shorts jpmorgan, wells fargo and more "squawk box" starts now. >> good morning. i'm becky quick along with joe kernen and andrew ross sorkin. as joe mentioned, we are higher this morning the dow is indicated up 320. it was down 328 points yesterday. so giving back everything it gave up yesterday. s&p now looks like it is indicated up about 37 points after losing 28 points yesterday. the nasdaq indicated up about 123 after losing 58 points yesterday. we'll continue to watch this getting into earnings season that will be really important today. i don't know if anybody is expecting much out of the earnings or forward looking guidance, we'll get commentary from companies today let's look at what's happening in the treasury market

the 10-year is yielding 0.75%. we'll continue to monitor that as well. we have a lot of guests today. including dr. scott gottlieb who will join us in a couple of minutes. j&j's cfo, the ceo of moderna, ceo of related companies and the ceo of zoom. all in the next three hours. andrew an update now on the pandemic in the united states. now more than 582,000 cases and 23,000 deaths. north has 96,000 cases and 10,000 deaths. new york governor governor cuome numbers appear to have knocked off in new york.

>> it was an accomplishment. a heck of accomplishment those health care workers for the rest of my life, i will say nothing but thank you to them. i was not sure if we could keep the tide from overwhelming our hospital capacity. they did there is going to be no ephany or morning headline that says hallelujah, it is over thats not going to happen. >> we'll hear more from dr. scott gottlieb about plans to reopen the country and more about governor cuomo's gathering of states on the east coast to discuss how to do that we'll talk bank earnings i was looking something up becky is going to talk about

goldman. first earning's season will get underway with first quarter results from jpmorgan and wells fargo. before the opening bell, goldman, others will follow. many are faced with biggest challenge with interest rate near zero and the pandemic nearly closing the economy expect earnings to drop 23%. the kbw bank index tumbling nearly 73% a new note out of goldman. the bank suggesting that world's major economy will be shrunking by 35% that is almost four times more severe than the impact of the 2008 crisis. from that note, saying though the number of new virus cases

appears to be peaking globally, the bad news is, this is their quote, the improvement is likely a result of social distancing and could reverse quickly if people just went back to work. what do you think, joe >> i feel much better this morning. i'm not sure i'm afraid to feel good anymore. in europe, things look a little better some of the hot spots. we were expecting a rolling, every part of the country to be affected and maybe that being mitigated by the state at home i'm hoping the mortality rate is way below what people thought. i don't know i watched it play out. i told you this, i think the day we had closed the night

before on the s&p down about 19.5%. the futures were called down about 800. coming on and said coronavirus is going to put an end to the 11-year bull market. he knew we were going to be down more than 11%. a week later, market watch writes analysts that have predicted coronavirus now very bearish near term. the way they said he predicted it was so lame i don't know whether goldman's people put it out. i almost said, you know, buddy anyway, the latest yesterday, goldman sach abandoned his view. said the bottom is now in. the call of the day from the

strategist says the worst is behind us. the down side we have from 2000 s&p is no longer likely. the guy who called the end is now saying that maybe the worst is over. i love the way that you can do things like that go ahead >> i was going to say. the thing i was watching that made me feel better. hearing things from governor cuomo made me feel better. amazon is telling third party shippers that soon they'll be allowed to send nonessential goods back into their warehouses i think those are the people who are really seeing the spikes in demand i'll back all of this with the idea that we really need to listen to the scientists and the doctors because if social distancing is working, fantastic. but i will say, i was feeling

more hopeful looking at a lot of things last night too. >> becky, it was three weeks ago or so that we knew about the total number of ventilators in the united states and governor cuomo, he was taking the worst case scenario. it looked like we had 5,000 ventilators and we needed 40,000 it was scarey and rushing to meet that demand i think we are in a better position now i'm not sure anyone is going to get turned away in the united states for a ventilator. ppe. there is not enough tests. they are not coming back quick enough but caught up pretty quickly. i've said all along, the world

only ends once and hopefully this isn't going to be it and maybe we are starting to see the sun come up a little bit cram craemer feels a little better too. don't you hope there's a summer? >> i nhope there is. we want to listen to the doctors and the scientists on these things see what they are saying there on the front lines and hearing directly about what is happening. i don't think every state is in the same position. what they've done and what they are doing seems to be helping and working.

that's great news. let me tell you about the other story -- go ahead. >> i was going to say. the stock market, it is not the same as the underlying economy or the pandemic. that's been acting a little better nothing good in terms of fundamentals i don't know how we ever reopen anything or go to a movie again. i don't know how we get answers to that stuff. hope springs eternal we'll have moderna on today. we'll see. >> lots to talk about. let me tell you quickly about roku shares. they expect first quarter

revenue to be higher because of a whoping 49% inkres in streaming hours in the first quarter. it gained 3 million active accounts since the beginning of the year that's another conversation we'll have they've been seeing a lot of things happening in gaming we'll talk to him about what is going on and how you monday ties so some of that and more countries extending the lockdown to the end of may >> plus we'll talk to dr. scott gottlieb about the efforts to flatten the curve here in the united states. that's next on "squawk box."

welcome back a quick roundup of pandemic across the world global confirmed cases have reefed 1.9 million with 113,000 dead in russia, cases have jumped up to 20,000. france finance minister updating the fraction now estimated at 8% contraction this year. the french president said he's extending his country's lockdown until may 11 the uk reportedly announcing it

will extend the lockdown three more weeks as well india has extended its lockdown until may 3. in china, exports fell 6.6% in march and imports fell nearly 1% those declines not as bad as economists had expected. good news, bad news continue to roll these deadlines and stay-at-home orders continue on as well new york governor cuomo said the worst is over in his state as long as mitigation efforts continue joining us now, former fda commissioner dr. scott gottlieb. dr. gottlieb, joe and i were talking about how we feel a little better. are you feeling better too >> i am. modelling continues to show

improving across the united states even states like texas and georgia haven't seen a growth of cases. it does seem like we are turning the corner nationally. the pacific southwest and tri-state area are coming down in terms of new cases. i guess the next shoe to drop is what if we stop some of these. are we going to see some of these big outbreaks again? >> well, i think we'll open in may and gradually reopen the economy. i think if we do it in stages, the summer is a backstop when you get into the deep summer, that will be some what of a backstop of transmission. transmission isn't as efficient

in hot, humid weather. i think the risk we have to be worried about is the longer term what happens if we return to the fall we come back to the fall and if there are outbreaks again. we are seeing resurgence in the uk and hong kong now where they are shutting down he can fomic life in singapore where they are closing schools and transport and mitigating the bigger resurgence of cases in that country. this will be with us until we get a vaccine. we need to learn to live with it and change aspects of our life that won't be too intrucive. there is a risk that this comes back and wants to come back in the fall it is a very contagious pathogen it will probably want to come back in the fall and winter. >> that may be the most

confusing aspect of things are you allowed to go on a walk with friends six feet apart, can your kids hang out with their friends? everybody agreed we are not going to do that for a while once you start opening this in stages, it opens up all the questions of what is safe and what's not does that mean we don't go to big basketball games or stadiums, does that mean my kids don't play sports? what are the levels we are talking about. does that mean we are not hanging out with family or my parents who are older for the holidays once again? >> i think it will be reducing travel when we can not take unnecessarily trips it will reduce spread. i think people will come out of

this concerned about the spread that it is going to change behavior in ways that are subtle probably the risk right now of spread because we are declining is a lot less than the risk was late february or march when we didn't think there was an em-democratic and people were taking precautions now people are being more careful. this is going to be with us. i'm hoping we have a better tool box to better spot outbreaks that are small and others who become ill and show up to mitigate the severe impact it will be hard to develop those in the summer. i'm hopeful we get it. an interesting study of women

who presented for delivery in one new york city hospital where they found 15% of the women were positive for coronavirus that's a very high percentage and suggests in these hot spot cities the overall expose youre might e quite high you might have more immunity in those cities >> doctor, back to becky's question about kids and grandparents when it comes to even this summer, assuming we are not quarantine or staying home but we are going to work, wearing masks and trying to be careful

given the risk, would you let your kids go hug their grandparents >> those are the kind of things people need to contemplate carefully. people who are older or have medical conditions that would predispose them to a bad outcome. we'll have to start living our lives again. we have to do things to be careful. wash our hands take our company all of those things will mitigate spread. we have to go back to living our lives. >> doctor, what's the calculus you are the doctor as a person who wants to know. can kids not only go into a room but have physical contact with

somebody over 65 or 70 years old? how would you even think about that what would you tell your own family >> if i'm reasonably confident this isn't spreading at epidemic levels and my kids are otherwise fine or healthy, i'm not going to be concerned about them being around their parent who's are older. i'm going to let them play with their friends. i'll be more careful to mitigate >> another question. do you get normal antibodies that make you immune does the virus, if you are negative, do you stay negative

i've read stuff that say it is akin to hiv. it doesn't go into genome and reside there, permanently, does it >> it is not clear there are some studies that show perhaps there is react vags. it is not clear if those never cleared the virus. we need to do sequencing studies. there is immunity. people develop antibodies to it. how long that lasts is unclear probably a year or more. it might be a little less in some people. even if your antibodies weigh in

over time, you probably have cell immunity. so next time you get infected, it is less severe. data suggests that now >> dr. gottlieb, thank you we'll see you again tomorrow thank you for the update >> thanks a lot. got to get there here we go it is tough. okay coming up, the earnings count down is on we'll hear from jpmorgan and n johnson&johnson in the next half hour some images of the pandemic impact yesterday across amicera.

