there are fabulous people in w.h.o., but why don't they look and change their own direction what the president is doing is bringing attention to it so we're safer around the world the deception of china has directly led to american deaths. what's interesting to me is what media wants to glob on and try to attack the president when he's trying to make us safer and bring attention to everything. what's interesting too is china has almost a billion more people and pays 10% of what we pay. >> we're out of time but thank you, and we hope to see you again soon that does it for us. now bewe're going to toss it ov to "squawk on the street." see you tomorrow >> good thursday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber this morning, james gorman and verizon's hans vesbrg, as futures are steady philly fed lowest since 1980 housing starts down 22

it brings unemployment claims down to 22 million in the past four weeks and that essentially wipes out all the jobs created sin the financial crisis we know the dapta was going to be bad and will continue to be bad because this is reflecting periods that aren't april, and we know april will be even worse. >> right these are daunting historic we look at them, we must think about what was happening, say, in 1930, 1931. we realize that the system may hold, may not hold i think we're in a stronger position than then because they didn't have a social safety net, but these kinds of layoffs, they're extraordinary. and we are at a loss for words for them obviously, all these people are now in some way or another getting compensated this week. but i think it's not enough, and i keep thinking that the longer we don't have -- and it's not opening or closing america

the longer we don't have faith in being with each other, you're going to have to keep seeing these numbers. i have to tell you, i was hoping i never see anything like this in my life it's happening, and right now, it's no sign that it's really going to change. >> the numbers are staggering. we have braced for them but they still take your breath away when you hear carl say something or you talking about the likes of which we have simply never seen, certainly not in our lifetimes, jim. that said, there is still this focus on trying to get back to business, so to speak. however haltingly that may happen the president obviously holding calls yesterday with a lot of corporate executives in terms of trying to understand how to reopen it's very much unclear at this point that there is really a plan of what that plan would encompass for various parts of the country. jim, as you point out, though, not good news, but at least we do know there are loans going to

lots of small businesses however difficult that has been to get the money to them >> right >> and of course, you heard mccarthy talking about, you know, getting more because they're running out. and we know that unemployment benefits are for at least now quite high, so again, not good news in any way, but at least helping to soften or cushion the blow >> definitely. the unemployment insurance is the greatest thing that's what keeps it from being '30, '31, '32. in many ways, the complication for the program, the program was and is that the unemployment insurance claims are high. you get more you get more if you leave, if you think -- if you're fired or your company closes. that's been a continual problem, but people are getting money in their pockets. they're going to keep getting money in their pockets this is going to last for a long time, until every single person can be tested every day they want when they do, and hopefully the

people who are sick stay home and it lessens the odds of dying. i'm no longer saying sick. if you have a 9% mortality rate like we did in new york yesterday, you want to lessen the chances of dying you don't want to think, if i go to the movies, there's a chance i might die. i'm not being too grisly, but that was contagion that was the larry brilliant movie, the man who vanquished smallpox these are numbers that are very bad. they're not "the stand" where it was 99.7%, but we can't have that many people die by going out. >> yeah. it does feel, jim, like companies are starting to take testing into their own hands i noticed emirates doing testing with the dubai health authority for all passengers leaving out of their terminal in dubai you have amazon, bezos' letter today say they're working on testing their own employees whether they're symptomatic or not, and larry fink talking

about businesses to the degree to which they're going to be cautious take a listen. >> every business is going to be very cautious. they want to be protective of their employees. they want to make sure if their employees feel good about coming back to the office let's be clear anxiety is still very high and we hope we have the ability to reboot, but in doing so, and i know many leaders told the president yesterday we need to have adequate testing to make sure that we have a secured environment. david, maybe when we talk to james gorman later this hour, he can tell us maybe a little more about the phone call with the white house. sounds like testing was a major topic of discussion. >> it was. and in fact, hahns vesberg, also a participant as well, and he'll bow joining us shortly, the ceo of verizon i'll certainly ask him as well, guys, about that call. the question, jim, continues to

be testing you know, we want to talk about business we want to talk about the economy. but it is inextricably linked, and given all the people who were on the calls with the president, testing you can't open the economy without it >> there's good news good news that somehow continually gets misreported abbott labs has a test they have it we just have to get it more widespread they'll have a serology test for millions of people, where you're going to look at your blood and see whether you had it or not. there are naysayers saying that means nothing. if you already have it, it's like a cold. you don't get a cold immediately after that i know it's not like a cold, colds don't kill you, but we have a saliva test, swab tests, tests that are happening we need three weeks. we just need three weeks then you'regoing to have millions of people being tested.

when we get the at-home tests, we absolutely want to have america open for it. until then, you can do a lot of great planning about what happens when everybody has the abbott test, but abbott has the test it's company, it's really good it's making the test we don't seem to think it's doing a good job if you use the test wrong, you get false positives. if you use it right, you don't it's a really, really good test. this is how the 5 to 15 minute test works and the serology. let's stop taking testing, testing, testing, and start saying abbott, abbott, abbott. they've got it they're really good. they've got it >> just a matter of distribution now. >> yes >> meg tirrell reporting 4 million this month, 20 million run rate starting next month meanwhile, codiagnostics, a new saliva test which is easier to use than swabs, but your point is exactly right and germany, which is going to

start to reopen their economy on monday, is doing that largely because they started widescale testing in january >> it's going to happen. the testing, testing, teing has been answered. it's been answered by abbott labs they do a great job. and the people who were behind were the quest diagnostics and labcorp. they never were ready for this kind of surge. i think that we have to accept the fact that no one thought you would have to have worldwide -- look, nationwide blood testing every day six weeks ago. we just didn't think it. hate him or like it, it really wasn't the president's fault it wasn't. >> jim, i mean, jim, seven weeks ago, secretary azar was talking about doing a million tests a week i don't think we're there yet. or if we are, we just got there. come on. >> abbott had to develop it. they're working -- i'm saying the private sector answered the call j & j, abbott, but it's like they weren't geared up because

they weren't thinking about it they were thinking about what their business was and i'm saying if the president had called abbott labs and said you need to do this, it wouldn't be different than abbott labs just saying they're going to do it because miles white was a great ceo. that's all i'm saying. it was harder to do than we thought. it was harder to do. the tests were harder to make. because it's a really complex, horrible disease >> and to make sure that they're accurate by the way, they're going to be with us for a long time, conceivably. it's not as though you're going to get tested once >> who knows >> abbott is going to have an at-home test, and we're going to get tested every morning before you go to work the question is are you going to be honest. here, you're tested, if you're not wealthy, you go to work anyway because you're afraid of losing your paycheck but we'll have at home pregnancy tests in a couple month, that's what they call them as kind of an analogy, and that's not going to change a lot. let's not get too down the other side is if you do get

it, we haven't seemed to answer how to get out of the hospital quickly. that's the existential part that i think bothers many of us barry dill was the first person to talk about it on air. the russian roulette of life >> dillard got to the more maybe disturbing aspect, which is the second order effects you have three waves of bad news as tom lee has said this week. the covid peak, then you had initial layoffs which we talked about with claims. then you'll have the impact on landlords and people who are owed money and people who are leveraged to advertising, which in dillard's words, you're talking about 80% decline in advertising out of expedia, what does it mean for facebook and twitter and snapchat and google? >> i thought it was unbelievable $5 billion in advertising going to nothing i think people have to listen. every executive has to listen to what barry said. he didn't say we have to cut back a little bit. and he didn't say it could

damage us. he said, look, as he said it full stop, it was an incredibly sobering interview i think a lot of us wish we had it a couple weeks ago, but at least we had a bounce up in the market, but he said some industries are done. that's why i keep saying an index fund is not going to work for you because many of the industries thereat are double, so to speak, are in the index. barry told you, look, here's this great thriving industry and it ended i think he was worth listening to simply because he doesn't play for dinner. he's not lawyered. he just says it. wow. i mean, it was chilling when he said it. >> we talked about ads being down dramatically potentially. doesn't mean facebook and google are not going to thrive, guys, in many ways >> did you see the piece today >> yeah, but it's the secular -- everybody is crowding into these secular growth names, that still includes google and facebook, obviously amazon and a like. jim, you know, it's -- >> but roku was spared, david.

