but the retirees who invested and depend on calpers for their future income. >> thank you for joining us. thank you for trying to help us. we appreciate it very much we hope to have you back it's a longer conversation please stay healthy and safe out there. >> thanks a lot. >> good-bye to everybody make sure you join us next week, have a good weekend, folks "squawk on the street" begins right now. follow joe on twitch and support the poker tournament "squawk on the street" begins right now. good friday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. verizon's hans vestberg joins us this hour with their earnings earlier this morning dow is down about 3% for the week georgia is starting to relax

restrictions, giving us clues as to how consumers may react durables down 14 june wti holding at 17 as energy is the only positive sector for the week a lot of discussion about 2,800, are we range bound where is the ceiling now markets giving all kinds of important clues. >> a lot of analysts, we follow them for a long time they wait and wait until there's a moment where they can go negative there's enough companies that have done well, i have every piece of research in front of me i don't have an upgrade. i have downgrade, downgrade, downgrade. because the stocks have run, it gives these analysts a chance to say, uh, i'm so lucky. it went from 29,000 down to 18 it bounced back, and now i can get off and not look bad and that's the whole tone of

this morning i find it curious. i think that in general the companies have done a pretty good job just they like to pull their forecast because who the heck knows. if dr. gottlieb doesn't know what will happen, why should he expect these guys to know what will happen. those who expect companies to pull guidance, i think that's a silly exercise gets you no where. >> yeah. we do have -- the two upgrades that i saw were ebay and peloton. we will exercise in our basements. >> there's a long wait for peloton. ebay, that is an interesting piece. it's basically saying traditional retail, something david thought about it being laid to waste, so therefore, ebay, there was one for etsy, too. i have another one, traditional retail, no good. et

etsy, look at this, traditional retail, no good. way fair we ought to do a "squawk on the street" dotcom, we can sell old clothes, we can do garage sales and we'll be recommended by these analysts >> yeah. etsy is doing a big business on face masks ebay will have the new ceo taking over on monday. wednesday they report earnings at ebay. it has had a resurgence given current conditions as we know, guys, old retail continues to be in very deep trouble. it's no surprise what we hear from jcpenney. even in a normal environment we might not have been surprised to see the company preparing perhaps for the likes of bankruptcy it's not alone in this given how difficult it is given how many retail establish the ments are e to do anything since they are closed >> one thing we have to think about with jcpenney is not the

stock or bonds but the people who work there what will happen to them there's 43 million people who work in retail restaurants what happens to those people they get unemployment claims su have be you have been a salesperson at jcpenney, what is your next move i don't know when we had a great economy, the answer is you make some calls. you go to craigslist now, i don't know what happens to someone laid off. david, there's a note today about ralph lauren, and whether people have changed tastes almost as if since this virus started that people don't even wear -- they don't wear ties when they go to work ralph lauren ties. >> right >> they're closed? sorry. >> it is friday. >> you wear expensive shoes. >> it's not saturday, david. >> it's friday

it's casual friday no, i'm wearing shoes. i feel like you need shoes to have the feeling that you are at work i'm not in slippers or socks i am tieless today we're all making decisions here, i'm with you even when we are fully back at the new york stock exchange on friday, i will be without a tie on friday. i'm sorry. >> do you think we'll ever go back >> yeah. >> you think, carl >> yes >> good. i miss it so much. i just miss it i miss the camaraderie >> we all do it's -- it's really beginning to wear, i think, on us emotionally. the way the three of us react to each other it's got to get repaired, which, jim, is why this georgia experiment is so important el-erian on "squawk" this morning saying we'll learn a lot in the next few days about how safe people feel >> i want to clarify for the

confusion that i created, i wanted to see what happens in georgia, okay? because i want to see. it's an experiment i wouldn't have done it with tattoo parlors or gyms you sweat and stuff. i do want to see what happens and i wouldn't approach it the way he is. the president i think first encouraged and then didn't i think all of us are thinking is there any hope here that we can return to something normal maybe he's been premature, but i think a lot of us just want to go to the store and, you know, kind of go to the store. >> yeah. >> what is that? used to go to the store all the time until the checker got covid, now i'm scared to go to the store. >> i know. i never went to the store, but i'm with you guys. everybody wants to get back to work as quickly as possible. you know, it is that balance that is so difficult to determine at this point in terms of opening the economy and keeping the virus at bay, and/or opening the economy and taking

what comes because frankly the human suffering that will occur as a result of keeping this economy closed for a longer period of time will be greater than the suffering that occurs if, in fact, it's not open at the same time, jim and carl, the question becomes what will human behavior be? will people be willing to return to the activities they had previous to when covid was with us that remains unclear as i know you believe as well, perhaps, jim, true behavior will not return to what it was until there was a vaccine, which could be many months >> right >> maybe years >> how many restaurants can take half the tables out and still make money regardless how much the government gives it's not going to happen that's a way of life now, yum brands, there's a positive stimulating return to growth ubs note. but that's the flip side of what happens to the regular restaurants. i had rich alison on last night from dominos

he talked about he never wanted it to happen, but basically the destruction of regular pizza parlors, where we sit down and have a pizza, they can't compete because they can't have the number of tables physical distancing is in many ways the death nail of restaurants the way the malls problems are the death nail of retail this wasn't supposed to happen it's just going to accelerate. it's bad >> we should take a listen to what rich told you last night on "mad money" about some of the logistical changes dominos has made in the wake of the pandemic >> we've taken 60 years worth of standard operating procedures and rewritten most of them in six weeks. contactless delivery is a big part of that the pizza pedestal is an innovation our team came up so when we bring you your food, we don't have to sit it on the ground or unclean surfaces

we it put it on top of a recyclable pizza pedestal so you can take your food in a contactless way. >> you can't beat that i put boxes out for a full day i don't know who touched them, whatever dominos i have total faith, this is in their dna. the pizza pedestal is good i feel like i can bring it into my house, it's not going to cause pandemonium. that's why dpz is doing so well. since april began, the numbers are good the stock sold off yesterday, but that's because it's been up a lot. dominos has figured out a way to make it so you don't have to have a pizza wait on your doorstep for 24 hours, which is not a great way to eat pizza >> kind of reminds me of world wrestling -- david, wwe is up this morning on 60% jump in sales, but their ceo says it will take several years for live attendance to return to pre

covid levels and needam saying companies are calling wwe for best practices on talent safety protocols these guys have been two to three live shows per week for years, and they have figured out in some ways how to keep their people safe. >> chipotle sure has chipotle had that problem with airborne food, and they created another way to deal with how their people interact with customers, interact with food. and it happens to be the perfect way for the era of covid that's one of the reasons why they're doing so incredibly well i think the stock can go to 1,000. they have it so again -- i'm thinking about places where if i go to them, i'm not worried, versus a lot of other places where i go to them and i feel like i'm injecting risk. so i think we're in this era of what's risky and what's not. a lot of these things are what you never thought was risky before a lot of the companies that are small and medium-sized business

they require crowds to do well the antithesis of what we can have right now is a crowd. think of that, that place is crowded. that place is crowded. as soon as you hear it's crowded, you can't go there. this is incredible it's the inverse of what retail is about the inverse of what a restaurant is about it's a terrible time >> that's true at the same time, jim, it's interesting listening to mr. allison at dominos and thinking about the amount of innovation that is going to take place at companies that are quickly adapting to what they believe will be the new behaviors adapted by the general population business will lead here. unfortunately perhaps not small and medium-sized yet, though in certain areas they might be able to innovation is taking place it may result in lower profit margins for some period of time for all the things companies need to do, but they'll do them

and they are beginning to already attack these problems as they perceive the world is -- what it will be like for a long period of time >> you are so right. but -- i know we have to go, but the airlines have not done a thing. they've not done anything. everybody has to adapt i want to go on a -- think of something, gary kelly, don't just stand there and take it >> and as cowen says, it's not just the airlines, it's the airports people need to feel safe before they ever get to the gate and get on the airlines. guys, we'll take a break >> covid distributors, they're called airports. >> we'll get to verizon, amex, capital one, google, boeing and more when we get back.

