monday, april 27, 2020 "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. we have a big lineup of guests starting in a few minutes with the latest on the pandemic from dr. scott gottlieb later, fanatics executive michael ruben will join us and mohamed el erian, tom friedman, and new jersey governor phil murphy all of those names to get to coming up. furs, let's get to the markets. u.s. equities, dow indicated up by 250 points. s&p up by 30 points. the nasdaq up by 111 last week was the first down week we had seen for the market in three weeks if we see gains from the markets today, the dow like it is up right now, that would be the fourth day in a row for gains

we've seen for the dow in a row, the first time that's happened since february this is all happening despite crude oil prices the treasury shows you the ten-year is yielding 0.627%. there are crude oil prices, generally when we've seen pressure on crude oil, that's put pressure on equities as well that's not the case this morning. wti is indicated down by over 15%. that's a decline of $2.66 to $14.28 a barrel. brent crude down by just 3.3%. it's now trading at $20.73 andrew >> meantime, an update on the pandemic and the numbers we bring you every morning about where we stand here's where we do stand global cases now are at 2.9 million. in perspective, cases in the united states are at 965,000, closing in on 1 million. 288,000 of those cases are from new york state with another 109,000 of them in the

neighboring new jersey yesterday new york governor andrew cuomo outlined the state's plans to reopen the economy in phases beginning on may 15th now, the first phase involves construction and manufacturing the second phase includes businesses opening with social distancing practices and with personal protective equipment available. daily hospitalizations in the state have seen a choppy decline since the first week in april. one of the things the governor has talked about is waiting until those numbers become less choppy as becky mentioned, we'll get an update on where things stand in new jersey and from the plan there from the governor, phil murphy that's going to happen in the 8:00 hour, an interview and conversation you do not want to miss joe? >> thanks, andrew. white house economic adviser kevin hasset will be on the show but he warned unemployment levels could hit not seen since the great depression speaking to reporters on the

white house lawn, he said the unemployment rate could hit 16%. warned the next couple of months will be terrible for economic data that's at 8:00 a.m. eastern is when we will speak to kevin hassett, who's back. he was gone and now back an economic adviser at the white house. on this week's agenda we have the busiest week for corporate results. more importantly, guidance on what's going to be coming next 142 of the s&p 500 companies will open up their books this week we'll be hearing from 12 dow components, including caterpillar, 3m, microsoft, apple and boeing again, joe, it's really not what we're hearing about the current quarter but what they see, what they're anticipating and happening in this month of april as well. >> life and corporate maneuvering goes on. speaking of boeing, becky, i love those embeaer jets, i fly them all the time on the short

flights we see that was a key part of boeing's strategy we'll see. in addition to the first quarter results, boeing will also hold its annual meeting and face the application deadline for a multibillion dollar aid package from the federal government. what i'm talking about today, the company is being accused by brazil's embraer of terminating a deal boeing citing inability to agree on final terms that's part of boeing's strategy previously embraer is accusing boeing of acting in bad faith in the negotiations obviously, boeing needs to conserve cash for collapse and demand in planes that's the real reason the deal was killed andrew and becky, you've been on these embraer jets one seat on the left, two seats on the right easy on, easy off. i never feel like i'm on that

small of a jet. >> i hate them. >> you do? i like them. >> i hate them >> you know you're on a jet. you like -- you like about 15 seats across. >> takeoffs and landings, if you're in the back of the plane, it's an issue if you get motion sickness. >> you know, andrew, if you're not in the front of the plane, it doesn't matter on those because there is no front of the plane. you don't have that stigma, you know what i mean >> no, it does matter. i don't throw up in the front of the plane. all the seats are the same, but i don't throw up in the front of the plane. when i'm in the back of the plane -- >> did you throw up to walking to sit down today? it doesn't take much for you, does it? >> no, it doesn't be take much. >> well, every time you're on a helicopter - >> bigger planes are better. >> you get car sick. >> no, one time i didn't throw up in a helicopter -- twice. i didn't throw up when i got shot of an aircraft carrier. i did fine on that. >> really? see, i would have -- why, because you --

>> i was too scared. >> you had fainted so you were unable to. >> right, probably >> anyway, i like them loading one of those wide-body jets is like, are we there yet no, you're almost on the plane, though go ahead, andrew >> thanks, joe i will say, i don't know if becky has tried this, i kind of think you might not do well with lose chris mode on tesla, which is the segment i'm going - >> probably not. >> becky, have you been on ludicrous mode in a teslay et? >> i haven't i haven't. have you done it >> i have. and i almost threw up so i'm thinking it's -- it's fast >> yeah. >> anyway, we do have some tesla news actually, tesla mixed with covid news, of sorts a little bit about reopening and getting back to business and some of the trials and tribulations and conundrums it creates, if you will tesla management now asking dozens of employees to return to

work they're asking them to do that on wednesday that's in order to resume production at the company's fremont, california, car plant that's according to an intern correspondence shared with cnbc. they are asking for minimum operations at that plant through may 3rd. the county sheriff's office said health orders have not been relaxed. this is where things are going to get complicated and the orders will be re-evaluated by may 3rd. there will be some places where places ask workers to come back to work where everything may not be exactly where people want them to be you can already seesome of the friction that's beginning. when we return, a lot more on "squawk box" this morning. >> hold on, hold on, hold on. >> yes, joe. >> becky was raising her hand. i know you have a monitor, you can see that i'm trying it -- >> i didn't see her. >> you have to watch the monitor. >> now i do.

