertising. More than a dozen u. S. Multinational companies raised concern on tuesday about the executive order saying Companies Included apple, ford, walmart, disney, p g and merck all of whom have employees who use wechat to communicate with clients and suppliers and all of it in china. Wechat is like water in china. Thats how people communicate. Companies getting a little nervous on apple and if that was not available and how you would communicate and whether youd be at a disadvantage. All right we are dealing i wait a lot of times i think you might have more to say i always have more to say i hold my tongue. It is harder it is slippery and impossible melissa, thank you for joining in here. Well see you tomorrow too here . I will be here with bells on my toes tomorrow yes, absolutely. Are there bells there now can you ring them. Yes get them out. I want to hear them. Coming up, not going to do it. Not gonna happen thats what President Trump said last night about a new stimulus relief bill. Well take you live to washington check out the price of gold. Im going do that as well in 13 seconds after a strong runup well be right back. 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. Usputs its customersde the waa wiin charge . Rierd it 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 stimulus stalemate i hate to say it but we want to get to washington now. Not that i hate to see elon but i hate there is a stalemate. Good morning to you. There was a phone call but still no progress. Treasury second called the House Speaker yesterday and said that democrats indicated that they were unwilling to negotiate until the white house agreed in advance to the 2 trillion price tag. Senate minority leader had a different thought saying democrats have compromised, however, it is clear that the administration does not grasp the level people are facing. They have yet to open talks for the ppp, schools and more. President trump said democrats arent going to do a deal. The democrats are also holding up money for schools, hospitals and Small Businesses, state and local governments. They tried stop americans from getting Unemployment Insurance and production from evictions, which is why i took this dedicative action, di executive orders this are now in full force. The federal money for those extra Unemployment Benefits are projected to run out those two things could be catalysts to get both sides back to the table we are still weeks away. Over to you. What happens next what happens today or tomorrow we wait that phone call was the first time they had the contract right now, it doesnt seem like there is anything left to discuss at this point unless something changes. Betting the executive orders would be enough to come back the corner clearly it is not enough ill send it over to joe you can talk about the other joe. Yes joe biden. Hesgoing to be joe, he told us remember vp pick, Kamala Harris join us now with how to help prior to joining cornerstone chief economist from house ways and Means Committee. Good to see you. There is what people say given what point of time we are in and there is what people do when they have a chance to volt senator harris weve seen her chances to vote attorney general from san francisco. We are hearing shes a california politician. Some call her a pragmatic politician do we know who she is . Certainly to the left of biden but nowhere near as far to the left as sanders. Moving biden to the issues hes been relatively silent on. Joe biden himself has a long record where he is right now given recent comments is not where he was 5, 10, 15, 20 years. If you are saying left of the new joe biden, that might be fairly left . Her climate plan costs 10 trillion bidens entire cost is 7. 5 trillion. She will have undue influence on the campaign it does matter a lot with respect to the policy what do we think the Health Care Solution that joe biden and Kamala Harris, what would that look like. What would that look like given the constraints to keep the economy rolling . One of the issues is how he would do triage. We saw at the beginning of a trump administration, given how sweeping the Biden Administration will be health care, thats a huge, longterm fight. I think that will crowd out the rest of the agenda biden has spoken to four different crises he wants to solve. Economic, Public Health, environmental. That could crowd out what is ultimately the plan to do. It is noteworthy the Kamala Harris proposal was basically the list tax those tax increases, tax cuts and the labor agenda with the expansion of utilization and increase of minimum wage i think that will crowd out health care and pushing Climate Change and really dashed the hopes of the investors that would find a place in the portfolio. Harris was a sigh of relief because she was moderate compared to other candidates now the question is that would have a good spot on the treasury market i think warren is a good candidate for that and just broader impact on the policy another would be what would happen on the doj. Biden has been silent. Hes only concerned with section 230. There is a much broader spectrum on antitrust i dont know who would be picked in the doj and on trade, those issues matter too trump has been on those issues. Theyve been more focused on human rights and carbon and countries that dont live up to their agreements that is another they need to consider as well okay. You are an expert right now. Is the senate likely to flip and is the white house likely to flip where we are right now last time around, we dont know we dont know what is happening until it happens could we be in the same position where those polls are not correct . Do you think it will be a biden presidency with a Democratic Senate i think thats the most likeliout come biden has a substantial lead now and we dont expect that to narrow a bit when you look at bidens lead nationally and compare it to swing states that margin is consistent with the overall margin we have looking at polls in different swing states and to what degree they are off and to what degree that bias is corrected more right now, where we are seeing that there is a chance if biden takes the presidency, hell take the senate there is a chance if biden wins, hell take the senate. There is a chance biden will hold on even if they lose the white house. It seems like a lot of those are baring fruit and they can pivot. Something based on the control at least for the economy and other things we are going well im not asking you to comment on that. Youve got to admit. Here we go back to the future. Thank you thank you for having me you are welcome coming up, the pressure is on for facebook as we approach the 2020 election. Well show you what the company is doing to combat misinformation next. Well tell you why cisco is the biggest market decliner down more than 6 this morning. Well be right back. Tmobile and sprint have merged. Now tmobile has thousands more locations across the country. More towers and more coverage than ever before. Tmobile is americas largest 5g network. With more 5g coverage than verizon and at t combined. Experience it now with our best deal ever. Unlimited for 25 dollars a line for four lines with 5g access included. Its time to join tmobile. [ engines revving ] its amazing to see them in the wild like th shhh. For those who were born to ride, theres progressive. Some Companies Still have hr stuck between employeesentering data. A. 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. Welcome back and time for our executive edge facebook plans to roll out its Voting Information Center later this week. Hear what Cheryl Sandberg said yesterday. One of the issues we are focused on is voting later this week, well launch our voting center. We want to make sure people get Accurate Information with the concerns about polls closing and how do i do this now, that is even more important. Well launch that later this week for more on what sandberg told us about big tech and Small Business, go to cnbc. Com to watch the interview. Joe. San franciscos results forecast with a weaker than expected outlook also announcing the cfo cramer is retiring shares of vroom are tumbling as the online seller of used cars first set of results since the ipo in june. Joining us in the first hour first things first calling it a used car is just not. We know what they are called now. Preowned. Are they not on the right page at this point . That could amount to the amount as well. You have a future of branding, joe. Yes the chief marketing officer you ever look around . I think about everything i say now, i hope you would too. I recommend that especially with a threehour unscripted format. Thats a lot of thinking. My head hurts joe knows i think too much about it so absolutely talking about what well be talking about. Weve got a lot to talk about on the other side of this break the pandemic relief has stalled and what that could mean for Consumer Spending and the u. S. Economy. As we head to this break, you want to look at the s p 500, winners and losers as we flirted with an historic high. 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. Good morning lets look at u. S. Equity futures at this hour a slight pull back is in the card s p looking to lose about seven at the home and nasdaq to be down by about 31 Consumer Spending supported by the biggest government stimulus. Hundreds still unemployed and talks at a standstill, the outlook remains uncertain. Steve is with us now substantial questions remain about the recent outbreak. The uncertainty around those government relief checks expecting another 1. 1 million new claims to be reported. Jobless claims at 8 30 this morning. One of three fed officials to voice concern about the outlook of more fiscal aid saying the forecast for the u. S. Economy this fall is quite uncertain. What we have seen in high frequent si data so far, that has remained flat jpmorgan looking at its own credit card spending looking at unemployment by state saying it is not visible but may be too early. Showing gains in Online Purchases but declines in those using credit cards in store. To support that optimism, for the millions of unemployed americans, that cheek needs to be in the mail soon. Either unemployment or a paycheck steve, we can only hope there is a check in the mail soon. Well talk more about this stick where you are for a second you should be part of this conversation for more on stimulus and jobs, New York Times tax and economic orders and the author of the new book the riches of this land. I want to talk about the book and what steve was talking about. What happens if these checks never go out or go out in the next month or two. Earlier what weve had, there is a lot of spending being supported by the government aid. There had been hopes that they would continue and there might be another round of stimulus checks something democrats and others may have wanted. That does not appear to be hope for a deal anytime soon and hope we should reflect as people run through any savings theyve run up through those checks earlier. Are you a believer that this could turn into a housing crisis that is when it could hit the banks and it could devolve right now, there is an issue people are worried about with renters. I think it would take more to spiral to a housing crisis this recovery is fragile we do not have control over the virus. The longer it dos on with the fiscalsupport. I dont think you should discount the possibility that this could get worse telling us what you think tax policy will look like under two candidates in 2021 how do you think it would manifest itself. We dont know what the a gepda would be he hasnt spelled that out i think they would push for another package. On the high earner to push and be a part of that program all of this, we are in the back drop of the ee session with that tax increase with the win and the economy sort of waiting for the next administration whoever that is let me ask you a lesson, it may be from the book the question is a, should weigh raise taxes or should we pay less you incorporate some of this in the book the book is how america built the great middle class in the 50s and 60s and we know we could do it again. We know the great thing for the middle class that formula is tight labor markets with strong Economic Growth one of the last lessons was congress cut off the stimulus well before the tight labor market we were starting to get close to full employment before this crisis hit one of the things economic history tells us is whether the fed or congress is that we could do basically everything we said to get back as fast as possible. Do you believe . And you talk about this period that 50s, 60s and 70s, that part of the reason the United States had the success it had was frankly that the rest of the world was without business we were eamon oply power and created an environment for the labor and things that were beneficial for the company but may not be replicatable today . I argue there was a very rep lickable there was an unleashing of women, black men, immigrants people that had been held back when they through the force of protests and results of wars and it turned out that they were very good at them. We are not going to have another post war monopoly but we do have an incredible amount of human talent in our country that if we could reduce the amount of discrimination and let that talent flow upward, i think it would lift everyone. We can only hope. The book is called the riches of the land. Thank you for the insight. You bet coming up, form treasury second jack lew will join us to talk about the stalemate and recovery watch us live any time on the cnbc app well be right back. Right now, switch to tmobile and get four lines of unlimited for just 25 bucks a line. With access to americas largest 5g included. Thats right. Unlimited and nationwide 5g for the whole family for just 25 bucks a line. Only at tmobile. Welcome back take a look at futures at this hour the dow would open off by 20 points jcpenney landlords nearing a deal to buy the bankrupt retailer Simon Property group and brookfield profits are looking at a deal that would safe penneys. That company has been so troubled for so long interesting there was talks about turning Simon Property and others for sears. You have to wonder rather than go a distribution route with amazon as a tenant a report that apple is getting set to release an exercise app that would compete with peloton looking at shares this morning under pressure by 4. 