>> yeah, roku. no problem there >> the blue chip of our era, david. roku >> we are going to talk with verizon's hans vesberg after a short break, and we'll get to some of these calls on netflix, a o example, as goldman goes t street high for 90 back in a minute

the street." verizon this morning announcing a deal under which it will be acquiring blue jeans network that's an enterprise grade video conferencing and event platform. perhaps a well timed acquisition. price tag not announced, although hearing it perhaps is around the $400 million range. let's brin in hans vestberg, the company's ceo, who joined us about three weeks ago, of course, to talk about the ever evolving landscape in terms of our economy. hans, always good to have you.

and let me start off with this morning's acquisition. was it something you had planned previous to the crisis or is it a result of the crisis >> we actually started to have a conversation with blue jeans almost one year ago. customers going on this digital transformation and digital journey. our verizon group is serving 98% of the fortune 500s, and those discussions, of course, enterprise grade video conferences come up all the time since then, we have been testing, of course, the system for security and features and functionality, and we're starting to sell it to our customers in june 4 last year, and we continued that discussion and we came to conclusion it was even better for us to acquire it, and of course, with this covid-19, it's been accentuated, but this was very much part of

our strategy in the verizon basis group. it was part of our strategy to actually have the acquisition in our business group as well as it was ultimately video conferencing and video will be enormously important in 5g >> sure. fully understood now, of course, the importance of this business has only been, well, magnified ten fold it would seem in these last few weeks, hans. and will be with us even when conceivably we do go back to work, the importance of being able to video conference are you planning on ramping up the business quickly, or are you going to be investing, you know, are you going to be able to compete right off the bat with the likes of webx or zoom or microsoft teams and its video ability? >> no, the product is really good they have a broad array of customers. almost 15,000 customers already. and of course, some of our customers are already using it,

so yes, we will be able to as soon as the closing of this, we will be able to offer it to all of our customers and give us choices, of course, but we see bluejeans is a really good product. feature rich and all of that we're going to be build our team of our universal communication suite. it will be easy for our customers to integrate it. >> speaking of where we find ourselves right now in terms of your customers and the world, three weeks ago, you were talking about the fact that actually verizon had increased cap-x. are you still on that mode, hans have you pulled back at all at verizon in terms of spending money essentially given what we have seen right now? >> no, we are on the same path we, of course, are attending this crisis for the safety of our employees, but at the same

time, we understand how important our networks are we still have some 20,000 people on the front lines seeing that the networks are up. as i reported so many times, the surge of data and video from home and gaming has been enormous now, we have managed that with a very robust network. we're actually doing a job that is actually important for the country. we're continuing to invest, and this, of course, is a point where you make acquisitions at these times and we think it's important for companies like ours that we continue to keep this country going with the broadband and the mobility >> hans, jim always good to see you great to see verizon doing so good best stock, unbelievable stock we still care about that not just about covid i did want to ask you something. bluejeans has been around, around for 11 years. i know initially they were a bridge between different video systems, early cloud play. but what i'm trying to figure out is where will they fit in against zoom eric is a dynamic figure

i know they had security problems, put you also have to admit, they have taken america by storm and webx has the enterprise. cisco does such a good job where can this company fit in? >> first, bluejeans already has a customer base of customers all the way from small and medium to some really large enterprises. first, we're going to continue to support them, 100%. then, of course, we see an opportunity with our distribution center, remember, what we have, we're the best network, the best distribution channel, and a very great rep. that's our competitive advantages of course, if we bring in bluejeans to us, that opens up new opportunities that bluejeans didn't have bf then on top of that, i can build it into our 5g product that will be enabled with digital because so much of the low latency, the speeds, is needed to have this on the edge. so i see this as both something

we can do right now but definitely something we're also seeing for the future. >> you must feel like i did. yesterday, i was going to all the different bank conference calls. goldman sachs said something, almost every person at goldman sachs works at home. this happened overnight. bank of america, the same. if you dont appeal to these people, you're going to lose big business the world has changed in the last six weeks, hasn't it, sir we're not going to work in the same place we did six weeks ago. >> no, we're going to have a new normal i think the usage of these tools that we now have so successfully deployed in this country and we work with all these banks that basically have all their traders, everyone working from home that haas gone seamless in this country. i have to say, that also can attribute to how the country has set up the rules and regulations for investments. we have spent between $17 billion and $18 billion, that is

paying off that's why we're handling it so well in this crisis with the broadband, the mobility networks are keeping up even though we see the surge of data so i'm proud of my engineers, what they have done and what they're still doing. they're on the front lines every day to see the networks continue to hum and have high quality >> hans, i know you were on the call yesterday with the president along with many other leaders of various businesses around the country when it comes to this question that was apparently being explored of how to open up the economy, how quickly to do so, given your viewpoint and the fact you have employees all over the country, what is your sense here in terms of our ability to get back to work and what if anything came out of the call yesterday? >> i think that everyone, all the large corporations, want to open as soon as possible but on the other hand, we always understand that the most important is the safe and health

of the united states and our employees. that's number one. i think the conversation was a lot about what corporations are doing, what is the progress, and the initiatives they're doing. like verizon, we haven't closed. we need to keep it up but still keep safe and healthy for our employees. that's a gradual or staggered way of coming back to the economy will be important, and that is very different for different industries the airline industry is very different from the telecom industry so it has to be a staggered coming back to the economy both geographically and also industry-wide. i think it's clear that everyone wants to get back as soon as possible but only when you can have the safe and health of the citizens and employees. >> right you mentioned safety, of course. it's our understanding that testing did come up often during that call. is that the case were a lot of other ceos or perhaps you as well saying hey,

we need more testing before we can open up this economy >> i think that was sort of a discussion what will be needed for coming back 100% the testing is important vaccine is important so a lot around that, and i was on the call with ceos who talked about what they're doing and where they are in testing and vaccine and all of that. i think, again, it was a call to be sharing what different industries are doing in order to make this what the private sector need to do to help this coming back to a new normal in this economy >> hey, hans it's carl. there are a lot of conspiracy theories around the world about the relationship between 5g and the virus. i just wonder, can you comment on some of those, as crazy as they may sound and is there political risk to 5g embedded in that?

>> there's no correlation at all between 5g and coronavirus it's just fake news. we have seen some of those articles coming out here and there, but we need to be very clear that there's no correlation in between the two and we are going to combat that with our communication and the industry's communication and with the health organization's communication. >> hans, i asked you three weeks ago what you were seeing from your customer base in terms of churn, in terms of inability to pay. you said it was too early. what are you seeing now three weeks later? >> it's still too early because i have an earnings call next week, so i need to wait until i call them. but again, what i said all the time before, we have seen areas where we have surge, where of course, a lot of enterprises need to move their traffic to home, et cetera. on the other hand, we have an unemployment we have never seen

in this country. of course, that is impacting people's ability to pay. on the other hand, we already have america connected as a principle, meaning we're not disconnecting any resident a or resident b for late payments or anything like that, and that's the right thing to do in this time it's an unprecedented time, a crisis that doesn't have a label, but you need to think about the society and customers in this as well. >> yeah. all right, here's a question that i would typically ask you not just -- not -- in another time, which is since you last came on, t-mobile and sprint finally finalized their deal they're now one company, apparently competing very hard in 5g. there are those who continue to say your alliance in millimeter wave spectrum for your 5g is not going to cut it, hans, and they're in a much better spectrum position at t-mobile. how do you respond to those criticisms, and how do you see the competition evolving now that there are three big players in the u.s.?

>> first of all, it's no surprise it has been in the works for two years so it's no surprise they came together. i think we feel really good about our assets i want to remind you what we have said. this year, we're basing on five times more 5g stations number two, we'll have more than 60 cities powered. we'll also do national coverage this year. i feel we're in a very good spot with 5g. remember, we were first with 5g home, first with 5g mobile phone. i think my team is doing an enormous job and we're not going to let that lead fail. so we're going to continue to execute, and you heard about that, so i feel good about what our team is doing. competition is always going to be there >> in terms of the 5g cycle itself, hans, has it been slowed down because of what's going on? you have a lot of your stores

closed i assume people can still buy phones online, but is the cycle itself been thrown off because of the virus >> of course it's slowed down when you only have 30% of our stores open and we serve critical needs only that we can say. i don't think i take anything away from the 5g cycle that is so exciting and many people really would like to have it and remember, it's business cases for enterprises, for society, for home broadband, and for mobility there are many different users of 5g assets rolling out right now. >> hans, always appreciate you joining us hans vestberg, ceo of verizon, which today announced its aczishz or definitive agreement to acquire the conferencing company bluejeans network. thank you, hans. >> all right, guys

looks like we're going to get the opening bell here in a couple minutes and we'll look forward to our next interview with james gorman, jim, who according to the headlines on the conference call, addressed a number of questions about margin calls, trading activity, the degree to which his peers may or may not delay their financial targets, which is clearly in focus for morgan stanley >> look, i think morgan stanley has a different model. how many times does james gorman have to do things that says listen, i am not one of these big banks that can get you in trouble. and yet it still trades with the others maybe today could be a deciding point. maybe when people realize when they combine with etrade, it will be different. so far, one in the same. a basket of corn, and it's got to get separate. i think that's what he's trying to do. >> interesting oil is the other interesting dynamic today, jim, as we know going into the teens yesterday, bloomberg has a piece up this morning that says the u.s. is considering a plan in which they