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the earnings season will be different from all overs and give a first look at the impact of the coronavirus shutdown. joining me now with more i saw you earlier today on

"worldwide exchange. >> yes this has been an early call for me the past few weeks trying to get everything going i'm one of a handful of people in our studio. it is pretty empty these days. we've been grappling with the same story trying to find clarity around what is going to happen with coronavirus. the earnings season coming up will be very heavy on banks but more focused on commentary around what banks see financially and economically around the virus itself. a number of these banks and two dow components if you take a look at the picture for these banks. tuesday, wednesday, thursday, friday, various banks from money centers to citigroup to investment banks, state street

all providing a different picture for different parts of the market credit risk will be a huge factor coming up if any of these will see a huge impact for customers. we have 24 s&p 500 components reporting and four dow kpo components also johnson&johnson later on today. you'll have the health care and financial view of those four dow components it comes down to whether any of these companies this time around will be able to provide any kind of clarity for many of these with a lot of u.s. exposure, we are going to see a lot of these impacts the shoutdown didn't happen until the middle of march. what some of these companies can

do, andrew, becky, joe if they have china centric operations, this past quarter may show some of the reopening of the chinese activity. if you are looking for a possible blueprint, look towards some of the companies in the past we are talking about companies like caterpillar, apple, nike, tiffany, starbucks, mcdonalds. many of these may be able to provide a glimpse of what happens when these reopen in this earnings season back to you. >> thank you a lot of earnings today. talking to a small business owner. joining us next to talk about the challenges of that april and

others in his space are facing bringing you a first on cnbc interview with the company's cfo 0 ery's&ok at yestdas p 50winners and losers 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, keep watching, and most of all, keep together. it's the job we've always done... it is the job we will always do.

>> welcome back. take a look at u.s. equities this hour. we have some green

it looks like the dow will open up about 337 points. we are talking to small businesses across different industries battle the coronavirus challenges this morning, we are talking to ken notori 43-year-old family business. best known for sleep wear and loungewear wholesale distribution makes up the majority your bottom line. the question on everybody's mind is i assume they are canceling orders >> yes andrew, we have wholesalers we sell to. we are a high-end manufacturer and supplier of women's sleep wear, we sell to sax, neiman

the question is not when they will reopen. when stores do reopen, how much are customers going to shop. they've canceled orders as far as to june and given guidance to further out in the fall. from running a buzz and trying to plan out for the rest of the year, there is a lot of question marks maki marks making it really difficult to plan. >> the e commerce business, does that mitigate anything for you guys >> 15 years ago, with he were wholesale only we developed natori.com a thriving website we have seen a big pickup in dot com business with more people spending time at home, sleep wear and loungewear has become

more important but it does not make up for the weakness we are seeing in the stores we have really seen the secular trend. it has been well publicized away this has been a skplecomplete acceleration away from stores even when they open up again. >> to that end, do you think the department stores -- speak to it whatdo you think happens >> all of these companies have great leadership they've really tried to pivot. they have all invested heavily to their dot com businesses and tried to innovate and stay ahead of the curve but that curve is very difficult and challenging

brands like us and department stores know this is going to even accelerate further that trend. all of these store's dot comes have been doing well i'm sure that will continue. the question is what is the right square footage and the right store count. i think they'll argue that pace at which that number is decelerating going forward will continue to decrease what is the balance between the number of stores and dot com, this whole crisis will accelerate the push fwoetowardse e commerce >> have you been able to get access to loans. i know you've been able to furlough employees do you think you'll be able to bring them back? is. >> i hope so wells fargo is our bank.

we were put in touch with a great community bank in mississippi. that will help given the complete change in our ability to ship to wholesale clients. that number will help. we need more visibility before we can look at our future. >> we'd love to have you back. say hi to the family for us. thank you so much. meantime, johnson&johnson's quarter results are just out >> it looks like a beat on both top and bottom line. we are seeing some of the impact

reflected in these numbers starting with the adjusted eps coming in at $2.30 versus $2 estimated by the street. revenue coming in $20.7 billion versus the $19 billion estimate. if you look at the sales growth guidance now down 5.5% down to 2% for the year from an estimated growth of 4% to 5% looking into the segments. they sell these huge brands like tylenol and motrin consumer sales grew. a lot of that driven by the increased demand from the pandemic seening an increase in zertec

and zarby's brand. medical devices down is that is an impact by the covid-19 pandemic as well as people aren't doing these elective procedures. really interesting to see this first quarter of growth and j&j working hard on a vaccine as well back to you. if you look at the stock, it is up by about 3% on this news probably one of the rare bright spots you'll see just as they talked about consumer demand. you've got to wonder which of those sales would go forward you may see the backlog of medical devices too. we'll break down the j&j numbers. we have the first with the company's cfo.

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johnson&johnson just out with results let's look at results. one of the interesting things, joe, one of the aspects that showed some negative effects from the virus was medical devices. could you go into exactly what is going on. some are elective. knee replacement or other devices. some are not so elective but i

can't imagine hospitals would schedule those there is very little of those being done unless it is essential. is that reflected in these results? >> yes good morning joe a pleasure to be with you. i want to extend mine and johnson&johnson's empathy to those who are suffering with coronavirus or close to family maebs, o ma members, our hearts and thoughts go out to those folks. especially in the first quarter, we saw medical device business we did get hit a little in ch a china. elective procedures are simply being deferred at this point about two-thirds of this portfolio relates to those type of procedures that ask be

deferred we think orthopedic, cataract surgeries, those are being deferred you have an effect with social distancing protocol that people aren't as active as they normally are you see strong reductions in events like trauma we are seeing the outlook. pharmaceutical and other business will be on par if not better than what we expected in january. we are taking down our guidance really in the medical device unit >> joe, what if someone needs a stint or an aneurysm or needs an implantable defibrullator? are those getting done or even those getting deferred

>> no. there are certain surgeries. for example, stroke, stint, those are still being done where they are seeing a lack of you' utilization is in ee elective suites we have done extensive modelling from a top down approach being looi l looking at what we saw in china, japan and south korea and the economic impact with people having less insurance going forward and how that might translate to full-year results >> meg, you are still with us? >> i'm still here, joe thank you. joe, curious if you can tell us about your comfort level even

making a guidance prediction this year. how come j&j felt like you could even make that guidance? >> a great question, meg good morning we have a great lens of the broad base of health care given the business that we are in. 70% of our business is nonmedical device. we thought we had a responsibility to share holders. we were encouraged by the commissioner's request to provide as much information and transparency as they could we just thought we had a nice purview into that. we thought we had a proud view range. on the bottom line with the broader range. we think at this point in time,

we've taken into account the fluidity and we know we have a pretty good modelling taking place with what is happening and other analogs we've done in addition to the other sources available to do this modelling we are in pretty good shape. things will change we'll look at what we assume in the second quarter we assumed anywhere from 65% to 85% decline in elective majors what we have seen now is closer to that 65%. we'll see how that goes with our call on the medical device business >> in terms of what you saw with consumers buying things ahead of the covid pandemic i know i was out buying anything

we might need over the coming month or two, is that all stuff that is pulled forward and will drag earnings down the road? >> first of all, thanks for using our products, becky. a lot of that will be a pull forward. our consumer estimates, those are largely in tact. we think people will now be a little more prepared and have things like band-aids, tylenol, even lysterine had a pull forward. but we are still on line with expectations from the beginning of the year. >> consumers are pretty smart because i got the last tylenol at walgrens. i bought as much as i could.

i guess people knew it appears to be better with coronavirus in terms of -- i don't know i don't know if the evidence is clear or just anecdotal. you know a big corn starch baby powder guy and i did not, unfortunately, hoard quite enough of that take a look at that chart that we have up i wonder how many other companies are going to have a v recovery like that i don't think that's going to be very common. we talk constantly about v, versus u, versus l recoveries. that is a v recovery you are maybe just a couple of dollars shy of where you were before any of this happened. i don't think that's going to be played out very often in the rest of the stocks that are going to be -- or companies that are reporting in this quarter. >> joe, thanks for acknowledging that i'm certainly not a stock picking xpert, but what i will say is i think the market does

see the strength of johnson & johnson. we will get through the pandemic as a society we hope that johnson & johnson is certainly on the forefront. you've heard some of our initiatives, whether it's vaccine development or contributions to health care providers with personal protective equipment the dividend this morning is a real good sign of the strength of the company we're in great financial condition. we think this can lend ourselves to some strength while we've taken it down, it's certainly not something that we can do we've taken it down from a position of strength we are not cutting research and development styles or programs that create access for healthy living we are foregoing a divestiture game because quite frankly the values that were available eight weeks ago to the potential buyer's credit, they've come down in recent weeks we don't feel we have to be a distress seller. we're making, i think, sound

decisions. we've talked to many investors they want us thinking about the long term, what's going to make the company successful two, five, ten years out. if that's reflected in the stock price, that's a great development and recognition of the 133,000 associates across johnson & johnson who are doing a fantastic job and really displaying i believe their muscle and the reason why johnson & johnson was built for times like this. >> joe, thanks for your time we'll have your great ceo back on you're a finance guy update us on the vaccine and all of the other things at j&j we talked to alex about last time thanks for being on today with your purview with the results. we appreciate it >> great. >> meg, thank you as well. beck. >> thank you guys, let me tell you about jpmorgan's earnings. they are out

there is a lot to dig through. they said they earned 78 cents a share. well below $1.84 there are a number of items. i'll talk you through them maybe the top line number is managed revenue. that came in at $29.07 billion the street was looking for $29.67 billion very good revenue. jpmorgan being conservative. let me talk you through the charges that they took in the first quarter. why that number of earnings per share was well below $6.8 billion of reserve builds largely because of coronavirus that is a decrease of $1.66 per share. they took charge of $951 million of losses within credit adjustments and others and cib related and funding wide on derivatives. they took an $896 million charge