75 . Peloton has been down the past five days in a row mostly because weve seen rotation out of the tech stocks into cyclical stocks coming up, our next guest says a biden harris could rthu bank stocks. Stay tuned you are watching squawk. We are on record watch with the s p 500 on striking distance of alltime high 3393 is the level. What stocks should investors be buying jeff mills is with us and a cnbc contributor. Good morning great to see you youve been skeptical of this rally for quite some time. Skeptical of tech so do you buy into this rotation that weve seen in recent sessions into the more cyclical value oriented names . Yeah, i have been cyclical. The interesting component is whats going on underneath theres been a bifurcation you have Small Cap Value and then large cap growth. You still have Small Cap Value thats under performing this year by 33 . I think its still 20 from the highs. If you look at the distribution of returns within the s p you still have 35 to 40 of companies in the s p, more than 20 away from their alltime highs. Theres certainly this bifurcation. The companies lagging are in the value cyclical area. I think thats where you want to be over the next 12 to 18 months i think it might take that long to get there im concerned in the near term its going to be choppy with Economic Activity being far below where it was before the virus hit. I think that can be a challenge. Because we have the gap and we dont know where the performance shift is going to happen thats where were positioned. We try not to think out any shorter than 12 months longer term, yeah, i think the rotation sticks. Near term it could be choppy its hard to move out there you have to have an overweight from tech. How do you get investors to transition and get themselves more leveraged to the value trade when tech is really di dictating the direction of the markets. These are the hardest savings with clients im meeting with a client and were going to be discussing this very thing in terms of exposure in the portfolios the way we positioned it, if you look through the portfolios to the largest individual holdings, its microsoft, apple, amazon. Theyre our largest under weights relative to the benchmarks we want to hold them in size but were not willing to move into them in a way that would be consistent with the representation because we dont think thats a prudent risk of management you look at the trailing pe. Its over 30 right now compared to the index which is at about 20 ultimately we think that gap closes so thats why we still want to have exposure because you have to to keep up with the benchmark. At the same time were trying to manage risk and valuation. We think its the biggest dictator of longterm return sz. For cyclic calls, its hard to navigate. As a monolith, its hard to navigate transports, you have ups and fed ex trading at 52 week record highs. You have in the retailers you might say overall and more broadly you dont want to be in the bricks and mortar retailers, then again you have target and walmart doing quite well how do you navigate that which stocks are your favorites . Yeah. Its actually a great question its nice for active managers because youre starting to see a little bit of divergence in performance fortunes even within sectors and industries to look at the companies and the idiosyncrasies, thats really nice we were talking about where you want to be everyone is talking about the biden harris ticket and what happens with the financial sweep. Financia financials, banks would be an industry in the cross hairs not only from a regulatory perspective but a tax perspective. Where can you go in financials that might not be banks and still get exposure that i think makes sense. I fast pitched this on fast money a couple of weeks ago i think a company like s p global, theyre actually positively levered to this low rate Interest Rate environment, this crazy debt environment that were in the share that they have in the bond rating market is huge theyre leveraged to the esg there are a lot of tailwinds that if you get a democratic sweep and looking at the value areas that would be in the cross hairs, you can still find specific companies i think when looking at Renewable Energy as an example, you can look at industrials like caterpillar. They would benefit if there is some massive transformation in the energy grid. There are companies you can look towards, especially as you see the divergence in performance fortunes. That was a good fast pitch. Thanks good to see you. Thanks andrew okay a lot more coming up on squawk. Thanks, melissa. Take a look at futures with the s p near the alltime high s p looks like it would open off 7 points this morning. Well have a lot more to talk about in terms of markets. Up next, former treasury secretary jack lew will be joining us on the stalled stimulus talks 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. Wow. Jim could you ipop the hood for us . . There she is. Turbocharged, right . Yes it is. Jim, could you uh kick the tires . Oh yes. Can you change the color inside the car . Oh sure. How about blue . Thats more cyan but. Jump in the back seat, jim. Act like my kids. How much longer . Exactly how they sound. Its got massaging seats too, right . Oh yeahhhhh. Oh yeahhhhh. Visit the mercedesbenz summer event or shop online at participating dealers. Get 0 apr financing up to 36 months on select new and certified preowned models. Not going to happen. Thats what President Trump said last night reopening schools safely President Trump meeting with educators and parents at the white house yesterday. Reaction from the leader of the nations Largest Teachers Union is straight ahead. Vroom stalls the stock under pressure the companys ceo joins us to discuss car sales during the pandemic as the second hour of squawk box begins right now. Good morning welcome back to squawk box here on krooiblg im joe kernen along with Andrew Ross Sorkin and melissa lee. Becky is off today weve got a great lineup this hour andrew, youre going to kick things off this morning. Okay. We want to take a quick check on futures quickly before we get to our guest. Take a look at where the s p stands right now looks like it will open off 7 points we keep talking about it flirting with an alltime high dow off 30 points. Nasdaq off 21 points 2 1 2 hours before we open meantime, we are entering day six since Congress Called off virus aid negotiations with Steve Mnuchin and mcconnell still urging both sides to come together joining us is jack lew he served as treasury secretary, chief of staff to president obama. Mr. Secretary, thank you for joining us i want to know if you were in charge right now how you would get everybody in a room and get a deal done. Good morning, andrew. Its good to be with you i have to tell you that were in a moment of crisis and the stalemate is playing with fire as jim tank said in your last half hour, we learned in the Great Recession if you dont continue to respond forcefully in a crisis, you pay the price in terms of lower Economic Growth and more pay. This is not and has never been fundamentally a debate about what the numbers should be its a debate about what we need to do in order to keep the economy growing, if slowly, and preventing the human suffering that weve been able to avoid because weve had bipartisan cooperation. Its clear to me that the things we need to do are, first, start with dealing with the disease effectively. This disease has been driving the economic crisis, and until we get our hands around it the economic crisis will continue. Then we need to deal with the reality that these unemployment checks have been keeping the economy moving and keeping families from going underwater they need to continue. We need to deal with the fact that governments are running out of money theyve already laid off well paid people. It goes on to a problem the people are facing eviction there arefamilies facing hunge with millions of children. There are things that we need to do in order for the economy to grow and people to avoid suffering. Jack, i dont did i agree with you the question is how do you get both sides together. Lets be fair. Both sides are playing politics, right . The democrats, if they wanted to, could find some way to compromise on the big deal that theyre offering and the republicans could come to the table in a way that they may not be willing to now either so my question to you is as somebody whos been in the room who has to get both sides together, what would you do . I wouldnt start with the number i think the administration insisting on a number of 1 trillion or less, you know, the democrats started at 3. 4 theyve made it clear theyre willing to move. They should be debating what do we need to do to keep this economy from growing if slowly and avoiding going into a recession. We are facing a fall where we are very likely to have Health Crisis driving the economy in the wrong direction. The recovery has been, i think, quite predictably fairly quick out of the very depths but then its flattened off i look at it looks like a square root sign even the chart that Steve Liesman showed in the last half hour we went down, went up and flattened out. It wont stay flat if we take away the purchasing power of consumers. It wont stay flat if we stop doing the things that are keeping the economy moving you have to debate what do we need to do the number is going to be what the number has to be we need to put the policies out there to keep the economy from crashing why do you think why do you think that politicians in washington dont seem to have the same sense of urgency that you do by the way, why do you think investors dont have the same sense of urgency and i think thats actually a negative feedback, if you will, to washington because the stock market for the most part keeps going up and i think that if it was falling to pieces, you might see more action. So, look, i think the markets are behaving in a way that ill leave it to you to explain, but they certainly seem to read any news alert a little more heavily than i would look at these executive actions. From the moment they were announced it was clear to me they were inadequate at best i mean, extending Unemployment Benefits through a questionable mechanism in a confusing way that the states dont even know what to do isnt going to work even if it did, it would work for five weeks, six weeks. Telling employers to stop withholding payroll taxes when you dont know if people are going to have to come back afterwards and pay it, they wont have the money to pay it and who will be liable we dont know that employers are going to do it it was kind of a halfbaked amateurish approach, but the markets seemed to think, well, somethings going to happen. I cant tell you why i look at it and what i see is something that easily could contribute to delay, which is dangerous, and i think thats a problem. I think waiting till september or october is a mistake. You know, i have lived through brinksmanship with many of the people who are in this negotiation. Having seen, you know, the Freedom Caucus in the house in the old days worry about going off the cliff. Im afraid that some of those people are calling the shots now. What is your forecast, if you will, if you were in office thinking about unemployment in this country, say, come november, come christmas time and even extrapolate out to maybe a year from now, next summer and throw in the possibility of a vaccine in between look, i hope, like everyone does, that we have a vaccine sooner, but i am skeptical about being able to rush science anywhere near the speed that people are hoping for and some are counting on. I think theres many, many trip wires that will make it hard to be as quick with the vaccine as we would all like. I think we have to expect its going to be a hard fall and winter i think that we have to expect that the projections that show were going to end the year with a very high Unemployment Rate. Unemployment rate of close to 10 , which is the worst we had in the Great Recession, is very real it means were going to start the year still in a recovery in an Emergency Response phase looking at a recovery from what is likely to be an ongoing recession for much, if not all, of the next year i think i think, you know, i look at Unemployment Rates of 8, 9d, 10 as something that requires response. If you dont respond, youre going to end up with a demandinduced recession jack, one of the sticking points has been funding for state and local governments. Its been a democratic priority. The republicans have said it will give 150 billion but dems say thats simply not enough already weve seen local governments cut spending by 5. 