would pay u.s. producers not to extract the crude, leave it in the ground, and deliver it at some later date. that's sort of where we are. >> i had matt gallagher on, one of the largest producers in the permian, and he said that's a cheap way to save hundreds of thousands of jobs. may be the cheapest way. and he said it should certainly be on the table. i don't know whether the president is going to go forward with that, but that is a very quick way to be able to save at least 300,000 jobs there's some green always good to see green >> yeah. filling in a bit here, jim we should take -- we should take note amazon is going to remain a story all week long. bezos' shareholder letter is out. talks about boosting wages, cragging down on price gouging, working safety, collaborating, jim, with the w.h.o. and also the journal with some

tidbits about how amazon, because their traffic is already so monumental, they have started to take the pedal off the gas in terms of advertising on google and price promotion because they're trying to limit the orders to goods that people actually need, not goods that you don't necessarily need right away >> has amazon not become a country during this period putting a lot of people to work, far flung into many different businesses it's got social policy, it's international diplomacy with france i find this is one, not only did alphabet become a casualty of this, i think, but amazon has become a huge beneficiary of this period. i mentioned alphabet because they said yesterday they're slowing down their hiring. amazon increasing their hiring amazon is -- it's either the grim reaper for everyone or the greatest thing that's ever happened to the american consumer, or maybe both.

>> maybe both. that's the way people talked about walmart. >> we hired more americans in the last ten years than any other business >> yeah. >> they're a juggernaut that just wipes out everybody you know, david, remember, david, the best interview you have done, not that you haven't done many that are great, but the desks are. when malone said it, it crystallized everything to me because what it says is if amazon is like china, china decided we're going to target that industry and wiped out the gift wrap industry, amazon is like that. they can target an industry and they can basically, like, look what they're doing to the drugstores i mean, there isn't now that you can buy where it doesn't tell you you can have a subscription to it and never think about it again. okay, fine, i'll take a subscription these are things i used to go to walgreens for all the time now, you know, you can't pay me to go to walgreenwalgreens. >> no, amazon, it's funny. we talk about amazon now, and we

have for some time, but even more so in the last five, six weeks. as we once did a decade or more ago about walmart, which continues to be the largest single private employer, i believe, in the country, but amazon quickly climbing those ranks. we have also, though, been talking about the advertising business i don't want people to misinterpret things i said earlier. facebook and google and amazon l of which rely on advertising, amazon less so in its advertising business, but it's high margin, those numbers will be down sharply. you pointed out, carl did, that amazon is buying fewer ads on the google platform. cpms will be down across the board big time there's no doubt about that. we'll see what it means for the financial performance of these companies, but jim, there are also people who look at the google decision to hire fewer people, to slow their rate of growth and go back to the '08-'09 period where they also cut operating expenses and benefitted a lot at the time

from having done so. >> i said last night, don't necessarily think it's bad for alphabet for the stock that they're not hiring or they're slowing down the hiring because they have spent way too much and a lot of people feel they haven't given a good return. we want google cloud's services to get more people, but the rest is not clear at the same time, barry diller did crystallize what is going on, which is when you -- i mean, i was thinking about going to see my daughter in madrid. i know i mean, whoever thinks that's something you would ever do, but she's in madrid. and i was looking up, emirates has a flight where they take your temperature and this and that you can go through uae, and i'm thinking this is ridiculous. where is the five ads about the flight to madrid they're all gone there's like no ads for flights. frontier, which went belly up, they had, what, a 1 cent round trip to california thing i mean, i'm not kidding. if you look at the ads, if you

want to try to go somewhere, forget it. that whole industry is on hold, full stop. >> it is on hold and to your point, ual this morning saying for may, they're going to cut 90% of their flights, carl. i think i saw that properly. 90%. i mean, hard to imagine, but a lot fewer planes will be in the air for quite some time. and the question of the bailout already yesterday, fast forwarding to the fall, you guys had, of course, doug parker on yesterday. but you know, will there have to be another bailout for the airlines come the fall how quickly can things rebound when you have cut 90% of your flights? >> i have a group of young people -- i said to our mad money team yesterday, let's go to california. they looked at me like -- well, let's just go sit in the electric bleachers >> a line out of mun yeez was

amazing. we expect to fly fewer people in the entire month of may than on a single day in may of 2019. david mentions the 90% cut to the schedule they're warning of possible job cuts cowen has a report out today where they don't see, in their words, a robust return to air travel for at least three to five years and now there's so many assumptions in there, too, jim if we got widescale vaccines in 18 months, you know, that model would like lee change dramatically, but that's what they have to go with for now >> i just want the tests you just have a test you go 15 minutes early. you get the test and if you have it, and even if you're asymptomatic and you are it, you can't go i want the planes to have ultra violet light which does kill it. i want them to be wiped down, and i'm ready to travel. i'm not kidding, i'm ready to travel >> really? >> absolutely. >> what are all these tests? >> jim, you said you don't want to go to walgreens

>> that's different. i don't want to go to walgreens because i don't like walgreens why do i have to go to walgreens? everything comes to my house now. i have to go to walgreens, look at all the things i don't want there's the edge -- i'm in there for the edge shaving cream there's something i have to unlock something in order to be able to get the blades and pull that person over no amazon it comes come on, have you ever been to a drugstore? you know everything is under plastic now and you have to say, hey, there's nobody there, help me, help me, i want to buy blades for $48 with plastic that's going to end up in the pacific. >> we all went to the blades getting delivered to your home years ago because of that. yeah, i get it but jim, you keep mentioning testing, you keep mentioning abbott and the ability to do tests quickly and everybody is going to do it, and maybe before you go in an office building and certainly before you to a sporting event what's that all going to cost? >> a lot

it doesn't matter. it's the new kind of -- maybe everything else goes down in price. i mean, maybe everybody else has to make less money maybe a hotel room in the magic kingdom is going to cost $59 a night. i don't know it's going to make it up somewhere, but won't you feel great knowing everybody has been tested who is around you >> without a doubt >> that's what's going to change >> in some ways you wonder whether the period that's coming is going to be ininflationary, t to mention all the money that's been added and what the fed is doing, or as you're pointing out, deflashary. how are you going to do it in a restaurant when you're half full are you going to double prices >> geez, you were at my house last night inthis is what we were talking about if we can only have half the number of people in a restaurant, can we charge twice? can you charge $12 for a modelo. and i don't know how we can get away with it, but we have to in

order to get to the profitability we had >> this is why we asked doug parker yesterday what break even load factor is on a plane if you take out the middle seat i mean, at a concert, at a broadway show, at a restaurant as you know better than most, yeah, the pricing dynamics with limited capacity are a huge question, which brings us kind of to kevin johnson's letter to employees this morning, jim. ceo of starbucks, talking about looking at ways in which they can open some stores in the united states with that china playbook already in their pocket >> their china playbook is so good that why i'm telling people to buy this in my travel trust. the fact is that their business is very good in china. they're going to be able to come back quickly i think part and parcel with this is who has the balance sheet. does the little coffee shop have the balance sheet to go against starbucks? does anyone have the ability to go up against, say, i don't know, a darden i find it really unnerving to

realize that i love to go to nice restaurant david and i have gone to. i go there for my anniversary with my wife the tables are packed, very expensi expensive. if you take out half the tables, i don't know how much they can make i don't know, david. you have been there. how do you make money at that place? it will be $2,000 a plate. >> i can't wait to get back. that said, they do separate us because we make so much noise, jim, and we're pretty far away from everybody >> i forgot. we were practicing -- we were practicing physical distancing because you're so loud >> i'm so loud yeah, right. uh-huh i'm sure everybody believes that one. listen, your point is a good one. so many things are going to change >> yeah. >> at least initially prior to there being a widespread vaccine

or this thing finally being eradicated >> let me ask you a question >> carl, you go to costco, right? >> yes >> okay, so costco increased its dividend last night 7% really big increase. you go to costco they now have physical separation there's a line they have a race track that you have to go costco has the lowest prices, but i feel great about that. i feel great because in the absence of the blood test, at least i know that costco has got everything under control for me and it's not fearful when i go into a little store, i worry there's too many people close to me, and now, i'm sure there's people out west who say cramer, why don't you wear a rubber suit? all the stuff we have been attacked for, but i listen to fauci. he wants distancing. even the president has distancing with those chairs i say i want to go to costco because they abide by it i think that dividend increase is part and parcel about why they're going to make a lot of money, because people want to go to a safe store. until we can test.