the president talked about georgia's reopening yesterday at the briefing take a listen. >> i know a lot about

economists, the answer is they have no idea i think i have as good an idea as anybody i think our economy will start to pick up substantially as soon as the states get open that's happening as we speak, it's actually very exciting. people are just -- just thrilled to see it. our country has to get back to work they want to get back to work. you see that, whether it's a demonstration or just in talking to people. they will go to get back to work and they'll get back to work very fast. >> we'll talk to the head of equinox later on this morning, jim, who is not opening. we talked to another restaurant owner yesterday who is not opening in georgia so, it's going to be up to the individual owners. i wonder what you would do right now if cuomo relaxed restrictions what would you do with your two restaurants? >> we're keeping both -- we'll keep both open the more expensive one in red hook, we're not sure what the plan is yet. i'll try to have a big cinco de mayo at bar san miguel with

margarita boxes out front. we'll try to do a lot of takeout. we hope it can cover our costs i did not get a ppp loan, applied for it i don't want one now, people say oh, you applied for it i'm committed to reopening but the answer is no i'm worried about droplets, people not wearing masks everyone should have to wear a mask not for themselves but because of others. until everybody has a protocol which does the best, we pull out the tables, i don't know how you do it. we'll lose money i can guarantee that i also know that we believe there will be a vaccine within a year and a half. we want to be the restaurants that survive through that period i know that's a longer-term period than wall street. when you're running a restaurant, it's six years for bar san miguel, i want to be the only place open on that block a year and a half from now ppp loan, yes, if i got it without it, i don't care i think you have to say i'm here

to win, i'll sacrifice 18 months if i can get through it. that's what you have to do it's too dangerous >> even this week, after roche, there was a boston consulting group guest on "squawk" today saying vaccines are a five-year process, you do not believe that >> i don't i think j&j is shortening that time i don't know exactly what we're going to get from pfizer, but pfizer's very much involved. moderna started human trials the fastest ever was ebola, five years. but these companies -- who would have thought we would have an atomic bomb in the time we did who would have thought we cured peel polio in the time we did nobody i'm taking the other side of the trade, i think betting against alex gorsky now is a big mistake. they're building plants to be able to have billions of doses why would you spend 2$250 millin

building plants if you had to wait five years? maybe every one of those -- maybe pfizer are just idiots, j&j is a fool. i'm not betting against american science. it's been a sucker's bet the chinese want to bet against us, fine i'm a believer that a year and a half from now we'll have something that makes it so you want to go to bar san miguel and go inside and have, okay, not a kron corona but a modello >> it's inconceivable to imagine we'll be on lockdown for 18 months, two years, or some parts of the population are, which is why it's so interesting and important to watch what happens in these states that do begin to open what the behaviors are of people and the willingness to go out and start to engage in economic activity which we're sorely missing. see what they're willing to do we come back to this time and again, jim there is certainly a greater hope that we will have antivirals available, not just the remdesivir, which remains

very much uncertain in terms of whether it's effective, but much earlier in chorus, something that would equate to taking tamiflu to make your symptoms of the flu so much easier to deal with >> yes >> then the question will become will people be willing to feel like, okay, i'm all right to go out. at the same time, the 21% rate that was cited by governor cuomo in new york yesterday in term the terms of people who have been exposed to the virus, that's seen as a positive thing, it's not near herd immunity, it's getting closer to it the virus will continue to mutate to a certain extent, but some believe it will become less harmful. there's a number of avenues you can go down to feel positive coming back to the overall theme, guys, we know so little >> antibodies, can you get it again? fall really bad. i have to tell you, there's going to be a class of people who feel more immune now than the rest of us if you get that antibody, you might risk going out to a

restaurant >> i'll go anywhere. anywhere you guys want to go wherever >> all right >> we'll have hans vestberg joining us litteater verizon reported earnings today. it did change and lower guidance for the year as a result of the current crisis hans vestberg is on the company's conference call now. he will join us in the second half of "squawk on the street"." we have mo cinba aer thworked lft 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. focus on what matters to you with thinkorswim.

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markets trying to string together a few days of gains as data comes in from german business confidence, uk business sales were weak. durable sales rewe weak, university of michigan at the top of the hour. don't go anywhere.

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welcome back to "squawk on the street." time for a mad dash. we will take you to the opening bell all right. here's a hint. it has a 1$1.2 trillion market value, the stock is down 6.4% for the year over to you, jim >> david, one thing i've always loved about doing the mad dash is pretty much every quarter i

talk about katie, my favorite analyst on apple she's at morgan stanley, she has a good point here. she goes it's set up well. apple is set up well what is she talking about? new product cycle, multiple 5g launches coming. she'll talk about -- she says something that people have to recognize. apple can put a mid to high single digit dividend increase the companies that have been doing dividend increases are suddenly getting a lot more pe multiple juice than ones that can't. so i think that's going to factor in. apple has a giant cash hoard apple has been cut number, cut number, cut number for ages from analysts i like this call i think katie will be very right. >> its credit quality is better than that of the u.s. government at this point. >> yeah. someone asked me the other day, why do you like j&j so much?

name me somebody else that is aaa besides batteries. >> these companies are able to have a lot of cash on hand and generate a lot of cash and are a continued focus given the difficult times we're in and that are coming still. we talked a lot about the companies that have been able to sure up balance sheets, however they can have done it. apple did not have to worry about that going into the crisis >> they're not pulling down any revolver these companies that pull down a revolver and cut their dividend. like kohl's. i never took you to kohl's shopping >> no. >> i probably never will >> yeah. that gets back to the conversation we were having towards the top of the show with retail it's not just jcpenney or neiman marcus or macy's, lazard has a lot of real estate there the gap saying its current cash position may not be enough

it's a general issue throughout. >> yeah. liquidity, liquidity, liquidity versus apple, the most liquid company on earth >> yeah. i see constellation got some new financing, caterpillar in a new revol revolver then the loss provisions over at amex, 2.6 billion, puts to shame the 800 million of a year ago. >> yeah. it puts in perspective the stress that people are going to be under and expectations in terms of their ability to pay their bills, doesn't it? by the way, verizon again, we will talk to hans vestberg, taking a larger provision for bad accounts that's the world we're going to be in. have how many million people 26 million people without a job at this point? obviously the benefits are okay right now. but the concern is that they are not going to be able to continue to pay their bills, important bills they may be, whether credit card or wireless phone. >> david, i'll tell you something that i think will be frightening for this country there's become a notion of

voluntary pay. i've been reading about how most people don't think that tenants will pay in may. don't pay in may, go away? they're just not going to pay. nobody will kick them out. that's not the typical american way, don't pay your rent i'm hearing about it from many reits, real estate investment trusts, my tenant is not paying. this is not way it's been before maybe in the '30s. >> that's the second order effects we'll probably talk about in late summer or early fall at the big board, the nyse assistant chief electrician. at the nasdaq, draftkings, which begins trading on the nasdaq today. we didn't really talk about the draft last night, given the pressures, the issues facing the entire planet. it will be a clue as to how we

adapt and try to get back some things that we seem to have lost it's almost like, boy, the commercial -- the advertisers knew it. yum brands piece today, yum was well represented i think that there was an electricity about having something live and then the second is the michael jordan this weekend. we crave sports in this country, you put the game on when you go home and that's gone from the times radio has started, you put the game on if we showed the wall, the green wall, people who are tuning in to us before that never tuned in before, they will say what an unreal world wall street has do they not know people are suffering? these are companies that are big and are not nearly suffering as much as the store you have to try to do business with down the block if it's open these companies are winners, they got to be public. the small and medium-sized

businesses are not on that wall. we're not trading the pizza parlor we're trading domino's pizza i want people to think, don't equate that. we're not heartless. these are the winners for heaven's sake. >> i think viewers get that. i think they understand i've been on zoom, i'm ordering from amazon i'm using my ipad. i.t., communication services, health care, people are being reminded daily what a huge portion of the s&p those sectors are. >> you're right. one thing we don't talk enough about and you have kids going to school, that whole world of school can i just say these teachers are heroes no teacher signed up to run a zoom class who -- these teachers are incredible they have had the pivot entirely with why they got into their profession congratulations teachers for