6 annually and its projected states will have budget short falls of 500 billion over the next two fiscal years. How do you think about the ripple effects, extrapolation of the damage of states having to balance their budgets, because they are mandated to do so, but doing it with much less and making deep cuts melissa, thats a great question, and i think that the reality is states dont have the option the federal government has. Just this week we saw the federal government set a new record with 2. 8 trillion of fiscal year to date deficit. States cant do that they have to manage to balance their budget, which means theyre already reducing their spending, thats why over 1 Million People have been laid off already. It will only continue and get worse. That will be a headwind in terms of a recovery because more people out of work means a slower economy, means less macro Economic Activity, but it also means in a time of crisis that our firefighters, our policemen, our teachers are going to lack the resources that they need we as a country should be putting what it takes to deal with the crisis first, not saying to the front line authorities that are fighting this terrible crisis, you have to make these choices that are literally life and death choices. I find that unfathomable that this has been turned into a blue red, democrat republican issue. It is not. It is an american issue. If we dont deal with it there will be suffering in republican and democratic jurisdictions. You mentioned the deficit, mr. Secretary. It tripled in the first ten months of the fiscal year. At the same time the reported new cases, coronavirus cases, still dealing, obviously, the lowest since august 3rd, 46,000 new ones you say that the stock market isnt doing what you think it should do. The reaction is not how you would have the market react. How do you know that the markets not looking at some fiscal restraint being exhibited by congress or whomever you want to blame it on, i wont make it blue or red. How do you know after all of this spending and the stock market almost at a new high, how do you know thats not a harbinger of something positive . That weve made we probably should start watching how much we spend after we spent so much . And how much of the thousand s p points were not predicted by what jack lew would have predicted . I bet most of the thousand you think probably should not have been added to the s p since the lows. Well, joe, what i said is i cant explain the stock market as i look at it, its not spread evenly were starting to see a wave of business failures in retail, Small Businesses were not at the end of this weve had extraordinary interventions to put off some of the pain one of the reasons this delay in legislation is so dangerous is that it means that all the things that have been propping up the economy will go away. I think i would question a fiscal restraint this is not the moment for fiscal restraint you and i have argued over the years about whether it was smart to spend 2 trillion over on a tax cut. That i think was a mistake spending this money now to keep the economy from going into depression is exactly what resources should be used for i think anyone who thinks that trying to save money now is a good idea will pay for it later. Maybe the market is reacting to the nascent rebound in what was a very strong economy, not just the stimulus that were seeing maybe its responding to the jobs numbers that weve seen maybe were flattening out, but we wont know that for sure until the first friday of every month. But, i dont know, everyone always seems to think that the stock market is fooled and a lot of times three months later it looks back and it wasnt the market that was fooled, it was the people that cant really you know, that cant really understand that the discounting mechanism is probably pretty good its hard to believe the s p is almost at a new high just based on stimulus and fed action i think the economy has some real potential to do better than people expect. I think if you look at the stocks that have been really strong, its highly concentrated and the tech stocks have really been driving it. So i think its not just looking at the whole index but, you know, i think the economy was at a the end of a tenyear growth cycle when we hit the corona crisis. Im proud to have been part of the first seven years of that in the obama Biden Administration what we have now is a level of unemployment that is as bad as the bottom of the Great Recession. That will go on for a very long time without appropriate response weve had good bipartisan cooperation in congress. Weve seen the fed respond with strength and i think wisdom. That shouldnt end now and there should be negotiations they should go back to the table. Even Mitch Mcconnell said that the day before yesterday this is a mistake and i think anyone who cares about the future American Economy needs to put politics aside and get to the table and talk. One question before you go, its directly a political question given that you did work with obama and biden and biden is now up for election, when we interviewed Vice President biden, he said that he was prepared to raise taxes immediately once he got into office my question to you is given what youve just been talking about, that in the midst of a pandemic and a crisis, what you need more than anything is stimulus do you think that that would be the right decision i think what hes made clear is job number one is to respond to the crisis. Job number two is to get on with the Economic Recovery Program which invests in the future while were dealing with recovery like we did in 2009 and then we deal with investments in the future that we have to pay for thats when the tax increases come in. I think the things ive heard him say are sensible you look at the Corporate Tax rate at 21 , and i know youre going to have to have jim brady on in the next segment when we were debating this a few years ago, the Business Community was asking for 25 21 was not even in the discussion theres a lot of things we can do in the tax code to pay for the things we need to grow this economy and to do it in a way that reduces the inequitable treatment of people and institutions that is so much the center of public concern right now. Jack, im not going to debate that i think the timing is of course the big issue. Raising taxes in the midst of a pandemic and recover is a harder issue. Youll have effective dates, andrew im not saying the date something should happen. I think were going to be dealing with the response and the recovery for some time and i think if you put in place the pillars for an investment plan, you have some flexibility about when different provisions hit. Okay. Mr. Secretary, always a privilege to spend time with you and get your insights. We appreciate it thanks so much thanks so much. Good to be with you all. You bet all right. Coming up, american hits keep on coming American Federation of teachers president Randi Weingarten on the president s push to open schools amidst the pandemic. I dont think shes happy with whats going on. We will see. Squawk box coming right back 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. The pace of economic recovery lands on whether schools open in the fall the states of play survey by ylan mui. Reporter the debate about reopening schools is not over just education, its economics we have six key battleground states polling found that many parents are facing tough tradeoffs when it comes to skkis versus career. More than 36 say as schools go online, it will be harder to do their job. 17 say they have to hire additional child care. The same percentage said they have to reduce their work hours. 8 said they have to quit their job, just leave the labor force altogether the burden of the choices is falling disproportionately on women. More than 60 said that theyre the ones who are planning to either reduce their hours or leave their jobs overall still the survey did find that there remain strong support for the local schools. 56 of likely voters said that they approve of their schools response to the virus. Only 44 said they disapprove. Joe, our survey still finds a majority of swing state voters do not yet believe it is safe to send kids back to the classroom. Back to you. Thank you, ylan lets continue along these lines. President trump med can educators and parents at the white house. Education secretary betsy devos was on hand and reiterated the president s core beliefs about reopening schools. We know that for students and their families, they cant be held captive to other peoples fears or agendas we have got to ensure that families and parents have options that are going to work for their child and for their childrens education joining us now, American Federation of teachers president Randi Weingarten the aft represents 17. 3 million teachers from preschool to grade 12 president weingarten, its great to have you. Youre on record saying if you want to blame someone over the schools not reopening, look no further than donald trump and Mitch Mcconnell. So we understand where you think we need to look if thats what were interested in in trying to figure out why its not working. You think that the house did their job and we need about 2300 per student. Will that do it . What would that when we need to get this done specifically where your teachers feel safe . So, im glad you asked the question and im sorry, you know, as were still all doing remotely, my dog started barking so my apologies for having her on my lap. But, you know, this is but, you know, what is really going on here is that let me be really clear we started working on reopening schools, not whether but how to reopen schools in the in april because we knew that even if you could tackle the virus, and we were hopeful that the virus would be tackled and Community Spread would be very you know, would be where it is in new york or new jersey, that it would be a logistical challenge to actually be able to marry the Public Health safeguards that even the cdc still require and that yesterday begrudgingly trump and devos talked about with all of the other instructional needs and wellbeing needs of kids and the problem is that the administration did nothing and so now you get to august and september and in new york city, for example, you dont even have ppe, which is why the Principals Union and the Teachers Union said yesterday, youve got to Delay School Opening because if you dont have the masks, how are you going to be able to do this . In other places that started, which is whats really freaking a lot of peek out, you had 900 over 900 cases in a couple of georgia districts that didnt do the safeguard so you saw huge quarantining. The issue here is this virus is a disease. It affects children. It affects adults and we have to take it seriously and thats why everyone is grieving over this those of us who have been on the ground have really tried to make this work. The problem is, without the resources and with still huge resurgence and Community Spread, thats why you see more and more and more districts going to remote, because they cannot make it safe for children or their staff. The most important thing in your view is that there is testing, i know thats one thing, testing, tracing, isolation. Right. The ppe and the masks, but you want the 5 the 5 threshold that no school should be open if the Positivity Rate is 5 . Right. Which of those whats the most important of those three . Or are they all equal . So this is the