on the firm wide bridge book markdowns. that works out to 22 cents a share. being very conservative running through some of these things jamie dimon, the chairman and ceo makes comments talking about how his heart goes out to the communities and individuals, health care workers, first responders and everyone deeply affected listen to what he talks through in terms of what the firm is doing. they say -- let me just get back to where i was going on this in terms of supporting their customers for this, they say that they drew -- their customers drew over $50 billion on their existing credit lines from the bank. they also provided over $25 billion of new credit extensions in march for companies that were most impacted by the crisis and they say they help their clients execute record investment grade bond issues. that's been very important to any company that could has gone to the bond market and has made sure that it has had the

liquidity it might need to get through this they talk about how much that was a record bond issuance for them in the quarter. for commercial banking they partnered with their clients on the liquidity needs and increased loans by $25 billion, deposits by $40 billion in the quarter. just running through a lot of the things that they're doing. it says that they're going to be standing by their customers. i don't have the numbers yet, at least i haven't seen it here in terms of what they've been doing for the ppp and the small businesses that's a number that's tougher to track because i know a lot of these banks are waiting on guidance for exactly how this is going to work on some issues, but that's another issue we can talk about if you run through the numbers, i think it shows you a lot right now let's bring in sarat sethi, portfolio manager sarat, just listening to what you hear from jpmorgan on this, not only the charges they took in the first quarter but the draw downs they heard from their clients in terms of those

executing lines and getting help in terms of finding bonds they were issuing as well, what do you think? >> i think this is going to be endemic of what we're seeing down the road especially from all the banks. what we heard about a month ago was a lot of corporations were drawing down the credit lines. then you add to that all the bond issuance we just talked about. i think when the fed came in last week, that was a very 'tiff thing. companies were able to go to the bond market, especially those that you'll see going forward that will have a hard time hitting their revenue numbers. i think that's where the balance sheets are going to be important and companies like jpmorgan, bank of america are going to be providing that liquidity, credit, the ability for companies to survive over the next couple of quarters. that is a very good indication for the capital markets and corporations what you're going to look for is when companies do announce the earnings, what are they doing with the cash? are they using it for working

capital, payroll, r&d? that's what we're looking for. going forward, what is the business going to look like for a lot of these companies. >> sarat, what are you looking for in earnings quarters, even in the releases or conference calls you hear with the company? >> so i think, you know, first and foremost, a going concern. are these companies going to survive? are they going to be able to sell whatever they are, whether it's consumer goods or services. and i think going -- and then looking at kind of what the market share is. i'm also looking for companies that are going to be potentially increasing market share. those that have an interesting product, interesting geographical location and really looking for kind of the positives of where do i want to put capital that maybe we didn't get a chance to before on the other side is also, you know, maybe some of these companies are permanently affected by this we'll see, especially on the

conference calls as to what happens. we have so many moving parts at this point you don't just have what's going on in the u.s., globally, what's going on with currency, their consumers and their customers? i think this is the first timing when companies talk about earnings, we're going to be looking at revenue guidance. that's going to be a big change from the past. >> right sarat, thank you great to see you we will talk to you again soon >> thank you okay we've got two big hours ahead this morning we're going to be sitting down with the ceo of moderna to see what's going on with the potential coronavirus vaccine. before that, aperture investor peter kraus will talk to us about the markets and what to look for this week as financials kick off eniarngs season two big hours ahead. when we started our business

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results as the earnings season gets underway. a recap of jpmorgan and what you can expect from names like wells fargo straight ahead. the race for a vaccine moderna ceo joins us next. that interview is minutes away

then the chairman of the small business committee, senator marco rubio, will join us with new numbers on small business stimulus and the eventual re-opening of the u.s. economy second hour of "squawk box" begins right now good morning welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equities at this hour. we are in the green on the big earnings day, kickoff of earnings dow up about 313 points. nasdaq up about 114 points got the s&p 500 looking like it would open up about 35 points. got a huge lineup of guests this morning to tell you about as well including we're going to be hearing from peter kraus to tell you about markets. we have the ceo of moderna and the coronavirus vaccine. jeff blau is going to join us.

we have senator marco rubio joining us and efforts in washington active visik activision blizzar joining us and ceo of zoom >> wilf, what have you got >> reporter: we've touched on the revenue, 29.4 billion. eps 78 cents forecast $1.84 all of that is backward looking when looking backwards is less relevant the one key factor in this quarter's release which is booked is credit costs how much of the loan book that the bank has is the bank now fearful might not come through in the future. that came in at 8.3 billion. provision for credit losses. now the range of analyst estimates that was out there,

huge ranges this quarter on every single line item was 1.5 billion to 25 billion. that was one outlier the median was 4.7 billion it came in at 8.3 billion. last year that number was 1.3 billion and it included a significant reserve build of 6.3 billion which becky was talking about. it's the reason why eps is below expectations 8.3 billion versus 1.3 last year meeting of the estimates of 4.3 billion. we need to listen to the commentary on the call in terms of the text, jamie dimon said the reserve build is a fairly severe recession. nothing in terms of what we had expected a couple of other things to focus on that are sort of new that we were looking out for and that's trading revenues, which is a strong beat a big jump there as again we

might have expected. we saw fixed commodities up 4% equities 2.2 billion up 28%. what are the other key things we're thinking about as we go forward. jpmorgan always been the standout in terms of return on equity same quarter last year return on tangible he can witd at this was 19%, this quarter, 5% giving a scale of the level of returns that these banks might be able to return going forward. still positive but significantly lower. about 1/4 of the levels it was this quarter last year costs. the efficiency ratio stated at 60%. on a managed revenue basis, 58%. only a little bit higher than expected we'll see fif the costs continu to tick up

>> wilf, thank you for that. we want to talk more about financials this morning and what's to come bring in peter kraus, chairman and ceo of aperture. peter, nice to see you help us walk through these jpm numbers and what you think they foretell about the rest of the earnings picture and whether we should be -- how much we can take away from the numbers or even care about this particular earnings season. >> well, actually i think the number that is the most important is the one that you were focusing on which is the credit losses. that's the forward looking number in the results. the backward looking number is revenues and expenses incurred are not particularly relevant for what we would expect to see in the next quarter or two but the credit expense is a forward looking number and it is

an estimate of the part of the bank to understand what the losses are that will occur in their book that number, as reported, is almost seven times larger than what it had been recently and twice the mediate of the number. it's not 25 billion, i.e.,, the yoit lie yo outlier. it portrays the difficulty that they're going to have to estimate the credit impact on their books, both commercial impact for commercial lending as well as residential lending through this recession and i don't think we really have enough information right now you know, you're a month plus into this shutdown we've seen tdelays in interest payments for a month job losses are really three

weeks old. so it's very hard to estimate what your losses are in this time period. >> so, peter, as an investor, we've talked to you now a couple of times since this pandemic really started to sweep at least across new york and started to be around the rest of the country as well. you look at these numbers. you look at how far the stock market has actually returned from where it was just probably two weeks ago and what are you telling your clients >> look, what i've been telling clients, i had multiple videos with our client base over the last few weeks is that the key thing to focus on right now is the differentiation you're going to see as earnings come out and as companies report. i've read about 20 different earnings announcements or releases in the last few days, and tlsh a fhere are a few cons things number two, the effect of covid-19 is real

number three, they can't estimate what that impact is so you have companies that are looking at their own operations and they're not able to predict what the impact is yet they know that that impact is significant. there are some tidbits of facts that show run rate earnings or run rate revenues coming out in march are very low so we're going to see diff differentiation in the market and we're going to begin to see companies that are going to be very challenged, whose balance sheets you're going to have to pick up and whose flexibility is going to be reduced and companies who will be in better shape. i think that's going to be the investment opportunity as you go forward. >> let me just ask you about that opportunity, which is to say in terms of the risk/reward profile of where we stand now given where the markets are, how much more up side do you think there is, right? what are we, about 14% off the highs? versus the down side and for those investors who are not necessarily investing in

individual equities, so many of the people watching this program have index funds either in their 401ks or otherwise, should they be buying, selling, or just simply holding >> there's two questions there level of the market and should you continue to invest only in passive or most of your money in passive and/or should you have some active exposures? so, look, on the level question, i think where we are right now, there's less up side opportunity than there is potential down side risk. it's really hard to predict whether the market is right at 2800 any more than the market is right at 2400. i do think that there is going to be some testing of lows, whether it goes through the low, goes down to the low, gets down to the low, i don't know having gone through five or so of these crises, they just do not go down and then go back up. by the way, we're all conditioned to december '18

where the market went down and went directly back up, but in all the other cases that is not the case market goes up, it settles for a while and then it tests the lows i don't see any reason why that isn't going to be this case in particular because it's so difficult to estimate what the impact is on companies in the next few months. we don't even know when we're going back to work, much less how long it's going to take to go back to work and how easy it will be to re-establish supply chains and get people back into your store, restaurant, into your office. how you're going to get people into your office there are a whole lot of unknowns around the world. it strikes me there are more down side versus up side as tots active versus passive, as i said, i think this is the opportunity where you'll see significant differentiation between companies. if you have that, you would expect that passive would be the least effective way to take advantage of that.