figuring out how to run a zoom class. unbelievable what's going on improvisation in this country is terrific we don't talk about it because, well, we're so depressed about everything else, i guess >> yeah. no, there is -- there is a lot going on still that we're able to do. hard to imagine what it would have been like five years ago, ten years ago. >> what would they be doing? how would you teach people ten years ago? >> i don't know, jim i don't know it's far for ideal, for the students and teachers. everybody would much rather have their kids back in the classr m classroom. it's an issue we talked about. it has a lot to do with the overall economiment once you open up the schools again, other things come along with that. by the way, i focus on the university system in this country, by far the finest in the world, whether or not universities will be able to open up in the fall, the pressure they're going to be

under, yet another constituency that's seeing significant reduction in revenues as a result of no summer sessions, foreign students usually full payers not being able to attend. >> chinese >> so many students will want to take gap years because they don't want to begin a freshman year remotely. that becomes an issue. the hospital system, getting that restarted with so many hospitals sitting somewhat empty and not taking elective surgeries now. so many parts of our economy need to get back online, but how we're going to do it remains very much unclear. >> going to red shirt your son because he's not going to be up there. everybody is red shirting. >> who knows i don't know >> everybody will be red shirted. >> that's interesting. back to sports, we had greg on yesterday from liberty media, they own the atlanta braves. baseball should be going on. usually in the background, but it's nice to have the game on. will they really be able to have a season it still remains unclear

the commissioner may have some sort of a plan arizona doesn't seem to be it or particularly likely after listening to him you know, so many of these different sports that we're waiting on including, of course, football, your first love, jim, whether or not those players that we watch get drafted last night will be able to take the field in the fall. >> it's just -- look, i don't want to get myself down. i think a lot of people are trying to rally and find ways to be able to have a zoom -- how many zoom cocktail parties are you invited to this weekend? >> yes there's a bunch. i love the onion headline saying the browns drafted first just out of habit a lot of good stuff going on in sports it's been a crazy, crazy week for commodities. this morning jeff curry has a note out one line is we entered the inflection phase where rebalancing has started.

could take four to eight weeks, they think, but given the nascent recoveries in europe, does that make sense at least? for ag, they see the window longer but for oil, that's it >> rusty braziel said how you can get to minus 37, but i think there will be rebalancing. notice freeport cut its production for copper. i've been waiting to see someone cut back as companies cut back, at least we have some support for commodity pricing and we would be less worried about deflation, which is something i'm worried about. we have pumped so much money, prices are still coming down it's amazing >> you know, that's interesting that you say deflation if you read the elliott note, if you got through it from last week without wanting to just, well, you know, not be around

anymore, they still are concerned that currencies and inflation could come at any moment, and people could lose confidence not so much about deflation. >> in germany it was deflation, deflation, deflation, then one day it was hyper inflation i understand the elliott model i'm shocked to see that the commodity companies just kept pumping and pumping. maybe they finally realized we won't get a "v," maybe they didn't think there would be anything it's nice to see them adjust to the new world. a lot of companies are trying to hold on to the old world bad model. >> i see whiting has some -- is on the tape now talking about exiting chapter 11 in five months so we're already getting some of those headlines crossing jim, the other thing is guidance and the small sample of mostly chip companies that are, in fact, giving you at least a

broad range. texan, seagate, now intel who we'll talk to later on this morning. >> talk to bob swann about the fact that it was positive on the data center. it was positive on the pc. mobile why not i happen to like bob very much he managed to turn the call into a call that made people want to sell i would sometimes like to be a call -- like with target yesterday, i would have liked to have spun that differently the fact is that intel is doing very well. when you see what lisa has to say, lisa sue will say listen, we have more competitive product, more product people want that stock will go up. if amd goes down on intel, that's the time to buy amd bob didn't handle that call right. he's such a good guy but he made it sound like there's something wrong at intel. and there really isn't

it's doing very well >> that's -- that's kind of like what you said about cornell and target yesterday >> oh, geez. i wanted to give him -- i happen to like him very much. here you have a model up 275% in digital. you figure out how to sell it. he's killing it in his neighborhoods. doing such a great job somehow the narrative came out he's under margin pressure that was such a buy. buy? i'm screaming at the set buy, buy, buy! the way people are selling target, the next destination is 110. even the ceos are like, oh, you know, i don't know yeah yeah i don't know t-shirts i don't know you know, chips. these guys, look, i want to go in there and give them a shot of b12 or something hey, how are we doing? not as good as selling lays potato chips it's not easy, man

it's not easy conducting a conference call from your house, your basement. >> but you have to pretend you're coming through the tunnel there is not -- you have to -- >> cleaning the toilets every other day. who wants to be doing that stuff? >> well, i -- >> not me. >> i don't know. but you have to be more jacked you come on these calls and you're not jacked. it's like -- this is the nfl, for heaven's sake. don't come on and make me feel that you're doing badly. show some enthusiasm for heaven's sake. this is your moment. you only have four games a year. >> we got the nasdaq comp only down 5.1% for the year it has been led, you mentioned apple and katie, alphabet, amazon, netflix certainly, good old f.a.n.g. this morning i notice some weakness in alphabet and facebook we talked oftentimes about the reliance that they have on small and medium-sized businesses amongst their advertisers, large corporations as well and whether they will see a significant

deterioration in the ability of those customers to spend that said, jim, i don't know if you have run into this, the google decision to stop hiring and start cutting expenses, there's at least a cohort of investors there who are like what are the real margins at the search business? we may see what they really are. this could be even more profitable than we ever thought. for the first time we'regoing to cut -- even during the financial crisis, google was hiring this is unusual. >> i thought this was so great when you go to a google facility, i mean, it's kind of like, wow, i always wanted to belong to a nice country club. i can't believe the amenities. google, it's time for google to act like all the other companies. and be a little more spartan i think google's a fantastic thing. my travel trust owns it, it's a huge win i love ruth porat, the cfo it would be great to see what it's like if you cut a few

expenses you don't have to live like a king at a company. facebook, by the way, up huge off the india buy. you didn't even mention that >> no. i didn't mention that. >> what got lost in the news this week, david, regarding alphabet is this blog in which advertisers are going to have to start to disclose a lot of information about themselves in order to place an ad and that information will be visible to people on the site. you'll see an ad, you will be like who are those guys? that was a big change in the disclosure that google will be making >> yeah. a lot more transparency. i'm glad you mentioned that. so many stories and things we would have spent time focusing on in terms of importance, going through the week here, you barely get to them that's an important change for them it will be interesting to see what the response is both from the advertisers and the people using the service. >> david, do you think that google is going to bid for

sunday night football? >> i don't know, jim i think, you know, there had been belief that abc, part of disney, would be involved there. we were very focused on the nfl rights prior to the crisis because of the likes of viacom, have the financial wherewithal what about fox so many different questions there. i don't know whether or not they actually would step up for it. the feeling had been prior to this, that probably not. >> yeah. that's been my experience. >> yeah. it's difficult to say. at this point, obviously we watched the draft last night you know, they have not moved forward with those negotiations. i know that there had been hope in some parts, certainly at viacom to get them done as quickly as possible, trying to put that question aside for them and say, hey, we got it done look at that >> david, you know how long it's been since you mentioned viacom? you put the kibosh on it at 30

that's not a 2 for 1 split, david. you back that -- by the way, that's in the oxford english dictionary, bakish >> is that >> yeah. there's a good chart like when you come off k2 the wrong way. >> it's bounced well off the bottom >> yeah. yeah super, dave. super. i daved you. i have not daved you in ages >> you have not daved me in a while. super dave, remember that guy? yeah >> super dave osborne, the best? are you kidding me that was great >> jim -- >> yeah. >> we have not touched on boeing bloomberg saying they're pacing for layoffs next week, cutting 787 production the "journal" today that the virus is delaying the approval process for the max.

