roller coaster ride on wall street yesterday twitter ceo donates $1 billion towards the fight against covid-19 good morning i'm becky quick along with joe kernen and andrew ross sorkin. at the end of the day, the dow was around 2600. a gain of better than4.1%. as we headed into the close, it gave back all of those gains and then some. other averages slightly lower.

the nasdaq down by 25 points this morning, you'll see futures are lower again. these are modest declines. the types of numbers we used to see all the time in the morning just over a month ago. right now, the dow looks like it would open about 42 points nasdaq around 18 points. keeping track of treasury yields we find ourselves this morning again with the yield indicated around those levels. 0.7 and change andrew >> let's bring you an update on the pandemic and some of the numbers. the number of confirmed u.s. cases rising to 400,000. more than 12,000 have died in america. new york is the epicenter with

140,000 confirmed cases. new york, new jersey and l.a. reporting the deadliest day. and los angeles mandates masks as essential >> sharing this responsibility to keep workers and everybody safe which is why we are requiring customers to wear face coverings. shopping for groceries, picking up a precipitation or any other business, you will need to cover your face. if you are not covering your face by friday morning, an essential business can refuse you service. >> overseas in china, authorities there lifting the 11-week lockdown on wuhan allowing residents to travel in and out of that city as long as they have a a mandatory

smartphone app that shows that they have not had contact with anyone with the virus. trains began running and highways opened about the same time given what china is doing, it raises the question about when we do get to the other side, whether that will be the thing we do with smartphones and questions about privacy and civil libertyies whether you'll be able to walk around at will or how it is going to work >> awful day for the optimistic case reading the wall street journal. and the analysis there talking about what the world will look like in terms of surveillance

the facts on the ground in wuhan were horrific. i don't know what to believe at this point but asymptomatic cases are up a bit in wuhan i don't know what to think is this thing put to bed it didn't sound like it at all >> i saw the articles and reading the materials and research there is a real question about whether this is coming back in china and elsewhere. >> hard to know. >> i don't think it is all that surprising if you think about the idea that staying -- if you think about the idea of the severe shutdown they did in wuhan, that is the reason they had so much success but once you release those restrictions, that's the question when people go back to work and

school, what is to stop that spread from coming back. >> that's the question we've been kicking around with dr. scott most of the week still a terrible number. >> i was surprised only down 43 but we did give back 900 yesterday. then you've got the uk prime minister who is in stable condition but did spend a second night in icu uk reporting the largest daily rise in death yesterday. 786 was the number in one day. that was attributed partly to a lag in data collection over the weekend. it is not like here.

the way to pass to dominic raab that he has the football, the nuclear codes it is not that clear. people love to rally around. churchill one of his idols it is difficult to see that. >> moving on to john prine who died at 73 years old from coronavirus. receiving treatment in nashville. he did have several underlying

health issues including lung cancer as we mentioned earlier, the u.s. hitting 400,000 cases overnight. a look at the curve, the daily chart of new cases in the united states bringing in the former health commissioner dr. scott leeb. cnbc contributor and serves on the board of lumina. we referenced your ideas of how we are going to need to, we are going to have to watch individual cases and make sure that we monitor those and track those and not let them get out of hand. that sounds impossible but probably something necessary to do >> you want to be diagnosing people with the infection.

not what china is doing, wuhan is doing with these alerts you do want to be having diagnostics in the community when people are infected, you can force isolations and tell them they have to stay home. that is the essence of case-based intervention. targeting the people who are infected rather than the whole population we need to have the resources to look for the people that have the infection rather than the whole population >> how can you decide who it test to isolate if you are

asymptomatic >> that's the problem with this virus. there was a study out yesterday that said four or five cases may be asymptomatic. it is probably pretty high the numbers of those who don't know they have the virus one approach is you test everyone who presents to the doctor's office. if you come in to see your physician, just like they listen to your chest. they swab you for the coronavirus. three or four visits a week to outpatient hospitals or basically testing a sample of the population on a regular basis to look at where the virus

is circulating and when you find an area where it is circulating, you deal with that area. this isn't just going away this is going to circulate at low levels we need to keep it from exploding and keep it from happening again. >> let's say the asymptomatic cases weren't as high. what if they are much higher and not herd immunity but a lot of people don't hawould have the anti-bodies? we would see it peter out towards summer months?

is this there a positive way that this could turn out or is this hoping against hope that that happens >> probably not absent technology you are talking about testing and looking for antibodies and people who were exposed and people who were asymptomatic and didn't know it there is speculation that people are exposed around 2 to 5% the idea of 10 to 30% americans who have had this and we drnlt know it and this is herd immunity it showed the younger people didn't develop enough immunity

to suggest they had any residual immunity the younger you are, fewer antibodies were involved it is kind of lingering in them harmlessly they are not developing a level that could develop that is speculation based on the studies done if that is true. if that is a theory right now, they would suggest people would receive a level of immunity that could still be infected with this going forward >> it is hard to get our heads around about how far our lives have changed and how rapidly 400,000 cases in the united states on today.

on early march, there were 11 cases. where do you think we'll be a month from now >> the mortality rate in italy is 12% i don't think our number will go that high. it will continue to plateau. new york is turning a corner i think it will turn and start to decline that's the whole tri-state area. southeast will start to increase florida has 15,000 cases louisiana with 16,000 cases. that will continue to go up before it goes down. the whole country will come out of this towards the end of the month and we'll be in better

shape. getting back to a steady shape where we can surpresideppress t enough that people can go out again. so people feel confident that their risk of contracting it is very low >> doctor, asking you a little about privacy. how much in terms of our daily lives do you think it will change and how much are we willing to hand over in terms of privacy. how much of that conversation will we have and when do we need to >> we discussed the idea in a paper we put out on the idea of testing and using cell phone apps to enforce self-isolation

when people have the infection, you can enforce self-isolation and tell them i have to stay home traditionally, that is done with caseworkers or police. you can do that with a cell phone app to have people check in and identify their location in china and south korea, they are using it differently to track people and track whether they've come in contact with an infected person. i think that's an invasion of privacy. what we need to develop is when someone has been infected, we need to ask them to stay at home until no longer infected if we don't do that, we'll go back to these population based interventions. i was hearing on twitter, people

feeling uncomfortable to telling people they have to stay at heem the flip side is telling a whole area to stay home. >> to be clear, those people have to self-identify. put themselves on an app on a voluntary basis and then the medical community is going to track them that's what ultimately will have to happen right? >> that's what happened. if you think about what happened before we had the epidemic, we had cases. hundreds they were doing cases. they put them in quarantine.

they had them on military bases. we won't be able to do that. we'll have too many people the only way do that will be with technology. we don't have enough caseworkers. or let them roam around and know we'll have outbreaks in cities i think if we have very aggressive testing and when they test positive, you tell them to stay home. until >> dr. scott gottlieb, we'll see you again in a short time, i'm certain. when we come back, new data

on patients suffering the worst outcome and what is behind that. checking u.s. futures. it looks like the dow would open down about by 17 points here, the dow ended the day down 26 points s&p futures down 7.5, nasdaq off by 14. we'll be rightac bk. awesome internet.

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welcome back, new information on which coronavirus patients are suffering the worst outcomes eamon javers has that information. good to see you. >> this is an aspect we are learning about that african-americans are among the hardest hit here data still emerging but take a look at this information compiled by the washington post overnight. counties that are majority black have three times the rate of infections than those that are mostly white

czech's 118 reported deaths found that nearly 70% of those were black way out of proportion with chicago's general demographic. dr. fauci offered his explanation. >> unfortunately, when you look to a predisposing situation and things that get people into icus, often leading to death, they are just those very comorbidities that are present in the african-american population >> he's said this is a problem doctors have known about forever. african-americans have higher risk for a lot of these conditions across the board. those are the same conditions that make you more likely to have a bad outcome

they'll need more science and data to understand but this might be another piece of how this virus is impacting society. that will affect the way americans will deal with it and how scientists have to scramble to solve the problem >> dr. fauci said there is nothing we can do about it right now? is there a longer term fix for this african-americans would be more likely to have a blue collar job that would require them to travel to work they don't have the luchxury of staying home asthma, hypertension, having to do with stress, lifestyle,

historical racism, you'd have to tackle those problems we are seeing that play out across african-american communities now. >> you think about the inequality and questions that rose out of the great recession that will look like childs play compared to what we see coming out of this. >> yes absolutely and the way this is impacting across society you are starting to see the blue collar, white collar stride here seeing the impact on immigrants coming in to work on farms

all of those issues will impact our health care system >> thank you okay fascinating issue and conversation we'll be talking to john o' bryant about all of these socio economic issues. twitter's jack dorsey gives $1 billion with a b here are images of the pandemic impact from yesterday across america.