>> i was all ready to give you a big shoutout, kraus, when you get it wrong, you hear from me 2 1/2 weeks ago, 3 weeks ago you were pretty positive in spite of people wanting you to be >> yeah. >> you were badgered about being positive. >> you're totally right. and we bought equities as it went down. >> i know. but i thought back then you thought that the lows might be in, and now you're getting -- maybe you're getting a little -- you might be right nobody knows there's a lot of uncertainty but, yeah, i was going to say, hey, kraus, against all odds very few people 2 1/2 weeks ago were saying that they were positive now you're back to your old self everybody -- you could definitely -- this is what you said during the december thing, too. that's what you said during the

december thing, too. you were waiting for us to retest the lows all the way up to 3200, which we did. >> which we did longer listen, you're always right and you're always wrong in a market because they go up and down. the point here is get an entry point that makes sense you had a 35% draw down peak to trough if you got 2/3 of that you are doing great. you never get the bottom and you never get the top. as andrew points out, you're 40% from the top that's a little bit higher if you get below 50% to 2/3, you're doing great. >> time will tell. >> peter kraus, want to thank you. always good to talk to you appreciate your time, your perspective and we look forward to talking to you again very soon >> thanks, guys. be safe. >> toss it over to casa quick. >> thank you, andrew. when we come back this morning, moderna is one of many

companies working on a vaccine trying to respond to the global health crisis. the company's ceo will join us to talk about the ogssprre they've made and much more stay with us you're watching "squawk box" on cnbc ork that puts you first. that connects you to technology and each other. that's built with and for first responders. firstnet. the only officially authorized wireless network for first responders. because putting you first is our job. edward jones is it'swell aware of that.et. which is why we're ready to listen. and ready to help you find opportunity. so. let's talk. edward jones. it's time for investing to feel individual.

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all right. coming up, we've got moderna,

mrna is the symbol we've got the ceo. you don't have to be a biologist to know that we're going to be talking about possible vaccines for this rna coronavirus then commercial real estate feeling the pinch now that some rents have been postponed. the ceo of related companies is joining us first, as we head to break, this morning's s&p specifically winners and losers we'll be right back. goodbye fred. [ toilet flushing ]

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welcome back to "squawk box. roku shares are higher this morning. the company expects first quarter revenue to be higher than the previous quarter. that's with an increase of 49% increase in streaming house. the sorkin family, i can tell you, has helped -- at least was one of those, becky. >> we had one before so i don't think we were one of the new accounts. in the meantime, amazon has confirmed to cnbc that it will soon allow third party merchants to ship nonessential items to its warehouses once again. since mid march they have been prioritizing essential products including household staples and medical supplies a spokesperson told cnbc they would continue to limit the quantity of nonessential goods

to meet the demand for priority products. still to come this morning on "squawk box", wework has stopped paying rent especially in new york city who will pay the biggest price for the decline? robert frank will have the story. jeff blau is back on the related real estate market and senator marco rubio will have the coronavirus pandemic report "squawk box" will be right back.

welcome back, everybody. in our headlines this morning, tesla is reportedly asking some of its landlords for cuts in its rental payments. "the wall street journal" cited firms that had been contacted by

the automaker. tesla is looking for cost savings as it tries to deal with the impact of the coronavirus pandemic. in the meantime, wework has stopped paying rent at some of its locations and could have a far reaching impact on the commercial real estate market. robert frank is here with more on that story. robert, good morning >> reporter: good morning, becky. wework stiffed the april rent to many landlords putting pressure on a commercial real estate market already in crisis wework is trying to renegotiate leases or trying to get a rent free wework is the largest commercial tenant in manhattan with over 9 million square feet. that's almost twice as much as jpmorgan it pays half a billion of roent a year in manhattan. who has the exposure

you have shatri, the rosen group, and in addition to that you have s.l. green. they're a reit their stock is down 40%. each of those companies leases to wework. none would comment on it sl green in the past has said that wework accounts for about 1% of its total and that this space is easily rentable wework may not be paying rent, but it is still charging rent to its members and renters in manhattan. its spaces remain open and it continues to charge the monthly fees wework saying in a statement that since some workers are critical and essential, it has not changed its practices. now on its own rent payments wework is saying we are individually reaching out to more than 600 global landlord partners to work in good faith

towards finding asset-specific solutions that benefits all the parties involved guys, you know, this is a company that as andrew has pointed out has this structure that makes it difficult in a downterm where they're taking long-term leases at 10 or 15-year leases and renting them out for let's say 12 months. it's very easy for wework's customers to break those leases and disappear. wework has $40 billion in long-term commitments for leases this is going to be a tough one for them and a tough one for new york city that is now so exposed to one rent ter. guys, back to you. >> robert, thank you for that report meantime, we're going to continue with a conversation about the world of real estate this morning we're joined by related companies ceo jeff blau who oversees $97 billion portfolio for an encore performance. we talked to jeff last week, and so many of our viewers sent notes in about that interview,

jeff and i really wanted to get just a little bit more time with you to talk about sort of what you're hearing, what you're seeing on the ground the big clients. the smaller clients. how it breaks down in terms of rent coming in and what kind of renegotiations are taking place at this point. >> good morning, andrew. thanks for having me back. so it's been an interesting week we have, as you said, spent a lot of time working with our tenants getting a feel of the market, sensing how they are doing. it differs across assets, as we talked on the residential side our multi-family building, i would say most people are paying we collected over 90% of the rents this past couple of weeks, which is a good sign we reached out to all of our residents to find out why are they paying, why are they not paying just to make sure that if

someone did lose their job, we could work with them and we could help them, and we have been doing that. on the commercial office buildings, we've collected essentially all of our rent. we haven't had any pushback yet. our hope is that that trend continues. the soft spot, as you know, has been the retail sector and whether it's -- our hudson yards, time warner center, or the malls throughout the country, all of those -- all of those assets have really suffered and our tenants are suffering. i think a lot of them are waiting for the government relief programs to kick in and hopefully that will help, but we collected across our portfolio about 35% of the rent. i heard the mall portfolios are down to roughly 20%. so it really depends on who your tenants are, how strong they are, their capability to pay and most importantly, how long this goes on. we've been spending a lot of

time -- >> that was what i was going to ask you. what are you planning on in terms of that time line? what kinds of steps and things are you thinking about in terms of as retail re-opens and as some of the office buildings re-open, what kind of changes that you may have to make? >> so we are actually -- we had set up a committee internally to really talk about what the re-opening looks like and how we're going to treat our customers when they enter into our offices and our retail i think -- i think the governor and maybe the president are going to determine when we first are able to go back. my guess is we go back to our offices first and we go back -- maybe it's the reverse of the way the governor shut it down. if you remember, first it was 50%, then 25% of the people were allowed in maybe 25% go back and then 50% go back. there's going to be a lot of new protocols. when you come into an office

building there's likely to be temperature testing. everyone will be in masks. there will be extra cleaning in all the buildings. do you touch elevator buttons? it's not clear that's what someone wants to do right now. what's the capacity in elevators? staggered shifts so so many people aren't going through the lobby at the same time i do think there are going to be fundamental changes in the workplace. >> and in terms of -- >> i think retail is going to be a second step. i think retail is going to be much slower to come back, you know, just because people go to their offices, i don't think they're going to rush out to congregate in restaurants nor do i even think that will be allowed in the first wave of openings >> and in terms of time line for the retail piece of this, what are you thinking about >> we're going to look to open as fast as we can after the offices because once people are back in their offices, they will

look to, you know, be able to get back to retail and get back to restaurants, but i think it's going to be, you know, weeks past the office opening. >> but if offices open in june, is this -- do you think july is realistic? do you think even sooner >> we certainly will open. you know, how busy it becomes and what the acceptability is, you know, of customers to be walking through and congregating, only time will tell >> and, you know, you talked about temperature testing on the way into the building. is that something that real estate companies and owners like yours will be doing? is that something that your tenants are going to be doing? who's going to take responsibility for that? by the way, what do you think the legal liability becomes? >> we actually just ordered five of these scanning machines to test them out. we're going to use them both --

first we're going to test them out on our construction sites and see that they work and they're functional, and we're going to see if we can actually get them to work in a commercial office setting so that people can walk through and it becomes less invasive than someone walking up to you and putting a thermometer on your head these are all questions that we're going to have to figure out as we re-enter the workplace. >> and are you talking to other people in the industry, is this something you're doing and others all landlords are going to be doing this or do you think it's going to be very selective in terms of how aggressive the return is on the way in and out? >> i think people are going to be very cautious about going back to work the more we can do as an industry to make our residents or office workers comfortable that we are doing the right thing, that we are looking to

keep the facility as clean as possible and keeping our employees and workers as safe as possible, it will be a smoother return to work that's what we're trying to accomplish i know others in the industry are looking to do the same >> one of the things we talked about last week, which was fascinating, was well-capitalized companies that were sending letters out to landlords saying they weren't going to pay by the way, there was a letter reported in the past 24 hours that said tesla was sending out memos to its landlords that it wasn't going to pay. >> we have it's become standard that lots of companies are sending those letters. look, i told you last week, i think it's very important that people -- large companies that have strong balance sheets and have lots of liquidity continue to pay, and painly because this

is a system, right the money that goes to rent, they go to landlords landlords have to pay their employees, insurance, real estate taxes, very important for the cities, and interest and debt service ultimately if that cycle breaks, you're going to have more defaults at the banks and the banks are going to have a problem and they'll have to get bailed out it is that system. rent is just one part of this ecosystem, and, you know, i think companies with strong balance sheets need to do their part and play a role here in this recovery. otherwise, you know, we'll wind up with a further problem down the road the most effective thing that can happen is that the government money enters the system, right? so if a company gets that money, they will have the liquidity to pay their employees and to pay the rent >> how worried are you, by the way, about that system backing up jpmorgan reporting its earnings

talking about taking a big reserve. jpmorgan obviously has a pretty big balance sheet. some other banks may not and also may be exposed to bigger risks. when you look at the national real estate agency potentially backing up, what does that mean for you? should we be worried >> this all depends how long this goes on if this is 30 more days or 60 more days, you know, the industry will survive, the banks will survive if this is four months be or six months, it's really going to take its toll. fortunately, the government gave strong guidance to the banking system through regulatory relief that they should work with their borrowers, and for the most part i would say almost all banks are entering into forbearance agreements now with their lenders and if that's true in a particular case, landlords are able to work with their tenants to do similar deferral programs

for their rent where it's going to be a problem i think is more in the cmbs side it's more difficult. there's no one to talk to in terms of entering into the forbearance agreements there's going to be backup in the system the big issue is how fast can we get back to work. >> i've got to ask you, maybe it's part of this moral -- i don't know if it's a moral question about companies that have capital behind them to pa their rent a couple of people tweeted out after you were on the broadcast last week, what about equinox? reportedly equinox sent letters to its board you're on the board of equinox what is the moral obligation to pay if you can >> sure. i mean, equinox is an independent company with multiple investors we don't make strategic or operational decisions for them,

but generally every business really needs to evaluate their liquidity positions. that's what equinox is doing they have to make judgments on what they need to do to protect their operations, most importantly their employees, and how they get back to work and that's what's happening over there. >> so i guess -- that's the question jim, for example, obviously is going to be impacted but at the same time i believe it's actually a very well -- >> equinox is dealing with what other companies are dealing with they have to fundamentally look at their liquidity position. they made a decision to keep their employees, paying their employees, and that's a decision that every company needs to make you know, i think it's a balance. you know, really the issues that i'm talking about are going to be large public companies with lots of liquidity and someone even like a tesla, i mean, when

you take a company like a tesla, they should pay their rent >> jeff blau, it is always good to talk to you we appreciate your time, your perspective and wish you luck. stay safe and healthy. >> thank you take care. appreciate it. thank you again. j joe, over to you. >> we don't go out much. we went by an equinox. >> even worse. there's a chain of places that give massages. there's one in mill burn who's going to go to that? coming up, ceo of moderna and don't miss activision ceo bobby kotick stay tuned, you're watching "squawk box" on cnbc