>> david port nnoy, noted analyt says he wants to punch boeing in the face david portnoy, you don't know him? >> punch boeing in the face? >> if it were a person like boeing's a tough stock to own, i think that's what he -- you don't know his work? he's an intelligent investor, buffett accolite. >> he's the guy who rated your pizza. you got a high rating. that's why we're staying in business we're going to be a parlor >> that's nice to laugh. we'll talk to hans vestberg after this break verizon reporting earnings this morning, did lower its guidance. let's hear what mr. vestberg has to say not just about guidance and the virus, but the new normal we're back after this. derek, seems like your team is operating just fine remotely.

yeah, everything is running smoothly with the now platform. (bling) see, incident resolved. how did you... gotta enjoy the small wins. you keep being you, derek. keep being you.

jim, we'll shuffle some things around here as we wait for hans vestberg. let's see what's on "mad" tonight first. >> one of the most talked about stocks is nordic tanker, and impossible foods beyond meat up 30 straight points they're reporting next week. the food chain in our company is

being destroyed except when it comes to plants. there you go something that is doing well in this country, plants dave >> that's a good one food supply is a good one. we'll see you soon, jim. we'll talk to hans vestberg of verizon on the earnings and guidance in a w mes.femont to keep customers and employees in the know. to keep business moving. comcast business is prepared for times like these. powered by the nation's largest gig-speed network. to help give you the speed, reliability, and security you need. tools to manage your business from any device, anywhere. and a team of experts - here for you 24/7. we've always believed in the power of working together. that's why, when every connection counts... you can count on us.

it didn't take us long to realize ... ...we weren't in the car business. at lexus, we were in the people business. we needed to be helpful . . . . . . respectful . . . and compassionate. to treat people like guests. it's what we all signed up for. and now when people need this most, we will do what we've always done. take care of people first. the rest will follow. i know that every time that i suit up, there is a chance that that's the last time. 300 miles an hour, thats where i feel normal.

i might be crazy but i'm not stupid. having an annuity tells me that i'm protected. during turbulent times, consider protected lifetime income from an annuity as part of your retirement plan. this can help you cover your essential monthly expenses. learn more at protectedincome.org . we mentioned zoom video a few moments ago. it's going to join the nasdaq 100. mike it bigger than micron and csx. put it in the top third of the index. a while ago it would have been in the bottom fifth. >> 300 million customers

maybe some upset because of the encryption problems. they have chinese servers. the man who runs the company as if it's his own company. i invited him to our boozy brunch last sunday it was meant to be not ak accepted he said your, i'll come. i love zoom. i love what he's doing he's enabling schools to be schools. got to hand it to the guy. good prices, too >> for those who want to look way ahead and look at what happens to the stock if a vaccine shows promise. the thesis is we're not going to roll back entirely the progress of this company. >> people hate commuting there are kids who can't go to school at the same time as others it becomes to me necessity

david? >> actually, a good place to discuss verizon. given everybody working remotely and using, of course, their internet connections broad band and their wireless phones. let's bring in hans vesberg who has been here over the past few tough weeks. we're happy to have you back after the company reported the earnings i want to start off with your outlook and guidance it's something i've asked you about in the previous conversations we've had. you're finally able to share it. you did lower your expected adjusted eps growth to what could be negative 2 to as much as 2%. you noted significant head winds through 2020 give us specifics to what the specific head winds verizon is facing are >> first, a solid quarter given the covid-19 rather gross earnings of 5% which included

also a big increase over bad debt it was a good quarter. when we look into the second quarter, we actually framed up the last four weeks, what's happened of course, there are some things inflected by yourself. we had to keep america connected meaning we're not disconnecting and the customer that has impacted by the covid-19, if they're consumers or s and bes, and that means we'll have customers in this moment who are not able to pay. we're not disconnecting them it's impacting roaming charges, of course, went down there's nobody traveling and we also have a lower hand set or hardware distance at that moment because our customers are buying less hardware. that is making an impact in the second quarter right now what we're encouraged is with the last week we're seeing a

good payment structure from our customers. that's improved. we saw it coming down into the beginning of the pandemic and now we see a little bit better payment from those customers impacted by covid-19 but it's a bit early to say. we wanted to continue our guidance to -- as a transparency to our shareholders in a time where there's so much uncertainty. we moved down a little bit on our ets guidance but with a lot of -- >> right and you said on the call as well, that you'll know more as we all will over the next 90 days and be able to report back at your next quarter in terms of the health of your customer base and how many are actually able to pay their bills you're hoping i guess we get clarity in the next 90 days? >> yes absolutely we will know more the next 90 days at the same time we have a service that is so important for this contract. a moment for all our customers

they are relying, having broad band work from home or education from home or connecting in different ways so long-term, we take the right position to affirm it might be painful, but long-term, we'll come stronger out from this, and i think the customers are feeling that when we're working with them. we're going to know more about that going forward, but i think at verizon we're coming out stronger from this >> right you did increase your capex. you said you felt it was a good time to have a robust network going into this difficult time, but i am curious as well about the rollout of 5g. we came into this year expecting it would be a significant cycle that you would get a lot of permitting to get cell sites in place and obviously the devices themselves would begin to be on sale has that upgrade cycle and 5g cycle slowed i know at&t told us they were having some permitting problems.

>> no. actually, not. i mean, we divided our team early on one team working with the crisis one team working -- rolling out networks and one team working on the new normal how we will operate when the pandemic is over so on the second prong, and so far we are on plan with our 5g, the deployment on 5g nationwide. our cities, and how many they want to do as well as on our fiber rollout. our team has found innovative ways to work with the permitting with municipalities to continue to do it and we're have very good connections with our supply chain intact at this moment. so far we haven't had any problems we're on plan. there's a lot of unknown out there, but i have a lot of confidence in my team that they will continue to execute and on the hand set side, it's going to be some 20 devices coming out this year

so far we have launched three of them, and we believe we're on plan to continue to release the other 17 this year so we're still on plan we have challenges but we're not letting up we take this time is of essence, and our customers are needing 5g and the capacity that will give them as well >> when companies used to combine in the cell phone space, and there were so many companies, there was always a moment for the superior operator oh to the go in and convince the customers, don't go with in this case, t mobile, go with us it's a moment when you can grab them what are you doing to try to get the customers to go to you and not t-mobile >> we've developed the last two years, a very flexible mobile with mix and match we have different unlimited offerings. we have an all digital brand

we have yahoo mobile we work with tracfone. we go with the customer needs and we'll have the service for them we feel really good about our service, and up to our store closures, we had good progress with new customers, but we put the priority on our employees early on, and we reduced our footprint on stores dramatically down to 30%, and smaller footprint. so i would say we have a good momentum coming into this year, and we ran all the way up to the pandemic very well now we're remapping that with a digital channel with our customers. so i feel good about how we can compete in this market with offerings we have and the network we have. >> and let me ask another thing. i'm a comcast customer, but i also have fios i'm always surprised you don't do more with fios. smaller gains each other why don't you go for broke with

them >> first, we have our limited franchise on fios where we can deploy it which we're doing. we have the same precaution here with our employees we are in the middle of march to not go into hold, to do installation our team has innovated so we can install fios, meaning the customer, we never need to go to the customer premises. at the same time we have a digital agent that can help install. we're ramping up to come to the same volume of installation without going into the home. this is the benefit of the pandemic you need to innovate, and our frontline employees are fantastic to find these ways of innovating them. so we're going to continue to push for fios in the footprint we are we know that's the best service in the country we'll continue to serve our customers and continue to expand the footprint in the footprint we have. >> yeah.