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welcome back the ceo of twitter and square making a very big donation to help fight the coronavirus

outbreak getting over to robert frank with that story. >> good morning. big indeed jack dorsey pledging $1 billion, that is about 28% of his wealth. he said his funds would go to, quote, disarming this pandemic and girl's health education. the public will be able to track all of this giving through a google spread sheet. this could be the biggest gift by far bill gates giving $105 million and jeff bezos giving $100 million. giving to an llc called start small. they can make donations and invest in for profit companies and they aren't required to give

away 5% a year or disclose their tax filings. these are very popular the use of llcs in silicon valley because they give donors a lot more control dorsey gave a third of his twitter shares to employees when he took over he said he hopes this gift will encourage others to give as welt >> robert, it's a remarkable thing for jack to do one question i had about the llc. are llcs tax deductible? when shares move, the whole thing gets deducted? >> eventually. here is how it works he takes those shares. he does not get the immediate deduct that llc as it gives those

shares as grants to charitable organizations, he does get the dedungs. he doesn't have to pay a capital gain at any point. eventually, yes, he gets the deduction. this is a sort of having the cake and eat it too. >> i saw this and thought it so generous of jack to do >> no question >> normally if capital gains were treated as income, half of that, $500 billion of that would go to the government

in a time when we are so resource starved there is part of you that would like to see the government to have 5:0 seaccess but at other times, there are people like jack dorsey who may be part of resolving the problem. >> absolutely. all of this is tax subsidized. i think jack dorsey would say this is a great thing he encourages others to do the same the issue if those shares could be taxed ultimately, these people have done so much good but never had their wealth taxed that needs to be discussed in washington when all of this is over, i'm

sure there will be trillions in debt guys, just so you know i'm feeling proud of myself for my new-found technical success. i actually went and swapped out my teleprompter. untaped it and taped it back up. feeling pretty good. >> we should do a behind the scenes at some point, don't you think? >> you had trouble hooking up the teleprompter in the first place. >> it is awesome >> you know what i was thinking about, andrew. you were starting to make sense there. i got to have some is coffee or

something. all these billionaires, they all prefer philanthropy because they don't think the government is as effective in dollar for dollar but boy, the minute we have a problem. it is like, give it to us. and they don't have the money to save us. >> that's the kpla indicated part of this i will throw it back to you. >> hold on there is one other issue you can say, look, there is an example where the government hasn't gotten it right -- >> you need somebody out there >> you need someone to be

helpful. >> you are ending up where i usual liam and i'm trending where usually are. >> great you are going to meet in the middle it is a beautiful thing. >> that's where becky is >> then i was thinking i want to go back to worrying about carbon i do at&t has connected us every day for over 100 years. and we're here for you - especially now, doing everything possible to keep you connected. through the resilience of our network and people... we can keep learning, keep sharing,

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good moornrning and welcome alabama. hundreds of thousands of small businesses in america are waiting for an injection from the government >> good morning. as of last night, the administration said some 310,000 applications had been assigned for a value of $82,000 that is just one step in the process. telling us dispersement amounts won't be available for some time the administration says more funding is needed and treasury secretary tweeting that he plans to work with the leadership on an additional $240 billion for

ppp. we did hear from three who have those sba e tran numbers assigned to his loans. with voters, the ppp is extremely popular. 96% of swing state voters support the relief package and nearly all think it is important to get this much-needed relief for some, the relief isn't happening quickly enough just yesterday, the house chairwoman sent a response about the information needed, guidelines sent out and aid for the very smallest of businesses. independent contractors and those are self-employed with not even apply for this until friday there is news thword many are s

waiting to get in on this program. thank you. for more on small businesses and how they are navigating that loan program bringing in a friend of the show from operation hope, john, thank you for joining us hope you are staying safe and healthy. tell us. this is your world tell us what is happening and what you are hearing >> i think i'm on the wrong show, andrew did i hear you and joe agree on something. >> you know, stranger things have happened. it is a complicated time right now. >> we are in a new world >> we'll be singing we are the world in a minute. >> yes this is a reset. it is unfortunately showing how

frag i' fragile our economy is a lot of things we have talked about on the show are coming about. many americans will need financial coaching the joke has been, when most businesses have a headache, black and brown businesses have pneumonia. they are saying most businesses can last about a month for black and brown businesses, cut that in half for all of these loans smal gone to business for $150,000 or less that tells me a lot of small businesses are getting this capital. but the mass infusion is causing a lot of people to not get capital. that was preventable

we can still lessen the pain of that because there is no skords nation on the ground the urban leagues, the church of god in christ, the network could have gotten the word out to meet these and coach them but it is an imperfect world >> one of these things i wanted to ask you about, we had this report earlier just talking about the devastation that this may have on the african-american community. the economic issues that the african-american community has faced so long. you've talked so long on our broadcast about inequality and the imindicatiplications from tt

>> i think there may be a rainbow after the storm. things we won't have to argue about anymore. was income inquality bad did anyone do anything about it? environment issues not being given the respect it deserves in the economy. who is working right now the hourly worker that look like me pushing those boxes, preparing those boxes. preparing food that are really second and third level responders keeping all of us comfortable in their homes on the other side of this, we don't have to argue whether self-care is important it won't be self-care. it will be weism we now understand how fragile

the economy is we understand 40% of america works an hourly job or works for a small business 20% of those small businesses have 20 employees or less and they can't survive 45 days without a customer or custody port there is no harvard for small business we are seeing the pin head there is for small business to survive and thrive yes, the administration has reached out to me about my new idea i call the marshal plan internships for all, apprenticeships for all. as much education as you can shove down your throat a ly a lift off a cree cap of the freeman's bank we need to start all of this

not a give out this is a handup whether joe likes it or not, he's my honorary brother we are all tied. >> john hope bryant, we always appreciate speaking with you an uplifting message i hope we can be uplifted during this challenging time. appreciate it. good to see you. joe, over to you coming up, futures bouncing around this morning. they've been down almost 100 they are up single digits. they change quickly. volatile session saw thedown lose almost 11,000 points later, we'll hear from the ceo from pvh on how brands are handling the down turn

watch us any time live on the cnbc app we'll be right back. derek, seems like your team is operating just fine remotely. yeah, everything is running smoothly with the now platform. (bling) see, incident resolved. how did you... gotta enjoy the small wins. you keep being you, derek. keep being you.

still to come this morning, our next guest isov overweight n health care, safeties and financials she'll join us to tell us why right after this >> announcer: today's big number, 982.79 that's how many points the dow gave up from its session high yesterday. the rally began to lose steam midday with the index closing lower, slipping 26 points.

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this is "squawk box" we've been watching the u.s. equity futures this morning. they are relatively flat we have some swings. yesterday it was a pretty wild ride with the dow up by 930 points and giving it all back in the final hours of the trading session. let's talk right now a little bit more what to expect on wall street for that we get over to

savita subramanian looking at some of your recent notes it looks ominous bank of america economists are forecasting the deepest recession in post-war era saying it could take miep years to recover the loves corporate earnings however, there are a lot of places you're overweight in stocks you want to talk about that? >> absolutely. the number one reason to buy stocks today is the yield. the yield on the s&p 500, the dividend yield is close to, i think almost four times out of treasury which is almost a post-war record. the dividend yield for the s&p 500 today is a lot safer than it was in 2008. so, i think what's important to be is that during the financial crisis, you had a lot more dividend cuts because the biggest contributor to dividends were financials which were the problem sector today the biggest contributor is

tech he and financial, both of which has lower earnings than the s&p, low pay out ratios, clean balance sheet. tech has more cash than debt financials leverage ratio has never been lower i think the idea that dividends are at risk today, there's some sectors that are likely to cut dividends, hotels, irlines, we've already seen about 20 companies announce dividend cuts but i do think the sustainability of dividends in the sectors that we're overweight are much stronger today than they were during the crisis so, you know -- sorry, go ahead. >> go ahead. >> well, i think the idea that, you know, i mean if you look at the world around us, the scarcity today is safe income. i actually think the s&p 500 still offers a lot of safe income relative to other asset classes. so when you look at small caps, you know, leverage ratios are

much higher, dividends don't look as safe within the s&p that's the reason that we are overweight the sectors that you mentioned you know, think of other sectors like the oil industry. some of those players have incredibly high yields right now. we have exxonmobil ceo on yesterday and right now they are defending the dividend, dividend of better than 8%. >> yeah. >> at some point you question if this doesn't improve if we don't get back to an economy that flourishes again in a number of months then you start to wonder what happens to some of those as well >> i think, you know, for the majors, these are companies that have never cut their dividends and have essentially done everything they can to defend their dividends. the idea that if this recession is actually worse than what our economists are predicting then what i'm saying right now is not necessarily the case we're forecasting a pretty dire

recession scenario we stress tested our earnings assumptions by -- like very strongly recessionary frame works and still coming up with an outcome where, you know, for the s&p 500 we see dividends cut by 10% which compares favorably to what happened in 2008 where dividends were cut by more than 20%. i mean i think that for energy you're right there are a lot of companies that have already and will be likely to cut their dividends, but, you know, i think when you look at certain companies even in the energy sector that have defended their dividends and never cut their dividends historically, one could argue they will do whatever it takes to preserve that income. think about it retirees today have shifted for allocation from bonds to stocks and the idea that we're going to see, you know, big multi-nationals cut their dividends and really compromise

their value proposition to retirees is hard to imagine unless we see this virus extend for longer than anyone is expecting. >> all right thank you. good talking to you. >> likewise. okay coming up when we return, or thoughclinical die agnostics rolling out a test for covid-19. the ceo will give us an update on what they are doing and where this is headed later blackrock's rick rieder tells us what he makes of the market in the stla few trading days "squawk box" returns with two big hours ahead. that the world needs.

but right now, the world needs all the good that we can do. to all of our employees and everyone working to keep america strong, thank you.