usually, i'll tell you, i try as much as possible because - >> oh, i know you spy on us. i know you spy >> she doesn't realize - >> that's why you got that thing down there. >> no, i've got it now, too. i like it. >> joe, i don't understand this is the way you're supposed to run a professional tv show. that's why you do it. >> do what >> what were you going to say, becky? >> i was just going to say, i think this gets back to the question of business liability you know, all of these questions that have kind of circulated it's been brought up to the white house. they said they're considering this if you start bringing employees back before those bans are lifted, how is the company not liable for anybody who gets sick under that environment this is where it's going to get interesting as companies try to come back, states try to open up and businesses try to figure out what that means for them. >> i'll tell you something terrible i talked to a ceo this weekend and we had this exact conversation about what happens if the employee gets sick in

their place. this was actually a very responsible ceo who was not trying to bring people back. but he said he had had lots of conversations with ceos who said, look, if people get sick, if lots of people get sick, nobody's going to figure out where they got sick from and that creates its own other conundrum. i think there are going to be executives, i hate to say this, out there willing to take the risk because the proof or the ability to actually bring that suit, unless you can prove that that entire factory was somehow completely negligent, it's going to be hard because you could say you went to the supermarket and, you know, went past somebody - >> disappointed -- >> if one person the workplace gets it and 200 people -- >> disappointed or not, more liable everybody is trying to work through this here. obviously, people are trying to get people back to work. you want to make sure if something happens, that guy is definitely in trouble if someone

gets sick. if you can't trace it exactly to the irresponsible ceo, then -- i mean, they're all trying to work -- you can get it anywhere. you can get it -- i don't know hey, will let me just -- we have to go. let me just ask one more thing here >> now we have to go >> because i -- i wanted to -- i want to ask you because this is unusual for the people that follow me on twitter they're telling me i need to watch a michael moore movie. you're talking about tesla have you heard of this michael moore movie and have you seen it do you have plans to see it? and why would my twitter people want me to watch this movie? >> i don't know what you're referring to which -- >> it's about all the renewable energy isn't -- this is michael moore. but it's dirty or it cannot do what it's intended to do in terms of cleaning up thins. that's what the movie is about it's supposedly very good. i don't know this is from michael moore, though, if you can believe it. >> i don't know the film.

>> now you'll probably get some stuff about it you were talking to another ceo. do you do anything but talk to important people on weekends, and scientists and ceos and small business owners and actually patients and everything else it's amazing to me >> it's called reporting it's my job. >> and you made -- you said, this was a responsible ceo unlike all those other - >> well, no. i was trying -- what i was trying to juxtapose to say this ceo was not saying it himself. he was not saying, look, i'm just going to -- i'm going to roll the dice, let everybody come back, if they get sick, i'll blame it on somebody else he's saying he was talking to another ceo who was saying that exact thing. i think sharing that with the public is important. the reason it's important is because there are ceos who are not going to be responsible about this and there are ceos who are going to bully their employees to come back to work before they have ppe, before they have social distancing, before they have all of the procedures and testing in

place. as long as the public understands that and knows that, that's the important part. that's my job. >> it's only - >> tell the viewers what - >> it's only 6:11 and you're yelling again. i don't know where you keep those soap boxes are they behind you in are they all labeled? not all ceos are going to bully people most people, andrew, are trying to do the right thing. and reopening a business, reopening the economy isn't necessarily a bad thing. there's people not like us and not like people on all of our cable competitors that have these great jobs at home and still getting paychecks but people aren't getting paychecks -- >> joe, 100% i want people to get back to work. >> you o you don't sound like it. >> get people back to work and get people back to work safely we want to get people back to work safely. that's the important part of all of this. if that is not your main goal, i -- then it's hard to understand what the sort of basic parameters are

it's safety first, then get people back to work. you could tell me, get back to work first, safety second. but that's a different issue. >> it's the way you look at things, half full or half empty. i don't think everyone is out there trying to railroad their employees getting into terrible, unsafe conditions just for the almighty -- i think everybody is trying to do - >> you go -- go talk to people in georgia the number of people -- we had one on our air on friday you go ba talk to the number of restaurant owners and all sorts of people in georgia, in atlanta in particular, who feel they are being bullied to go back to work i'm just telling you, that's the reality of the situation i'm not saying it should be. i think everybody wants to get back to work figuring out how you do it is the important part we can talk for the next three hours how you do it because there are interesting proposals that have been developed - >> i feel like dr. birx. >> so, everything else - >> this is all viewed with -- in