>> yeah. yeah three big hikes. j & j, proctor, and costco, all this week. >> there's your buy list >> did you hear fauci on snapchat talking about how major league baseball and the nfl could salvage the season with stadiums that are empty. you put the players in a hotel they can't go anywhere they're tested every day, and now "the washington post" says the nfl is considering some contingency plans that include maybe playing to an empty stadium or one that is half full >> there's a plan i know of apparently where they start on thanksgiving and you would play each team in your division, and they would have a limited number of people go i hope they don't jack up the price too much for those, but yeah, they're not going to try to miss that season. they have to have continuity they have to have continuity to play, though what am i concerned -- i understand baseball, not anything you can just tag you're it or something, but football is

hard to have social distancing while you're driving a guy into the ground i don't know how it's going to work any ideas? i ought to ask fauci he was a point guard a good point guard, apparently what were his numbers? >> i don't know what his numbers were for 79 years old, he looks pretty good. >> he ran the marine marathon. >> the guy is amazing. you have to hand it to the guy he makes all of us 5'7" people feel great >> amen. >> when it comes to sports, guys -- yeah, jim, i think you have a special guest for us. take it away >> a treat one of the guys who actually had covid, came right back, didn't talk about it other than to say he's back and doing a good job that's what he is. this is on the phone is morgan stanley's chairman and ceo james gorman congratulations on going through an illness and also putting up a good quarter at the same time. >> well, thank you, item it's been -- it's been an

interesting couple months, but you know, i was one of the fortunate people who was not hospitalized or in serious danger and my heart just goes out to those folks and their families, and you know, the tremendous tragedy that so many people have gone through >> let's talk about what's happening in this industry you have worked mightily to make it so you're asset light or even making a terrific acquisition of a company that is a different kind -- that's a customer-facing interface that is terrific and dovetails with absolutely no loss of clients that i can believe with you guys. and yet at the same time y have watched your stock trade as if it is just another bank once again. i don't know what -- what can you do your characteristics, etrade's characteristics are very different from the cohort you're in >> well, i think, you know, i think that is a great observation, one i make to myself and probably much anybody who will listen to me many, many times a day. you know, we think we have

radically changed the profile of this company, the risk profile i think you just saw that in the earnings we generated, you know, 8.5%, rotcs over 9%. really solid quarter given the environment, and that's before we have etrade i mean, i think etrade just further stabilizes the organization, gives us more power in the wealth management side and brings incredible technology you know, in time, listen, the market will adjust we just need to see -- get through this crisis. obviously, we came through the '08 crisis that was scary this is completely different the firm is in really strong financial health i think the market wants to see that, see the etrade deal close, which we're excited about in the fourth quarter, and then we're off to the races it will come, jim. one has to be more patient than we probably all want to be >> now, you are experienced when there's big downturns the first

thing the big brokerage companies do is fire a lot of people what's your plan >> i came out publicly a few weeks ago and said we were not going to fire people this year you know, we think our employees have done an amazing job we have 90% of them working from home they're under enormous personal, you know, stress, and with everything that's going on in the virus and with the economy so we thought it's just the right thing to do to tell them for this year at least, and hopefully for much longer, there will be no riffs here. we're standing by our employees. and honestly, i just got off a shareholder call, i think that's a shareholder friendly thing to do you want to build great cultures, great loyalties people are proud to be associated with, and this was a no-brainer. unanimous vote of the operating committee. we get to the end of the year, hopefully this thing has stabilized a little bit, meaning the markets, the economic environment we're in, and we

won't go into a riff we're going to be building this business >> james, it's david you know, you mentioned, of course, the '08-'09 period and this is unlike anything we have really seen. so what do you do? it's so impossible to predict the future day-to-day let alone six months from now. what are the key things you have to be focused on at morgan stanley that you know are must-dos even though you don't know what's coming >> a great question, david and good to catch up with you. listen, the first thing is the plan has to work we're the number one equities house in the world we're managing, you know, $2.5 trillion of client assets and wealth management, arguably number one or two in the world we have a very strong respectful fixed income business with trading all over the world and banking asset management the plan has to work when clients put trades in, when they're looking for morgan

stanley, it has to work. if you told me three months ago we could have 90% of employees out of the office and be functioning with the volumes we have had, and we had our ten biggest days on record consecutive ten biggest days and i thinkthere were each more than 50% bigger than the last biggest day, i would have said the probability of that being pulled off is close to zero, but it happened. so number one, focus on the plans, which we're doing number two, obviously risk we're all over it, every position, every client situation. you know, and the retail side, the margin book has held up. the mortgage book unbelievably well we're careful. we came into this conservative third thing is you manage liquidity, which we have done. and we also went to the market in the last couple weeks, did some funding and then, you know, fourly, make sure the organization is talking to each other. we're in the middle of a war now, and our operating committee has been doing daily calls

we're constantly on the phone with the board we're very connected, and i think the beauty is almost all of this team were together in very different jobs, more junior roles, most of them, back in '08. we had 12 years of working together as an operating committee, and there's great, great communication between the team >> james, again, back to this point of we can't predict exactly what the numbers are going to look like or what the future will look like, but we could see a 30% down gdp number. you mentioned that in the call we could also see an economy that is slow to get back on its feet is that what you're planning for? there are those who still believe we're going to have a v. are you expecting that as a possibility or are you more in the camp that it's going to be a u? >> listen, we all love to -- we all love to wish and to hope you know, i wish, i hope for a v. do i expect one? no, i don't.

you can't have this kind of dislocation and expect people to bounce immediately i mean, just -- i'm in new york city i know you guys are. and or you're in the region here in new jersey, new york. it's shut down this is not going to turn on a dime we're not going to down. this is not going to turn on a dime we're not going to get to the point where everybody is just on the subway in one day. to get consumers and small businesses back and to get everybody feeling like the world is stable again, that's going to take months. that's not going to take days. so your best case is some sort of "u" recovery. and i think if i were a betting man, if it's a "u" or "l", i would say through the end of next year we're going to be working through the global recession. >> an excellent piece by your firm today rising dividend risk, you firms react to a cut this morning in the new york times as banks pay dividends the

fed faces questions. i want to read these things. one of the reasons why people are worried about all banks including morgan stanley it's in the air that you may have to suspend, cancel your dividend, even if particularly in your case, because of the way you run an asset-like book, it would make no sense. >> yeah. jim, obviously this is being debated everywhere and what's the right thing to do by society and by your shareholders and for stability of the system. we voluntarily, we --i'm takin about the large eight banks in the country under the umbrella of the financial services forum, we voluntarily shut down our buybacks and we did that not because we had capital issues we just thought it was the right thing to do to use that balance sheet and capital basis to support clients in need during this period of time. that was 70% of capital distribution dividends of 30 %.

our quarterly dividend is $0.35 a quarter. we just hit in a very, very, very difficult environment, a dollar so we've done almost three quarters of dividends just in this quarter so there is no capital argument as to why banks should shut down their dividends. there's no sort of is it the right thing to do or not the right thing? it'sa balance here in terms of shareholders we have millions of shareholders across this country who own large bank stocks. they depend upon their dividend for income this is the piece being lost in the discussion it doesn't make that much difference to the banks but to the individual shareholders, that income coming in in this time when many people's income is dried up, i think that's essential. i don't understand the argument why you would stop that income simply because you can if you needed to because the banks were short, that's different, but they're not they're not remotely close to it >> it is incredible how the government seems to forget there's no money -- if you're

retired or elderly, fixed income, the only way to get any is from banks like yours now, i want to talk about e-trade. i was excited when this deal came through i sense there's a group of younger people that are interested in stocks they saw what happened with alphabet and tesla they understood that if they bought amazon they'd do better than index fund. what's the book of business these younger people are doing and why are you so drawn to having them? >> listen, i'll talk about e-trade at a couple different levels by the way, they've held up unbelievably well during this crisis, jim. their plant which is where i started the call, it's held up great. they're a terrific talented management team. and we're really excited to have them join us in the fourth quarter. but listen, they've also got one of the country's biggest stock plan businesses. so do we that combined business will have almost 600 billion in plans.