to all of our employees and everyone working there are times when our need to connect really matters. to keep customers and employees in the know. to keep business moving. comcast business is prepared for times like these. powered by the nation's largest gig-speed network. to help give you the speed, reliability, and security you need. tools to manage your business from any device, anywhere. and a team of experts - here for you 24/7. we've always believed in the power of working together. that's why, when every connection counts... you can count on us.

a volatile week on wall street are equities getting ahead of reality? we'll debate u.s. coronavirus cases surpassing 400,000 we'll speak to the ceo of a die ag nnos -- diagnostic company

rolling out a test good morning, everybody. welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. take at a look at u.s. equity futures at this hour after what was a remarkable volatile day yesterday. we had gone from the green to red. dow looks like we'll open up right now in the green, 56, 57 points higher. s&p looking to four points higher nasdaq looking to open 22 points higher right now joe, over to you >> thanks, andrew. our next guest says volatility will remain but a year from now markets will be higher jim paulson is here. jim, i'm looking for answers to the nag questions, the big

questions for myself and i agree with almost everything you are saying here but i'm not satisfied. i'm not getting the answers i really need. you know why because i don't think it's possible to have them right now. i'm realizing that but you say a lot of positive things number one, that maybe we hit a bottom but maybe not maybe we retest the lows which is likely, maybe we go to new low, probably not. but maybe we retest them all in all we'll be higher a year from now. is that the best you got for me now, jim >> might be the best i got, joe. >> i know. >> look, the concern about the low, i think, can he lead you astray let me give you one example of that a lot of people compare this to 2008 both were really nasty declines. but in 2008 the market set an interim low on november 20th, i think, 2008, and then hit a 20%

rally after that much like we've done here from the recent low in the stock market but, it preceded abooceeded to e it body on march 9th of 2009 the thing is, it was only lower than that november low it was only low for nine trading days and then a year later, in november of 2009 the market was up 45% from that november 2008 low. so my point is, is that, you know, this market cowaner around a while. it could go to lower lows yet. if you think where we could be in 12 months or 18 months i still think there's pretty good upside here and even if it has to go lower first it might not be down there that long. so i think it's more important to focus on where we might be a year, a year and a half from now

than what it is that could happen over the next three months, for example. >> good. i want to have you -- we have people on a lot. i want to have you on a lot. here's another one here's another one so, you don't think that we should be focused on how deep the recession is but how long it is and you're pretty sure it's going to be the deepest recession maybe ever or it could be the deepest recession ever but you're still holding out for only two quarters of a recession and that would be, if you could be right about that, that would be big news. that would be a positive development. >> well, i think that this recession is a complete oddity in the entirety of u.s. history, joe. this is not a recession brought about because of fundamental problems with a recovery this is a recession by proclamation we just decided to turn the off switch on the economy and when

do you that you know you're going into a free fall and we're doing that the numbers of 50% second quarter decline in gdp are not out of the realm of possibility or 30% unemployment rates. but the thing is about that is you also can hit the on switch again and we're going to definitely take a huge down side hit and we won get it all back right away but if you go from down, huge amounts in the second quarter, even if you have mildly up qu t quarters in the last quarter of the year that's still av recovery i think the market, the best news is the virus curve bending, and i think if that continues to follow the same pattern that we've seen in china and other parts of asia, now in europe and maybe now here i think the market will start to look through to that to the other

side you know, we had a lot of good data earlier this year that the market ignored because we knew what was coming and i think now we're having a lot of bad data but the market expects it and already discounted it and i think they will start looking at what looks like in the summer and fall and i think those outlooks will start to look more and more optimistic. >> that's the way it always works. that's what i've been arguing. so many expressions, always darkest before the dawn. we know how bottoms are made when it's the scariest time. but looking at a lot on the positive things that you talk about, they are all positive sometimes i wonder whether any type of technical analysis works at all when it's a crazy black swan, you know, unprecedented medical epidemiological situation. i don't know whether we can count on any technical

i asked dr. scott gottlieb a couple of things you said the way we return to some kind of normalcy depends whether we get some type of herd immunity or some type of summer burn out -- i don't know if we're guaranteed that if we don't then your whole v, u, whether it's a v or elongated v are off. those are things i worry about in the mid of the night >> i do too, joe i don't know if this thing drags on for the rest of the year and keeps us shut down then you can paint a depression if you want to, if you can turn the economy back on, that's going to be a depression but i get that there's some-odd to that but i still think that's a very

low odds bet i really think even from just a novice like i am on pandemics, if you look at the trend what happened at the epicenter of china and you look at what happened after that to other countries, they all follow pretty similar pattern here of a surge for a couple of months and then a burn out. and whether that's social distancing, or whether it's affected much more of the public than we know and more people that get immune or whether the virus just runs its course, i don't know but it sure seems like the evidence we do have strongly suggests that same pattern is likely here. and if it is, then we won't be fully going again by the last half of this year but we'll be having parts of it moving. and i think if we get past the hospital crisis, joe, we can overwhelm our hospitals, which is a horrific, horrific thought of people dying in the streets

then i think, i really believe that we might still have incidents of it but if we have sufficient hospital capacity i think we'll get back to work you know if we have a 30% unemployment rate in this country, you're going to have social outcry by people that are young and healthy without any other medical conditions that are saying i want my job back. give me my job back. let me go to work again. i need a paycheck. and i think that pressure is going to force us to re-open parts of the economy where we can relatively safely even if the virus is not completely burned out provided we have sufficient hospital capacity >> jim, here's the question i've been thinking a lot about, which is i completely agree that there's going a huge pent up demand for people to get back to work and people want that. but especially those of us who are in the new york area, who are seeing the health impact not just, by the way, the mortality rate

i'm not even sure that's the accurate statistic we should be looking at but just the number of people that are becoming ill, number of people going to hospitals, in our family my son's music teacher just passed away last night as a result of covid. and i think that actually there are people and maybe it's not reached where you are yet, genuinely scared about the prospect of going out and potentially getting covid and maybe they are not going to die, but they could end up in the hospital and even if you could argue to me that there's going to be space in the hospital i'm not sure that that's a great gamble at the moment so while i'm sure there are people who would like to go out into the world all over again, i think there will be, especially in places hard-hit it will be much more timid or at least you have to get over that in a very different way and i'm not sure that's being built into this

analysis what do you think of that? >> i think you're right, andrew. i don't think we'll snap right back from this there will be longer term effects. people will not hop on an airplane again for a while, a crowded plane or go to a crowded baseball stadium i totally agree with that. but look, i'm looking at the stock market and the stock market when it hit its low had faller 34% on the s&p 500 in 23 days that was the quickest bear market in post-war history by a margin of six to seven times on nch the previous 13 bear markets had fallen 5% in the first 23 days of a bear market this one fell 34%, six to seven times more and i see that same phenomenon across the financial markets bond spread widened out much quicker in this crisis than they did in the past. commodity prices fell much quicker than they did in the

past the bond yields fell much quicker in this crisis fed responded much quicker my point is this is a bear market at warp speed and already discounted much quicker what the damage is to come than any other bear market in post-war history. so we're going to have a lot of damage that's now going to hit the economy but i'm not so sure most of it isn't already in the financial markets. >> this is exactly what andrew and i talk about every day. that's been my take and, you know, like i say in the middle of the night you get shaken but that's exactly what has happened in the past. i'm just wondering this horrible three words if it's different this time. anyway, dr. paulson -- becky, do you know he has a doctoral degree from iowa state university and you don't throw that around, you don't pretend like you're --

>> i'm not sure i can read dissertation any more. >> it was from iowa state. i got little pang of sadness i love that basketball team. there's no betting becky, i went on and played blackjack with simulated money and i lost $2,000 in three minutes with simulated money >> it's a good thing it's simulated. >> it was simulated. >> monopoly money >> i bet more when i started losing i'm so glad i didn't wager the $89 in my account. paulson, thanks. >> thanks for having me. >> my best friend lives in minneapolis and her son goes to iowa state too must be a midwest thing. >> there you go. >> there you go. all right. when we come back we'll talk about the role out of an

automatic antibody test for covid-19 the ceo will join us this is one of the tools we need if you're going to let people go back to work this is one we're paying very close attention to tomorrow we'll bring you and interviews with bill gates don't miss that. it starts at 6:00 a.m. eastern time let's get a check on the texts market the dow looks like it will open by 115 point after yesterday's volatile ssieson "squawk box" will be right back.