problem. In a virus, all of these things are important, meaning if the Community Spread is over 5 , that means the virus is walking into schools the virus is invisible and there are asymptomatic carriers, so thats why even the cdc and dr. Birx have said that if you dont if you dont if you have greater than 5 , dr. Birx said you should be on Remote Learning but the other issues are not about Community Spread, its about how you make sure the virus doesnt isnt spread to other people, and thats why testing, tracing, isolation is so important and thats why the six safeguards that are in the cdc guidance are so important. Its not just one of them, its all six of them. Its the ventilation and the cleaning, its the masks and physical distancing and its reasonable accommodations and making sure that were washing our hands. Ill give you an example we held our convention the aft held its convention in virginia virtually at a studio a few weeks ago, and the studio had the temperature taking and all of this stuff, but we actually specifically asked for more safeguards and we spent more time doing things like making sure there was fiscal distancing, making sure there was good ventilation, good cleaning and having mask wearing. And it so happened that there was in parts of the studio, there was an outbreak of covid people tested positively but my staff because we had done all of these things, thank god none of my staff tested positive thank god we all tested negatively over the last couple of weeks after we found out the studio had tested positively and so those thingssay to you in a school, in a workplace, youve got to do all six of those things most you know, weve been on this, you know, fight for resources for schools for a long time now its clear why a window has to open in a school, why you have to have good air circulation, because this disease is airborne and you need to circulate the air so whats happening in School Systems throughout america is that if the windows dont open or theyre nailed shut, they dont have good ventilation, they dont have ppe yet, they cant figure they dont have the cleaning supplies yet, the dont have the testing in place, all of this stuff needs to be in place to open. So what we have been recommending to people, because people you know this now because people have been trying, but what weve been recommending is so create the trust and confidence with parents and teachers start slowly bring teachers in first. Create some professional development. Make sure that the school doesnt feel like a place where youre going to get sick and then ultimately, you know, start remotely but then phase in a start when you know that you have the materials and the resources. We know parents need child care. Thats part of the reason that we have fought so hard for the resources in the in the in the new heroes act that the president and Mitch Mcconnell dont seem to want to negotiate. We know they need the money. Great. It was great that trump and devos finally said that there needs to be these safeguards, but really saying it in august . We said it in april. If you had done it in april if they had done it in april, more schools would be open right now. Randi, let me ask you this, and, you know, i sympathize with so many of the teachers out there, but there are so many parents, frankly, who want their kids back in school. Some are angry about the situation. You look at a city like new york city where the rate of positivity is at a very low rate today, probably the lowest rate that we may very well have this fall given right. So many of the masking and so many other steps that people have taken still teachers in new york city, at least many of them, are still very concerned about going to school in certain cases i think they do have the ppe what do you tell them and what do you tell parents . Because its one thing to be in an area where theres over 5 . Im not going to debate that with you at all. Right. Its another case where you get into a different situation and, by the way, there are some parents in america who say, look, were going to work at walmart. Were going to work on the front line every single day. Some of them are doctors theyre putting their lives at risk theyre saying, if kids are not the most important thing, if school is not the most important thing we do in this country, what are we doing . Well, let me actually say this first off, i just read last night dr. Sanjay guptas very lengthy essay about why he is not sending his kids back to school, and, you know, i think that what youre seeing now with the pediatricians and others, my sister is one of those pediatricians, they lean into childrens wellbeing but they have said over and over again, if its not safe, safety comes first. Teachers will often say maslo beats zoom every day of the week i want to be very careful. I empathize with those parents part of the reason that we are trying to stand up child care and having rec centers and trying to make inperson learning work is because we know it is absolutely imperative for some parents because they have no choice but, you know, think about whats going on here schooling is not supposed to be child care we know that schooling has lots of functions, including that and including that for the economy, but first and foremost we have to make sure that kids are safe. And theres a huge difference between working and walmart and working in a school and theres actually a pretty big difference between working in a school and working in a hospital. You cannot walk into a hospital without everyone taking the same safety measures. Any teacher and any parent who has worked with their youngest children who are like 2, 3, 4 years old, its going to be hard to figure out five years old, six years old how to reliably help kids have a routine about masks. A friend of mine is making these, you know, face shields for little kids to try to figure out how to do those kinds of things so youre talking about a very different kind of job and, yes, it is really important thats why the safeguards should have been there. We shouldnt be still fighting for the money for the safeguards and for these kind of things in terms of new york city, thats why the two unions, the csa and the uft have been working with the board of education for two months now michael mogul from the uft has been out there as long as ive been out here trying to get these things done. It takes a village to make sure this happens, and im not sure that bill de blasio has actually saw or understood the extent to which this is a logistical challenge. Look at ross baracca in newark what he has done is said were going to stand up some places because we know that kids need to be there. Thank you he wants people to stay home if they can. President Randi Weingarten of the American Federation of teachers, thanks for joining us this morning appreciate it. Thanks so much. Coming up when we return, a look at whats moving markets after the s p flirted with but then fell just short of that new record close we head to a break, heres some early movers in the s p 500. Were right back after this. Time now for todays aflac trivia questn. Io twitter was founded in what year the answer when cnbc squawk box continues aflac. These are all the cab rides to my physical therapy. And aflac paid me directly to help. Aflac. What he said. And this unexpected bill is from. The twothousanddollar specialist. Thanks. Aflac. When youre sick or injured, aflac is there. We can help with Expenses Health insurance doesnt cover. Get to know us at aflac dot com. Its totally not the getsame without you. Were finally back and cant wait until you are too. Universal orlando resort. Buy now and get two days free at the parks. Restrictions apply. Now the answer to todays aflac question twitter was founded in what year the answer, 2006 our next guest says that regardless of who wins the white house, there will be implications for healthcare, tech and trade we have Profit Investment management and mike santoli joins us for the conversation. Guys, good to see you. Eugene, i will start off with you. Im not sure knowing Kamala Harris is the vp pick, but as an investor standpoint how do you look at the ticket most closely in looking at the portfolio . Im happy with the Kamala Harris pick. I think basically regardless of which Administration Wins the white house, the Economic Impact will be somewhat similar your question regarding the cabinet lends forward how progressive or to the left we would go if we have a change in administration i think that would be somewhat muted. Biden has said that his initial focus is going to be on the pandemic thats going to require continued stimulus, thats going to require focusing on putting money there. I dont think that youre going to see the policies change dramatically i know you will see a tax increase at some point but i think that it will be similar to what youre seeing now except a different focus on the pandemic and how he handles it. Back to the markets today, mike it looks like were a little bit farther away from 33 poin3386, whichever you choose to watch at this point you need to see Technology Take us there because of the math of the markets at this point. You have a real gravitational pull towards the cyclicals they are much more under valued, under priced in the market at this point and people want to position themselves for that rebound. Right the shortest path would clearly be for the winners that weve gotten familiar with, the ones that dominate the s p to carry higher yesterday, apple and microsoft up 3 each that did the job of getting this near approach to the old highs i do think that, you know, its been tough to decisively say that there really is a tidal shift going on within the market i think its better to say that its just become a little bit less exclusive in terms of whos driving the rally. In other words, market kind of broadening out a little bit giving a little bit of allowance for a better economic recovery the early cycle people have wanted to try to play for a while is kicking in for a while. Certainly its gotten clearance like it did in may and into june from this declining National Covid case count rate which even if its only temporary, the market can kind of extrapolate it for a while i think all of that stuff in play, i dont know how much it matters they hesitate on an index level on highs the other thing to look for, were up 50 in less than 5 months i think sentiment and positioning is getting progressive. It might come together as we get to and through the high and we have to reassess and say we built in a little bit too much good news but that remains to be seen. The broadening of the market, eugene doesnt sound like youre a buyer to the more value and cyclical oriented stocks. Im not, melissa. I think on the Positive Side it does indicate that the bull market is broadening out and thats a good thing. On the opposite side, i think thats a little bit of a value trap i think when you get down inside the fundamentals, stocks came down quite a bit when covid started and a lot of the growth has been the faang stocks but even within technology, if you look at a situation like cisco which is 19 pe would be a value name you have a system where Old Technology is not going to be rewarded theyre focusing on the enterprise services. They have been a little bit off going back into the scientific merger so i think that Overall Technology still will, i think, let you have a lot more risk control. Right eugene, thank you. Eugene prove fit and mike santoli. Still to come on squawk box, shales of vroom reported bigger than expected losses. Theyll join us dtoiscuss business during the pandemic squawk box will be right back. S were gonna find the shoes that inspire the look at dicks sporting goods. For me, its all about the shoes. You start with the shoes and then you build your outfit up. For me, the shoe is definitely the biggest focal point. I mean, airmax 90s, cmon now. Look at that, look at that pattern. I had no idea how many shoes dicks had. Whether youre in the classroom or on camera, find the shoes that inspire the style. Day one starts here. 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. [beep] [whoosh] give everyone something to look up to. The allnew highlander hybrid. Toyota. Lets go places. 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. Welcome back to squawk box. Renters are fleeing new york city leaving a Record Number of empty apartments in manhattan. As vacancies rise, rents are happening. Robert frank joins us with the latest reporter good morning, july and august the strongest month of the year with manhattan rentals. This year we are seeing record declines the number of new leases fabllin 23 . Median rent with the largest decline in history what is most troubling for this market is the number of empty apartments there are now over 13,000 apartments in manhattan that are up for rent. That is an alltime high and more than double last years total. Now to fill all of those apartments landlords are offering lower rents, offering bigger and bigger incentives for new leases they are now giving an average of 1. 