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welcome back, everybody. biotech company moderna hosting its first vaccine day today. joining us to talk about that and other things they're working on is stephane bancel. we are joined by meg tirrell stephane, welcome. great to have you here i was thinking back. i think it was the last week in january when i ran into you in davos and you were already at that point very actively working on a vaccine for covid-19. this was just about two weeks after the chinese authorities had passed out the genetic sequence of covid-19 can you tell us what kind of progress you've made since then? >> yes good morning, becky. thank you for having me back

so we've started a clinical trial on march 16 in the u.s. under the leadership of dr. fauci and the nih. 45 healthy subjects already dosed with 25 microgram and we are using the highest dose, 250 microgram. things are going well so far so we look forward to the data. >> meg tirrell >> just wanted to continue with that question. your vaccine day today you're highlighting data from other vaccines in your pipeline, including one for zika tell us, you know, what can be determined about how well the covid-19 vaccine may work based on the results you're seeing in other trials that may be more well advanced? >> good morning, meg great question as you know, we have a platform

based on the technology. we use the same chemistry to make it and we use the same chemistry for delivery of a message when you inject it so the process comes in many ways, safety we give vaccine to healthy subjects and so we believe that the safety profile should be pretty similar to what we are seeing so far across the platform we have those more than 1,000 humans across the world, and so we are optimistic about the safety of the vaccine for covid-19 on the side of things, do you make antibodies and are the antibodies neutralizing? we have the chance to have worked on mer, the middle east respiratory syndrome with dr. fauci's team over the last 18

months, 24 months. we had good animal data in that set. when you look at that data, i would say we are cautiously optimist optimistic. >> right of course, this is a brand new technology, no vaccines based on mrna or drugs based on mrna. this is a brand-new virus and you're moving at lightning speed for the trials for covid-19. tell us, you're thinking about having a vaccine ready for high risk groups like health care workers in the fall. how much data, how long do you need to be able to make sure that this is really safe and in how many people? how long does that take to be able to figure out >> yes, that's a great question. that's a dialogue we have with regulators planning the rate of phase one

we have phase one. the phase one study in early summer, we pick up the dose as early as late summer, early fall what i'm trying to do is get as much as we can to understand the safety and the study we're going to do some additional studies outside the u.s. just to be able to understand the safety. >> stephane, what is the next thing that we should be watching how quickly do you think a vaccine can be developed that would be mass produced i think that's the big question when we start to wonder when we can re-open society based on

coronavirus? >> yes, that's a question everybody asks, becky. with vaccine, safety is priority number one you give those vaccines to people who are not sick, you want to make sure, of course, you hurt nobody. as we've stated in the past, we are partnering with the nih, the earliest we could have an approved vaccine we believe is in 2021. what we are working, what can be done potentially later this year assuming the virus might come back in the fall to be able to protect population at risk this is a dialogue we're going to have with the proper u.s. government agencies, fda, the cdc, nih and so on >> we had bill gates with us last week, and he brought up the idea that a vaccine is particularly tricky when it comes to this coronavirus because it has a great impact on

older people he said in general vaccines are less effective on older people they tend to be the things that are in the smaller doses and herd immunity because you have younger people that are taking the vaccinations one thing that will be tricky, you have it high enough so it will be effective for those older and making sure it's not lethal for younger people who are taking it, particularly infants, maybe pregnant mothers. how have you been going about trying to tackle that problem? >> this is because as people age, your immune system does get weaker so if you look at the phase 1 study, which is in healthy adults, it goes up to 250 microgram. with this technology, you know, cancer vaccine setting we use doses up to 1 milligram, four

times higher dose in what we're currently trying in seattle. we believe we have a lot of room to maneuver. it could not be impossible that we could use a different dose between healthy adults and healthy elderly. you might have more frequent boosts because it wanes overtime as you age, you could see healthy adults might need a boost every three years, every ten years we don't know yet. you need an annual boost for the elderly. this we have to explore and understand >> all right stephane, thank you very much for joining us and for the update we hope you come back again soon meg, thank you we appreciate you for bringing the interview, too >> thank you okay when we come back, a lot more on "squawk box. small business committee

chairman senator marco rubio is going to join us he'll talk about government stimulus plans, new loans and the economy after the pandemic as we head for the brake it looklis ke we could be 375 points higher. squawk returns after this. here's the thing about managing multiple clouds for your business. when you've got public clouds, and private clouds, and hybrid clouds- things can get a bit cloudy for you. but now, there's the dell technologies cloud, powered by vmware. a single hub for a consistent operating experience across all your clouds. that should clear things up.

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all right. welcome back, everybody. breaking news just out from wells fargo with the first

quarter results. the company is coming in with diluted earnings with 1 crept a share. they were looking for 33 cents you are talking about a huge build in their credit reserves the provision expense for loan and debt securities was $4 billion. that's up $3.2 billion from the first quarter a year ago the share impact of reserve build and impairment of securities is 73 cents a share they say they saw a 6 cents a share impact from the redemption of the series k preferred stocks you will be looking at numbers that are not going to match up because of the huge reserves banks are building because of what they anticipate will be bad loans because of the situation because of the economy if you're looking at first quarter revenue, that was below what the street had been anticipating, $17.7 billion versus $19.28 billion. stocks up by 1.5%.

we'll have more as we dig through the numbers just out joe? >> thanks, beck. new numbers on the paycheck protection program the government's reporting more than 1 million approvals loans valuing 240 billion total. joining us now, senator marco rubio of floor darks chairman of the small business committee senator rubio, it's great to have you on. your biggest concern is that we don't run out. we're making progress but it would be a terrible mistake to let the funds run out. is that going to be taken care of >> i hope so that money, when we talk about running out, i've read some reports saying none of the money has been disbursed yet they don't understand how that money works. that money is a guarantee. once we hit the cap. once we announce there is no longer any money left approved by congress for the guarantees, we'll have a big problem banks will stop the approvals.

they're not going to issue an approval on a loan that there's no money to guarantee. it's a moving target every single day we can't exactly predict we're getting very close to hitting the cap. we're getting close to having to announce we can't approve anymore of these small business loans and it's unfortunate it had a slow start, had some chaos. understand until april, 11 days ago, 12 days ago no one had ever made a ppp loan in the history of the world anywhere. this was a brand-new program it's beginning to move disbursements are starting to happen to have to announce to a country that's already hurting that we have to stop doing these because of a fight in congress is completely unacceptable. >> how is that going to play out? who's talking to whom? where is the stumbling block what do both sides really want >> well, i think ultimately at the end of the day there's two

things at play here. the first is that senator schumer and speaker pelosi want more money for governments and local hospitals which is not something necessarily that any of us are against. i do say there is no formula for it and there has to be a broader discussion about how it's distributed. for example, how do you distribute it to all of the cities around the country? what is the formula to determine how much each city is going to get? that has to be worked through. we already know what happens with the ppp money we know exactly what this is all about and you can just plug it right in as an add-on. a big difference what they want and what we want it's not that anyone is saying no to them, there's not going to be money to guarantee new loans and ppp will come to a halt. >> we heard most of that some of it we had a little trouble with have you had any conversations

about phase 4? >> everyone is wondering what phase 4 is going to be is phase 4 replenishing or recovery there's general talk about what recovery looks like. everyone is acknowledging local governments are getting hit bad. we'll have to plus up some of the stuff in phase 3 there's a question of a 3b or 3c 4 is recovery. it's hard to talk about recould havy until we know the extent of the damage until we know the extent of the damage. >> i meant infrastructure. do you have a strong feeling on who should make the decision on re-opening the country when it's all said and done, it's just semantics, isn't it? governors will be involved in the decision president will be involved in the decision do you think it's going to -- do you think this back and forth is

going to get even worse? >> i think the white house and federal government issues guidelines ultimately it's going to be the governors. it's the governors who instituted the different shutdowns in different states. it's the governors that are going to make decisions about when certain activities are allowed. obviously it will be tough for a governor if the federal government and president are advising against it. they ordered the shutdowns at the state level and that is the appropriate place where the orders will be modified. the guidance from the federal government coming from the white house will be very influential on that. >> if you were to vote on whether the u.s. continues to fund the w.h.o., if you were given that chance, you would say yes? you would say it with conditions you would say no >> i think with conditions, and here's why i think the ground -- the people on the front lines at the world health organization, the doctors, epidemiologists, people

deployed around the world does a great job. w.h.o.'s leadership played into chinas politicization. there needs to be changes at the top. it was polite sized in the decisions and announcements by china's pressure and leverage. >> and if you weren't a republican, put on the independent hat, how do you think the administration has done in dealing with this crisis >> i think the administration has done as best as they possibly can under very difficult circumstances. the nature of crisis is they are difficult to manage, they are chaotic, they bring the unexpected and mistakes will be made i think everyone is working really hard and over the last two months i think they've done a very good job of managing a

very difficult situation. >> senator marco rubio, chairman of the small business committee. thanks for coming on "squawk box" this morning. >> thank you >> appreciate it when we come back, a big day for the banks. we have already heard from jpmorgan and wells fargo when we come back, we'll get reacti fm aly rht after thisig