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hydroxychloroquine . welcome back to "squawk box" this morning tesla says it will furlough all non-essential workers and cut salaries as the virus outbreak shuts down the automaker's production the company planning to resume production it says on may 4th. so when people are trying to think about what that timeline looks like at least tesla for now putting a may 4th date on it meantime walt disney may require visitors to have their temperatures checked when it re-opens its theme parks the temperature check is one way to make the public feel safe about returning to the parks this is one of the things we

talked about privacy and whether people are going to be willing to go through some of these measures in separate news on disney wells fargo is downgrading that stock to equal weight from overweight. it's cutting the or citing the severe downturn for the parks. price targeting cutting to $700 from $155. becky. >> the thing about those temperature checks that only picks up people who are symptomatic. if there's a large amount of spread coming from asymptomatic it's just window dressing. i think we need to know more about the science. mortgage applications out. diana oleck here go ahead >> no, i was going to say we have a segment coming up on antibiotic testing and if we can nail the antibody testing we'll see. >> let's get back to mortgage

applications they were just out diana oleck is here and she's got the numbers and can tell us what they mean diana, good morning. >> reporter: good morning. higher mortgage rates last week made matters much worse. total application volume fell nearly 18% compared with the previous week. refinance activity had bounced back the week before after a sharp drop in rate but those rates didn't hold. the average on the 30 year fix for conforming loans rose to 3.49% from 3.47% not a huge move but enough to cause a pull back. we're 144% than the same week one year ago now mortgage applications to purchase a home these are the most for watch they fell another 12% for the week and were 33% lower than the same week one year ago the numbers were far worse in states hardest hit by covid-19, purchase application fell 47.5%

annually in california, 55% in new york and nearly 60% in washington state sentiment among buyers is weakening dramatically half of buyers surveyed at the end of march were less optimistic about home buying and 37% of those looking to buyin the next six months said they were now postponing. guys it's much harder to get a mortgage now because of all the volatility in the market back to you. okay diana, thank you for that report when we come back a company behind antibody testing and a future of preventing the coronavirus spread and then pvh ceo is joining us his company owns companies like izod and calvin klein. we'll look at winners and losers in the pre-market this morning stay tune. you're watching "squawk box" right here on cnbc

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box" clinical diagnostic is bringing a test to the market within weeks the testing kit detects antibodies for covid-19 that can detect an immune response joining us on the phone is chris smith, the ceo, a company backed by the carlisle grownup and others tell us about this particular break through and how quickly you think kit get rolled out thank you.

great to be with you first i want to thank all the health care officials and/or though clinical teammates out there. at ortho our mission is to save lives. we've been a leader around infectious diseases for 30 years. this is just another step in our company journey. we're one part of the overall solution when you think about this test, it's really the first test that has a large national install basis of blood analyzers that's in hospitals and labs. we can scale and detect antibodies of covid-19 as an example we would be in over 1,000 hospitals and labs. given the ability to scale quickly this antibody test will give us critical, critical in determining the country's approach to re-open markets and

returning employees back to work >> chris, one second one question i have, though, about that in terms, though, of the speed and rapidity of this, this is a blood test this is not a swab >> correct >> so there's a couple of things that have to break our way here. first we have tofigure out whether these antibodies actually do protect people and how long they protect people we don't know at the moment? >> we do we're learning more about this disease every day. as you look at the test the important thing is the sensitivity. we're above 95%. it allows you to understand whether a person has immunity or not and that's what's going be key. now the other thing i think that's interesting in this process is that you need to have a high through point, native analyzer that can test 3,500

samples a day. when you take that across a thousand hospitals and labs across the country you can move pretty quick that's really what our goal is so we're justin process of starting to introduce it and move in production we'll make several hundred thousand kits by the end of the month. as we move into may we'll make a couple of million kits a week. that's one of steps to help health care workers and patients have they been exposed to the virus. many have been exposed but have not had symptoms this test will tell you who built up antibodies to the virus. >> two questions on this, chris. what happens if the virus mutates will those antibodies protect the person any more and second of all we had dr. scott gottlieb on the show earlier he said in children a lot of times even if they've been exposed they may not have built up enough immunity to say they wouldn't be infected again >> yes, thanks, becky.

obviously we're learning more. one of the keys for this is for us to continue to work close ias they do research one of the decisions we brought out what's caught a total antibody test as our first test. rather than focusing on the antibody that comes later that picks up igm as well which come earlier. our hope we see that even in children now, generally we're starting to roll this out. we'll all learn but we're working closely with the fda on this they doing fantastic on work with diagnostic companies. you're seeing this high level of sensitivity and specificity in the test then you have confidence in the reliability and that was the problem we saw over the last few detains tuck and why those tests ended up not being used that's the charter of our team and if you look at the history, one of the first companies to bring hiv to the market and

hepatitis c is that ability to nail the sensitivity that's what the key will be and that's what we're hearing from the fda that's important >> chris, the other question i want to ask going back to this being a blood test, obviously it takes time, takes time to take people's blood not something that can to be done, i don't think, and can you tell me through a drive through the way we're doing coronavirus testing right now. maybe it can be. but in terms -- you know it's very impressive to hear how quickly some of these things can get rolled out 35r,500 a day or even getting up to much higher numbers it will still take a lot of time, not only in this country but if it's used globally >> i think a few things. on the 3,500 that's per analyzer when you have well over 1600 of these we can do upwards of four to five million tests a day. it's not a drive through

this is different than take a drop of blood. it use as tube of blood. it helps drive some of that sensitivity and specificity. but you have to go through that process. what we think is the industry works together it's not just about or though. we're the first ones to bring this test to market. it's important for all diagnostic companies analyzers are in hospitals and clinics across the country you have to do the blood drop like some of these point of care tests but you'll have to have tests like ours to test. think about the hospital workers to have the ability to have an analyzer in the hospital they can test those workers quickly and under if they built immunity it's just one step in the journey that i think the companies will have to do. >> chris, we really appreciate your time and perspective and all the work you're doing on this and so much else to try to rise to the challenge of this

particularly unique situation we're all living in. so thanks so much. joe, over to you all right. andrew, good job still to come we got blackrock's rick rieder. he knows all things about credit markets related. he can help us navigate some of these difficult waters president if you're not in equity, market has to be somewhere. later an update on the retail sector, manny chirico of pvh his company owns calvin klein and tommy hilfinger. "squawk box" is coming right back ♪ in nearly 100 years serving the military community, .we've seen you go through tough times

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box," everybody. we've been watching the futures this morning the dow will open about 100 points above where it closed yesterday. joining us now to talk about everything happening in the markets the rick rieder, chief investment officer of global fixed income at blackrock. rick, it's great to talk to you. hoping can you fill us in a little bit about what you're seeing out there what do the fixed income market look like and feel like to you right now? >> thanks for having me. it's a pretty crazy time one of the things that people underestimate is the amount of volume going through in the fixed income market. it's at all time highs like the investment grade market is incredible 110 billion of supply last week in investment corporate bonds, 115 billion, 110 billion a week before the opportunity in the market is some of these better quality companies and investment grade per the fed also buying investor

grade credit higher yield market is tougher opportunity in higher quality. you want to be in the right sectors. similar to what we're doing in the equity markets opportunity in tech or communications or health care, et cetera and we're trying to capture yield. the need for yield, think about what the central banks are doing, rates are going be zero or in other parts of the world negative where do you get yield but in quality paper that you feel good about for the duration >> i've been a little surprised to see some of the more distressed names even like carnival cruise line able to raise more money than they anticipated, over subscribed for some of these issuance why is that >> pretty incredible if it is the right issuer and not so much the right issuer, but got the right protection and it's priced right the market is sitting on so much cash. i think the number is over 700 billion of cash that's come in

to the money market funds. people have to put their money to work, if your collateral is good, yield is right, there's an immense amount of demand it's unbelievable how much demand there is. if it's priced right and i feel the company has enough cash flow to make it to the other side the demand is extraordinary. >> how much of this is because there's so much faith in government's backing, government's programs that has been rolling out whether it's the fed, treasury, any of these programs to say no matter what happens there will be a backstop >> it's huge you can't under estimate i hear from people who do the math and think about how much personal income will be loss, how much business income will be loss during this period of time. when you map that too and we've run a lot of sensitivities, how much income will be loss and

business closure will take place and you put the size of the stomachlis, over $2 trillion and the fed is doing with the multiplier to get you over 4.5 trillion of liquidity in the system it's so much bigger than the potential loss now listen, you got to do the math on the duration of the virus when the curve flattens. the assumption by the markets is that there's more stimulus coming if the virus, if the curves don't flatten soon enough so you couldn't separate it. the central bank, if the fed and the fiscal initiative wasn't of this scale we would have a significant problem. but today the numbers are really big. we take the sensitivities. you'll start re-opening businesses in the coming we'll be right back and months there's enough to get to the other side. >> you said re-opening businesses over the coming we'll be right back and i think there's a big debate about that

right now. what do you really anticipate, do you think four weeks from now, eight weeks from now most of the country opens back up what are the assumptions you all are working on >> we're pretty deep in the data and analytics and it's hard to model this but my assumption is going to be that and to me the most important thing to focus on is the testing and extensive nature of the testing and then there will be an opening of the economy of the u.s by the way, you are thinking in the global context china is operating at a decent level. so watching the international markets, italy, obviously, and europe my sense is over the next four to six weeks you'll get this opening of different regions, different sectors that is going to lead to an opening of the economy but it will happen intermittently and that's part it but it will to be done in a reasonably pragmatic way but it will come in stages.