7 months of free rent just to lure renters. Now theyre also throwing in gift cards, furniture, other adons the pain is likely to start trickling up to landlords. This is the big problem. Half of the apartments in manhattan are owned by Small Business owners. Without the rent they cant pay their workers or property taxes. Property taxes, of course, is the largest source of revenue for new york city so that could start to affect services in manhattan. Guys, back to you. Okay. Robert frank thank you. Appreciate it very much. Joe . Thank you i thank robert as well you know, thats a lot of times its not about the delay, its just we want to thank him so much for the amazing job he does we both are thanking you, robert. Coming up, shares of vroom tumbling the companys ceo joining us to discuss business during the pandemic pandemic well be right back. The ambigui. 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. Simon pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Demand is high for used cars its even higher for auto dealerships. Phil lebeau joins us with more hey, phil. Reporter melissa, go back to march 18th and the run in auto dealer stocks has been remarkable kwun reason w one reason why theyre hot is because the dealers are red hot. Look at the rise in the value of auto dealerships a big part is because of the underlying value of the real estate where those dealerships sit. The other thing thats impacting this are three factors first of all, you have large auto dealer groups that continue to expand and this is a market thats ripe for consolidation and will be for years to come. Profitability is rising, in part because of the red hot used car market prices in used vehicles year over year had increased and whats important for the car dealer is that, again, the margins on used vehicles are about double that of new vehicles you can see why june, in the month of june the average auto retailer had record earnings earnings were up 85 for the average dealer as compared to 2019 june. Reporter thats not what a lot of people are expecting on march 18th why are we going back to march 18th with the auto dealer stocks thats the day that the big three said, you know what, were shutting down production because of covid19. Everybody sold off on the dealer stocks and the auto stocks they said its going to be a terrible year. Oh, no, these stocks for the most part have basically doubled. I know youre talking here with the vroom ceo. Keep in mind the disappointing q 23 guidance impacts that. Its a red hot time to be an auto dealer. Thank you, phil we are going to continue this discussion with paul hennessy. The stock has been on a bit of a tear this morning off 14 in part off of the Earnings Report relating to the guidance. Paul, we want to talk about that and then we want to get into some of the larger issues taking place in the auto motive market. What do you think youmissed in all of this . Well, i think that the market is probably reacting to the change in Consumer Behavior that weve seen in our business as a result of covid. And what has happened is customers have changed their buying preferences vroom used to sell cars in the 28 to 30,000 range and now its 23 to 25,000 range vroom is meeting that demand were encouraged while the average selling price of the vehicles is lower, our gross profit for unit is ascending. We had a very strong Second Quarter. We improved our guidance for Third Quarter and i think the street is probably digesting that move in average selling price. How much of it though was a guidance issue and how much of it was a miss on in terms of, as you were thinking about, inventory. How much inventory you wanted. I mean, to some degree i dont think anybody anticipated exactly what was going to happen here i think a great story of Second Quarter will set the stage in march youve heard the march 18 day, in early march we read the tea leaves we have a strong data Science Organization we saw no good would come from sitting on inventory we made the conscious decision to lower our inventory and we sold off that inventory, very, very quickly very agile organization. In doing so, the demand bounced back in may and weve spent really since may rebuilding our inventory and as we rebuild our inventory that, of course, drives both consumer demand and con sergs summer conversion. So we have the highbrow problem of being unable to serve the demand and we are growing our inventory and listing that inventory. Its interesting you say its an improvement in the Third Quarter guidance it was below what the analysts said in terms of the inventory, is it really that youre caught off guard that youre sort of off sides on inventory when you said you reduced inventory in the Second Quarter, thats when there was peak demand they wanted to buy a car and you didnt have the inventory and now youre rebuilding the inventory. With all of that data science, are you able to better predict how much inventory you need to meet the demand which is interestingly growing during this pandemic. Again, that was very early in the cycle when we decided to sell off the inventory as soon as we got signals that demand was returning in mid may, thats when we started the ascension on inventory we guided for continued monthly sequential both sales and earnings growth. So i think the street will digest that and understand that weve got honestly the fundamentals are intact in an ascending business. In terms of the ascension of the business and basically how sustainable these type of growth rates look like, once detroit gets back on its feet, once you start seeing new automobiles supply of new automobiles, how do you think thats going to change the dynamic for your business longer term yeah. The used car market is very large. Its 841 billion in annual revenue and massively fragmented so the vroom Business Model is just going to continue to steal share from the existing traditional dealerships and even if the new business has a has an increase over time, the used car market is healthy. And a great place for consumers to get great value on vehicles they get much more for their money. We see great longterm prospects in the used car space. But in terms of price, what is your right now obviously so hard to get a new car and, therefore, harder to get a used car. You play that out 12 months, what does that look like to you . Yeah. I think that there will be some, you know, ascending pricing in used cars. Were seeing that right now. Up a couple of points in the actual month but i believe given the value differentiation between new and used and the absolute size, 40 Million Units in annual used car sales, i believe the used car market will continue to be robust. Okay. Paul, its great to see you. We appreciate your time this morning. Hope to see you again very soon. Thank you very much have a good day. Coming up, congressman kevin brady joins us to talk the stimulus stalemate in the next steps in washington. Later, dont miss our interview with brian grar zeon the state of the Media Business. Squawk box coming right back good morning, mr. Sun. Good morning, blair. [ chuckles ] whoo. Im gonna grow big and strong. Yes, you are. Im gonna get this place all clean. Ill give you a hand. And im gonna put lisa on crutches wait, what . Said shes gonna need crutches. She fell pretty hard. You might want to clean that up, girl. Excuse us. When owning a Small Business gets real, progressive helps protect what you built with customizable coverage. And im gonna eh, eh, eh. Donny, no. Oh. Good morning the calm after the storm futures only a little lower which took the s p right up to the door step of a new alltime high. No deal in d. C the two Political Parties still squabbling over the next round of coronavirus aid although markets dont seem to care very much well speak to congressman kevin brady on whats holding up an agreement pretty much everyone feels is needed. How the late Sumner Redstone changed the media and how its changed by the pandemic. Brian grazer is our special guest. The final hour of squawk box begins right now. Good morning and welcome to squawk box here on cnbc. Im joe kernen along with Andrew Ross Sorkin and melissa lee. Becky is off today and were still on record watch though with the s p 500 just a few points from an alltime high hard to imagine. I think its august so pretty quick turn around, melissa, in anyones book. Pretty crazy. Yeah. February 19th was the day of the alltime high. That seems like ages ago though, right . Think of how much the world has changed since then in just a few months. Life time meantime. Yeah, lifetime ago. One point we were all sitting at the Nasdaq Market site very close to each other no masks a lifetime ago we had just gotten back from davos where all of these people, which is hard to imagine, remember, sorkin, they were altogether in the same rooms. Yeah. Eating open food. Inside. Eating inside. Breathing on each other with drinks inside. And then getting on a plane and flying around. It was a i dont know whats surreal, where we are now or where we were then do you know, sorkin . I think davos was surreal what are you planning oh, i dont know. Whats coming up . Theyre plan to go do some kind of theyre planning to do some kind of smaller in person virtual thing well see what happens it will be very interesting to see. I dont know yeah. What about the caviar virtual caviar just isnt the same, is it now . Heres a story that were following for you. Apple is reportedly getting ready to roll out several bundles of services with the goal of scoring more customer subscriptions and recurring revenue. Apple is going to release new iphones. One can include apple music, apple tv and another can add gaming and news content. Shares of peloton under pressure apple is working on a virtual fitness offering that could compete with the exercise bike maker. Those shares are down almost 5 right now. Andrew. Meantime, palantir planning to go public they would begin trading publicly without raising any new capital. Current investors wouldnt have to wait for a lockup period to expire to sell their shares. Cuts on their shares and we spoke to alex karp we said we are planning to go ipo. We will do very well in that context. When you look though at some of the other offerings taking place . Heres the thing. You can basically look at this last ten years the typical way to look at tech is it was a bull market. The way we looked at it, palantir, it a bull market for monopolies stick companies and bear market for everyone else. You dont finance growth with the sweep vapors of foreign venture funds, you focus on growth with high quality revenue. Weve told people ipo will happen and youll see the results. We were practicing our outdoor social distancing back then palantir was founded by peter teal feel good about our ability to do the show the way we did it over there, andrew nothing but fresh air. Outdoors. We can do it in the cold we can just set up shop in the middle of times square, separate, put our coats on and go for it. Oh, no. But if we went to davos the way we went there, maybe have one less guest and wed be separated and were outside. We can do it i dont know how were going to get there and i dont know about all of the meetings. Minor details thats yeah, exactly january, what do you think i dont know we may have davos before we have a new stimulus deal, i can tell you that a war of words in washington over stimulus negotiations nancy pelosi said treasury secretary Steven Mnuchin made clear that, this is a quote, the white house is not budging from their position concerning the size and scope of a legislative package. For his part mnuchin said pelosi was unwilling to meet to continue negotiations unless we agreed in advance to her proposal joining us is congressman kevin brady. The Ranking Member of the house ways and Means Committee congressman, just for people that are watching the show today, i mean, we heard from jack lew, we heard from Randy Weingarten it just sounds like the 3 trillion is reasonable that congress was proposing in terms of whats needed the idea that we wouldnt spend the money right now is just no concept from either secretary lieu or president weingarten on not doing that on the other hand, you think that its so loaded with wish lists, left wing wish lists that its a nonstarter what are we supposed to think . What are our viewers supposed to think about whats real here look, joe, i think theres not just an extreme bill in so many ways. The question isnt just how much you spend, its how you spend it i think the key is, you know, congress is reacting remarkably, so is the fed in many ways, but theres still more work needs to be done both on driving pressure on