a political spectrum not everybody thinks - >> there's nothing political about this >> not everybody thinks -- i have friends down in georgia. >> there's nothing political. >> saying, isn't our governor great? isn't our governor great >> colorado -- >> i talked to someone he was a friend. not an important ceo. >> colorado is run -- colorado has a democratic governor. however, the numbers in colorado were very different than the numbers in georgia >> what's that got to do with -- what's that got to do that he's a democrat you said it wasn't political. >> you said we're looking at this through political lenses and i was saying - >> no, i'm just saying - >> not everyone in georgia thinks this is just a horrible -- there are people that actually want to do this, andrew maybe not tattoo parlors but there are -- >> no, no, no, there are a lot of people want to go back to work. >> go ahead, andrew. >> we have a lot more, as you might imagine, on "squawk box"

this morning we're going to talk to dr. scott gottlieb who can maybe add some sanity to this conversation about businesses reopening and how to do it safely, folks. take a look at shares of starbucks, partnering with venture capital company sequoia capital in china looking to form commercial partnerships with the next generation retail food and tech companies flexshares etfs are built with advanced modeling.

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welcome back to "squawk box. salons, retailers and other businesses in several states beginning to reopen over the weekend. in georgia, tennessee, texas, south carolina and alaska all began easing shutdown orders colorado, mississippi, minnesota and montana are set to begin reopening this week. meantime in southern california, warmer weather combined with lockdown fatigue brought tens of thousands of people out to beaches despite stay-at-home orders that's likely to continue as a heat wave in the upper 80s is coming to much of the area this week want to bring in former fda commissioner dr. scott gottlieb, also a cnbc contributor, sits on the boards of pfizer and alumina. he discusses in his op-ed why it's so important to win the race for a vaccine for the u.s.

economy. good morning to you. doctor, it's great to talk to you. i want to talk about that vaccine in just a moment i want to talk about reopening for a second because i did speak with a number of business leaders and also small business owners over the weekend who are in some of these states trying to make a go of it the real question they keep asking is, can they make a go of it it's one thing to say you're going to reopen. it's another thing to make your business work in a reopened world. if you're in the restaurant business, a lot of restaurant owners are saying, the entire economic model doesn't work if we actually have to be social distanced. meaning, if we have to go three more months like where half the restaurant is going to have to be empty and we have all these additional costs on top of it, you know, tell me i'm reopened but i might as well not be what do you tell those people? >> i think the question is, is the consumer going to come back? i think the way to bring consumers back into stores and

restaurants and hair salons is to give them confidence there really isn't pervasive spread of this disease in the united states the reality is, there is still pervasive spread of coronavirus across the entire nation there are parts of the country, states that never really had a significant outbreak, they certainly meet the criteria to reopen aspects of the economy. i count about five states that meet the criteria the white house has set out in terms of sustained reductions in new cases. for most parts of the country, they have plateaued but they haven't started to show sustained declines in cases. we're still showing 30,000 new cases a day and recording 2,000 deaths a day while we've plateaued, there's evidence we plateaued, and new york is starting to come down very slowly. across the nation we're in the throes of this epidemic. i think we have a couple of weeks to go before we see the sustained declines until we reach that point, consumers won't have confidence. you can reopen things but i don't think consumers come back in the numbers businesses are going to need. >> doctor, perhaps the single

most forwarded article around the education world over the weekend was a piece by the head of brown university on that university's plans to reopen in the fall and how they plan to do it i just want to walk through it for you. i don't know if you know about it because a lot of educators are saying, if that's how we have to do it, i don't know how we're going to he's talking about testing every single student, teacher, every single person who walks into the school on day one and then doing it regularly, all of the students wearing masks to classes, all big classes being done on zoom rather than in class, social distancing in the towns, restaurants, bars, all of that, would obviously be closed or in a social distanced way, taking over hotels in providence so you could use them as a quarantine infarminfirmary and g everybody's privacy away because everybody would have to be on an

app and every time you're tested, you would go into a system so, it would be a closed ystem and a lot of educators are looking at that saying, that's a very interesting model but if that's the model, that may be hard to pull off around the country. >> we don't know what's going to happen in the fall we're either going to have sustained spread of this virus and smoldering infection or we're not. and we have to wait and see. there's a real chance that come the fall, we have tools in place that we can mitigate small outbreaks and detect small outbreaks and we're not facing a constant risk of the infection or there's a risk we never get rid of the infection, in the fall it explodes into larger outbreaks or epidemics if the latter is true, i'm not sure we'll have college campuses it's a tough environment if we can keep the virus at bay, try to control it and small outbreaks and we're able to detect them quickly, we'll be able to go on with our lives with much less risk than we're