>> we can hope rick, again, of those areas that you say you would be investing, the high quality areas for corporate bonds, anything that really stands out the you? anything that you think is the best place to put your money >> so, i talk about corporate bonds. i talk about equity as well. one thing that's amazing from the equity point much view is i see all this analysis on multiples off of next quarter's earnings when we finance real estate in our commercial real estate business or residential business we look how the tenant will do for the next 30 years. i'm blown away by the industry that does this when you buy equities or credit you're looking at long series of cash flows there are industries, technology, health care, defense, communications, home building, think about demographics and technology shaping the world. in those sectors today if you think about what the cash flow

will be not just over the next quarter but what it will be when you buy long assets and buy multiples and get equity there's a pretty good opportunity out there. but i'm not suggesting it couldn't go down first but to pick away makes sense. >> great to see you. we'll have you back very soon. but thank you for your time today. really appreciate it >> thank you >> yep thanks i was going to say i wonder about that too we hear a lot of people saying earning are coming out next week or whenever. coming out soon and we'll see these earnings and the market can't possibly be going up because of these earnings. i don't know i have the same feeling you have, rick i don't know right? i know the earnings will be bad and no one is making any money because no one is in business. is that really what a stock should key off of, this earnings report that is front and center? i don't know but, you know, everybody has a

different idea thanks coming up, gut wrenching ups and downs in the market have you wondering what to do with your 401(k) we'll dig deeper into the question after the break as we head into the break here's the pre-markets winners and losers stay tune. you're watching "squawk box" on cnbc ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade,

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y. the recent market turbulence has probably taken a toll on your 401(k). sharon epperson is looking at what investors are doing >> reporter: fidelity, vanguard, t.rowe price said investors stayed the course and didn't change their allocation during the month of march but 401(k) index which track the investment activity of 2 million 401(k) participants tells a different story. net trading activity within 401(k) accounts speck to record high levels in march, just as the s&p 500 lost 30% of its value from its record highs. now total money transfers as a percentage of 401(k) starting balance was the highest since october of 2008 during the financial crisis nearly half of the outflows were

from targeted funds. 29% from large u.s. equity funds and two-thirds of the 401(k) money flowed into stable funds, a quarter into money market funds and 6% into bond funds fidelity which is the nation's largest 401(k) provider said they only saw 7% of 401(k) investors make any changes during the first quarter but seven out of ten of those money moves happened last month. sharon, i think what's going to be really interesting is finding out what average 401(k) investors are doing now. now that the market is down. are people continuing to put money in their 401(k)s you've talked about how important it is to make sure you put money in now so you can get the matching fund from your company before that gets chopped particularly if you work for a smaller company. that's what's going be so interesting do people have the cash, do they feel they can

continue to put money in the 401(k) especially when the markets have cut down so much. >> reporter: that's what we're beginning to see with the data coming out in the next few weeks. what's interest is many financial advisors as well as some in the industry are somewhat concerned we may not see people putting as much money especially now under the c.a.r.e.s. act the rules to get your money out of the 401(k) has been relaxed like the ability to take out $100,000 loan double or take a hardship withdrawal of $100,000 and not face that 10% early withdrawal penalty if you're under 59 and a half there's some changes to make it easier to take that cash out >> all right sharon, thank you. good to see you. >> reporter: sure. good to see you too. when we come back the ceo of the company behind the brands of

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all right. welcome back u.s. equity futures have been fluctuating all over the place this morning in fact, i'm looking since i have a 10 or 15 second delay i'm looking at a commercial. they've been around 74 points most recently but, you know, if you have a high priced stock now you have 129 point you have a high priced dow took that moves and been trading, you see a lot of volatility, a lot of fluctuations. but we've been up which is something to see considering we were down triple digits earlier after that 900 give back yesterday. but we're still a little bit positive at this point becky. >> joe, thank you. right now let's take a look how hard coronavirus is hitting the retail industry. for that we welcome manny chirico the ceo and chairman of

pvh. their brnands calvin klein, tomy hilfinger and many others. good to see you. >> good to see you as well, becky. >> i know this has had a huge impact for your company and your company has taken some extreme measures to try to survive what's happening out there part of is that you're foregoing your salary. the members of your board are foregoing their salaries but you had to furlough 75% of your employees what's actually happening with your company right now >> a tough time. obviously we've been closed since mid-march. our stores in north america, europe, australia and south america have been closed by the government edict and it's clearly putting a lot of pressure on our business. we have had, to unfortunately, been put in a position like most retailers about furloughing about 75% of our workforce here in north america and that is, you know, this week

has been a real challenging week for us retail companies are not built to have their stores closed for extended periods of time and, unfortunately, we need to really plan for the worst and hope for the best. we clearly have a balance sheet that can with stand this for an extended period of time, but it's a question of how long that time would be and how cautious we need to be to make sure we come out on the other side healthy, strong and in good position to move forward >> what do you need right now, manny? is there help from the government that could assist you or do you just need business to get back >> i think there's two areas, becky and it focuses on the same thing. all focuses on liquidity retail companies and the retail eco system employ over 50 million people in the united

states that's almost 40% of the overall workforce when you take the full supply chain from the beginning to the consumer. and the challenges that we really face, main street has been highly successful, highly profitable but clearly has liquidity challenges right now the biggest issue we have is given seasonality of most retail business, inventory is coming in today. it's sitting in our warehouses, sitting in our stores and there's no place to sell it. we're selling online that represents about 15% of our total revenue. but 85% of our business is shut down and where the government can really help is on the liquidity side in one area that seems so obvious to me is on the deferral of duties. i'm not talking about political issue about does it make sense to have duties on certain countries. we're fine we owe that money.

the real issue is inventory comes in today a week later we need to pay our duties last week we paid $15 million in duties to the government last year we paid a quarter of a billion dollars pvh to the u.s. government on duties if we had a deferral of those duties for a period of time, 90 days to 120 days just like income tax we could have avoided putting as many people on furlough as we have. it's not just the pvh issue, this is an industry wide issue it's an issue that seems to be easily fixed, the white house has the total authority to do it on their own and for political reasons it doesn't seem to be happening it just seems to be a natural -- sitting here with our stores closed and having to pay duty ahead of time when the government is trying to get money into small retail businesses, into larger retail businesses just doesn't make a lot of sense to us

>> manny, does it hit home that retail may be changed forever. there may be companies that have gone into this that may have survived the changing retail landscape beforehand but may not because of this additional pressure that's coming from coronavirus? >> i think that's really true, becky. i've said prior to this virus over the next five to six years retail is going to go through a monumental change, and in two areas. consolidation at the retail level and supply level, brands and retailers. i think you're going to see more and more consolidation but also tore closures and i think over time i was anticipating that 20 to 25% of stores over the next five years would occur, retail-square-footage too much in the united states i think today that five to six years now we're talking about two to three years

i think there will be winners and losers there will be casualties along the way. and it's going to path lot of pressure on this industry than virus is just totally intensified that and has put a really highlight on the stress that's going to be on the retail community and particularly on jobs in the united states. i think from that point of view with 50 million jobs in the u.p.s. from the retail industry, i think it's a real concern as we move forward. >> manny, we were talking about how are you company is kind of going through this, but we should point out that you, yourself, are recovering from actually getting the covid-19. how are you feeling? >> thanks for asking, becky. i feel terrific. i'm very fortunate i had mild symptoms. i was fortunate enough to get through it without any real damage my wife also, we believe had it.

she wasn't tested. but she had symptoms and my parent both 90 years old live with us, in a separate apartment and we had to isolate ourselves from them. thank god everybody is doing well >> you were also on the board of a hospital, is it right? >> i'm the board of montahugh medical center and we've worked closely with them and try to help them bring in about 6 million surgical masks when you talk about heroes during this pandemic crisis, those doctors and nurses and health care workers across the board in a facility like this, services the bronx which is new york city seems to be ground zero and really having a major impact on the community, economically stressed, the doctors there led, the ceo there

has done an amazing job. when you see the sacrifices that they are making, to me they are the heroes of this crisis. >> i want to thank you for your time and sorry for everything you all are dealing with right now. we hope you'll come back for an update with us too >> obviously pvh will definitely guest through this our people, our brand and balance sheet are a strength for us we'll get through it thank you for time >> all right manny chirico. thank you very much. andrew coming when you we return, senator kevin cramer on the possibility of more funding for small businesses and the payroll protection program we'll talk about it. then tom friedman will join us "squawk box" will return with all that and more.

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y ♪ in nearly 100 years serving the military community, we've seen you go through tough times and every time, you've shown us, you're much tougher your heart, courage and commitment has always inspired us and now it's no different so, we're here with financial strength, stability and experience you can depend on and the online tools you need because you have always set the highest standard and reaching that standard is what we're made for ♪

. good morning stock futures on the move. bouncing up and down a day after the dow gave up huge gains into the close. and then the new normal. how the coronavirus has changed the mind set american consumer in just a few short weeks. new data straight ahead. plus the investor who called fraud. carson block will tell us about his brand-new position against what some call the netflix of china. the final hour of "squawk box" begins right now

good morning i'm joe kernen along with becky quick and andrew ross sorkin u.s. equity futures at this hour indicated up over 100 points they were down this morning indicating a drop of 100 in the pre-market they were flat for most of the morning. but recently picked up a little bit after yesterday's volatile session which saw a 900-point gain in that break with a small loss when it was all said and done treasury yields, i guess, we still watch, obviously we have been might want to stick a crude oil check in there instead, given that tomorrow we'll see what happens in terms of the saudis and opec and the russians and everything else. treasuries have been story most recently which is a good thing, anyway. becky. >> bigger problems crude oil was down 9% yesterday. not sure where it's down this morning. we'll get a check on that soon

there's crude oil. it's back up about 3%. we'll start this hour with a window into how americans are feeling about the economy and their money right now. as you might imagine things have changed drastically in the last few weeks. steve liesman has been digging into this. he joins us now. steve, this survey is more important than ever right now. >> reporter: really registering a historic change in americans attitudes towards the economy. both good and bad, by the way. let me go through the data we've seen an unprecedented decline in americans use of the current state of the economy registering the largest and fastest decline on views on the economy we ever registered let me put itin context. 9/11 terrorist attacks saw a decline of four points that decline happened over five months 2008 financial crash, 19% decline and that took six

months we saw a 25% decline of americans say the economy is good and that took place over a 24 day period. one of the reasons for that decline, one in four americans report either losing their jobs or having their wages cut as a result of the shutdown that's accompanied the coronavirus. another 10% believe that fate awaits them. hold on because 51% of americans, it's a record now, believe the economy will improve in the next year that's up 17 points. what's happened they are taking their optimism or views of the current state of economy and have put that into the future in part because a majority believe this shutdown will only last a few months americans are optimistic, their stock values will improve in the next year. all of this is actually helped the president here his approval rating rose to 46% from 40% in our december survey.