this vaccine but also helping us return to normal lives and a healthy economy. Thats where the focus ought to be right now it just seems like people are pushing in a trillion dollars or taking it off the table or talking about it when we really ought to be focused on, look, how do we reconnect workers back to their job . How do we help businesses trade safe, Healthy Workplaces for their customers and their workers . How do we make sure we do have businesses, Small Businesses, midsized businesses, even some of the distressed ones who continue to need some help i think some targeted, smart policies will work and ill just say this, look, weve got nearly 6 million job openings in most years that would be a record most of our small and main street businesses are begging for workers to come back we need to have an Economic Policy that reconnects workers to those businesses now to be the focus. What would you tell nancy pelosi needs to come out to make it possible to compromise . What specifically is in that 3 trillion that will not be acceptable to republicans no matter what . Well, i think there are a number of those provisions, but maybe i would start over with rather than lets pick a number and just stop spending into that, what do we really need if you start from that stand point, i think the senate bill traded some very immediate, practical, targeted cree lev that can be very helpful, both on healthy lives and the healthy economy. I think thats an excellent starting point i do think, you know, the president s actions im pretty sure he didnt want to have to take those steps but weve had six weeks of inaction. The house isnt supposed to come back until mid september theres people that are hurting and businesses, you know, taking that action i think was pretty crucial. But congress, you know, can remove a lot of this uncertainty by moving to a package really this week. I mean, we ought to be moving now. Yeah. I dont know what the prospect you know better than i what the prospects are of doing that when we talk to secretary lieu, former treasury secretary, the question i asked him was is it have we passed the point of where we just say we need to pull out all the stops and just spend whatever is necessary and can we take the recent action in the stock market almost at a new high is that predictive of an economy that is showing signs of being able to stand on its own two feet or is it a stock market thats just responding to all the things that have already been done and what the fed is doing and everything else. My point to shim this be might be the time to get above stall speed, take the training wheels off. If its a strong economy, it ought to be able to stand on its own and we probably shouldnt spend that much more money given what weve already spent. Yeah. Joe, just listening to you in the conversations weve all had, you know, can you imagine, you know, a few months ago that we would be talking about another trillion on top of 3. 5 trillion that weve already injected plus the feds liquidity . Who would have ever thought that would be described as being a conservative, you know, figure it is an enormous figure if you apply we can help here we can help. Look, i dont think its a case of pick a number and thatll fix the economy. Its just were not at that point. The truth is, there are a lot of the dollars that congress allocated that havent been spent and arent getting used yet. Look, lets be smart about this. Well, it just seemed like a political football at this point. Im not sure, you know, trying to keep score of whos winning, whos losing, whos got Public Opinion on their side. It becomes very frustrating. Yeah, i know. You like what the president did in terms of the eo, executive order. Not everyone did not everyone in texas did, i dont think. I think like many, im not a fan of executive orders. Were still in pretty unprecedented times. Theyre very targeted. You have authority fema disaster aid, unemployment in a number of those areas areas. He has the authority to do that. Its no substitute the president acted. Were not through the pandemic main street businesses, banking r health care. I for one have not been a big fan of payroll tax holidays in the past, but i will tell you rewarding work, helping those essential workers who, frankly, in health care, manufacturing, others are exhausted right now, giving people a pay raise and rewarding that type of work, you know, if youre going to stimulate the economy, thats not a bad place to start congressman, one of the issues i think relates to the level of covid and beyond the level the amount of ppe thats able to be provided on a local basis and frankly testing. I think i dont know if youll agree with me, i think its been relatively horrific across the country in terms of the lack of testing. I know weve gotten more and more, but still on a relative basis to where we need to be and clearly we have a ppe issue. When you hear from teachers about not wanting to go back to work, one of the things that Randi Weingarten says, we dont have the testing in place, we dont have the ppe in place. We need actually a budget for this kind of material and thats why, you know, we talk about trying to get employees back to work and we talk about liability insurance. You only want those things if all of the Component Parts are there. The idea that people dont want to take risk is because we have risk and the question is what were doing to limit that risk and whether you think weve taken enough steps to limit that risk you know, the short answer is we can always do more. You know, i think both on the testing side and the ppe, theres been just stunningly remarkable progress but its not good enough yet. Thats why i think you both in the schools as well as in our businesses, i think congress can help offset the costs that will create that confidence that there is a healthy workplace i know too, sort of like the math, the school issues become far too politicized. The truth of the matter is most districts, not all, but most have taken a very common sense approach i know with us in our public schools, now seniors, schools started yesterday, theyre giving parents a choice. You know, do you want your children to start online or at home theyre just making smart decisions. Look, am pretty confident that theres some pretty common sense answers here we want to help our businesses we can do this im more optimistic than others that we can reach an agreement here i do think theres some smart things we can do right now common sense. I dont know weve got a threehour show. Didnt sell you on that one, huh, joe no. I can collect the common sense ive heard in a little, itty bitty thimble. Not talking about you. Congressman brady, thank you i appreciate you coming on this morning and talking to us once again. Thanks melissa. Thanks. Take care. Coming up, a hollywood heavy hitter on the life of sumner red stone who died this week at the age of 97. Academy Award Winning producer brian grazer will join us to talk about his legacy in the media world as well as the changes in the business during the coronavirus pandemic as we head to break, check out the shares of 3m 6 increase in july sales compared to a year earlier broad based improvement across the businesses 3m had said sales to that point were up in the low to Single Digits that stock up. Stay tuned, youre watching squawk box on cnbc 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. Dont get mad get e trade and start trading you say the customers maklets talk data. S. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g, everybodys 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. Just have to make more corners in this building. Chad. Your wireless. Your rules. Only with Xfinity Mobile. Now thats simple, easy, awesome. Switch and save up to 400 a year on your wireless bill. Plus, get 400 off when you preorder the new Samsung Galaxy note20 ultra 5g. Welcome back to squawk box. We got the sad news sumner red stone had died at the age of 97. The man who coined the phrase content is king. Hes remembered for his outsized impact on the modern Media Business joining us to talk about sumner red stones legacy, so much more, where were all going. Award winning Film Producer brian grazer old friend great to have you on the program this morning wanted to get your reflections on sumner and how you remember him and how you imagine the industry will ultimately remember him when history is written. Well, theyll remember him as a builder. I mean, he, along with rupert mourdock, were probably the single icons and builders of modern Media Centers i mean, they had television, movies, video. They were they were fully integrated, you know, media sources. So hell be remembered as a builder by having to have to go through tremendous amounts of adversity to create viacoms and united together or cbs, now its back together again. You know, hes someone who was supportive of you over the years. You talked to him even i think in the last years of his life. How did he reflect on what had happened to the industry he wasnt a person that reflected upon what happened or what was going on. He was a person that would talk about things that he did or accomplished or things that he might have missed possibly, none that i can personally remember he was he was a very committed absolute sort of a person binary in a certain way. Tremendous amount of focus and concentration. Im sure youve read his book where he was code breaker. Yeah. And he i think he graduated number one in his class at harvard very extremely intelligent, well read. People often didnt find him to be the most approachable, and i was one of those people that didnt find him approachable in the beginning and, andrew, as you know for 35 years i will every two weeks go out and meet somebody you know, i call them curiosity conversations in anything other than what i did for a living so when a few of his employees said, sumner wants to do this meet with you and he wants to do this Television Series which is a documentary called iconoclass i was very, very resistant i said, no, no, i dont want to do that. I dont want to do that. I dont meet media emperors because i dont want to get involved in any kind of power dynamic or political dynamic within these power system. But they were so persuasive that i ended up meeting with sumner and i ended up meeting him he said, meet me on ventura boulevard at an aquarium theres a famous aquarium, a tropical fish store that he wanted me to meet him at and so i said, sure. And i have this window into his humanity because he had such intimacy with these fish and he knew he knew at least 1,000 different types of varieties of fish, which was really kind of impressive. Again, sort of a window into a different perspective into sumner red stone right and that became the beginning of our relationship. We did do the iconoclass we shot it together. He was supposed to ask me questions as i was supposed to ask him questions, and it seemed as though i was asking all the questions. So he was coaxed to ask questions of me, which he found that a little dit so we shot it, did it, and then we had to do reshoots because so he came to my art studio and he struggled with it but he asked all sorts of questions about the composition of what i would, you know, paint and what i would use, oil acrylic, oil stick and pencil he kind of found that interesting, but he was a person that he learned by reading things he assimilated what he learned and he could immediately apply it and as we all know, he was absolutely fearless. Absolutely fearless. Brian, as one of the great consolidators of the business. He was somebody who merged a lot of businesses together, got involved in lawsuits a lot of times in the process do you as a creator, when you look at a landscape in the Media Business today, do you think that consolidation has been good has benefitted the industry industry, has made it more competitive, less competitive. Theres questions of big tech, whether some of them are getting into the Media Business, whether thats going to be a good thing ft. Meade yeah industry. Well, weve gone through so many different Distribution Systems and everybody always worries about that thats going to ruin content it doesnt seem to ever really do that because between the bigger systems like whether its apple or amazon or netflix and then of course the analog systems, even when theyre competing with each other they do find a center somehow because artists struggle from that center theres this always theres this wrestling match between these consolidated Distribution Systems. Right basically i think right n now there was a time where i thought it was going to erode away the quality or create homogenization of content. I feel like its going to find a much better place. Brian, before we sorry, andrew. Before we let you go. You may not be able to see it on the screen we have a list we had a list of Big Media Companies on the screen there was netflix, there was apple, there was disney, at t, comcast. If you could bet on one of them that well be talking about in a very big way ten years from now that you want to be in business with, whos that well, i will say i would only say i would bet on the one thats philosophy had the most commitment to quality of content. You cant bet on it. Apple i think is the Biggest Company in the world and they have all the capability in the world of doing that. It depends whether thats their Business Model or whether thats their commitment to it, whether it lives inside their heart. So i would bet on the company thats the most committed to it of all of those. Okay. Its a longer conversation, brian. We hope to have you back we appreciate your remembrances of sumner this morning and would love to talk to you more about the Entertainment Industry and where theyre headed in terms of this pandemic. I know youre working on projects hoping to get back into production and we hope to look forward to those conversations i admired sumner so i was glad to be on. I appreciate it going to send it back to joe joe . Okay. Thanks, andrew. Coming up, weve got breaking jobless claims data that well take a look at it economists expecting to see more than a million new filings since mid march. Upwards of 55 million americans have applied for unemployment nefits stay tuned youre watching squawk box on cnbc new claims on the analysis up next on squawk box. And tailored recommendations. Thats the clarity you get with fidelity wealth management. Pampers cruisers 360 fit can too with a stretchy waistband and adaptive 360 fit so they can move the way they were born to [music] born to be wild pampers cruisers 360 fit welcome back to squawk box. Lets get back to rick santelli. Rick. Reporter yes lets start out with import prices up. 7 for the month of july thats a little hotter than expected it follows up 1. 