people accumulate wealth through their workplace overwhelmingly this gives us access to that at a scale that we weren't barely in a couple years ago. number two, there is this huge demographic of millennials and next generation that are obviously dealing their financial services whether it's through credit or payments, or for investments or research, they're doing it all digitally we need world class digital capability these guys bring us that for our existing clients and for a time like now when everyone is dealing remotely, it's a huge positive to our platform e-trade also has its own unique client segments and a heavy trading segment which we welcome. we had that in our institutional business you know, somebody asked me the other day how i felt about the deal a couple months on with this crisis. i feel more strongly about this deal than the day we did it. we bought it stock for stock the company is a great company

it's performed under massive stress, and honestly, it augments our technology platform in a way that would take us years to do. >> james, i doubt you're going to tell us a lot about the phone call with the white house yesterday, but the reporting suggests testing was a big topic. is there any color on that you can share and do you enjoivision scenarios have they bring employee testing in-house as a way to manage the employees coming back into the office? >> good to see you and thanks you guys. testing, you know, i won't talk about it it wasn't open to the media. so it's not my job but testing was clearly something that many of the ceos are focussed on. i was traveling internationally a few weeks before this crisis occurred, and it was just starting up, and there was some companies there were doing temperature checks on people

coming into the building back then this was beginning of march. so i think the ideal is take temperature checks have people who have been through the barracks like myself go back to work. whether you do it at the place of work doesn't feel to me like the right way to do it i think this is something that should be done through the health care system but i think over time employees and visitors to buildings are going to want to know what the people sitting next to them have been through or not been through and their state of health. i think that's a reasonable expectation, and particularly for those who have elderly parents or people with immune issues in their families at home that's a reasonable thing to expect so yes, testing both before, testing to make sure you've got it, and then testing to make sure you've got rid of it are clearly top priorities from my

perspective. >> james, thank you so much for coming on. i'm so glad you're safe and doing well that's james gorman, ceo of morgan stanley with a good quarter and a very tough group great to talk to you >> jim, always good to hear from him. ceo communicators, he's in the top echelon. a lot of candor there. >> the fact that the easiest call to make is he's not going to lay off people. the fact that those of us who know him, he had the illness if you can have illness with grace, that's what that man did. i like the combination very much, but it is a very big quanda quandary it's a huge etf and he has a find a way to fight out of the etf. his model is less dangerous. look at how much he made basically in an annuity stream and even more once they merge with e-trade how could you be worried about

that dividend? i hope he wouldn't be covered by sweeping banks have no dividend policy, but i think he would be. i don't know how he gets out of that i don't. he's fin tech. i don't know >> yeah. i mean, wealth majority, i did unfortunately -- well, not unfortunately. i was happy to have them i didn't get to ask about wealth management in terms of what they're seeing among their client base. an important component of their overall earnings $4 billion was the revenue number 4.4 billion a year ago pretax income, 1.1 billion in the last reportable quarter. that's not part of the conversation anymore given how difficult it is to figure out the future gorman admitted that i thought saying he sees it as a "u" or potentially an "l" recovery >> that's the fear bill ackman, march 23rd was that

day. take a look on the charts and you see that was the "l" day i think a lot of people have come back to either a "u" or a fear of a "w" if we go back too soon i feel like if i can't ever mention the word testing again that's all people talk about and the mortality rate there was one day in new york that spiked but the mortality rates in general are higher than people thought even, say, six weeks ago, and i don't want to extrapolate too much what happened yesterday in new york it was wild high but it is part of the equation when you hear mr. gorman come on and speak, and he sounds like he did before, i found it reassuring maybe it's the slim reading but it's nice to see a guy back at work >> indeed. jim, highly transmissable, and relatively fatal for sure. jim, what's on mad tonight >> one of the greatest insurance companies in the world is chubb.

let's find out what they're thinking mike -- a testing company, agilent because testing is the solution i think we're not as far away as people think the vaccine, sadly, i think we're far away working on it. >> see you tonight 6:00 p.m "mad money". to everybody, good thursday morning. i'm carl quintanilla with sara eisen and david faber. the s&p is in the red as the data continues to roll in negative housing starts, jobless claims and others this morning that are historic in many ways. watching oil as well even as we get guidelines, sara, out of germany, north dakota now that are basically looking at way to open their economies beginning the first of may >> president trump hosting a call with governors to talk about the reopening and what it

can look like. we've got to hit the unemployment figures another shocking report. let's turn straight to steve liesman on the jobless claims data this morning. totaling now 22 million over the last month >> yeah. really shocking. grotesque in the words of one economist, and the data is unprecedented across the board manufacturing data we got this morning. housing data and the jobless claims number. let me show you the three data reports we had today jobless claims 5.2 million totaling 22 million. we'll show you that in a second. worse than expectations. philly fed minus 56. the worst since the eights housing starts down 22 .3% we haven't seen a number like that since 1983. now, let's look at the last four weeks of jobless claims and what you see is you have that initial blip up 282. and then it really started to skyrocket. it really unbelievable numbers

totaling 22 plus million in the last several weeks here. now, these claims numbers are interesting in the sense that on the one hand they show where -- who has been hardest hit and how much but also the ability of states to process claims. you can see that when you look at the state detail data california has done it looks like the best job or among the best jobs of the states in taking in the claims and they went down. they were up near a million in the last week. now they're down to 660. new york lagged behind they're up now 396 you can expect new york has a lot of catchup to do georgia has been hard hit or done a fabulous job processing claims we don't know the difference but they're down now after really being among the best states in terms of claim processing texas is down. we don't know what's going on there. pennsylvania also has done a very good job. they're down as well

some of the commentary we received, pantheon saying it's prote grotesque, but the peak of claims they say has passed sara, i'mseeing estimates that these claims numbers when you put them together and try to figure out the unemployment rate is going to be north of 20%, and now there's a race can we get the economy back open, keep people healthy as well as keep these claims numbers from becoming temporary layoffs, from becoming permanent layoffs? >> yeah. bring those jobs back quickly. steve, how do we make sense of these numbers with the rollout of the ppp, the government relief plan, the small business payment protection plan, and all the other measures intended to keep workers still on the payroll? >> well, i mean, i think you can say that at least initially it hasn't had its intended effects

in that these numbers that claims are very high right now it may be that some employers kept from laying off workers in anticipation of these loans. we know that they -- the treasury and the sbf have done a good job in taking in applications we believe all the money now is spoken for, however, it's not dispersed. you would expect companies would not bring people back until they have the money in hand so hopefully these ppp programs will work prospectively, keep additional layoffs from happening. keep people from going from unemployment claims, bringing them back to the employed ranks. but there's still time that has to play out here, and this money has to get dispersed from the banks. there are still some issues there we've been reporting plus clearly it's not enough and there's discussion about expanding the ppp program. and we'll see over time if these programs can keep down the unemployment rate. it hasn't worked so far.

>> steve, thank you. let's stick with the market reaction bring in mona mahajan and tom lee. tom, the market is barely moving s&p is down half a percent stocks have discounted this bad news on the economy, but what's in the market as far as whether or not these jobs come back and how quickly the economy recovers >> i mean, that's -- that's what the stock market is trying to discount, because i think there are three waves to this crisis we've had the co-vid case crisis, and now we have the first wave of social distancing company victims and now we're going to see how the asset owners react so there's a lot of information to discount. u by think -- but i think it's good news that we aren't getting just awful data and the stock market unlike early march, it's not in a free fall

i think the market is starting to look through this and think, you know, 2020 earnings are kind of a write off, and even if it's a slow recovery, stocks generally recover almost 12 months before gdp. i think we're seeing a pretty typical bottoming of the market and a removal. >> tom, i know you've had some particularly good and timely calls lately when it comes to the recent action. bring us up to speed on where you are, what your performance has been and what you're calling for now? >> yeah. i mean, i don't think we've -- we can give ourselves great marks for this, because it's really been so hard to adjust to what's happening because this paendemic is moving so quickly i think what's been really notable is we recovered 2800 on the s&p. that's a 50% retracement since 1929 there have been ten

declines of over 30% whenever you recover that halfway mark, 50% of losses you don't make a new low i think the stock market has really bottomed. i'm saying this realizing there's a lot of uncertainty, and i think logic says there's so much bad news ahead, how can the stock market be looking ahead? i think part of it is the policy makers did a really good job of really acting quickly. and we know the central banks have intervened and supported the markets in a way that's provided and tampering volatility i think that's why -- i know it sounds strange, but we are really in a bull market, and i think recovering the 28 00 is a big deal i don't think we revisit 22 00 >> it sounds strange and it's out of consensus mona, what do you think about that call if you're keeping track in s&p is down 18% from the highs. that's technically out of that bear market phase and a lot better than where we looked in march. absolutely look, we're down 14% year to