facing now we may also have, to the other point you said at the outset, a vaccine in the fall that's while not approved is deployable in the setting of an outbreak our tool box could be very different in the fall and our risk profile could be very different. >> dr. gottlieb, on that point, mitch daniels put out a letter to purdue over the weekend and perdue alum said, they think it's going to be okay because most of their students are of the age they think there won't be a big impact. i thought, you bring the students back and don't get them near the professors who are older. i want to talk to you about your piece in "the wall street journal" today this idea that we need to make sure we're building a vaccine and it's happening here in america first. that's a huge issue. and i thought about this a little before. there are potential vaccines that maybe look like they are on the cusp of things in other countries. what are the odds we're going to be -- where will we be in line in terms of receiving that

vaccination. i think that's your point, we need to make sure we're working hard here first. >> we don't need to be first what we want in an ideal world is have a vaccine simultaneously in many parts of the world the reality is vaccines that come to the market will be supply constrained no one will come to the market with a vaccine and have -- they'll have 50 to 100 million doses. as much as countries say they're going to share vaccines, they'll prioritize inoculating their own populations. with h1n1 we have a vaccination manufactured in a foreign country, a u.s. product manufactured in a foreign facility and that country said, we're going to hold onto your doses and vaccinate our population before we ship you what you're owed this is probably what's going to happen in an environment if you have epidemics and outbreaks in the fall we need to make sure we have a supply here, make sure we have manufacturers stood up here. we can't just rely on china or the europeans to share a vaccine with us before they supply their local population if you look at what's going on in the world right now, there's

six vaccines in clinical trials right now. three in early stage clinical trials three in more advanced clinical trials the three in advanced clinical trials are in china, entering phase two, phase three studies they may have a vaccine, they said, in early 2021 that's fully licensed and available for their population so, we risk being behind the curve on this and not having it available. and the point i made in the piece is that, you know, this is a public health achievement but we also neild to remember that the first country to have a vaccine and be able to mass inbeing on you late the pop lal population is first to restore their economy. hopefully this is a wake-up call to policymakers and say we need to put resources into this. >> you saw the w.h.o., it was almost a controversy they changed some of their comments and their tweet it was reported initially that definitively that the -- your antibodies don't give you immunity long term for the virus. then the w.h.o. changed -- the

w.h.o. changed the language and said, there's no evidence at this point that you get long-term immunity do you think this is a case where we need to hope for the best but prepare for the worst normally the way the immune system works -- i know we have seasonal flu but that's a different flu every year normally you've seen -- if your immune system has seen something as specific as covid-19, there would be immunity for a certain amount of time, right, or we just have no idea whether once you've had it that you don't get it again >> well, that was a characteristically cautious and muddled statement by the w.h.o. consistent with things they've been saying throughout this epidemic there's no reason to believe that if you have this infection, you're not going to develop some level of immunity. you will develop some level of immunity some people might not. there's variability. but if this behaves like every other virus and every other coronavirus, you'll develop

antibodies how long that immunity lasts or how strong it is, we don't know. it might not last that long in certain people, it might not be that strong so you get reinfected but not that sick but most people will develop some level of immunity. i didn't understand that statement. it's inconsistent with everything we know about viruses. now, it's fair to say if you have antibodies and you test yourself and you have antibodies, it's no guarantee you can't get it again that's a reasonable statement. but you'll have some level of immunity >> dr. gottlieb, there was an article in the financial times that you retweeted that caught my attention for sure. it suggested the death rates could be 60% higher because of underreporting, particularly in some countries where they're not tracking it quite as closely >> well, there's been an excess number of deaths in every country, including the united states so, if you look at mortality trends and you back out the known cases of coronavirus, what people have succumbed to the infection and look at overall mortality trends, you see an increase in mortality over

baseline from this time period relative to other years. some of that might be covid. that's not getting diagnosed where people are succumbing to the infection at home or institutions where they're just not -- some of it is people who are dying and not presenting to the hospital we know people are having heart stacks and strokes and not coming into hospital because they're afraid to get treatment in hospitals because of the covid infection. some is excess mortality as a result of lockdown certainly some of it is coronavirus is not getting diagnosed. >> doctor, we're losing you a little bit i'm going to try to ask you one question if it works, we'll do it if it doesn't, we'll try to see you tomorrow and the question is, bill ackman tweeted last night, i believe it was last night, about therapy taking place using pepcid having

some success do you know anything about it. >> there's a trial under way in new york using pepcid. this comes out of china where people were given high doses we'll be able to turn over the card on that data pretty soon. these were people given high doses who are critical patients. i wouldn't recommend people use this on an outpatient basis. there is some data that supported going forward in the clinical trial. >> another question i have for you is another piece from the weekend from "the new yorker," juxtapose the way seattle and the state of washington and how new york and the governor and mayor handled this and talking about how in washington state, scientists led the process and in new york it was political i just wanted you to weigh in on that and whether you think that really was the -- is the reason that there is such a juxtaposition between those two states and what the ultimate

outcome has turned out to be >> look, i think new york was much more heavily eded than th pacific northwest and california and we didn't know it at the time california got lucky and new york got unlucky -- new york was also -- the first to react forcefully was the mayor of san francisco. >> doctor, we want to thank you. >> i want to ask him one more thing before we go to break. 2.9 million in the world, doctor, what do you think the actual, absolute minimum number is is it 10 million, would you say or give me a range and then we have to go >> i think we're diagnoses 1 in 10, 1 in 20 infections so multiply the number of infections by ten. >> so it's either 30 million to -- who knows. anyway, thank you.