4. That was interesting that was the highest level since april of 2011. If we look at ex petroleum up. 2, if we look at year over year, they were down 3. 3 as expected versus minus 3. 8 in june export prices, they were up. 8 double expectations. In the Rearview Mirror up 1. 84. That was the highest at 1. 4 since 2011 as well finally, if we look at year over year export prices down 4. 4 as expected all right. The money ball we break our record. We do not go to 22 weeks above 1 million on initial claims. The record stops at 21 weeks because its 963,000 from a slightly revised 1. 191 million and if we look at continuing claims, theyre better than expected but not by much 15,486,000 definitely lower than the 16 million plus from last week but pretty much as expected arguably a little bit only only a bit lower. Mostly looking for 15. 9, 15. 8 million. Really initial claims is the one that really over performed with regard to that dip below 1 million. And in terms of Interest Rates, consider this. Were at 68 basis points in the ten. Unchanged from yesterday however, 51 basis points is the alltime low yield close from a week and a half ago. We are up a bit. There is a cushion there the yield curve has been hanging above 50 on steepness and when you look at inflation and deflation around the globe, ours has been a bit hotter. Germanys been a bit cooler. Their whole sale price index which is like ppi on a yearoveryear basis was down negative for the fifth year in a row. If you look at the harmonized cpi was down half of 1 . We want to pay close attention to the changing dynamics and equivalents of metrics overseas. Melissa lee, back to you. Rick, stay there. Not too Much Movement on the tenyear yield slight improvement in the futures. The nasdaq was now indicating to be up by 16. Lets bring in senior markets commentator mike santoli and Steve Liesman. Steve, what do you make of these numbers first . You know, theyre down. Theyre going in the right direction. On three levels. First, you have the weekly claims going down. I have to look at the not seasonally adjusted. These numbers have been inflated by seasonal adjustment it goes away when you look at the continuing claims which are also down. Thats good. Then were looking at a broader number which is those receiving traditional claims and those receiving not traditional claims contractors and gig workers eligible this time around. That number fell from 31 million down to 28 million thats a number. You might wonder if perhaps as that benefit went away, that extra 600 benefit maybe more people decided not to apply. You had some big declines in new york down 21 florida down 23,000. Georgia down 11,000. You did have an increase in, wait here, joe, nevada, im hoping i got it. Surely tell me if i did. Its down but its still a high level. Suggesting theres still real trouble in the jobs market hell surely tell you if you got it wrong, i think, steve, as opposed to getting it right. Well, yeah, exactly exactly. Im doing my best mike, usually the markets dont really move too much on claims but these days are different. We do have the nasdaq moving higher were now up by 28 points. We will be up 28 at the open if we open here the nasdaq and the dow firmed up on the numbers. They went in the right direction. The anticipation was for a stall in the improvement on the jobless claims level this was a welcome surprise, at least if a modest one. Usually what its meant is its not necessarily about whether the entire market celebrates or gets upset about the number, but what types of stocks seem like theyre a little bit more in favor. In theory, if people want to take this to heart, it would confirm this idea that you could see some firming up of the more cyclical areas obviously people are a little bit maybe loathe to extrapolate too much simply because were waiting for, you know, any progress in the Fiscal Relief package. We dont know what were on. Without a doubt its an upbeat surprise. How do you think this data plays into it, into this debate . Does this reinforce the stalemate here theres time here to kickback down the road a little bit more . Yeah, melissa, i hope this is not too controversial, but i think the idea that the stock market is high has made congress feel less urgent about solving this problem and i remember back in 2008 it was, what was it, a 700, 800 point drop in the dow that caused Certain Congress people to get religion about helping the economy when it came to t. A. R. P. I think showing that its coming down is helpful. I think the stock market being high eases the urgency on the part of congress to make some sort of deal. The stock market is high. Weve thrown everything at it though maybe the stock market is a good indicator. Weve thrown so much at it maybe its a good divining law in the past when the stock market had a hissy fit to put congress on a different path, sometimes that was the wrong path as well its not its not a good divining rod, rick, if youre poor and waiting for a check i understand that im just talking from a market sense, im not getting into socioeconomic aspects, im just saying that congress is probably more reluctant to move because the equity markets and the markets in general are doing pretty well because of all the money weve already injected into the system. Lets not make it political. Its not political, rick. I think its a matter of yes, it is. It is political. Two very different rick, there are two very different experiences going on here. One group of people, 40 of workers who can work at home and feel very little effects of this virus other than the fact that theyre stuck at home and you have another group of people that are watching their stock portfolios grow as a result of a lot of the stimulus being put in the system and all sorts of other reasons going on. A lot of the people youre talking about are tethered to their Stock Investments to retirement plans and Pension Funds and mutual funds like firemen, policemen and teachers so they are hooked in. Theres another group of people that dont have 400 in savings to their name that live paycheck to paycheck. And youre making an assumption that the democratic package that is stalling this up is going to address that thats the assumption. I didnt say anything about the democratic package. Yeah, but you did thats the but thats the stalemate, isnt it . No, i didnt. One issue i said waiting for a check. Waiting for a didnt say whose check. Im going to put myself into this conversation. The issue, rick, is what the fed is doing, what the fed has done in any stimulus package is not going to address that issue, is it i mean, it gets to the point where the president trying to do an executive order to do that, the hangup doesnt seem to be helping people that need it, the hangup seems to be what is viewed by many as adding things into the package that arent directly affected by covid you mean like aid to the states, rick listen, it was like states that have a 500 billion short fall. As a market guy, it is telling me that at least the markets view is that Congress Better get a more efficient package because currently the market seems to think theres enough liquidity to do everything its really the logistics were arguing about, how to funnel the right money to the right people. People cant eat market liquidity. People cant eat market liquidity. You cant pay your rent with market liquidity. Congress will in fact come up with fiscal stimulus, there will be something done. Thats the bet. The market is probably positioned to have a greater than even chance that something does come through, i agree with that the markets also, i think, you know, benefitting from at least psychologically from the idea that we have these lags in how the prior stimulus has worked its way through and even though and in aggregate, just looking at the aggregates, you had this huge spike in disposable income and huge spike in the savings rate. Yes, youre going to get every single week youll have more households under stress if you dont get aid. I dont think it has necessarily moved the overall needle in terms of what is being spent or the spending potential in the immediate term thats probably why theres been a lack of panic. It can rely on the idea that something will come even if its not too timely all right melissa, youve got a nice interview coming up. Liesman, melissas wrong if youre right, i will give you kudos, plus im also trying to stimulate the correct behavior in the future. Nevada theyre cheering on the strip right now that you finally said it nevada perfect. It was beautiful, steve. So dont count i worked on it. I worked on it i looked in the mirror and recorded myself. Nevada thank you. Good. Im telling you, people are happy out there. And we want everyone happy in all 50 states. Theres 50, right . Have i got that right . Melissa. All right thank you all. Rick santelli, mike santoli and Steve Liesman. Its like firming in the ten year yield and futures for more on the data, lets bring in scott brown, chief economist at Raymond James great to have you with us. How do you think about claims and how to you think about unemployment Going Forward especially as so many people are anticipating that there will still be a wave of bankruptcies to come . There is an issue with the claims data in that the seasonal adjustment is multiplicative and those are the seasonal low points for jobless claims. The figures are going to get amplified. If you look at the unadjusted claims figure is 820,000 which is much better than weve seen that is extremely high by historical standards its indicative of Market Conditions are still weakening the one concern i think we have about the job market is weve gone through these immediate layoffs. If anything regarding people being close in close distance to each other, those layoffs have occurred. Some of those jobs have come back some of those jobs that have come back have gone away theres been new job creation in grocery stores, home delivery. Were worried. This is the big concern, were going to see some economic weakness to cutting costs and labor is the biggest cost to firms. We may see an elevated level of layoffs continuing for some time still an elevated Unemployment Rate we had a good number last week at 10. 