date we rebounded about 24% off the lows retraced nearly 50% of the losses in march. that being said, we do think some of this may have come too far too fast we really were driven by ne, the virus and the health issues. perhaps stabilizing here that's good news the stimulused fr from the fed kwiekly. to us the risk reward doesn't seem as compelling we're facing key unknowns ahead of us. what does the reopening of the economy look like, especially now with an unemployment rate close to 18% after this morning's jobless claims numbers. and a consumer that's really quite cautious, still. keep in mind this u.s. economy is driven by consumption and the u.s. consumer. we see a bottoming process ahead of us between now and the june time frame where we agree is we may not

retest the low given the nature of the stimulus that's been nearly 40% of gdp in the u.s to watch is the 24 00 in the s&p. that 10% to 15% perhaps downside but we do continue to believe that this type of retest does provide opportunities. how do you position in sectors we see thriving in a coapost covid-19 world >> what are the recommendations there? give us your top three picks maybe. >> again, we always talk about the barbell approach on one hand of the barbell, we like defensive asset gold, ig the post co-vid positioning includes things like the online retail and delivery services technology trends. 5g cloud computing, cyber security. especially for companies looking at a more work from home work force, and then really

fundamental shifts in the health care states. telemedicine, pharmaceuticals, trends toward testing equipment in an on demand fashion. we're starting to see interesting positioning and we're seeing some of it reflected already in the s&p with tech and health care two of the outperformers thus far we continue to feel like while we will get a bottoming process, there are ways to position yourself to outperform and really benefit from this >> tom, when i hear you talk at least somewhat bullishly, what are you using in terms of a 21 number for s&p earnings? what kind of multiples are you assuming here? james gorman joined us just moments ago talking about in his view at least, the likelihood of a "u" or even "l" in terms of the recovery, so to speak. that doesn't necessarily point to strong earnings for 2021. >> yes i agree. i think we should look at 2021 and say there's a lot of

uncertainty. and so it's safe tore say it's going to be an "l", or "w", or "u "u", but we think earnings will rebound quickly in the u.s but could it be as high as 170 next year? and when people look at the velocity of that recovery they'll want a higher multiple you could see people talk about 20 times 2021. the reason the rebound could happen quickly is so many of the companies that are social distance victims, they can restart quickly. they already have their legal entity in place. they just have to see how customers come back and remember, they're employee intensive businesses if they can rehire at more optimized wages, that means they're operating leverage is quite high i'm not trying to say that they're going to hire people at

low wages, but they can optimize their labor structure. i think businesses will do quite well on the other side of this >> it sounds like you're making a distinction between big business and small business. if you get a recovery in earnings if small business is flat on its back which is half the employment in this country >> sara, you're right. the economy is really complex. we took a look at the median income of where the job losses have been so far and if you talk about something as high as 20 million of the social distance companies losing the work force which is close to 50% of the work force there, the effect on overall personal income is only 6%, because the median income is much lower. it's typically for young people. unemployment even at full employment is around 20% we're not talking about as much damage to labor force. but you're right i mean, small business produces jobs

they're really important company but they often only produce enough income for the business's owner. they're not companies that generate enough income to expand so i think yeah, it's a really important distinction, but stocks recover 12 months before gdp recovers i think the market is going to make a v-shaped recovery it's happened ten out of ten times. typically it takes two and a half times to make a new high as it did to fall if we fell over six weeks, the market should be making a new high this year i know it sounds illogical it doesn't sound intuitive, but that's what market history tells us >> well, we'll hold you to it. tom, thank you mona, thank you. >> thank you dow down 276 when we come back we'll talk to a doctor working on the first saliva-based coronavirus test. we'll take a quick break and be back in monta me - [narrator] at southern new hampshire university,

we're committed to making college more affordable. that's why we're keeping our tuition the same through the year 2021. - [woman] i knew snhu was the place for me when i saw how affordable it was. - [narrator] find your degree at snhu.edu.

welcome back to "squawk on the street." want to note for our viewers that as of 8:45 a.m. today, the sba, small business administration reporting there have been over 1.637 million applications under the ppp program. totaling $339 billion. 49 00 lending institutions what does that mean?

they've hit their limit. they're at the limit in terms of what they can actually lend. they need a new authorization from congress, a new allocation from congress to go beyond that. did want to mention basically ppp at its limit we've been talking about the reopening of the economy here in the u.s. and how reliant that will be on testing testing,testing, testing certainly seems to be many -- what many people talk about as needed if we're going to do it let's bring in arthur brooks dr. arthur brooks, director of technology and development at rucdr and also rutgers professor as well. andrew brooks. dr. brooks, my understanding that you are going to be introducing a saliva-based test for covid-19 when and how successful do you believe it will be in determining whether the virus is

present in the person who takes that test? >> yes we've already released the test. we got our eua approval last friday we've been running the test from the time we submitted our data packet for review to the fda we feel this is a big difference compared to swabs given that the collection is easier it does not put a health care professional at risk it saves ppe it can be done in a couple of minutes. the collection device is not uncliek the device you use for some of the direct to consumer -- we're collecting 2 mls of saliva versus the end of a q tip. the amount of material allows us to detect more virus more sensitively. >> when you speak to health professionals on the front lines, they'll tell you whether plenty of false negatives and

false positives with the swab test do you feel your test is more accurate >> i think a lot of the tests out there are accurate the data being reported with false negatives is not from patients being presented or tested on the same day what i've heard and seen is that someone has symptoms, they get tested it's negative. a day and a half later they feel terrible still, go and see their doctor, get tested again and it's positive. everyone's infectious journey with covid-19 is different we've seen patients that are very sick that have lower viral load than a patient that might be complaining of a headache so repeated testing i think is what's going on important when we talk about getting people back to work and monitoring this with respect to viral shedding and whether they're infectious or not >> how quickly can you ramp up the testing? what are the numbers that you sort of see potentially being able to reach in terms of the saliva-based system? >> it's a great question what the saliva collection does

is enables more tests to be collected every day, and in a safe way and the bottle neck is back to the lab. so access to reagents and instrumentation will potentially become the limiting factor the samples are stable and the preservation agent and the saliva solution, but people want to know and we have to know in order to make health care decisions. we got a call from the white house after the eua approval asking the exact questions what barriers can we remove to make sure there are no bottle necks downstream now that we've alleviating a big problem. and after that we got phone calls from the largest science companies in the world asking some of the same questions obviously they understand the issue. and now we're all working together to make sure that those reagent instruments are provided with the government's support in some areas to increase capacity.

>> as far as i understand it, doctor brooks, the fda is saying this test should be performed in a health care testing under the supervision of a trained health care professional. is that the case, and if so, how do you serve companies that want to buy a lot of tests and administer them to employees in their own homes? >> right a lot of people are interpreting health care setting and supervised collection in different ways there are a lot of telemedicine companies that can meet both of the requirements but the fda has been very clear about home testing and self-testing which this is not they've expanded that to include home collection. we're working with the fda now and we are submitting data that after being reviewed by the fda will allow for home testing. certainly we wait on their

review and their comments and their approval, but once we provide some data around the safety associated with collection and the stability of the sample, we think we can work together in a short period of time to get kits into people's homes. it will certainly have to be physician prescribed physician reported there are many platforms that can do that. but that's how we're going to do it once we get the fda approval or eua extension, the devices will then be able to send to people's homes to get companies tested and get them the data they need to get back to work. >> you know, we just keep reading about countries like germany and south korea and iceland that are putting mass testing at scale they're being praised for doing it and getting this virus under control. i don't understand how we talk to so many companies like yours where there are 300, i've counted, at least test developers working on these kind of tests, at least 34 emergency

authorizations from the fda, and yet, we have such limited testing capacity in this country relative to europe and asia. >> i don't disagree. i think as a community, we were not prepared in fact, our lab is doing this kind of testing. this is not our regular business we have turned our entire lab 200 technicians, all of our resources toward contributing here this was not our core business a month and a half ago and i think that that's going to require other labs to do the same also the testing for something like this has never been considered at scale. when we developed our approach, we made it such that there's nothing proprietary. they're all individual commercial partners and we built that platform. what we've seen can be rolled out in any clinical lab or commercial lab and we're happy to help them and are fielding lots of calls in

order to grow scale not only in our own lab but across the country. >> you mentioned reagents and access to reagents and/or other raw materials. for a number of tests out there. is that going to be an issue access to these reagents, and/or a shortage of things needed to process the test >> yeah. we've critically looked at the supply chain, and we've worked with our vendors i don't think that's going to be an issue moving forward. i think instrumentation that's required is coming online that was not a couple weeks ago but reagents are now being produced in quantities that will truly help alleviate this issue. i think at the end of the day, given this kind of test, it's going to be people power, so we are actively bringing on and training additional technicians to support this. our environment is highly automated. we've miniaturized it a bit so we can process up to 10,000

samples a day now. and we're going to add increments of 10,000 but that same strategy is going to have to be used in other labs for us to make a dent. but i don't see especially with the white house's task force directly involved with some of these partners that those reagents are going to become a critical issue >> so obviously the huge innovation here is the saliva, the spit test which you're tracking for active virus. are you also working on a test that would be a spit test for immunity which our country desperately needs to happen in an easy to use and accurate fashion? >> we are. and as you've seen and as has been reported, a lot of the self-testing or finger trick tests have been extremely unreliable we've been looking at them doing parallel studies in patients with traditional means we're working on spinning up two

traditional enzyme linked amino acid platforms that will have some scale limitations given it uses tradition gnal automation we're excited about being able to look at antibody in saliva. imagine collecting onesaliva sample and looking at viral load as well as immunity and being able to do it in once approved in either a home test or self-administered test it needs to go back to a lab, and the reason is we need accurate data reporting in order to truly understand and continue to track this pandemic but our goal is to be able to use the same sample type to get both immunity and whether or not determining someone is infectious >> yeah. that would certainly be a significant moment, dr. brooks final question what is this going to cost what is your test going to cost for those who use it