fios in a box. we were talking earlier on the program about innovation that's an example of it. i want to come back to 5g. i understand you're getting the herm permitting and spending the money you need to, but the hand set question people can't go to the stores and buy them it's not clear where apple is going to be in terms of the transiti transition i don't understand why you're confident people are going to upgrade, especially given the economic pressures that people are under as well. >> as we said, we don't really know where the second half of this year will end up. some of your comments might be relevant, but i think also when we see the improvements and performance improvements on 5g, i think that people will actually -- we also have an opportunity far digital channel. we're seeing our customers are start buying the phones and

upgrades digitally that's a new normal. we have means to handle this i'm as confident as i can be at this moment. right now we're executing on the plan as it would be almost normal second half when it comes to hand set technology and usage on the network >> that's a hope there you mentioned the new normal a number of times. what are you doing to prepare for the environment that we're going to all inhabit once we get on the other side of this virus? what's going on different that's going to stay different for verizon and the customers and employees? >> i think we're going to see a lot of new products geared for working from home. education from home. in the time that would be impossible, will now be broken down the way we're working in our

office, et cetera. that will continue in the new normal so -- and we are -- ultimately broad band services are essential in the structure in the new normal >> last question on advertising, you do have some visibility into it given your media businesses it's not particularly good i know you indicated that. what are your expectations there in terms of advertising both as a huge spender when you market and as what you're seeing coming in for your media businesses >> we saw in the last four weeks that we measure down to advertising for obvious reason advertisers don't want to do it. we're probably going to see that for a while as the pandemic is overshadowing everything else, which is right, and you should do in these times. on the other hand, we are seeing an enormous up tick on our media asset when it comes to usage of yahoo finance, yahoo sports and

our yahoo news so we have much -- >> a good basis for going forward when you come out from this but clearly a downturn now. >> always appreciate you taking time and very much happy you've been able to share your insights over the last difficult weeks. chairman and ceo of verizon. carl all right. david, our thanks to jim hope he has a good weekend we'll see him tonight. >> a boozy party what do you say? zoom in 2:00 tomorrow. i'm going to do one. >> i'll wait for the invite. >> drop by >> have a good weekend, jim. good friday morning. welcome to squawk on the week. trying to hang on to the green here dow session high was up 202. the data has been week

durables, uk retail sales and now let's get to rick santelli >> our final read for april on sentiment. remember, our mid month read was 71 so it moved from 71 to the new final at 71.8. that is the lowest final read since the end of 2011, december of 2011. and maybe one of the reasons the market is moving maybe some thought they'd see a little bit more of a bounce off the mid month read since this is april, it is catching corona economic effects. if we dig through it a bit the current conditions move from 72.4 mid month to 74.3, and our final read on the inflation numbers, one-year inflation at 2 .1 same as mid month and 2.5 ontw to five year the one-year inflation rate has come down. at least in part, that's coronavirus related. there's many deflationary

pressures through the economy. carl, back to you. >> rick, thank you we'll keep our eye on that data as we look at georgia and try to gauge consumer reaction to their loosening of restrictions. the president is going to sign that aid measure passed by the house yesterday. $484 billion is now mnuchin and others talk about what comes next >> we find ourselves in this sort of new trading range. after the market has rebounded so strongly from those march lows after that deep selloff, we've been going back and forth, and you can see it in the flat action today also was on board for the gilead roller coaster ride yesterday. at one point just in speaking to traders and people about how much the market is pinning their hopes on this gilead remdesivir and the disappointing word according to w.h.o. from china that it was a flop which gilead says you know, sort of there's

still hope for this drug there's so many other treatments out there. i wanted to bring some attention to maybe they don't get as much attention as the gilead remdesivir you have the anti-inflammatory drug being tested. regeneron's cocktail of antibodies the plasma study across hospitals in this country led by the mayo clinic. other anti-inflammatory drugs and some smaller drugs as well from distributed bio and other from countries in japan and israel so that continues to fuel some hope, i think out there that we can, perhaps, open normally if we get some sort of good treatment against this disease in the meantime, you've got stimulus flowing and there's breaking news on that from the federal reserve. adjusting rules around bank accounts and making some other headlines. steve liesman with the details >> yes sara, from the medicine needed to attack the virus to the

medicine that's being used to help the economy, the federal reserve releasing some data about the lending programs that it has launched, the emergency lending programs it's launched for the virus, and this is part of a required disclosure under theed dodd frank rules when the fed uses emergency lending powers the fed is saying under the primary dealer credit facility it's loaned $34.5 billion through the middle of april. and that's a facility for a primary dealers to get loans up to 90 days under the commercial paper facility it has loaned about $250 million and under the money market facility, $51 billion. the federal reserve saying it doesn't anticipate losses from this that's part of the reporting requirement. and in one of the programs it's earned so far $5 million of interest which one was that that was the pvcs. this is part of the new

disclosure when this fed uses the emergency powers got to report to congress. the fed yesterday told us that under the care act programs it's administering we're getting disclosures of the names, the amount of loans every 30 days. >> steve liesman steve, thank you also seeing a headline the fed can allow customers to make unlimited transfer and withdrawals from their savings account, removing the six-month rule carl >> all right sara, we'll keep our eye on that obviously a lot going on even as we're talking about those prospective treatments, the fda out with a statement warning against the use of hydroxychloroquine we'll watch that joining us david haro who manages oakmark funds. good to talk to you. >> happy friday to you from chilly, cloudy wisconsin >> yes same weather here.

i wonder if you could talk about just the range we're in and there's been so much discussion of 2800, 2820. we obviously got denied yesterday. it's hard to know if that's because valuations are at a two decade high or because we got some random headline that was net negative on gilead why do you think that number seems to be increasingly important? >> well, as a long-term kind of value investor, i don't focus on these day-to-day movements and technical levels i will say the u.s. markets had a relatively stronger recovery than what's been happening oversees, europe in particular and i think there are areas where -- that are still extremely oversold, and this is where the investor focus should be on, places where there's good global businesses, good global franchises but share prices are down 30% to 50% year to date

the day today changes in the u.s. make for good play by play, but we really try to focus on buying the best quality businesses at the lowest price and where the market has let fear overrun any sense of basic valuation parameters and so to that degree, i think these markets still offer lots of value if you look at the right places >> and those right places involve sectors like >> like if you look at the european financials as an example. they're down anywhere from 35% to 50% year to date. yesterday a company like credit swiss reported earnings. this is a company that's well diversified from both products and geography. it has a good, solid sound balance sheet. there's other european financials likethat are trading 30, 35% of price tangible book

value. and they are very, very strongly protected given the strength on their balance sheet, and they've been ignored and almost used as shorting tools by investors, by traders but real investors have an opportunity here for when they recover, when these types of businesses recover, they're not going to be up 20% or 30%. they're going to be up 50 %, 120 % when the recovery does come, and i think these are the types of situations investors should be looking at. they should be looking forward as opposed to just looking in the rear-view mirror >> david, i know you've been beating that drum on the european banks for a while now it's interesting you picked up a few names in some more heated spaces like energy energy exploration production company eog and booking holding in the hospitality sector. why are you going for those

riskier-type names >> well, in the travel space in particular, we like those businesses that are asset light and strong balance sheets. and a company like booking, for instance, is very asset light. and it has the financial strength and balance sheet to make it through this eventually travel returns. we, of course, don't know at what type of a level or speed this return occurs but travel will return and so we look for companies like a booking and international portfolios we own trip, the biggest online travel agency in china so there are ways you can play a return to travel in a more asset-light lower risk manner. and a company like booking or trip are two examples of this. >> what about energy >> yeah. international portfolios are really just exposed to one

canadian producer in all this. and we do believe that today's price of energy is actually quite unrealistic. six, nine, 12, 18 months from now it's unlikely that these low prices will be maintained. now, over the medium and long-term, it's hard to be an oil bull, given the supply conditions and the demand conditions but in the short and medium term, we think there are places where you could advantage yourself by looking at select energy companies that have good low-cost exposure, exposure to gas and good exposure to the market meaning getting their product to the market but you have to be very selective. and you have to be -- >> i was going to say -- >> balance sheet -- >> when you talk about these opportunities, are you talking about equities specifically or credit or to what degree to