his disapproval rating has declined from 49 to 43 first time he's above water here in this poll of 800 americans around the country that's his approval rating is higher than his disapproval rating now when it comes to americans views on the handling of the coronavirus the cdc doing very well, 75% of americans approving of it. 57% approving of how the fed is doing. the president there at 50% and democrats and republicans in congress not doing too badly, actually approval numbers are often in single digits sometimes. you can see there 47 and 45% approval for republicans and democrats in congress. there's overall approval of the bail out packages that are out there but a lot of distinction among americans about which industries should be bailed out. 92% say it should be a priority

to help hospital, 83% small business, local restaurants get approval and 60% retailers after that the support for bailing out airlines, bailing out the oil and gas industry, bailing out boeing, cruise companies and casinos falls off the cliff right there. our republican pollsterwe have a republican and democratic pollster who advices us on the questions and analysis if you want to sell this bail out package talk about small businesses and hospitals, don't talk about cruise companies and casinos. becky? >> steve, thank you very much. i mean i think that's kind of interesting. they feel, obviously, the hospitals need it and then the small businesses around them, the restaurants they use kind of surprising how quickly that drops off though and that's going to be a big issue that washington has to address. >> becky, also across the board. when you look at that bailout by

industry -- by the way, overall approval of the bail out has political support on both side of the equation. some concern more about republicans about spending too much but even conservative republicans support the bail out. there's a little more support among republicans for oil and gas. a little bit more support among democrats for some of the local restaurants. it's really quite amazing how flat the approval is for bail out and how similar different economic groups are, different demographic groups are for supporting different industries. >> steve, thank you very much. >> steve, thank. a lot of cruise ships have casinos too. i can't even imagine where that is anyway thanks, steve. as congress tries to do its part to get the economy back on track senate majority leader mitch mcconnell says he's hoping to amove more funding for the small business paycheck prothe texas this week. join us now senator kevin

cramer senator of north dakota. great to have you this morning we ask everyone basically to start with the same question, give us your thoughts on how phase three is working and whether phase four is something you support and whether it should include >> well, thanks for the opportunity, joe before we get to phase four i would like to see how phase three is working in the early teasing the paycheck protection program, that small business piece, the $350 billion a grant disgiesd as a loan for the most part to keep people in their jobs good for business and employees. watching steve's piece it's clearly popular with the american people as well. there's an overwhelming demand for it i think senator mcconnell's decision to try to up that a little bit by a couple hundred billion or 250 billion what the president is requesting is widely popular with the

congress now as i told the president on friday no low-hanging fruit goes without becoming leverage for associate else for what they want to do we know there's a desire for more for hospitals that's probably appropriate. we need to focus on the pandemic itself and the disease itself. there's quite a bit of desire for some states and local governments who are not only having, you know, costs of dealing with the pandemic itself but lost revenue to their coffers as well. so i can see some tweaking here and there but i hate to get too far appealed from those high priorities that both the public and the congress feels are important. >> but i think you think that maybe infrastructure at this point, you agree with president trump zero interest rates and neglected a lot of this for a longtime you think somehow that comes into play whether it's a phase four or separate way to do

things >> well i think you raise a really good point. i've been an advocate for an infrastructure package for a longtime as fortunate. i'm not sure i share his zeal for debt even if it's zero interest he sees debt as leverage i see debt as debt but i do think if we're going to do something big now is the time to do it i really think it's the perfect stimulus to be honest with you it has as its primary purpose the supply chain of goods and services, the profitability of the private sector pinpoint has been neglected for a longtime. if we go deeper than what the trust fund provides, then now is the time to borrow the money and do it but it does put information work pretty much instantly and enhance the equipment sales, it will enhance salaries and wages and more importantly enhances the infrastructure that's critical i wouldn't just confine it to highway infrastructure either,

there's a lot of transportation infrastructure that moves goods and service on other means than just highways and bridges. >> senator, i want to ask you about the word that you just mentioned which is debt. we're in the midst of a crisis so stimulus is something clearly that is needed to get us back to work and get the system and economic machine working again but at some point we'll have a conversation about debt and i'm not arguing for austerity but the question for you from a policy perspective longer term how will that play out either in the form higher taxes, form of less service how do you think about it, senator? >> well there are a couple of things first of all, we have got to deal with the mandatory side of the ledger or never get balance. we know two-thirds of our debt at least is driven by the mandatory side of our ledger, entitlement programs and other thing. we have more money going out than can come in to those

programs you asked me what should be on the table. i think it all should be on the table. i may have my preferences. i may prefer one side or another whether it's tax increases or cuts in service. i think changing some of the formulas is appropriate. but what i don't think we can do is start a conversation, certainly not a bipartisan conversation by saying what's not on table we simply have to put it all out there. we have an opportunity with these low interest rates, the president talks a lot about even restructuring our own nation's debt i think that's appropriate secretary mnuchkin has talked about doing some of that in the long run we have to have as much revenue coming in as going out and that will take a tough conversation the other thing, andrew, we have to have a conversation so many in the political arena don't want to talk about it because they know when we start talking about the insolvency of social securitys is or medicare or funding for medicaid it becomes very difficult at

re-election time so we just have to be willing to bite that bullet and have the adult conversation that a lot of us have been trying have for a longtime >> senator, real quickly, your don't mince words here about saudi arabia and russia. american independent oil producers crack the code to the energy renaissance but saudi arabia and russia want to put them out of business by exploiting a global pandemic so you're ready for the president to do whatever to either -- who is the bigger violator, do you think, saudi arabia, russia, or they are both bad? >> well they are both bad, joe but the biggest disappointment is saudi arabia. here is a country that's supposed to be an ally, a country where we 24have 2,500 t stationed. we have four missile defense batteries protecting the kingdom and their oil assets and of course we have a navy that escorts their ships.

all the while they are take advantage in the downturn in demand due to the pandemic and other factors and instead of cutting back production they are increasing production, filling up everything including swimming pools it appears and going to kill our shale industry especially the independents. i'm glad the president has reached out. i've tried to carry a big stick in this as you mentioned i'm all for pulling out of saudi arabia, pulling our troops out of saudi arabia. this is not how friends treat friends. i don't know why we protect their oil assets when they declare war on ours. the president is throwing tariffs on the disable whether it's through 301 gage of anti-dumping or 332 authority he has for national defense, both are appropriate. but most important thing, those is to change their behavior. then, of course, we need to get demand back up and the only way to do that is to solve this pandemic >> senator, thanks

>> my pleasure >> good luck andrew coming up, when we return, "new york times" columnist tom friedman will join us and look to the other side of the pandemic he said if the country can step up politically there's a chance we can come out of this crisis stronger then later investor carson block will join us he sniffed out the fraud at luckin coffee. i he'll join us here on "squawk box" u shouyour neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading commission free today.

don't get mad get e*trade and start trading yeah. this moving thing never gets any easier. well, xfinity makes moving super easy. i can transfer my internet and tv service in about a minute. wow, that is easy. almost as easy as having those guys help you move. we are those guys. that's you? the truck adds 10 pounds. in the arms. -okay... transfer your service online in a few easy steps. now that's simple, easy, awesome. transfer your service in minutes, making moving with xfinity a breeze. visit xfinity.com/moving today. welcome back to "squawk box," everybody. we've been watching the futures this morning and have seen a bit of a pickup in just the last half hour or so. at this point the dow is up by

200 points we've watched this fluctuate throughout the morning when we first started at 6:00 a.m. eastern time, all three major averages are indicated higher s&p 500 up by 21 nasdaq up by 70 and of course this comes a day after the dow gave back the massive gains it had seen throughout the session, just as the close bell was ringing it went from up 937 points to down by about 26 point by the end of the session. andrew okay meantime republicans and democrats have so far been able to come together to pass broad relief for american workers. at least they are trying side lined by the coronavirus. our next guest says it will be national if we can't get to national bipartisan healing by the time thissize over joining us is tom friedman his latest column "what america needs next a biden national

unity cabinet. this isn't the time to leave behind the high per partisanship that made it hard for us for the last two decades then when tom thanks for being here. the idea about getting to the other side and what you think is going to happen to politics as a result >> well, you know, right now, andrew, is sheltering in place mostly and trying to play nice as well as we can to get out of this crisis president but i believe that when the fog clears and people come out of this and survey the massive wreckage of our economy, the jobs loss, the businesses that went under, the savings that have been devoured by this, there's going to be a really wrenching debate about who got bailed out and who didn't and that is coming and to the extent that we could have a national unity cabinets one that has republicans and