2 if you factor the fact that people have exited the labor force, its really closer to 13 . So this is still a real problem for the economy. Were still seeing a lot of weakness in the labor market we expect that to continue state and local government budgets are under enormous pressure here. As we saw in the financial crisis in the aftermath of that, theres a lot of budget pressures which will probably lead to cuts in state and local Government Employment which will further, you know, delay the recovery and, you know, we do really need fiscal stimulus. We talk about the economic outlook. It depends on the virus and efforts to contain the virus it depends on the fiscal stimulus well be getting. Youre heading up to an election and who knows whats going to happen after november. The first wave of jobs we saw in the lower paying jobs im wondering in terms of the job cuts to come, is it perhaps more concerning just because these might be higher income jobs and might have a more profound impact on spending and, therefore, gdp yeah. You know, if you look at the initial job losses, those at the 20 lower, the bottom income scale, 40 of those people lost jobs some of those have come back people in the upper end have been more easily able to work at home and the really interesting sing this the fiscal support supported the spending at the low end and its the lack of ability to spend, which has led to the huge increase in savings. It could help provide some fuel for the economy. Again, as you press on, maybe a lot of those people in the mid to upper income range start to lose jobs and that, in turn, will have a bigger effect on spending what weve seen so far. In your forecasting, scott, im curious. How do you view the passage or the approval of a vaccine. I mean, do you view it as a slight switch on the economy or are you more cautious about how many more people might take that vaccine and what the actual impact on behavior, things like spending, going out, things like that that will stimulate Economic Activity . Well, when you look at it at a vaccine, its unlikely were going to have a vaccine coming to market thats 100 pe effect or 60. So for people that are susceptible, people that are older, so on, youre not going to want to go out and get on an airplane or go to a restaurant its still going to be a very, very long time before we get a full recovery in the overall economy. But we should still continue to see improvement as we progress in the months ahead. Again, a lot will depend on what kind of fiscal support we give and what sorts of High Frequency data are you watching most closely, scott, to give you some clues as to how the monthly data will shape out . The claims data obviously are the most critical. There are retail sales, credit card usage, those kind of things you have some seasonal variation which can create noise theres a new york fed Weekly Economic index, which i think is a pretty good summary. It tends to combine a lot of these low frequency numbers. A lot of the High Frequency stuff is proprietary you have to pay in order to be able to access the data. But i think you know, i think the job market is always going to be the key because that helps drive Consumer Spending and Consumer Spending is 70 of the overall pie. Sure. Scott, thanks for your time. Great to get your thoughts appreciate it. My pleasure joe yes melissa. Love it. I just wait because i like it when you say my name everybody likes when someone says their name. Have you ever noticed that really smart people depends how you say it. Yeah. Well, thats true. If you say it right. But people do like it. Joe when you say the name, melissa. Melissa, thanks. Thank you, joe. Analysis. Its going to be hard. Analysis of two big stock splits how do you analyze a stock split . Theyre splitting the stock. Anyway, the last two weeks apple and tesla, what do the moves mean for investors and why arent stock splits, it says here, that much of a thing anymore . I dont know why as we head to break, check out the recent performance of the dow transports that index is on an 11day winning streak thats the longest since the 90s isnt it possible, do i dare say, that that could mean something that it might be positive other than stimulus and the fed . I dont know i dont dare say it. You can always watch or listen to us live on the cnbc app stay tedun youre watching squawk box on cnbc i keep working my way back to you, babe with a burning love inside yeah im working my way back to you, babe and the happiness that died i let it get away servicenow. The smarter way to workflow. At cdw, we get theres thats why cdw experts, partner with apc by Schneider Electric to keep you up and running with a full range of Edge Computing solutions, including the new lithium ion smartups u. P. S. , with two times the battery life and cloud enabled remote monitoring. So you can deploy data center like resiliency, with a performance and certainty you expect, and the ongoing support you need. For i. T. Infrastructure and uptime, you need apc by Schneider Electric. An i. T. Orchestration by cdw. People who get it. Welcome back to squawk box this morning take a look at futures we are 40 minutes away from the market open. Dow looks like it will open off two points the s p flirting with flat for now as it has been flirting for days though with an historic high melissa . Six points away from the record closing high to be exact. Coming up, jim cramers first take on the thursday trading day ahead and then well do the splits. Stock splits that is has the tactic worked when stocks have gone that unrod. Stay tuned much more squawk box after this quick break wealth management,fidelity your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Welcome back to squawk box. Check out shares of Penn National gaming where is dave portnoy right now . That stock is up higher, as he would say stocks only go up. Im not sure that is true. Goldman sachs initiating coverage of the stock with a buy rating and 60 12 month prize targets. Analysts writing they believe, quote, barstool sports embedded Customer Base and content creation engine will drive one of the lowest Customer Acquisition costs in the Sports Betting industry allowing penn to quickly take share within goldmans proprietary i gaming and Sports Betting model jim cramer joins us now. Penn is his favorite casino stock. Jim, what do you think its true, by the way, portnoy and all those guys have created such a like free advertising, its an elon musk approach which is you dont have to pay for advertising when everybody is following you on twitter and following you on social media. Do you know what, its funny in the penn nat gaming piece by goldman which i like very much it says precisely that, it talks about the number of tiktok fans, the number of twitter followers of dave. It doesnt mention dave as much as it should, it just talks about barstool but thats okay because barstool is a big entity this is going to be a fantastic sports book, ive been in favor of penn nat. Ive had penn nat on a bunch of times and they are fantastic work this buy of barstool, this merger with barstool basically, what it really does is make it so that when football comes back, oh, my, andrew, i mean, i just think youre going to want to go to a penn nat game and to penn nat casino and lay some money down and i think that barstool has made it fun i dont think dave is going to stop doing stocks. Its too much fun for him, too remember he did get in the bottom and stocks just go up, andrew, since hes gotten in. I never asked you what did you make of the great barry dillards decision at iac to take a stake in mgm and do you think that they are going to be able to transform that business in that same way, digitally . I thought that mgm by now would have already partnered with a couple of entities out there. I think they are sports book is going to be gigantic the numbers in the goldman piece are very good, i think theyre also understated i dont think they understand the power what have barstool brings to t my colleague david faber often things i overestimate the power of portnoy, im not doing that, what im saying is there are now 13 Million People, 13 Million People peep at robin hood, how many of them were brought in by the work that portnoy does i think a substantial number because hes made it interesting. He never once says hes done any rigorous fundamental research. Never once has he claimed that so lets just back off and say hes making it fun, i know its if you know money, but money is what its done is bring in new people go educate him hes not against that, hes in favor of t anybody that brings more people into this, particularly young people, its been so long, andrew, since weve had young people involved, i think its fabulous and the Penn National gaming piece is jim, orioles phillies 4 05. Phillies are favored and the over under is 9 1 2 runs what should i do we dont have a bullpen were playing covidlike without covid. This guy might be good, jake arrieta. He had a got outing last. He did. Its a short stand and were playing a lot of doubleheaders i know. Seven inning doubleheaders guess what i bought, jim guess what i ordered and im cheap. Mlb network. Every game is there. Every game is there, my friend, its 44 a month. Im there ive been there. Its auto renew. I had the marlins yesterday and the over, i had a big win yesterday. I am on im on fire. You are on fire. Well talk after the show i will send you a couple of my picks. You know, they play at 1 00 in the afternoon so theoretically you could turn it on in your office some of them. Dont you feel like that we now realize that theres just too many games and they should trunk kate this season because this is fun. Its fun the phillies lose the first game against the braves and then come back and score a touchdown and two field goals in the next one. I love it. Yankees are dont bet against the yankees. Anyway, we have to go. We have to hit your show right at 9 00 or we are all fired, i think. Good to see you. And we should mention, by the way, we will be watching squawk on the streets interview with the National EconomicCouncil Director larry kudlow who will be joining the gang. Whoa. Joe all right, thanks, andrew, Companies Often split their stocks to appeal to Retail Investors that was the old mentality, according to s p global there have been two completed splits this year, tesla and apple, both recently announcing thats compared to nine in 2010, 83 in the year 2000 around the dotcom bubble todays average hair price in the s p isnt much higher than it was back then joining us to talk about this and more is j. J. Kinnehan at td ameritra ameritrade google, amazon, Berkshire Hathaway maybe started it, with robin hood and the idea that you need 100 shares and you need a round lot to, you know, cut costs thats all gone. Whats the rationale why is it necessary . I think thats why no one does it anymore. Do you know what, joe, first of all, i think its a great idea that they did it, both apple and tesla and we applaud the listing exchanges for working hard to get this done. Why its important i think professionals sometimes forget that Capital Management is a big part for retail traders. They would like to participate a little bit more, but to go out and buy, you know, 100 shares of apple right now is probably cost pro had i been testify for most people if you go down and cut that price by four a few things about it in a world where we have a 60 basis point tenyear note you can actually enhance your returns. If you want to sell a put in order to buy the stock, if you want to sell a covered call against your stock you can start to use that, but besides that, joe, again, people want to participate more figure back to 2014 last time apple split, that week we saw seven times more orders im sorry, seven times more accounts place orders for apple that week people are interested in being involved to a higher level in companies that they know and like this he want more than one share or two shares. In the Capital Management part of this is so often overlooked as to how much money people have in their accounts. Okay. That makes some sense, i guess so to do the if you want to sell a put to acquire a stock or do some covered calls you need more, but, i mean, its not that hard to buy fractional or to buy ten shares of a stock at this point so that makes sense. I agree. J. J. , you have 30 seconds to talk or you will never be on again if you go beyond that. Okay, joe, i will not go beyond that, but i will sa that, again, with these high priced stocks people want more than one share or two shares, they want to be involved, plus in terms of market structure, those are protected orders. Okay. Its also a big deal. Even though retail gets Great Service overall, i think that its overlooked how much people would like to participate and this gives them an opportunity to and im under 30 seconds. Thanks. We will talk about the transports next time, 11day swinging streak. Join us tomorrow squawk on the street is coming up right now and that means its time for us im david faber along with jim cramer carl has the morning off and this is, of course, squawk on the street. Happy to have you all join us. By the way, speaking of joining uses, larry kudlow will be our guest later in the hour. Jim will be leading that one always good to hear from our old colleague, certainly plenty to discuss with him, jim. Lets start off on the broader markets this morning as we often do at this time as you give a look here at whats coming up in a half hour when we open kind of a mixed bag, but we are talking about new potential highs for the s p, jim are you a believer