coming up, oil prices tumbling again today we'll talk about the fallout, including the bankruptcy of a major offshore driller as we head to break, some images of the pandemic's impact from yesterday from across america. every financial plan needs a cfp® professional --

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time now for the executive edge let's start with the crash in oil prices down again this morning. it's tough to keep them up tankers all over the place, offshore, all of them full today a new casualty in the crash in crude diamond offshore says it's filed for chapter 11 bankruptcy protection the company recently skipped an interest payment to bondholders, starting a 30-day clock to either pay up or default diamond blames the unprecedented impact from the oil price war. becky? >> thanks. still to come this morning, we'll get you ready for the biggest week of earnings season. that's next. in the meantime, the u.s. equity futures this morning are indicated sharply higher you'll see the dow futures are

up by over 200 points. s&p futures up by 25%. the nasdaq up by 94. if the dow finishes in positive territory today, that would be four days in a row of gains. that's the first time that would have happened since all the way back to february "squawk box" will be right back these days, it's anything but business as usual. that's why working together is more important than ever. at&t is committed to keeping you connected. so you can keep your patients cared for. your customers served. your students inspired. and your employees closer than ever. our network is resilient. our people are strong. our job is to keep your business connected . it's what we've always done. it's what we'll always do.

good morning u.s. equity futures indicated up this morning, about 230 points or so on the dow 220 right now.

it's bouncing around even though oil is down sharply. down almost 17%. you can see that on the little bug in the lower right we'll keep that up market faces a big test this week, 140 of the s&p 500 companies are scheduled to report, including the likes of caterpillar, amazon, apple, mcdonald's and microsoft many expect companies to continue drawing guidance, no doubt. joining us now, global investment strategist at jpmorgan private bank. and i guess that the reaction that the market has to these, you can't just say, well, the bad news is already out. no one's expecting anything good it's going to be probably -- you know, you're going to look at these things and go, wow, that's really awful, but in your view, it's not going to be monolithic. there's going to be some numbers that don't look that bad versus some that just look abysmal.

the ones that don't look so bad, you might focus on those areas can you tell us which ones those are? >> that's right. exactly, joe on the broad market level, you're right, you'll see more downside consensus that's the history of the last week or so we've seen companies not beat as they typically beat. the average beat is actually a miss and only 65% of the companies are beating in the typical average about 70%. because of that, for the broad market, we can see some downside in earnings expectations as you point out, there are definitely pockets of opportunity that you will have more companies and the average beat yes, i'm looking to tech and health care. they have been winners year to date and i say, stick with these winners because these are the companies, these are the sectors delivering above average, above benchmark's earning growth if anything, they've been

strengthened by the current environment. so, to be fair, some of this is pretty consensus and some sectors are pretty well loved. once again, if these are the companies that are able to grow earnings above the benchmark, and, by the way, some of the future upside from new applications is not surprised in, that's why we continue to like tech and health care. >> just, you know, tops down and macro viewpoint, not individual sectors, do you believe the market looks out nine months or so, the stock market and if we're starting to see, you know, some thawing in what's going on over in europe, even in italy and different countries, spain, you know, kids are going back out, so there's some reopening of economies around and we're starting to see it slowly here in the united states, do you think that the market needs another big leg down based on the earnings we see over the next three weeks?

>> i don't think you need -- it needs a big leg down i am a little cautious on earnings, of course, but to your point, joe, it is being offset by the reopening of the economy conversation you're right, the market looks ahead. in fact, we know that on average the market troughs 3 1/2 months before the end of the recession. if we think the end of this recession is going to be by the end of june, because that's when we project 80% of the states are actually going to open up, so it makes sense we will likely have seen the low for this particular crisis already so, we know that the economy's not going to snap back to 100% level of activity. we'll probably have to wait a year or two for that but we know that earnings can actually have a v-shaped recovery from this year to the next we've seen that, for example, during the global financial crisis, even though the gdp itself did not recover yes, i think markets lead the economy and those sectors of tech and health care, i suspect,