>> what we're really monitoring is what the other rates are with respect to insurance and payers. as of yesterday the white house and the policy doubled with respect to the cost associated for virus testing. what it is for antibody testing, we're not sure but right now the test for look at whether you're infected or not is somewhere in the range of about $65 for the test that's being run with saliva. >> okay. $65. thank you. and dr. brooks, thank you overall for joining us very much appreciate it. dr. andrew brooks. >> my pleasure thank you. let's hit our etf spotlight. we're looking at the home construction group, itb, under pressure after this morning's

disappointing housing starts data for march the etf down a percent housing starts tumbling 22%. the etf down more than 9% so far this week. we're going to be right back here on "squawk on the street. stay with us the s&p 500 approaching the flat line nasdaq positive. the dow is down 177. about .75% at&t has connected us every day for over 100 years.

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let's get a coronavirus virus update this morning. >> good morning. a new jersey police have found 17 bodies inside a morgue at a nursing home they were responding to an anonymous tip that the bodies had been moved there after being stored in a shed officials say there have been 68 recent deaths at the care facility 90% of nursing homes in new jersey have reported at least one case of covid-19 >> in iowa two employees of a tyson food plant died from covid-19 dozens of workers have tested positive and more than 140 cases have been tied to that plant the tyson facility has been closed since april 6th switzerland is easing pandemic restrictions starting april 27th doctors, hairdressers and other stores can open on that date a 99-year-old veteran

completed his successful fund raising walk surrounded by soldiers from the successor regimen. he had originally hoped to raise $1250. he raised more than $15 million. as always, for more coronavirus coverage, head to our website. sara, apparently he said he would walk the length of his garden 100 times that was the fund raising effort >> not bad we love that story thank you. >> sure. about an hour into the trading session here, and stocks are lower. at least if you're looking at the dow. part of that is a big drag from boeing with the dow down about 200 points right now winners big tech some of the health care providers. unh leading the dow. the s&p is pretty much hovering around the flat line and the outperformance of technology being reflected in the nasdaq which is up a little more ththa%

stay tuned for this coverage and... let's get started. (music fades in) hey! -hi! ♪ ♪ ♪ ♪

bob talks markets this morning as we are, bob, almost through the first full week of our earnings season. where do you think we stand at this point >> well, the good news for this week is that the intraday price swings we're saying in the s&p are much lower than they were, and it's been declining every week for the last couple weeks now. the volatility is lower. the price swings are lower the vix is still north of 40 that's significant, high and it doesn't show any signs of dropping i think there's good reason for that yesterday we were talking about the fact that the first stage of this was the panic phase all the way from february 19th to march 25th at the bottom. and then we had this sort of rally phase, the relief phase, you can call it. now we're in the reality phase what i like to do every day is

look at the list of companies that are either furloughing people or suspending or declining to provide guidance. the list of declining or suspending guidance is getting very long. today we had abbott labs, conocophilips. jack in the box. go pro, bed bath and beyond said they're not providing any further commentary on guidance in europe, volkswagen, audi suspended guidance how do you figure out earnings in 2020 when nobody has a clue what their guidance is going to be this is a real problem the other problem i have is the sell side analysts have been slow in bringing the numbers down they were more aggressive in february and they stopped. there's a lot of people not updating their numbers in a month, month and a half. that's crazy you have some analysts who have updated the numbers in the last few weeks. others haven't a lot of these numbers, frankly, are worthless.

i don't look at sell side, the bottom's up analyst like i used to i think they're so far behind. the top down guys are better and they indicate bigger declines. these are the estimates for the fourth and third and second quarter. i think it's going to be worse than that. i would say don't use needs sell side analysts unless they're updating numbers you've been talking about costco increasing the difr dend this is the anomaly. most of these companies johnson & johnson, procter, most are eliminating them morgan stanley had a long list of companies potentially cutting dividends. they concluded we expect more companies to reduce or discontinue their dividend payments over the next several quarters proctor and johnson & johnson and costco have done well in this environment, but they are

not representative of the trend. i don't want everyone to think all the suden the world is getting better some companies are increasing their dividends. >> bob, as you're talking we're starting to get language out of the sba on their website currently unable to accept new applications for the paycheck protection program based on available appropriations funding. we are unable to enroll new ppp lenders at this time as well kayla has reporting that a senior democratic aide says pelosi and schumer are expected to talk to mnuchin today that's going to draw a lot of new modelling on what jobless claims might look like next week >> yeah. now we have 22 million unemployed these numbers are just staggering and i do believe, and i'm not necessarily in the "l" shape camp, but i don't understand people who think a "v" or "u" shape. getting started up is going to

be difficult particularly for small businesses, think of restaurants out there taking two months going to be down and then you snap your fingers and they're back you want to watch the bellwether, watch the new york stock exchange obviously i'm close to it. they're not going to reopen until they're very much in consultation with the governor of new york, obviously, but they're not going to reopen until they're sure that people are walking on that floor and not going to infect other people on the floor we don't have that capability yet. let's hope we get it very soon let's hope we get it in the next month, whatever the date, but that's going to be the main criteria you know, pick a date for that is it a month away is it a month and a half away? i don't know let's hope it's sooner rather than later but we don't have that capability right now and it's not immediately on the horizon in the next week or so >> yeah. bob, absolutely. as far as the ugly, ugly, ugly economic data we're getting in today's jobless claims number is just the latest. how do you see the fact that the market has really been able to

perform quite well given some of these unimaginable statistics? the fact that it looks to have already discounted some really bad news as far as the economy or is it just the fed making everything better with don't fight the fed and the injection of liquidity in an unprecedented way? >> well, it's amazing how many people believe in the fed. when the fed did the actions in the last few weeks including at the end of last week, announcing they were buying high yield etfs, that was a real shocker. i had people who have been in the business for 40 years call me up and say bob, they're telling you they are not going to lose. not only are they not going to lose, the fed is more aggressive and smarter than they were in 2008 they're getting ahead of the curve faster than in 2008 because they saw what happened in 2008 when they started finally getting aggressive after months of not being so aggressive so yes, there's a whole bunch of people out there who believe the fed cannot lose and don't fight the fed is not a cliche

it's a fact of life. do you believe 50% rally off the lows coming upthat we've regained half the losses is where we ought to be right now that seems very aggressive to me remember, the stock market is a discounting mechanism. they're trying to figure out earnings most strategists are talking about 2021 numbers i find that remarkable they're willing to look that far ahead right now let's say the reality phase is setting in. it's going to be tough tore get more gains now >> i'm just wondering if you change your posters on a daily basis. i feel like you have a new lineup behind you today, bob >> i do. yes. not every day, but i switch them around a little bit. i switch them around it's a little bit of levity in all this unrelentingly grim news i've been collecting rock posters for a long time. it's a fun little hobby. >> clearly bob, thank you quick programming note as we

head to break. don't miss an exclusive interview coming later on cnbc fed president patrick harker, a voting member. we'll talk about this market disconnect with the economy and a lot more 3:00 p.m. eastern. we'll be right back. stay with us on "squawk on the re" thheowow16stetwi t d dn 5.