stock pickers need to be worried about delusion down the road people are having to sparse various qualities of the capital structure. >> yeah. you really have to look at this period of economic instability, balance sheet has to be almost the first and foremost balance sheet and cash flow generation during the next three, four, five months has to be the key focus of any investor because first and foremost, the company has to make it through the period then you have to look at the business model and as the recovery begins to take shape, and there will be some recovery, and as the -- who will be the winners? who is positioned to take advantage of a recovering global economy? these are the things we try to measure and take a look at when valuing businesses and you know, the market is even shorter-term than normal if the market used to be focussed on the next couple of

quarters, today the market seems to be focussed, the stock market, that is, on the next couple days or the next couple weeks. and if you're a real long-term oriented investor, you can take advantage of this. right now we're out of favor, but it will come back and people will begin to consider valuation and price. and this is something they're not considering today. but to get to that stage, you need to make sure you're invested in businesses that are soundly financed and have the business model that will allow success for when the recovery begins >> it's easy to blame the market for being short sided but they have huge swaths of a vacuum of corporate guidance where companies aren't giving us any clue huge binary outcomes on things coming in the next couple days like how consumers in georgia respond to relaxations

it's hard to get around that, isn't it >> we do have some clues you can look at china. it isn't a place where you get the most accurate data from, but china was kind of first in this and first out. we can kind of look over at china and see how consumer behavior is happening and. in the auto sector we see february in china was down and march down 45 %, and in april we can see this data, it's far more constructive with sales maybe some of our premium producers only down 0% to 10 % we can see as we come out in china. we can see some better consumer behavior a lot of the firms have restaurants occupancy and people are returning to restaurants and buying cars in china so every place is going to be a little different, of course. consumer behavior is not so

monolithic, but we do know that as time passes, and we get through the health portion of this crisis, this will also begin to ease up the economic portion of the crisis. but it's going to take some time, but as investors, we know that our business valuations aren't just the next couple quarters. it's the next year, the year after, and all the way to perpetuity so we have to consider everything and not just the couple of weeks or quarters where it's very difficult. one of the reasons why you're not getting the guidance we all want is because no one really knows what's going to happen in the very short-term. >> that's where value investor play a role. i hope the weather improves over the weekend. see you soon >> thank you vefor having me. take care.

>> back to david faber with news >> yeah. i have breaking news at&t is having the annual meeting virtually. i did want to share news that we did just get from the company's chairman and ceo he will be stepping down as the ceo of at&t on july 1st to be taken over in that role by don stanky, the man who is currently number two at at&t, overseeing warner media john stanky will become the ceo of at&t on the first of july stephenson retiring after 13 years as the company's ceo he will remain as the executive chairman of the board of directors until january of 2021. and, again, the company's president, chief operating

officer will become the ceo effective july 1st and also a member of the board of directors. not unexpected in many ways. stephenson was expected to step down during the course of this year obviously nobody knew we would be in the midst of the crisis we are right now. one question had been whether stanky would be deemed to be the gentleman or lady to take over for him, but the board has decided to move in that direction. don't forget, elliot management just by a percentage, quite small overall percentage ownership has had an influential role at the company to some extent, and i have a statement from their partners saying they support john stanky as the company's next ceo they say they've been engaged with the company throughout the search process, that service a

robust one including a range of highly qualified outside candidates they look forward to working with him as he begins his term as ceo stephenson changing at&t dramatically over the course of the 13 years that he has overseen the company with significant acquisitions the likes of which we know well. direct tv which has certainly not been the best of deals given the decline in subscribers there, and, of course, topped by the acquisition of time warner which took quite some time to get done given the opposition of the federal government to it the trial they had to go through to get the deal done which cost them valuable time, but moving away from the wireless business to a certain extent as the core business at the company, mr. stephenson's strategy focussed on that. now it will be john stanky's company to run wanted to get that out there i don't believe the release is out yet, but they had this

virtual annual meeting and mr. stephenson shared the news during the course of the meeting itself with everybody who was following along virtually. >> a huge deal the stock has been jumpy but holding on to the gains. he remade the company. it looks more different than when he took over. what do we know about mr. stanky, his background and assent to take over this media conglomera conglomerate >> he's a long-time telecom executive. of course, he did get a great deal of attention when he took over the warner brother assets we sat down for an interview in the fall, i guess, when i went out to l.a. when they introduced hbo max which soon will be available roughly a month from now, i believe or less, they will be introducing the service to a public that is certainly

looking for any opportunity to consume things at home but he's been running that there have been a lot of questions in terms of his leadership style, i think it's fair to say. but he's a no nonsense guy and he was always seen as the potential heir apparent, but when elliot came in and started making noise to a certain extent, there was an expectation, perhaps, that it would mean a more difficult ascension for mr. stankey. you heard the statement from elliot they are supportive, and we'll see. this is an unusual time to say the least, to take the reigns of one of the country's major companies at this point. we just spoke to the ceo of verizon talking about the wireless industry. wireless is the least of the concerns at at&t, frankly. it's much more been on the continued erosion of the sub base of direct tv, and think about warner media right now facing the problems a lot of media companies do

a lack of advertising. a lack of sports on some of their key networks hbo, however, perhaps a power house, but hbo max, that introduce, that's a key for this company, no doubt about it >> the coronavirus prices, the company recently came out with earnings, detailed more about how they're being affected, committed to the dividend, but it's an interesting time to take over a company like this where not only do they -- does he have to navigate through the crisis, but also potentially changed landscape for business and for media, and just the way consumers behave >> yeah. no doubt there's benefits to it, of course well, in terms of the need for as much robust broad band as you can possibly get into the home and 5g wireless to the extent

that is going to be able to replace it in some fashion consuming as much content as we all are given we're stuck at home at this point at the same time there are continued questions about the satellite direct broadcast satellite business whether there's potentially value that can be created in some fashion despite the fact that it generates a decent amount of cash flow and the wireless business. again, coming back to hans who we spoke to at verizon, how many people are going to be unable to pay their bill for the short-term how long is that going on for? how long is it going to impair the company? at&t has a large debt load that has certainly been a key question also for the company in terms of how it manages that and how it's able to continue to pay the dividend and focus on cap ex, and everything else needs to it's continued to say it's fine financially. that has always been an

overriding question to some extent, but this clears up any questions about leadership at the company. again, mr. stephenson, the long-time ceo who will remain on as executive chairman until january of 2021. >> remarkable we have more visibility on management since they did pull their guide on wednesday. david, thanks. we'll take a quick break more squawk on the street continuein mens aomt. since 1926, nationwide has been on your side.

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dow up four points let's get the latest on the coronavirus outbreak we have details. >> good morning. good morning, everyone michigan's governor has extended her state's stay at home order until may 15th some businesses will be allowed to reopen including landscapers and plant nurseries. more outdoor activities will be allowed like golfing and motorized boating. one out of every four american adults say someone in their household has lost a job because of the pandemic. that's according to a new poll by the associated press. however, more than three quarters of those polled say they believe the jobs will return the international monetary fund and the world trade organization are urging nations not to restrict exports of food and medical supplies they say moves can be counterproductive and could limit food production. a string of throw sures of meat processing plants is

raising concerns about food shortages. u.s. beef production last week fell 24% from just a month ago levels by one estimates. pork production is down some 25% and poultry is 10% lower find more on our coverage by heading to cnbc.com. sara, back to you. >> energy the only sector that's positive with the group etf ticker xle up 2% as we've seen a volatile week for oil where we saw the futures contract for the current month fall below zero for the first time ever. joining us is the founder of energy futures initiative, the former u.s. energy secretary thank you for joining us good to see you again. >> good morning. >> the damage is done. a 70 % drop for the price of

oil. how do you think about how dire it is right now for the u.s. energy industry? >> we should make the distinction energy is not just oil. we also have some drops in electricity demand, for example, but certainly far less dramatic compared to the oil sector in particular where we probably have a drop by a third in demand now, i do think that as the economy starts coming back, there's no reason to think that most of that demand, at least, will come back there are uncertainties. will people shy away from public transportation will there be a shying away from flying as much as there was? but basically, i think there's every reason to expect a comeback in demand but, of course, for the oil industry, there's also the secular reality that over some period of time, the energy