will lead the economy as well. >> i mean, it's pretty unbelievable and, you know, if you've done this a long time, maybe you're not surprised, but to look at what we're seeing, 16% unemployment, let's say, and a negative gdp number we haven't seen since the depression, and the stock market is 16% off its all-time highs, now, that would normally -- that would look to someone as a total disconnect and we need to go, i don't know what the fair value would be, but that looks -- that looks totally out of whack, does it not? >> i would say there are a couple reasons why it's not totally out of whack and the first reason for that is, yes, you're right, there's a massive gap that's been left by the shutting down of economies and the spike in unemployment rate, but that massive gap is being plugged in, is being offset by the monetary and

fiscal policy. so, if we look at the balance of loan guarantees and bond purchases and paychecks, just checks going to companies and consumers, they go a long way to plugging this massive gap that has been left. so, i think one of the reasons why we've seen the s&p multiple move higher since the market's 23rd low is because it's pricing in a good degree of policy success. and i do think that's warranted. the other thing is, the markets do look what's going to happen with the economy the next quarter and the quarter after that in the next year. that's why it's so important for states to actually open up in may and june, because that's what consensus expects most gdp consensus estimates expect a second half recovery. to the extent we deliver, i think we're in good shape. if this becomes a more pro longed reopening, we might have

more downside. >> thank you we appreciate it. andrew, we're only down 16%. it's amazing, isn't it with all the carnage you have to admit -- how do you explain that >> it's remarkable well, we can talk about it the more you look at it, it's -- but it's an unbalanced index, for the most part. i think that's the thing to think about. certain companies are really outperforming and then there's this whole other group being left behind. they're being held up. i think the real question is do the big guys that are holding it up, do they continue to hold it up if you have economic carnage on the other end i think that's the big question and i don't think anyone knows the answer yet we'll see. a lot more to come -- thank you, joe a lot more to come when we return we'll talk to michael rubin about the impact of pandemic on retail. a reminder, you can watch or listen to us live any time on the cnbc app we're right back ♪ in nearly 100 years serving the military community,

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welcome back, everybody. the arverage price of gasoline fell nine cents. the national sarchlg now $1.93 gas prices are down about 80 cents a gallon since mid-october. of course, crude oil prices have collapsed. you're not seeing that just yet at the pumps though. when we come back, with sports on hold and millions of americans out of work, we'll talk with the head of fanatics how sports apparel sales are holding up

welcome back, everybody. the coronavirus is reshaping the industries shares of macy's, kohl's, bed, bath and beyond are losing michael rubin who's the executive chairman of fanatics good to see you this morning >> good morning, becky >> you know, i think about retail and how you wind up in this on the one hand you're in a very favorable position because you've got online retail, which

is the one thing that is really taking off these days. on the other hand, sports have been canceled and that is obviously a huge feeder to your business how have you seen an impact and how has all of this played out >> generally if you're in the sports business, you sell sports merchandise and there's not sports, not a great ingredient just cut to the chase. if you look at our business, break it into two parts. 30% of our business is wholesale merchandise -- wholesale business to retailers like dick's sporting goods, kohl's, walmart. within that 30% we operate about 50 different venues, stadiums. that business is down nearly 100% 70% of ourbusiness that is ecommerce, it's holding up its respect. the business is decent it's -- for not having sports, i guess the glass half full, it's pretty decent. the ecommerce with 77% of our

business is okay the 30% is nonexistent >> michael, question for you when, in fact, we do get to a place where some of your products are going to be sold on store shelves, how do you think that's going to change the business do you think people are going to go into stores and try clothes on i mean, that's always been part of the thing, trying on the shirt to make sure the shirt fits. >> yeah. >> if i know somebody else has tried on the shirt before, it may change my view >> yeah. i think that people talking about how much pain everyone's going through right now with all of these businesses closed i think that's actually less of the pain the real pain is getting people to open back up and your restaurants are running down 30% in traffic another 30%. now the traffic to the restaurant is running down 50% when the stores open back up and they're running down 50% i think one thing that's definitely happened from this is a real sheer shift change. if ecommerce had been 20% total

retail, i think post corona, post vaccine i bet it's still 30, 35%. there's a share shift up ecommerce and physical retail. between now and when a vaccine actually happens, i think retail and kind of restaurants and travel, all of these industries i think are going to be off. the big thing is, you have all of the costs associated with the business except you don't have the gross margin dollars that come from the precorona business. >> michael, that raises the question, what kind of collateral damage is done in the meantime it's not as simple as just turning the lights back on if this continues for an extended period of time >> well, i'd say if this was over today and all the lights were turned back on, this is going to be brutal for retail. i don't think you can underestimate, people open back up, still have the rent, labor costs, costs associated with business but they're not going to have the volume that was there. if i had to give you a guess, i