democrats working together, i think to manage that debate better we have another debate coming and you've been alluding to it on this show this morning and that's around privacy and civil liberties. the only way we get out of this crisis ultimately is with a vaccine but between now and when we get a vaccine it could be 18 months, maybe at best, or hopefully sooner it could be a while. the only thing that fills that gap in is intrusive technology just as after 9/11 i wanted to know the person sitting next to me on an airplane was not carrying a bomb. i'm going to want to know before i take another airplane ride in this country that they are not carrying covid-19 or i'm not carrying covid-19. that's going require a lot of intrussive technology. just watch what's going on in china now they opened up wuhan and you see the kind of measures they are applying. i support those kinds of things but there's going be a big civil

liberties argument over it as there was after 9/11 and this will be much bigger. for that reason, again, i think we'll need to approach that with some kind of unity in purpose in governing. >> how do you think politics changes when it comes to economics? to things like minimum wage? i think this has been one of these moments where we've seen the importance of people on the front line, not just health care workers but people working in warehouses, people getting items to the american public, people working at the check out counter. how do you think that changes the conversation around taxes, all of it? >> you know, i think the discussion we have to have, andrew, is about resilience and propulsion that's one of the things we under is we need to be resilient. and one of the things we understand we need to be

propulsive we don't want to close our economy i want to grow the economy. and for me it's too early to assess that. so much depends on how long the crisis lasts, obviously. how deep the economic destruction is you've been talking this morning about what role the government should be. when i think of wanting to come out of this crisis stroenger, for instance, two things come to mind fdr had the rural election act coming out of the great depression stronger. two things that come to my mind investments that would amplify our productivity as a country would be a rural broadband, bringing broadband to every home in the country people live in rural areas don't have the easy online education access we need we still have a lot of people who don't -- a lot of people who don't have rural broadband this would give a boost to

productivity a national electric grid where we can manage and demand supply and renewables when you were talking about, we had the senator on talking about what saudi arabia and russia are doing to us and it's an attack on our fracking industry and it's an attack that should be rebutted. i'm for natural gas as a bridge fuel but why top there let's make ourselves truly independent of saudi arabia and expand solar and wind production solar and wind are now 21% of electricity production today in america. it's an amazing number it continues to go up. the price continues to go down i don't want to be dependent on these guys ever again under any circumstances. >> also wanted to ask you if you weigh in on the debate we were having earlier today jack dorsey announcing he's moving a billion dollars of his stock a third of his wealth

towards trying to work on the covid challenge. we've seen people like bill gates and jeff bezos and a number of the wealthiest in the country work on these projects but at the same time we've had a big question about whether philanthropy or the free market of philanthropy should be competing with the government or whether these donations unto themselves should be tax deductible, whether that money should be going the government, given that when we do have a crisis we still rely on the government ultimately. where do you land on that? >> basically i've been saying from the beginning we're in a race today it's a race between -- i dropped out. i've again saying since the beginning we're in a race. race between moore's law and covid's law. our great dispensary as a country is our ability to leverage moore's law to find the intelligent solutions with they

are you ticks and vaccines faster than any country in the world. to the extent we can leverage the public sector, the private-sector, the philanthropy sector to get to they are you ticks and vaccines i'm all for it i'm not interested in worrying too much about the other parts of that debate i think it's one of our strengths and we should be leveraging it. >> okay. tom friedman, good to see you, my friend. stay safe and healthy out there. thank you. >> tom, would a biden cabinet mean biden has to be president i don't understand that piece. is that part of the deal or -- >> joe, it's a legitimate question let me turn off the show sorry. personally, i don't have strong feelings about that. >> i was trying to read it without thinking, okay, i see what you're saying but then i think it means biden would be

president. that brings in a whole new angle into the whole thing anyway, tom, i just yanking your chain because i was wondering if one follows the other because you want to announce i want at the convention it doesn't mean he becomes president he just puts forward this idea of this big bipartisan cabinet. >> my priority is having a national unity government that can manage the incredible stresses and strains an joe, we haven't even begun to feel the pain and anger that will come out of this. let's remember that the last crisis produced the tea party and occupy wall street they will be knitting circles. they will be knitting circles compared to what's going to explode after this >> all right thanks, tom. just listen to everything very quietly. was not -- just wanted to end on

clarifying it. >> you get two strokes >> don't bring up -- that galls me to no end how good you play >> this is not my tease. is it. i'll introduce senator cramer again. i got to go to a tease here. i'm ready. this is very complicated north ireland chairman, going from tomato glenn hutchins talking about the delicate task about banks and carson block how he spotted fraud at luckin coffee we'll share live with us in just a couple of moments. you want me to show boeing or not? w sits in green ase head to break. we're not going to do that the anyway we're going to break. we'll be back in a few yes. it's the first word of any new discovery.

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coming up next here on "squawk box" we'll be speaking about glenn hunt chins man who wears many hats. he's on the board of directors at the new york federal reserve. we'll talk to him about what he's been seeing there but also with brookings institute on the board of at&t he's the chairman of cair that's a charity that does a lot of work and on the board of presbyterian hospital. he's been coming at this virus from all angles. we'll talk to him about what he's seeing right now. we'll start with the fed u.s. equity futures up by 184. stay tuned we'll be right back. when you look at the critical issues facing our world,

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welcome back, everybody. in the last month federal reserve has arguably thrown more at the coronavirus than it did during the whole of the financial crisis our next guest says the fed is entering in dangerous territory by connecting with individual businesses joining us right now is glenn hutchins, chairman of north ireland. he wears a lot of different hats but what co-author of an op-ed in the "wall street journal" with gary cohn from yesterday.

the fed's new mission to save the economy. glenn, it's good to see you. >> nice to see you hope you're well >> you too let's start off talking about the federal reserve and this mission that it's embarked on. i know you think this was an important step for the fed to take, but you also say that there are some potential pitfalls that you hope the fed can avoid. what are some of those risks >> first, i think it's important to emphasize the fed has done a phenomenal job they've acted incredibly quickly at a huge scale and stabilized these markets. and they also innovated particularly by security markets and corporate credit markets in the way they haven't done before the c.a.r.e.s. act gives them the ability to lend trillions of

dollars of money we were concerned we make sure we get that right both from a commercial point of view and legislative point of view the loans have the intend impact and engenders confidence on the part of the american people as opposed to what we saw the consequence of the bailout in 2008 >> what do you think so far? obviously we're in the very early days of this but what do you think the biggest potential risks are as we kind of move down this path >> well, the big issue that we're focusing on right now which is something different which is getting these loans, the ppe loans out through the small business administration to very small businesses, and that's basically huge logistical challenge. and so that's the -- that plus the right grants to people who are in need are the most

immediate task the next task behind that now that the fed has stabilized the markets for credit worthy borrowers is to infuse credit across the economy in a way that allows companies to bridge to the end of the crisis. that's going massive charlottesville understanding and how to extend those loans what channels to put them through, banks or direct loans and how to structure them in a way that, in my view, ought to be concessionary should not be the penalty type much rates that he we usually charge to banks that have gotten the economy in trouble but these corporations through no fault of their owner laboring and we need to make sure we finance them these are good businesses that are credit worthy bust just don't have the kind of revenues and access to capital that they had before and will have that's a very important task

>> lsteve liesman gave us the results of a poll he conducted just asking the public how they feel whatever you want to call this, relief, bail outs. they steam be very happy of giving additional loans and assistance to hospitals, to local small businesses, to restaurants, perhaps and even retailers but then it drops off a cliff in terms of how happy they would be with giving some of this assistance to things like the airlines. the deal with this political reality the longer it plays out who should qualify for this and who should not >> you have to make a distinction, becky, between the kinds of loans that are really grants the kind of loans that are going through the sba are money being given to companies in form relief they have just have to maintain their payroll. that's a different thing than extending capital to existing

companies that have good operations, that might not be in capital markets for this period of time and keep them operating. it's not perhaps won't be unlike trying to make the argument that we need to save the banks because the banks are the lynch pin of the whole economy these businesses are the lynch pin to our overall economy we let them go down -- remember the duration of this crisis will determine it's depth if this goes on for a longtime and significantly today healthy companies cannot finance themselves, then repairing that damage will be an enormous task when we come out of this crisis. being able to keep those companies operating through that part of the crisis will be incredibly important in shortening the duration of the period in which we can recover and get back to a prosperous future by the way, i have no doubt that

we're going to have a very prosperous future, that we'll be able to rebuild from this, america will be richer an stronger than in the past. i'm an optimist. but we have to alleviate the damage along the way so we can get back to your prosperous future more quickly. >> glenn, you sit on the board of the federal reserve bank of new york and, obviously, the federal reserve everybody associates it with it probably has to be pretty cognizant of some of the inequality issues that came up after the great recession. just the idea that, you know, it felt like those who were the haves maybe got helped more than the have notes because of the stock market going up, because of just, again, this inequality and issues that surfaced after that how do you focus on that from the federal reserve's perspective on this time around to try and make sure that there is less of that feeling that's out there because, you know, it just seems to me there's going be a lot more feelings coming

out of this. you got blue collar workers being asked to work on the front lines while white collar workers get to hide at home and stay safe you have small businesses that are really the life blood of the economy but also have a much shorter time that they can go without a lot of help and assistance or much smaller backdrop to be falling back on if this lasts longer than expected how should the federal reserve be thinking about that >> speak not for the federal reserve in this case but for myself how i think about this, points made are extraordinarily important ones that's why the first-round of the c.a.r.e.s. act relief went, to you know, guaranteed payment to everybody who needed it extended unemployment insurance, food assistance, and why round four that's being talked about right now will have to address

that i think the larger policy backdrop and the larger argument you have to make for the kind of things -- this is not just the treasury department because anything the fed is doing will be based upon a guarantee later from the treasury department and also as a consequence of a legislative mandate. so this is not just the fed acting alone and so i think what you're going to have to do is have a set of standards that make the kind of lending you do faithful to the legislative mandate. that's why we talk about having good governance in this process so you can target these loans at the companies that preserve employment in ways that soften the blow that you are talking about. the people who are the hardest hit by this, need the most immediate assistance are those that are addressed by these other unemployment insurance groups and other kinds of programs you're absolutely right to focus open that. this is a crisis that's

disproportionately getting disadvantaged. you see the statistics, health statistics in new york show the bronx and western queens are the places hardest hit by the virus as an example. >> glenn, you mentioned a couple of times the volatility in the markets and how much instability we've seen there from your perch, what can you tell us about how steady those markets are at this point? are there pockets or places that you kind of worry? >> look, i think the fed has done a very good job of stabilizing the markets. and i would make one broader point which is that remember that markets serve to give us a price today for futures stream of earnings. to the extent that future is looking through a glass darkly one question that none of the experts can answer us is when this will be over.