transition to a much lower carbon world will continue, and that's why we also see at the same time we have the oil companies obviously worried about the short-term issues, the large oil companies are also very actively preparing kind of new business models for the time in one, two, three decades from now where we will see a much lower carbon economy >> in that reality, in that future, can the u.s. be energy independent? >> well, first of all, i have to say that i think the term energy independence is not exactly used in my view in the right way. that is, even if we were to have a net zero imports of energy required, we would still be very

coupled to the world energy system, and certainly up to now, we see that right now there's a big fluctuation with west texas, the oil index, but the reality is we remain very strongly coupled to global energy prices. those mean our economy is strongly coupled to how that goes i find the use of that term energy independence a little bit misleading in that context now, clearly -- please go ahead. >> i'm trying to figure out the short term pine versus long time mnuchin is apparently considering a lending for companies in need of assistance. is that something the country should do, bail out the shale

industry >> i might say the government is already taking some steps. for example, the department of energy right now is evaluating bids for use of the unused space in the strategic petroleum reserve. so that will help if you like, take oil off the market. it may not be the full solution, but that's an example of what's already going on i think it's, however, worth remembering, that the issues with the oil sector were there well before the coronavirus came as you know, the investor community, for example, was expressing its strong opinion that the producers really had to start getting cash flow as opposed to running on debt, on inexpensive debt so i think there was already a major restructuring going on,

and i think as we come out of the virus, one's going to have to disentangle what are the impacts of the virus and the demand destruction in the short-term, versus what were going to be significant structural changes in the industry, probably leading to less production in the united states the production as you know went up very, very dramatically to, like, 13 million barrels a day, and i'm not sure that was really sustainable in the long-term >> secretary, i want to change the discussion for a moment to the nuclear threat initiative of which i believe you're still the president. it's come up in a number of conversations i've had people concerned we're so focussed as we should be on the virus, but worrying our enemies and perhaps either others with not particularly good intentions can take advantage of us through

cyber security or concern about the prevalence or potential for nuclear weapons. you're focussed on that at the nuclear threat initiative. is it something you're concerned about? >> absolutely. and the virus, for obvious reasons gets attention, and despite the name nuclear threat initiative, i should say we have a very large program on bio security and pandemic preparedness, and, in fact, last fall we published together with johns hopkins and the intelligence unit a major report on gloebd pandemic preparedness. unfortunately it proved to be prescient in evaluating global pandemic to be dismal to be honest nuclear, and i might add another major future disruption to society, climate change.

both of those are -- we've lost a lot of focus in the public discussion now, on nuclear in particular, there's -- there are major things happening right now that need to be decided that are being put on the back burner in terms of public discussion the most clear example of that is the last vestige of major architecture this country as built over many decades, including in the reagan administration, it's called the new start treaty it puts limits on nuclear weapons and delivery systems very importantly, it provides the last remaining boots on the ground verification program for the united states and russia in terms of the nuclear weapons stockpile. a reminder the united states and russia still possess more than 90% of the world's nuclear weapons. that means many thousands of nuclear weapons.

well, the new start treaty will expire in february unless the essentially automatic five-year extension happens. our view is strongly, the view of many including in the military, that the new start treaty is to our advantage the russians have announced they are prepared to sign it. no preconditions that is to sign an extension which requires merely president trump and president putin agree to that. frankly, i think it's mysterious the united states has not taken the same step. there's an example that unless something happens in the next months, six months, eight months, that we will have lost a very, very important llt of strategic stability with nuclear weapons, and that threat, as you basically said, that threat is

if anything now, exacerbated even compared to the last few decades, by the risks of cyber security because our command and control systems are not invulnerable to being cyber attacked so there's so much to do here, and it would not be to our country's advantage to sit back and not keep thinking about this >> we opened a whole can of worms on that we could do a whole show on, but we can't. thank you for joining us >> thank you >> the markets are shooting for three straight positive days the majors are on track for their first silong week in three. we're back after the break every financial plan needs a cfp® professional --

confident financial plans, calming financial plans, complete financial plans. they're all possible with a cfp® professional. find yours at letsmakeaplan.org.

is it time to rain in on market augs? one strategist makes the case on trading nation more "squawk on the street" coming up.

georgia starts phase one of the reopening today. despite giving the green light to gyms, barbers and massage therapists open, many are choosing not too equinox is one of them we have the executive director

of equinox good to see you. >> thanks for having me. >> tell us what is your decision about georgia? >> i think you have to take a step back at look at the context of how we're operating during the closure. we closed in mid march, and mid march we focussed on protecting our employees. and so you need to the fitness industry and hospitality at large, retail or anything, any industry where you have zero revenue, most industries have stopped paying employees we took a different approach i think it speaks to how we're thinking about georgia as well we have about 65% of our employees still on the payroll that includes the group fitness instructors and personal trainers we decided first we're going to protect our people that was an easy decision. then we made the tough decisions around reducing not only to special spending as we moved through that c we started focusing on engaging our community and supporting our community. a lot of that was through digital efforts.

i wanted to share that first we've been working on our reopening plan and identified a task force to work on a comprehensive plan with our own team of medical experts. so when you look at the global pandemic, it's really a localized issue. as we look to reopen, we'll be working with our team of medical experts to determine what's best as well as for local government officials. in the case of georgia, where we're permitted to open today, we've chosen not to because while we're eager to open and a lot of our riders are eager to come back as well as our team at soul cycle, we also have a responsibility to continue to embrace our high standards and not rush to open so we're going to take a wait and see approach and we'll do this in all of the cities that we operate whether it's the u.s., canada or london we're going to work with local

health officials and also work with our own team of experts to determine when it's best to open and creating the safest environment for our teams, our safest environments for our community of members or riders as it may be we need to create confidence with them that it's okay to come into our clubs and our studios >> that's interesting. i neen, harvey, we've seen examples where it's been evident your customer base can be vocal about all kinds of things. we've seen episodes of that in the past it sounds like you're saying you're going to work on your own practices, but you'll wait to hear from them about whether or not they're interested in coming back, and you're not hearing that yet is that true >> well, we're definitely going to -- we're already talking to them, and they are a vocal community. we appreciate that it's a -- it reflects on how we engage and how passionate they are about our brands we just did a survey this week

of some equinox members. 70% said they'll come back when we open. 70% for using it when we closed. we know there's a strong desire for our community to engage. and they trust it. they know we're going to take our high standards to another level and be thoughtful and protecting them and our employees and we've got advanced things we're doing and basic things we're doing, but we're also talking to our community. we have to consider all of our stake holders to make the right decision for everybody involved. >> harvey, it's sara outside of georgia how are you managing through this economic shutdown are you still paying your employees? are you still paying your rent >> so hi, sara good to speak with you obviously we are a larger u.s. company but with operations in canada and the uk. and we continue to pay

approximately 60% or two-thirds of our employees i'm very proud of that once again, it's so unique, and that's how we think our employees are the heart of who we are and what we do. and protecting them and taking care of them i can't tell you how many emails and texts i've received from employees saying thank you that i can still pay my rent. thank you. i can still take care of my sick parent at home who was sick prior to covid-19 and i didn't know how i was going to do that. we made the easy decision and continue to do that. in the first couple weeks of closure in march, we paid them in full. we said we'd keep everybody on health care coverage throughout the pandemic and then starting april we went to a reduced compensation. it was minimal but it was reduced so we could keep as many employees on the payroll as possible i don't think there's anybody else doing something like that that's been critically important to who we are and our future success. in terms of the essential spending, obviously we have had

to make some tough decisions it was easy decision around employees but it was a tougher decision where not to spend money. and so i think it's out there that we're not paying rent we have great relationships with our landlords. they want to see us around for a long time. we are an important tenant because of the anchor or nature whether it's equinox or soul cycle. most of our landlords agree with what we're doing in terms of taking care of our people and are working with us for the future in terms of what we do about the rent issue >> harvey, without a vaccine for a while, can you foresee a future where we have packed gyms as we had before this crisis broke out? >> well, for what we do, we're never packed we serve our community a different way. i think there's going to be even a stronger flight to quality i think that speaks well to our