bet you when retail opens back up over the next few months i bet you that restaurants run down 40%, maybe 50%. i think retail runs down 30% through the balance of this year and headed into next year until you get into a point when people come -- until either corona is cured or america's sentiment changes. >> because you think people will be too afraid to go? they won't want to risk it >> i think young people are not going to be nervous. i think there's going to be a percentage of people -- my mom who's 79 years old, she's not going to a retail store. she's not going out to a restaurant she's staying confined to her home i think there's a percentage of population who feel that way for me personally, i feel differently. there's a segment of the population that's not comfortable shopping and as a result of that crisis, it needs to come down with our business, our ecommerce business, 77% is more

respectable. we're discounting more than we do in the off season we genuinely discount 10 days a month during the holidays we discount 30 days a month. we're discounting everything now. we're giving more value to the fans >> michael, what happened with the draft? was that a shot of business for you guys >> absolutely. the draft was very good. the nfl did a great job on the draft. i think it shows how you can innovate and lead. i think they were really smart for not pushing the draft back, keeping it on schedule a lot of people said they should push it back that would have been a mistake i think it came off really well. the tv ratings were up nearly 40%. that's good business for fanatics we love seeing any signs of sports actually happening, but at the end of the day, today we're still in the business of selling merchandise whether our sports book is good as we sell

comfortable clothes. the part of retail that's suffering the most is kind of overall apparel, dress up merchandise. we give great value and discounts, that business is struggling more than fanatics because they're selling dress up clothes. >> michael, i'm sorry, we'll let you get back to that have you requisitioned a bengal -- have you ever made a bengals jersey before? do you know how to do that if you need to? have you got the -- whatever you use to do that ready to go now that there's been a burrow you've never been asked. >> joe, first of all, you can interrupt me any time you want the joe kernen curse remains alive. i'm assuming that somehow you're going to figure out a way to ruin the cincinnati bengals. your love has turned into bad outcomes for the team. hopefully you'll give up your love for the bengals, you'll put

it with the sixers and you won't share the bad luck to your cincinnati teams. >> they told me 30 seconds they had to find out whether you've actually got the -- i don't know what you need to actually make a -- you know, those stripes. have someone design that. >> actually, big on cincinnati bengals. doing terrific i saw the sales. selling lots of burrow jerseys retail will be very interested as is restaurants. that's why we've been working so hard on the challenge and so excited about that i'd love to spend a few minutes to talk about that because we've got some exciting updates. >> never enough time it seems like send me one of those, a burrow or a hat -- no, no, no, you're right. that'll jinx it for sure don't send a sixers either >> we've got the bengals coming for you. it's exciting. i don't know if you saw, we crossed over $20 million raised for the all-in challenge

big auctions closed. >> see you, michael, thank you okay go check out the all-in challenge. it's amazing what michael rubin has already accomplished with what he's trying to do we wish you a lot of luck, michael. in the meantime, want to give you news right now. wall street journal reporting apple may be delaying the mass production of its 2020 flagship iphone by about a month. this is according to the paper, the journal, that is the company is dealing with the covid-19 pandemic which is weakening consumer demand and disrupting the manufacturing process potentially in asia. the journal is saying apple is still pushing ahead with the plan to push four new iphone models this is a super cycle for apple talking about it including the new 5g phones. a lot of focus on it historically the phones come out late september, sometime in october. start to think late october into cuvember if the reporting is

acrate we'll talk a lot more about it later. squawk returns after this.

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good morning welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equities this monday morning. we are in the green. the dow is up we'll call it round up and say we're up about a percent across the board

nasdaq definitely up a percent dow a little less than that. s&p 500 a little less than that. we'll send it over to casa quick. hey beings beck. >> hey, andrew thank you. the national association for business economics out for its latest read on u.s. business the numbers are gloomy as you might anticipate steve liesman is here. i'd be shocked if you told me anything else. >> reporter: that's not what i'm going to focus on, becky, just because of what you say. the current assessment is gloomy the outlook is gloomy. the net rising of 104 polled, 55% expect sales to be down net net in the next three months all of that stuff, employment is all bad, but let's focus on where this survey might be useful in my opinion, which is on the outlook for their specific businesses from these business economists. when you look at going forward, 9% expected business to be open in one to four weeks 30% in five to eight weeks

28% in three to six weeks and just 16% say it will be longer than six months. i think when you look about how they're planning their businesses, that's one statistic or one chart to look at, which is in that 39%, in that one to eight weeks range right there. okay how about how long they can survive without government assistance and the number's pretty high 74% say they can get by greater than six months where their businesses can get by greater than six months without government assistance. 11% say one to six months. 15% don't know when they may, indeed, find out if i want to echo something we talked about last week which is this idea, will work change in the future and there is some indication, again, that it might when we come back and resume to normal, 35% agree that their business will have more flexible hiring, more flexible workplace. 47%, 19% disagree. so that's the outlook in terms

of when they expect to be back to business. i could toss it back to joe with just a quick comment i have. i agree a little bit with andrew, a little bit with you, joe, on this issue of opening back up. i think most businesses want the best for their employees and their customers. there may be some unskrub poulous customers and there may be some union with businesses, employers, best practices, it's not something that i would leave to the big market. it's not something that has a monopoly on it i think businesses would welcome that >> interesting michael rubin was talking about how empty places are going to be, which is conducive to social distancing at restaurants and the like if no one wants to go, then it will be easy to keep tables six, ten feet apart >> 40 to 50% of the revenue. joe, if you're bringing in oo 40 to 50% of the revenue -- >> 50% better than zero.