in an ugly earnings season, one market strategist sees some

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that should clear things up. the small business administration is saying this morning that it is currently unable to accept new applications for the paycheck protection program based on available appropriations funding. similarly we are unable to enroll new ppp lenders at this time, they say our next guest has been looking to the sba, small business administration program to help save his restaurant already laying off 250 employees and seeing hundreds of pounds of steak go to waste. joining us the owner of uncle jack's steak house in new york city willie, thank you for joining us tell us about the experience of applying for this loan and what you're hearing about it. >> hi, sara and david and carl the experience wasn't too hard we're on the website we work with bank of america in the initial first day they said you had to have some

outstanding loans but the next day that was solved. we filled out the paperwork and did the sba and all the loans on one type of format it took a few hours for each corporation and every store we have open. it wasn't too bad. we had some questions. some more paperwork and taxes and payroll information. we filed for basically everything at one time >> and what have you heard as far as when those funds would be released i mean -- >> we talked to the bank we get emails. we're out of money i shut down. i had 250 employees. i closed up the shops in about a day and a half as tight as possible because when you're dealing with steak and high-end meet items, you are going to burn your cash so you had to regroup. you had to really shut down. we set up everybody on unemployment right away. the corporate infrastructure was there. we made sure we're having conference calls with the

locations. we have a location in georgia that's different than new york the sba came back to us, said we should start getting funding i applied for $1.6 million in payroll funding and also the sba loans. that's up to them to see how much money they'll give you over a long-term period >> when did you apply? >> we applied two weeks ago. >> and have you heard anything about whether the funds are coming >> well, we got emails, and i work with the bank representative, the manager there. so the information about seven or eight days ago, we believe funding should start i talk to him daily. he says we'll get an email and be updated that's the most i know >> hey, willie, it's david did you guys pay rent for april? how did you approach that? >> no. i own my building in bay side. i'm the mortgage landlord, but

my other locations, i didn't pay any rent yet i notified all the landlords of the situation. we're all in this together everybody understands. this is affecting the entire world, the entire country. >> no doubt. i'm trying to get a sense and present to people by asking that question it's not just about you. it's about who you rent from it's all about your suppliers. i'm curious about that as well what's happening to those people, those businesses that were providing you with all your meat >> yeah. in the business you ask for 30 to 60-day terms. as you doing business, you're always paying for what you use 30 to 60 days prior. so when you shut down, they shut down so whatever cash you have in the bank, you try and give them as much money as possible or you don't want to wind up with zero funds. so everything about us, the vendors, we're in it together. i spoke to all of them when i was shutting down.

if there was any product that was unused, could they take it back that had some difficulties so i distributed whatever i could that was perishable to my staff and all my workers in each location then everything else we shut down and held accountable. >> so to your 250, i think employees you said are out of work how do you think about reopening? could you reopen, let's say, in may or in the summer under the governor's orders to get things moving again >> well, i have conference calls every tuesday with my entire corporate team, and all the managers and chefs of every store. i'm getting feedback i want to know which employees are sick is everybody getting their unemployment money so i'm in tune with the store and a lot of people are getting their unemployment they're getting the 600. some people also got the $1200 checks so people are getting funding,

getting money. it's a little delayed. but i think the government has done a great job at trying to help business. because our country is a business if we have to reopen, i believe we'll run at 25% staff at a base minimum. in the minimum. in the restaurant business without 25% of people you cannot function you have your kitchen chef, your waiters, management, you have to regroup and get inventory and supplies again if we get 25 percent of the people and we run out of minimalists we can hopefully cover our costs and stay open and do some business. >> do you imagine a world where you have to separate more distance in between tables obviously you said fewer employees, but under the social distancing rules, until we get a vaccine, what is eating at restaurants going to look like in new york? >> yeah. i mean i think it's crazy. restaurant industry in the

whole, high-end restaurants have been in turmoil in the city between the rent and payrolls and it's going to be strange and weird and we'll do our best and adaptive and all entrepreneurs the staff will understand. i believe the guests will understand this funding we're getting is not going to helps us in the long run we will need more government fungds we don't know how many people will come out to dine inside of a restaurant. >> finally, willie, you were planning on opening new restaurants in georgia, a few of them are you still going to do that >> well, i have one unconstruction right now it's 50% done. that construction has not stopped in georgia they're running things differently than new york. my other two locations, the location, the lease, engineering, the designing, that process is still happening i do all of that on go to meetings and zoom like this. everyone is functioning. i'm still helping the economy.

i build houses in the hamptons as a hobby i have a construction going in watermill. we were able to pour the foundation, backfill and now we have a stop and waiting to start framing it i love projects and building and keeping america working, but everything is about the people and the safety each state runs it differently hopefully we'll employ 125 more people in the state of georgia by the end of this year. >> wow that's amazing, willie it's that kind of optimism that economy is going to definitely count on we had a long discussion is this morning on air about pricing and if you are running say 50% capacity when you reopen, does that mean a steak costs more or is -- are consumers going to be so strained that you got to promote and lower your prices if is this whole thing going to be inflationary or deflationary >> i believe with the government an the fed and everything they put into the economy, the

billions and trillions of dollars they put in, i'm a positive person, an entrepreneur risk taker and not going to look to raise my prices i don't want to gouge the guests if i can break even and slowly build back the loyalty and the customer base i had and make sure the people who work for me make a living and get back to normal and can make more than they made on unemployment that's my objective i feel with the government paying everyone to stay home, that people are going to accrue a lot of savings during this time, whether it's 10 weeks, 12 weeks, 14 weeks, 16 weeks if if the government extends the plan, i believe people will come out ifs the virus, we have, you know, a vaccine or solve the problem. i think people will come out as gang busters we're in new york. this city tudoesn't sleep. people are eager to go and want to go to work. we fought 9/11 and blackouts and so many things

nothing stops us the american spirit, the entrepreneurs, the people who want to get out and produce and function daily, they have their routine. i'm very optimistic. i think the fourth quarter could sky rocket that's what i feel >> when that happens, i know david and sara asked you about your suppliers, i mean have your suppliers in the meantime tried to connect with grocery drrg chains. >> yes. >> and when business returns will it be easy to come back to you? >> yes they're all looking to improvise and do what they can a lot of people were strict on the restaurant supply industry, but i speak to them daily. they all did what they could do and they're trying to transform their business temporarily but the hospitality industry in this country employs, you know, hundreds of millions of people but not only that, every industry, if you see the dairy, the eggs, poultry, everybody is

being overloaded because you just think about hotels, strauptsz, tourists, day-to-day operations, how much we purchase, it's unbelievable. we're huge for the economics in this country >> willie degel, thanks for your optimism we hope you get what you need and good luck and keep us posted thanks for joining us. >> thank you, sara, carl, david. have a great day >> you too uncle jack's steakhouse. carl >> sara, dow session low was down 289 we have trimmed our losses although the two-year yield is once again at a three-year low we're backn mont ia me

>> sara, dow session low was turn on my tv and boom, it's got all my favorite shows right there. i wish my trading platform worked like that. well have you tried thinkorswim? this is totally customizable, so you focus only on what you want. okay, it's got screeners and watchlists. and you can even see how your predictions might affect the value of the stocks you're interested in. now this is what i'm talking about. yeah, it'll free up more time for your... uh, true crime shows? british baking competitions. hm. didn't peg you for a crumpet guy.

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vaccine for covid-19 china is cutting the red tape for approval procedures and offering some big companies financial support. eunice, you kno eunice has more on that today. hi, eunice. >> hi, carl. three chinese vaccines are in clinical trials in china and one is being tested right here in this lab i'm at sinovac and the company's chairman told me that government support has helped tremendously. chinese businessman is at the forefront of the fight against the global pandemic. this week his company nasdaq listed sinovaccine got approval to start clinical trials the vaccine shouldn't be for a certain country or area. it should be for the globe his team is using an older method to develop a vaccine that he thinks is safer called an inactive vaccine, it uses a virus killed by

chemicals. it's being tested at this lab and will be checked before going into clinical trials the company says that 100 volunteers are being recruited for the first phase and doses of various sizes are being prepared it's targeted to finish trials in june and test the vaccine in infected areas in china or overseas that's faster than normal, he says and he said that the company wouldn't have been able to move so quickly without the government's help. for example, china's version of the fda approved the human clinical trials in one month as opposed to six months and he also said that the authorities have allocated land and facilities so companies can ramp up production and he thinks he would be able to ramp up his own manufacturing in three months and his goal to produce several millions of doses every single year of course he didn't commit as to

ben that vaccine would be available. >> eunice, absolutely fascinating when the entire world is focused on solving one problem. our eunice yoon in china good morning welcome to "squawk alley." i'm carl quintanilla with morgan brennan and dominic chu. the data continues to come in weak housing starts, jobless claims, but markets trying to look through some of that stuff all-time highs for netflix today, amazon once again, dollar general, eli lilly and abbott. >> the drug companies, a lot of the tech companies, communication services, carl, is right where we're going to pick up here because the markets that's where the entire narrative is going right now let's bring in rbc's mark mahaney back with us i'm looking at you in your own home studio, so to speak, you're using telecommunications devices and hardware is