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it's all because sofi let us see light at the end of the tunnel. - so thank you. - thank you. ♪ ♪ breaking news. earnings season is here. two dow components kicking off quarterly results this morning and we're going to dig through the wells fargo numbers that just hit at the same time, we've got futures. pointing to gains at the open. right now they'd go a long way towards wiping out yesterday's losses. and this hour we're bringing you a c-suite doubleheader all geared around how we're using technology during the global pandemic we'll speak with the ceo of

gaming giant activision blizzard and the cfo of zoom. the final hour of "squawk box" continues right now. good morning, i'm joe kernen along with becky quick and andrew ross sorkin u.s. equities seeing the best levels this morning. we've been in the 5 or 600 point ranges since the futures opened last night before the pre-market session. we're getting back all of yesterday's pull back following what was a 12 or 13% gain that we saw last week j&j one of the features this morning with some positive numbers, i guess, at least being taken positive by the markets. j&j up about 5 points. that's helping the dow treasuries at this point, not a lot has happened there for the past couple of weeks up .7. somewhere around .7% been looking more at oil, but

we'll bring up that board and you can look at the yield curve. check it out yourself. it will be more important, i guess, today because we've got so many bank earnings. credits and everything else. >> yeah. in fact, wells fargo also just out with earnings just a few minutes ago. came with earnings of a diluted number 1 cent a share below 33 cents and not a big surprise you're not going to see many of these companies hit their numbers. revenue line also lower than expected that's the difference between wells fargo earlier today. looks like revenue came in at 17$17.7 billion versus $19.2 billion the street had expected. taking a look through, they did a huge build on their reserves for bad loans. provisions for loans and debt securities of $4 billion that's up 3.2 from a year ago.

that is 73 cents a share that's a big charge they're taking in the first quarter. part of why you see the earnings so far below the values. don't miss, by the way, first on cnbc interview coming up later today with wells fargo cfo john shrewsberry. other big banks reporting results. wilfred frost joins us with more first on jpmorgan. >> reporter: hey, andrew we mentioned the revenue and eps numbers for jpmorgan revenue in line. miss very much on the credit costs and the provisions at $8.3 billion. provisions for credit losses well above last year's number of 1.3 billion for the same quarter. another gauge on this, if we switch to total credit reserves, there was an additional 6.8 billion this quarter

on their books they have 25 billion total reserves built up over time. that means they've reserved 2.3% of their entire trillion dollar plus or so loan book as for this quarter's bill that splits to roughly 2/3 from the consumer, 1/3 corporate would be corporate focused on oil and gas, real estate, and retail now the key thing for the call will be what have they factored in in terms of timing to get to that estimate. we mentioned strong trading revenue earlier as expected. also wanted to mention within asset management it rose 7% by cumulative net inflows despite market levels. very impressive. in terms of guidance, net interest income for the full year lowered to 55 billion, previously 57 to 58. expenses up to 65 billion. those i guess could be much worse in terms of four-year guidance again, the key is going to be on

credit losses. for that, the media call and i'll jump back with more jamie dimon is on that call. >> all right, wilf thanks for the warning appreciate that. let's bring in a familiar bank analyst. joining us, marty mosby. director of bank and equity strategies marty, i'll just let you, you know, just start things off with the things that struck you in either jp morgan or wells that were most noteworthy you realized there would be a big addition to the reserves >> yes when you look at this, we have to change our perspectives used to be returns and revenue growth all of that is basically where it was when we left it off we now are focused completely on credit how much capital do we have to be able to pay for the credit costs. if you look at the earnings that jpmorgan just released at 78 cents, that compares to what we're paying the dividends at 98

cents. they earned their dividend which is the first threshold if we look at their total credit costs for the year, were they going to be able to do that? we have a cushion of $30 billion. they put $8 billion this quarter. pretty much in line with what we would expect to be able to defend what you're looking at with the dividend. look at the potential book values relatively flat in the guaido drant-- quadrantst looks at stable dividends and tangible book value so far >> so far so good. is what you're saying the banks are in better shape than years past. how long do we have time? >> so that's actually the question is what we put in our note yesterday we put it out there, how many years can we actually burn

through this if we're earning where we're at today, we have several years to kind of go through that process. if it continues to go in the economic disruption builds from here, then these credit numbers will go higher what we think is get back to work in the summer, what we're running on these run rates do another quarter the next quarter and what we've been preparing for for the last decade is have enough liquidity and capital for the banks to do what they talked about, lean into this, focus on employees and be a part of the solution, not a part of the problem. that's what the bankers were working hard to do be on the front line on the economic distre distress they can't help on the medical side >> what would you -- do you have questions for the cfo of wells fargo? what would you want to know

about what he's thinking about what they're planning for for the future >> the key thing that youneed to know about is given the accounting methodology that we just adopted back on january 1st, it's just unimaginable that you put this new accounting in we knew it's going to create more volatility in credit costs, but how much of this credit cost is actually getting pulled forward because of this accounting how much will we see as it rolls into the second quarter and third quarter? understanding the new accounting methodology all of these big banks are having to deal with and it's going to be a key question of what we have to get an answer to all of these calls are coming up shortly. >> so wilf will be listening in. is there -- we always say future predictions are hard many times they're muddied by

others do you think you'll hear some assumptions being made based on what we're hearing from the administration >> as uncertain situation we can find ourselves in. in that situation we're asking bank managements to estimate how much they're going to lose in credit look for not just the next quarter, the next year the new accounting methodology says you have to look through the whole life of the loan what's changed for all of your loans, all of your portfolios. what kind of downgrades have you had? what kind of restructuring have you seen that's right there's so much uncertainty. right now we have to go as we progress through this in the next three to six months to see how it develops. right now we're looking at for jpmorgan there's enough earnings to pay for the dividend. on wells fargo they have enough

it was break even. if they break even they can pay their dividend for seven more years. if we're looking at what we saw so far in these two banks, each of them what their positives are, what their negatives are, they are passing the test that we're looking for for sustainability and for strength. and that's what we're really wanting to see in this quarter's earnings right now >> all right, marty. marty mosby, vining sparks director of bank and equity. used to sit with us a lot, for hours on the set on days like this >> yes. >> i promise you that will happen again hopefully at least -- i mean, i'm hoping for at least by next quarter when we're doing the same type of stuff, marty. thank you. >> well, we look forward to it thanks for having us on this morning. >> you're welcome. >> good to see you when we come back, we've got two people from the c-suite.

bobby kotick will join us and the cfo of zoom will join us as zooming solidifies its space in the business lexicon earnings indicated up. been higher all morning long right now the dow looks like it will open by 357 points. stick around we've got much more on the markets and what investors should be paying closest teiotohe"sawbox" returns.

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welcome back to "squawk box" this morning roku with preliminary results.

people are using roku's video streaming advice roku did withdraw the full year advice with uncertainty surrounding the pandemic becky? >> andrew, thank you as the covid crisis forces people to entertain themselves at home, video games have been a big winner they've been a clear beneficiary of all of this the question will that translate into market winnings joining us is bobby kotick he is the ceo of activision. good to see you. how are you doing? >> likewise. good to see you. thanks for having me. >> how's everything going? what are you hearing from your employees? what are you hearing right now >> that's my principal focus right now, the hell and well-being of our employees and their families that should be the primary focus of most ceos we've been very fortunate.

we have a small number of people across the world who have developed symptoms from the virus, but we do have the parents of a lot of our employees affected and we're working really hard on a number of different initiatives that are new for a company like ours to be involved with, but we're supporting, for example, a clinical trial at ucla and a new japanese drug called apagan which if it's effective will be a low-cost, anti-viral we're supporting a number of initiatives that are focused on convalescent blood transfusions, which is another very promising area for care, both for critically ill patients as well as for health care workers and then we're supporting a lot of local hospitals and health care facilities across the world where either our employees or our operations >> bobby, i know you've taken a number of steps for your employees to make this time easier for them, too

things like waiving the 30-day prescription refill that normally you can't get a prescription filled for more than 30 days without having to pay an excessive amount. >> yeah. we're certainly doing things like that. but we've also got some really innovative programs like telemedicine providers for employees in countries where there are national health care programs we have private doctors helping to assist and navigate through what can be a very complex process getting international health care. we're working with organizations like wealthy that provides mental health care or center city to provide licensed child care i think when we look at the available tools today to allow people to work at home safely and comfortably, getting access to good health care, there are a lot more programs available today than ever before we've always been a pioneer in these kinds of benefits.