already high standards we're going to regulate how many people can come in our clubs or studios or classes and we'll do that largely through technology our app will be set up in a way where we will control how many people can be in a club at any given time same thing in scheduling clas s classes, and then we're going to control the physical distancing and encourage to continue to control social distancing. but we're going to do -- we're going to do temperature checks we're going to have a health declaration before people come back so our community collaborates with us in taking the appropriate standards or precautions that they should not just what we're doing. we've identified innovative techniques in terms of electrostatic sprays we'll use that are prove ton kill covid-19 we have new hand sanitizers that have higher alcohol content and are also proven to kill covid-19, but all of this is working with our team of health

experts who are advising us on the actions we are going to take what's most important is creating a healthy and safe environment for our employees and for our members. and we'll take whatever precautions we need to do to achieve that >> harvey, it's david faber. given that you're saying there, i would assume it's very difficult, but you have to be thinking what are our numbers going to really look like in terms of customers who perhaps are willing to pay for that kind of environment but customers who may choose this is not going to be for me. do you have any idea of what your roles are going to look like in terms of members come when you do reopen fully >> david, there's so much unknown here it's hard to answer that question. i'll go back to what i said before about 74% of our members say they're going to come back when we reopen one of the things we did in terms of protecting and supporting our community we haven't billed our members since

february and put on freeze at no cost, although when you typically freeze there's a fee associated with it we believe over time most of our members will come back, but we need to address their concerns and fears. we're not going to once again rush we do believe that there will be challenges between now and vaccine or when other therapies are available that people feel more comfortable we also believe when we get on the other side of that there will be more demand for who we are as equinox or soul cycle than ever before because there will be a flight to quality from the consumer a flight to quality from the talent and that speaks well to where we're going. the future has never been brighter, but there is an interim period, we don't know how long the interim period is going to be, where it's going to be challenging and the lots of unknowns we've proven that we can adapt quickly and we'll continue to adapt. a perfect example of adapting what we've done with our virtual personal trainers. we didn't have it before we

closed and we have 65% of trainers engaging with their clients in personal training and we have 3,000 trainers we'll continue to adapt as we need to but there's a lot of unknown in the coming weeks and coming months. >> finally, harvey, is it too simplistic to argue that a gym might come back before a room full of bikes where you take a class? >> look, i think it depends on how you operate, and so part of that is i think in our environment as equinox, we can do things that others maybe can't afford or won't think about doing. i talked about some of the advanced practices we're doing basic things which goes without saying in terms of the type of cleaning and what have you, but i think we can control the environment there and i also think we can control the environment in the studio. at soul cycle a typical studio might house 60 people at capacity that studio will have 20 people in it for a period of time

so we'll regulate once again the number of people, the density of our clubs and our classes to create a safe environment and make sure our teams and members and riders feel safe we need to build that confidence in them and that's what we're committed to doing >> harvey, appreciate you coming on and sharing that with us. always good to talk to you harvey spevak of the equinox group as we keep our eyes on georgia and, david, now our eyes on the president's twitter account as he comments on randall stephenson great news the ceo of heavily indicted at&t which presides over cnn was forced out and goes on to say hopefully the replacement will be much better. >> yeah. i am -- yeah i guess he's focused on that interesting. of course, as we have said this is not a surprise that mr. stephenson is stepping down. he's given every indication this would be his last year at the

helm of at&t and john stankey was presumed to be the frontrunner to take over and will be taking over the job of ceo come july 1st of this year and i'm sure that many of the shareholders share the president's sentiments, carl, he will be better than his replacement so to speak in terms of creating more shareholder value. >> david, there's a history here, right? president trump's department of justice tried to block the merger of that&t's buyout of warner media wasn't success of time warner and part of the argument the company had was that president was interfering i mean this has been a long-running thing. >> it has. it's interesting because mr. stephenson's politics are not exactly to the left. i think i can say that but nonetheless, the president has been focused on this company in part because of its ownership of cnn he was focused on time warner

prior to that. and as you say, sara, it was a very much unexpected opposition from the department of justice given the nature of the deal was a vertical merger, not a horizontal one, that they would oppose it. ultimately they went to court, judge leon ruling in favor of the company, allowing them to proceed with the deal putses the amount of time that it took certainly hobbled at&t in terms of its integration with time warner and something they look back on i think with regret in terms of how long it took. you're right, there is no shortage of antipathy from the president for any of his enemies as he sees cnn as one. mr. stankey will now have to deal with that as well >> at&t shares still higher up about 0.2 with many americans having to work from home, what changes should they be expecting when they return to the office jane wells has been looking into that story for us. good morning, jane.

>> hey, sara when we have to go back to work, i talked to a couple of office designers about what may change. you're going to see video of what cnbc headquarters looks like right now as most people work from home designers are starting to talk to clients about what's next in the short term you may see teams divided of employees which come in on different days, sitting at different desks, more space per worker, one way foot traffic, the high wall cubicles will come out, communal hangouts go out and what about the conference room? >> i would say that conference rooms are probably off limits for a while. i think even though we might be under one roof we're probably still going to be doing zoom meetings >> and what about the bathrooms? so maybe you can open the door with your elbow and have touchless soap dispensers, touchless sinks for washing, even hands-free towel dispensers and then you come to the toilet stall. traditionally not hands-free. >> there's ways that you can

open even toilet partitions with your foot, thinking through what things are cleanable, where you use grout and where you don't. there are ways that we can start thinking through even incorporating voice activation to open doors and the like that will make it an easy experience. >> toyota said in its conference call it's going to put plexiglass from bathroom sinks and discourage people from using the elevator and we may sees the return of the operator that touches the buttons for you. >> that is wild and a lot of thought being given to that. thank you. we'll send it to rick santelli over in chicago good morning >> good morning. thank you, sara. i would like to welcome jane sorensen, president elect of the national pork producers council. let's get right into it. not only do we lose restaurants in the pork business, but now plants, processing plants are closing due to coronavirus

infections and we're seeing potential shortages of pork. tell us what's going on? >> yeah. you hit the nail on the head, rick we are definitely in extreme peril right now as u.s. hog farmers, we've lost 25% of our market to restaurant closures and unfortunately due to covid-19 and worker absenteeism we're losing packing capacity too. hogs are backing up on our farms and we are bleeding money. we're losing so much kapt. our swine economists tell us we're about to lose about $5 billion as an industry collectively for the rest of this year and that for a hog farmer means about $37 per head, which is a lot of money. lot of fear going on right now. >> what are your suggestions in the big picture, how to get these things back online much is absenteeism due to fear

of coronavirus which we all can understand i hear the governor has some plans for tests. how is that going to go? >> you know, we've seen a tremendous amount of resources go into keeping the plants open, keeping them open and that line speed going. a lot of ppes, lot of dividers, lot of extra communication, hazard bonuses i know the governor here in the state of iowa has done a tremendous job in to mitigating that risk, but it's a big concern for u.s. hog farmers right now in terms of what that closure means to us and backing up our pigs. >> very quickly, even though phase one is done with china, obviously coronavirus has changed many things. what about the export market finish us off about the potential to save industry through exports? >> yeah. i mean covid-19 has an impact around the entire globe right now and our exports unfortunately are slowing down

the u.s. is dependent on an export market. in mexico, for example, stay-at-home orders and labor related trade logistics are slowing down exports in china we have such a phenomenal opportunity to export more pork into china. >> all right listen, jen, we're out of time and have a hard break. we will get you back after we get more information on this thank you for your thoughts on the future of pork and, carl, back to you. >> all right rick, thank you very much. rick santelli. good friday morning, everybody welcome to "squawk alley." i'm carl quintanilla and morgan brennan and jon fortt coming to you live from various locations, narrow range today, the dow going back and forth between the green and the red, shooting for three straight days up, although we'll be looking at its first down week in about three big news of the morning, though, david faber brought us about an hour ago randall stephenson of at&t will retire on july 1, remain executive chair until january and john stankey wil