since you don't have that, the answer to that question, you can't forecast with any degree of reliability any stream of earns. that's the major issue with pricing securities to date, fixed income and equity and other asset prices and that's why markets -- now that we're out of the period for a massive grab of equity and more regular way market my view is we'll don't have volatility around these levels as we get good news or bad news and people adjust. but the problem is until we have some sense when this crisis is over we won be able to get any kind of forecast that's a big point number one. big point -- to answer your question i think the thing that people have focused less on than market levels is the massive amount of volume that's gone through the system at a time period when we're working to split staffs and people working from home

and so there have been some very significant issues that have arisen around that what they call the market operations, something that the regulators not the fed but the fcc have been focused on. it's a hidden success. we've done a good job of managing this volume, all this activity that's stressed every matter of the market's infrastructure not just the trading community. that's who you might say the dog that hasn't barked in this crisis >> glenn, we're out of time. but there's a lot more i would like to discuss with you i hope you come back soon because we would like to hear the situation about new york presbyterian where you're also on the board >> any time, becky stay well. >> few thank you, glenn when we return coming up we're going check in with our friend jim cramer as we make our way towards top of the hour and the market opening at 9:30 and

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welcome back to box. futures right now are at the best levels. time to get to jim cramer and i have a question for jim. he's at cnbc headquarters. yesterday, jim, you were talking about oil, oil matters, oil can dictate what happens, whether we hold on to that big pre-market gain that we saw in stocks and then i think oil was weak and then we didn't hold on to the gain what i don't understand. help me, because when it's demand related i get it because it means that, you know, maybe the economy is worse than we think, but if it's more supply

related are you worried that we put a lot of our big part of our economy out of business because it's too low >> yes yes. >> that makes since. >> the algorithms have been set wrong. the whole time the market was going up oil was going down and algorithms they were fighting it algorithms now, they tick down if you want to know how to solve the oil problem -- i'm not a tariff guy -- which one of your guests earlier, senator cramer i should know. he spells it with a c. what are we doing. we're defending the saudis and they are the ones putting a huge percentage of our economy out of business including his other than navy been as and sunflower seeds but he supports it i think he made a lot of sense >> yeah. i almost asked him about the united states of kramerica

>> i had a barbecue with him when he was secretary of ag. he said who is number one in navy been a, who is number one in sunflower his state. not bad. >> i know he defeated senator hudcamp. i said play it straight. that makes sense still is a pretty important part of our economy could unravel not just some of the smaller e and p companies but there's banks on the line for that so it's a large part of the economy. doesn't matter whether it's demand or supply, it's better to keep oil up above 30 >> it is so many oil companies are at 34 to 36. a lot of larger ones there are some eog, pioneer, parsley, those are all nice. they can make good money here

and some of them have even hedged the upside. diamond back, that's find. this other chort we need higher oil prices they made some mistakes. exxon interview yesterday was quite chilling seeing a company take advantage they have a balance sheet to cut their production and not get hurt at the same time like really exxon, exxon is in trouble of course exxon will deny but they cut production and need growth it makes me concern we need this industry to be strong you may hate the industry. you may be totally green but boy there are a lot of jobs on the line and we need people to go to work. that's what we need more than anything else in the world, people working >> i thought there was something else i was getting ready to ask you, jim and i was listening to

everything do you think that either the saudis or the russians will play ball with us based on that or do they really want to hurt us? >> i think the russians are still -- it's the old russians this is the brezhnev russia or t the post cold war. they want to have it be bipolar, they want to create mischief like they used to. it's repulsive they can do it the saudis, it's a great mystery. this is one of those, whose side are you on i thought you were on our side i know we're all so -- there's so much going on in washington, maybe no one has the focus to tell the saudis, listen, we're not as good friends with you as you think, but we need jobs. sometimes you have to just say, guys listen, you better stop one day this will be through when it's through, we'll remember who our friends are

>> right >> we better we better remember who our enemies are. some people are really against us >> all right, jim. we'll see you shortly. ten minutes on "squawk on the street." coming up on this show, we'll talk to carson block yesterday his firm unveiled a position against what some called the netflix of china. today he has a new short he'll reveal le thivwi us, that's next when "squawk box" comes right back ♪

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. welcome back to "squawk box. shares of luckin coffee have fallen since the company disclosed last week an internal investigation that found the coo

fabricated sales our next guest announced a short position against luckin back in january, now he has another short for us joining us is carson block, founder of muddy waters. i want to talk about the luckin experience and your support for another short that was announced yesterday. i gather you have a new short that you've put on and that you're willing to disclose this morning. >> yes i mean, it's a short that we think should be down significantly. it's a u.s. company. it's e-health. and e-health -- >> e-health, all right >> why not a fraud -- e-health, yes. e-health in our view is a massive stock promotion. it's a perfect storm of a new

management that really wanted and argued to pump the stock, and a new accounting standard that really is perverse when applied to this business, but masks what is actually now a very unprofitable business and makes it look highly profitable. >> explain how they're doing that >> sure. so there's a new standard that went into effect as of 2018 that really was intended for software companies that have recurring license revenue. so these guys are insurance brokers. mostly in the medicare space what they started doing is they said okay, we sell a medicare advantage policy we'll book three years of revenue up front and what -- so the key is, though, there are assumptions that go into how they book or what they book as revenue. it's marked model accounting,

literally. we see this blow companies up all the time so they booked last year 500 million in revenue based on their highly aggressive assumptions that we don't think are realistic. we adjust that down by 128 million or 25%, but more egregiously looks like they're very profitable. they reported about 100 million in operating profit, but we think that they actually really lost about 181 million on an operating basis. that's what our adjustment is. the tell is cash they incinerate cash they say we're investing for growth, the problem is once that accounting standard went into effect, they changed the business and started doing those late-night tv ads side by side with mesothelioma lawyer ads, and they get in a low quality high churn group of enrollees.

so they base their model off of what was kind of a steady state business, higher quality secure enrollees, but now jamming it through the pipeline these enrollies that churn quite quickly and basically booking all of that theoretical revenue today. and that is -- that's the crux of the problem that's why these guys are out there raising money and why management is out there dumping stock. >> carson what has the company said about this issue of churn >> well, so they actually mislead on the churn when you look at -- when you compare churn in 2017, which was the new management's first full year of running the company, it's like they slow walked the business that year, i suspect deliberately in order to -- in order to basically gain the test, so to speak, or gain the

model. then that churn now went from 37% in 2017 to 47% last year now, we put our calculations of churn into our report, it's very straightforward. it's very basic. when they present churn, they use an aggressively small numerator and a misleadingly large denominator to say, well, churn is actually only 36% or so so that's the way they're pulling the wool over investors eyes with respect to just the delta in quality, but it's clear when you use a basic means of calculating churn that the profile of your -- of the 2018 and 2019 cohorts is very different from that of the 2017 cohort >> right carson, real quick, the stock as you have spoken dropped

precipitously, about 15% down. we should also note cnbc reached out to ehealth for comment, and we'll bring it to you when we get one. what do you think this company is worth >> we think it's back of the envelope worth about 20 bucks. the problem is this is not sustainable. you cannot keep running a business that is destroying value. we estimate that on every medicare advantage enrollee they lost about $400. they think they're reporting a profit, positive profit of a few hundred dollars. you can't -- you keep doing that, and you lose capital market access, that's it >> carson, real quick, we have 20 seconds at the beginning of the conversation you said this was not a fraud. i want to be clear about that. do you think this is a fraud then or do you think these are just

aggressive assumptions ten seconds. >> well, from a legal perspective, it's not a fraud. intellectually it's fraudulent legally it's -- they have the latitude and the standard to do this stuff that's the problem with marked to model accounting. >> carson block, i want to thank you for coming on the show hope we can get you back and spend more time with you to talk about this and some other things taking place in the marketplace. want to make sure everybody out there joins us tomorrow. stay safe and healthy in the meantime cnbc's special coverage continues right now. good wednesday morning i'm carl quintanilla with jim cramer, david faber coming to you live from different locations this morning once again the bulls try to add another positive open to this week's rally, despite the intraday selloff yesterday got a busy day ahead, we'll get fed minutes, calls on twitter, disney, apple. we have another vaccine candidate out of