some of the things we're doing now like supporting the clinical trials at important health institutions, these are things that are unprecedented for us as a company or any other company we're definitely feeling that the extra investment, the extra attention is appreciated >> i read in the notes that all of your employees have your cell phone, that they can call you if they need to you have 10,000 employees. is that true >> about a month ago we sent out an email from my email address with my phone number and we encouraged every single employee that has a concern related to their health care to contact me directly so far that's been working well. they've gotten a lot of attention, a lot of good care from all of our providers and our hr organization is extraordinary. the team that's been working 24/7 since we started working from home in our offices in

china and europe to make sure that they were available for the employees and their families >> how many employees have personally reached out to you? >> i'd say a few hundred now and -- we're fortunate very few have actually tested positive so far for covid-19 one of the initiatives we're working on right now is a trial for a blood serum test, which is a low-cost, very accessible 15-minutes for the results blood serum test that has fda approval it still is required to be administered by a health care professional, but i think when you look out over the next few months, we start to think about what will make employees feel safe and comfortable coming back to work, testing is going to be a very important part of what we're going to need to be able to do. >> agreed. how quickly do you think things like that can get rolled out to the general public based on how much research you've been doing in the medical field, how long do you think it

will be before we're actually ready to go back to work >> well, every country is different, of course i think that every government is going to treat the rules with respect to their own countries differently. we're taking guidance from the state, city, local and federal governments everywhere we operate, but then we're adding an extra layer of protection and concern. so right now most of the world will continue to be work from home for the foreseeable future. i think we're fortunate. we have a very collaborative business when it comes to software development, so we have people in lots of different countries and lots of different offices who for a long time have been collaborating with each other on software development so i don't think we've had the same challenges on a work from home perspective as other companies look, people are feeling the isolation and frustration and anxiety and so, you know, i don't even think that there's a

real normal that is going to exist for a while. our view is that you need to see a low cost, widely available vaccine. you need more antiviral therapies that are proven they're low cost and widely available. you're going to need more efficient, low cost blood serum testing. so until all of these things are in place, i think people are going to still have this anxiety and uncertainty. and -- but we're working on a lot of these initiatives >> hey, bobby, it's andrew here. in the world of hollywood, as you know, production has effectively halted and production may or may not resume sometime this summer or even this fall. i know there's conversations in hollywood about testing actors, people on a set. obviously your business is very different because people can be behind a computer, but they -- i imagine, they don't have all of that power necessarily at home

how does that get distributed? how does that affect production? >> well -- >> in your world >> i don't know that we quite know yet most of the things that we have in production and development are on track for now i think we'll have to really reassess that for the month and three months but, yeah, we've been doing things like encouraging employees to upgrade their home broadband to the highest broadband service and we're paying for that. we had equipment available for take-home so everyone in the software development part or animation functions, we made equipment available so they had the newest, most secure devices. but i think it's still too early to know what the consequences of development are. we're very fortunate we launched a new call of duty

and 50 million people signedup candy crush is going well. most of our games are seeing a record level of engagement people are getting the benefit of entertainment at home from what we do >> hey, bobby. i know that people have been playing video games a lot more how does that translate into profit for the company is there a way to monetize at all? >> look, no one wins in a situation like this but, you know, in periods like this when people are at home, they're definitely getting the joy and sense of camaraderie many of our games are very social while they might feel isolated at home, it is a way to connect with friends and family and do it through the lens of entertainment. it's much more fun it's a much more social experience than video games were ten years ago. i think people are really appreciating the benefit.

>> do you think that that changes some people's maybe longer-term patterns even once this is over, maybe they get hooked on some of these new things >> well, i definitely think based on the numbers that we're seeing, people are coming back who haven't played games for a while. a lot of new players are coming for the first time so, you know, we -- i think the last number we reported was something like 425 million users in our network that number will probably be higher as we approach the end of the year if you think of that as scale of user base, you know, we have more players than twitch, than twitter, than netflix subscribers. i'd say the only three networks that have more players or users would be facebook, youtube, and we chat. so it's a big audience to begin with >> bobby, i want to thank you very much for your time this morning and we'd love to get

updates on how things are going with all of these unique programs that you're funding at this point, too. >> happy to share those and it's great to hear your voice great to hear your voice, too, andrew >> thanks, bobby take care. >> thank you okay, bobby. you know, i'm not going to mention how nice those paintings are after you just blow me off completely nice shots behind you. thanks for coming on today good to see you, bobby, and we hope you're well. coming up, going to talk to the cfo of zoom on how to make the turn from free quarantine app to paid for business necessity and the serious growing pains in the last couple of weeks check out the shares of the biggest u.s. banks update on jpmorgan ahead as corporate america gives us a glimpse into how the coronavirus is changing business, we're up over 400 points now on the dow stay tuned "squawk box" will be right back.

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welcome back to "squawk box" this morning take a look at futures we are in the green earnings day here after what was a down day yesterday. dow looks like it will open close to 400 points. s&p 500 up 48 points, nasdaq up 158 points. when we return on the other side, we have the cfo of zoom going to join us live on zoom. imagine a lot of people in our audience have been using zoom a lot lately we'll talk about the surging demand for video conferencing and also some of the privacy concerns that have dogged zoom in the last few weeks and what it means to not just be an enterprise business anymore but being used for everything. we'll dig into what's most important to watch as earnings season kicks off with a top ayrgan stanley strategist. st tuned you're watching "squawk box" right here on cnbc tf...

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>> the great thing is the resiliency and i hope this will be a great example of this the key take away from the numbers is that they have accounted for the government bailout programs within their estimates for what provisions and credit losses might be they clearly said we don't have perfect foresight. they have gdp improving. unemployment also improving in the second half of the year but the take away there, it's not perhaps the worst, worst, worst case scenario that they've used to get to that number and it does rely somewhat on some of those government programs working. so perhaps if things go longer and the programs run out, then those provisions and credit losses could get a little bit worse. on one of the key programs, the

paycheck production program, they confirm that $9.3 billion is out of the door, has reached businesses for about 36 billion of loans so far approved jamie dimon said that, in fact, that program was ebs sepgsal, commended the sba, commended steven mnuchin for it that the scale of it, the rollout, the scale of it should be commended. in terms of his own health, he said march 5th, the day he had that heart issue is a day i'll never forget he does like working he was eager to get back to work he's been out walking a lot. he commended daniel pinto, smith and the entire group that ran the place while he was out and he was pleased to be back and refused to address my repeated attempts to ask him whether it changes his perspective of wanting five more years. that remains the party line, guys >> okay.

wilfred frost, appreciate that report meantime, want to talk about something i imagine virtually all of our watchers are using these days, which is zoom. the number of people using video conferencing at zoom has skyrocketed during the pandemic, from 10 million to 200 million it's being used for a lot more than just business meeting events from virtual birthdays, weddings, workouts are now being held on zoom the increased usage has brought with it a host of new privacy and security concerns. joining us now to talk about all of it is zoom cfo kelly steckelberg. we appreciate kelly joining us kelly, nice to see you i believe you're coming to us on zoom. >> good morning, yes i'm in my sister's studio here in sherman oaks, california. >> so let's just talk about what's happened here this is or at least started as an enterprise-based business that's now become very much a consumer oriented business my kids upstairs, by the way,

are using it for school today as well how has it changed your outlook for the whole company? >> so that's exactly right first of all, regarding your children using it, we are proud that we've been able to enable over 90,000 schools in over 25 countries around the globe to use zoom and that, along with many other use cases that we didn't contemplate before this, such as, you know, grandmothers using zoom to read to their children, read bedtime stories to their children across the country as well as small businesses using it now to do tutoring or give yoga lessons, it has really transformed what used to be a business and a platform that was primarily used for enterprises to be used for all kinds of consumer and small business use cases as you mentioned, that has caused a 20 times increase in our daily participants from just december through march so, yes, with that has come new

opportunities and challenges as well, including opportunities to educate and enable our youth in a very different way than we needed to before >> so the question i'm asking is you clearly had to scale up, by the way, on the hardware end to keep up with all of this usage i assume there's cost involved in that. is the expectation that two, three, four, five months from now hopefully when my kids actually can go to school in person and we're all back at some semblance of work, that usage comes down, how does that change the dynamic for you and thinking about how to start charging people, so many of whom are now using your service for free >> yeah. so coming into this pandemic and seeing the increase in demand, we have been very focused on ensuring that the platform is stable, reliable, and sustainable. we did talk about this, that we

had already started to see the rise in demand and while i'm not confirming guidance today, we did indicate then that we expected to see an increase in our costs, our costs that would have an impact on our gross margins and that is consistent with what we have continued to see. in terms of what does this mean going forwards and are we trying to convert some of these users, we have a fremium version that many new users are using today we are really focused on ensuring that everybody and anybody who needs zoom or has a use for it can get access to it. we want to focus on minimizing the disruption during this time for everyone it's too early to tell what comes next ideally as you said back in a few months we're all back to a more normal state. i don't see everybody going back to the way that it was before. i don't think that all -- everybody that's working from home today is going to go back to their office necessarily or

that these small business owners are going to stop using it in the way that they have so we'll just see what that brings it's really too early to tell today. >> right tell us about the progress on the security front a number of companies, including google, which has a competitor competing service with yours, others including government have said, don't use zoom right now we don't feel comfortable with the security, there's this idea of zoom bombing. people jumping into these public webinars and things and doing crazy things on the video. how much progress are you making on that? what kind of big changes may we be seeing on that front? >> so some of these challenges that we've seen are due to the fact that zoom was historically really an enterprise application and we have asked i.t. teams to enable and teach users how to use the platform as we've seen the massive increase in

consumers and individual users we have needed to do a better job of providing them the information that they need as to how to keep their meetings secure, how to keep their meetings private there's a couple of things we're doing. first of all, i want to say zoom is absolutely safe for everyone to use for their meetings. we have a 90-day plan to make everybody understand how secure it is. couple of things we have done. we have started changing the default security programs for new users so they have password protection on their meetings we also have entered a 90-day phrase where we are freezing any new features on our platform to enable us to really focus on ensuring that the existing feature and platform is as secure as it can be. we -- have formed already a c-cell council some of the highly respected companies giving us their perspective on

how we can ensure that our platform is appropriate for them to use in their organization eric, our ceo, founder, has a weekly webinar every wednesday that is called ask eric everything so every user has the opportunity to ask eric questions or give us feedback about what they would like to see. >> kelly, got a question for you. this was a turn on what -- bill gurley had a tweet he said we talk a lot in silicon valley about first mover advantage. zoom was hardly the first mover. the biggest and brightest have coveted this invested against it. cisco, microsoft, google, facebook zoom was the one that broke out. you previously worked at cisco i'm curious what you think i remember telepresence and the conversations we'd have a decade ago with john chambers and everybody else why do you think this worked this time? >> i think that eric really had

a vision about having a video first communications and we all believed that video is the future of communications this pandemic has just been an accelerant to people getting exposed to it in a very different way. everything about our platform was built from the ground up to think about video first. the ease of use, reliability and the focus on delivering happiness to our customers is what has made zoom stand out it is such a great simple platform to connect people around the globe it sounds simple and yet it really was differentiated, it is differentiated from the other competitive products out there. >> kelly, before you go. i have one question on behalf of my mother who has become a zoom user, for free the free available for 40-minute meeting. if you set the time you can either set it to 30 minutes or 45 minutes you can't grab the 45 minutes.

the sorkin family wants to know if you can change that. >> if we can change the minutes? >> okay. >> if you're given 40 minutes, the dial should have a 40 minute on it as opposed to 30 or 45 once you hit 45, you have to pay. >> okay. thank you. i will relay your mom's feedback to our product team. >> kelly, we appreciate your time and everything you're doing for so many who are using the service right now. appreciate it. >> thank you great to be here >> thanks. joe, over to you >> all right thanks, andrew. coming up. we're going to check in with jim cramer we'll see what he's watching as earnings season gets underway. a lot of update from wilf on the first quarter results and what banks are telling analysts on what they should be keeping their eye on stay tuned, "squawk box" is coming right back.

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forecast it now says that the world will very likely experience the worst recession since the 1930s. the organization expects the global economy to contract by 3% this year. it forecasts a partial recovery in 2021 but cautions this is conditional on an improvement in the health crisis. joe? >> okay, beck. let's check out j&j earnings that's the medical giant johnson and johnson with earnings above analyst's expectations it raised the dividends but they lowered the full year guidance to account for the coronavirus pandemic it saw medical device sales fall more than 8% in the first quarter as americans stay inside and hospitals cancel most elective surgeries j&j cfo spoke with us about that earlier on the show. >> we talked to a number of

hospital ceos and where they're really seeing a lack of utilization is in their elective suites, if you will. they're at about 25% of normal capacity, and that's really where we project kind of a downturn in medical devices, specifically in the second quarter. >> and, again, you can see the shares of johnson & johnson trading pretty well. up three and change and helping to add to some of the gains we're seeing in the dow, becky >> all right, joe. thanks joining us from cnbc headquarters, "mad money's" jim cramer jim, been watching the earnings this morning maybe we can start by talking about jpmorgan obviously the numbers came in below expectations really, going through and listening to jamie dimon's comments, listening to the numbers they lay out it gives you the sense they have this under control and that they feel pretty okay about where things are headed even though we knew it was going to be bad numbers? >> right the work that got done shows me

they got this figured out. i know the work that wilf said i like everything i hear i think that like many people, we really don't know what the future is. it's amazing that anyone who gives you a forecast one of the reasons we love j&y so much is they give you a forecast they're spending 1/4 billion their midpoint was lowered by 9% frankly, that's exactly what the elective surgery would do. they have 9 drugs growing at double digit pace. i think people are looking at dividend yields. they gave you a 6% increase in a dividend in a time when people are saying, wait a second, i don't know if my dividend is safe j&j, one of your guests is saying don't own the s&p you get too much nonsense with the s&p. i'm looking for the old defenders that do nothing just index investing. it's not paying off anymore,

it's just not. >> joe pointed out to the cfo the stock chart that you're watching on johnson & johnson. that is the v-shaped recovery that you're not going to see in a lot of different places but it is amazing how that stock has rebounded pretty actively. >> we have to give it a premium. aaa balance sheet. there are people who are deciding some companies i can't invest in because they're too levered to the consumer. others are levered to secular growth trends that they've developed and those are buyable. there will be a super premium for some companies j&j is an example of, okay, come get us come get us with a triple a balance sheet and those who think we can't get it in this environment, what are the answers? bobby otick was talking about.

people are staying home. video use is up. there are just two tracks. there's the stuff that people use and then there's stuff that there's no demand. they can open up all the different states they want people don't want to go out. they don't want to go out because there's no vaccine >> jim, jamie dimon putting out a number on the ppp. $9.3 million has gone out the door to small businesses to go out there. we had a lot of questions yesterday about the ppp plan, how this is working. i have to say there was a point when yesterday evening when i was thinking are we going to go back to work before any of this money actually makes its way out the door i guess it's good to see real numbers. >> i was impressed with that. >> quantified numbers. i'm impressed with the fact that you're going to get a check this week dollar general is up, amazon is up walmart is up. there are things that are working. i think to create demand is the real hazard.

we just don't know, but you can keep companies alive until there is demand and bet that someone does come up with a vaccine or that we get people out of the hospital faster, recommemdesivir we're between a rock and a hard place. we the same time we know people were sick yesterday. there was an amazing collaboratio google that did a contraact tra t that is remarkable if we have contact tracing, i think we're able to start going out. i think most people are scared >> all right jim, thank you we'll see you in a couple minutes. thanks for your time all right coming up tonight on "mad money," we should point out, don't miss a big interview with glaxosmithkline's emma walmsley talking about a new

collaboration with sanofi. "squawk box" will be right back.

welcome back we have some very interesting comments coming out from one of our frequent guests and a well known market strategist that we talk about a lot, mike wilson, morgan stanley chief u.s. equity strategist these are new numbers, mike, on the down side for the s&p forecast, 2,500, maybe 3,000 middle of the road, 3,250 on the bullish case is that new for you? >> yeah. they actually went up, joe, in the past week. really the catalyst for that is the fed's actions last week

again, illustrating they will go kind of where they need to to make sure markets stabilize. the movement in the high yield, i think, was inevitable if they needed to, but the fact they did it proactively is powerful that, you know, suggests to us that we are still very much in this era of financial repression, the fed will do whatever it takes to make sure we don't go into depression, part of that for investors sake means you have to grab risk premium when it comes. it doesn't stick around long when the fed is in there buying. multiples can expand further from here, even in this period when uncertainty is high, financial actors will participate. >> right the -- it's hard for people to understand any type of bullishness. they see what's in front of their face

it's very difficult. that's a big range in the first two, 2,500 to 3,000, even on the low side, that would not be new lows but you're giving yourself breathing room on things worsening. that 3,250 number. people will have trouble with that or with believing it just because of the inherent worry about life never returning to normal or not near-term. a lot of people discount technicals even focusing on near-term fundamentals when they talk about stock markets. they're usually wrong, obviously. 3,250 sounds like a return to normalcy for the economy and for consumers and people don't see that how could you -- how can you justify that number by the end of the year? >> look, it's a bull case, right? that's not our base case, it's an optimistic view, but there is

a real possiblibility that because of the nature of this crisis, which we can agree is a health care, it's real, and its present danger, it's eliciting the kind of response from congress -- forget about what the fed is doing -- congress reacted in a way that i don't think any one of us was possible six months ago we were discussing six, seven months how would we get fiscal stimulus and now we're getting the biggest fiscal stimulus in history. what happens if we get back to work on schedule, maybe we get back even ahead of schedule for some reason and all of a sudden you have this stimulus in the pipeline, they're not going to give it back you could lead to a powerful outcome for 2021. >> that's an upside case that's how you can get to that 3,250. i think it's -- as every day

goes by, the market will think about the upside case and the down side case it's a real possibility. >> just hard to imagine 40%, i could probably come up with, 40% of the economy six months from now still being severely effected, whether it's movies or -- take your pick, airlines whatever you want to take. it's hard to connect -- even going back to 3,000, last year we were -- 3,000 was a bullish number for people. even 3,000 -- to return to normalcy is something all of us want i'm hoping for it a lot. but it's hard for people to see through the current situation back to that >> yeah. let's take another stab at it. so we all know we're in a recession now. and we have been in a late cycle environment for quite awhile of course when you're in a late

cycle environment people feel good talking about market participants we got a little too excited the end of last year and earlier this year. coming out of recession there will be a cyclical impulse in any event, no matter what kind of policy response we're getting. getting back to normal is the natural evolution of a business cycle. once again we're talking about year-end price targets which will take into account what 2021 looks like right now we're in first quarter earnings season for 2020 everybody expects it to be pretty bad we would agree but i would argue that the market is already looking past 2020 it has written off 2020. we need to make sure a certain number of companies don't go bankrupt clearly, you know, as we look forward to 2021, it's going to be a better year it's just a function of how much

bette better >> so, i'm just -- so we're even giving the market the benefit of going past its nine-month discounting mechanism. is anything you're forecasting dependent on a vaccine or medical break through? or do you think that it just somehow that we don't even need to be experts about how the pandemic plans out you can just use stock market analysis and economic analysis to figure this out >> clearly the circumstances of today are unique you mentioned it before, the bear case is 2,500 there's a scenario, too,poorly normally we wouldn't have a range this large we are accounting for that the best case is a 50%, 60% probability outcome. the bulls, bear are 20%, 25%

outcome probability. this is not an exact science, but those are the parameters we're dealing with when we got down to 2,400, we were aggressive, we felt the downside was limited there are always things to do. as you always talk about, there's a bull market in something always that's the other part of our message, people need to be thinking about what's the next bull market. >> all right excellent. we may hear from this guy coming up now, that's an express he uses a lot, cramer does. mike wilson, thanks. we'll end today with the dow indicated up about 400 points. time for "squawk on the street." ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber coming to you live from various locations. dow futures up 400 as j&j and jpmorgan kick off earnings season with sis