>> better than zero but -- >> the issue is -- >> i was just going to say that the key here is you can talk about manufacturing businesses are different, but the customer-facing businesses, they need to not only have the confidence of their employees, they need to figure out practices that will gain the confidence of customers. what's the point of opening up if the customers don't come back there's going to be different ways to do it. the best places i've seen in my reporting from here are places where businesses and government work together. >> let's get -- mohamed is with us he had an article yesterday that you probably would be really interested to see all about the fed and worrying about moral hazard i don't know how we -- how do we avoid moral hazard when we're all in mohamed, i also want you to -- since it's a big earnings week, you said earnings will matter and we just had a discussion with anastasia about whether

it's really a -- is it a macro call on earnings or do you look specifically at the details of each report? because we basically are going to be pay painted with the same brush mostly, crappy whatever you want to opine on to start with, mohamed, those are some of the companies that are reporting if you have a model. we're going to get a lot of data but none of it will be positive probably >> so, joe, let's put it all together none of the data is going to be positive to use becky's term, it's going to be gloomy that's not the point right now the point is the markets are bridging for the future. they have to deal with the three issues you've been talking about, when are we going to reopen fully how are we going to reopen can central banks in particular and to a lesser extent fiscal agency, but for markets it's about central banks, bridge us to that point? those are the three things that are in play. we're going to get a ton of information this week and next

week on them and it will allow us to make a much better assessment. >> tell me, are they going to be able to do that? what does it look like to you? >> so it looks to me messy you're talking about the how there's two hows there's the top down how look at us in the u.s. we have three groups of states we have states that are adhering to the guidelines and reopening in line with the guidelines, there are states that are going ahead of the guidelines and there are states that are going slower than the guidelines so we have a natural experiment. that's the top down. the bottom up is a discussion you've had it's not clear how businesses and consumers are going to respond. all i can tell you, this is wonderful. we're going to get lots of data. we're going to be able to form a better judgment about what's ahead, and we're all learning. we are learning hear we're learning in europe we're going to learn more and there's one thing we don't know, which is will there be a second

round of the infection hopefully there will not be and we can run this experiment and get a lot of clarity and that will give us a lot of guidance as to where valuations should be >> you think that the fed sits around over the weekend thinking, well, we've done all of this, how's it going? or what more are we going to be ready to do? they're probably talking about what more can they do at this point, mohamed. >> so i think the bank of japan already did a lot this morning the ecb is going to do more. i don't think the fed does more. i think this is what they get from the fed and this is what we don't get. what we get from the fed is reassurance that they're ready to do more than what they've already done, and they should draw comfort that they've calmed the markets down and they've reopened not only the investment grade market wide open for companies but the high yield

market as well those are achievements what they won't talk about but i hope they do behind closed door but they wochblt talk about publicly is what do they do with the fed put that is firmly in the stock market people rightly think if the fed went all the way down to high yield, why not do that further into stocks? do they keep quiet and allow that implicit, that put support the stock market or do they say something to stop more moral hazard? i think they're going to avoid this issue central banks are great at winning the war against a market meltdown they are not good about securing the economic piece of hey growth, and that transition is really this time around as it was and we blew it in 2008 and 9. >> people say not to worry, the dollar is the reserve currency of the world we can basically -- the fed has

an infinite capacity to step up and help if everybody's printing. maybe the dollar doesn't weaken because it's a race to the bottom will there come a time where the dollar weakens and interest rates, you know, have become prohibitively expensive to service everything we've floated at this point? gold is where it was seven, eight years ago. i know it's had a nice run recently, but with the size of the fiscal deficits around the globe, i don't know why it's not much higher if we're really headed there why not? >> so, first, joe, i've been saying for years now, don't fade the dollar don't fade u.s. markets vis-a-vis the rest of the world. the u.s. does better in most state of the worlds, except one when the global economy picks up

in a strong way. that's not going to happen i'm with you we're not going to see dollar weakness significant in the next year or two. we're not going to see interest rates go up. the mmt crowd, by the way, they're having it all. they can't believe that what they want is playing out and they're going to be proven right in the short term. we will print a ton of money we will fund the government as if there's no limit and we're not going to pay anything in terms of the dollar weakness, high interest rates or inflation. so over the short term i think we do better than the rest of the world. guessing it is very, very hard i can see there will be continued support for it whether it's where it should be or not, joe, i don't venture near gold. i don't venture near bitcoin there's no inherent value that you can price off that easily.

>> right unless you do some of these stock to flow models. >> look at oil >> oil, god. i thought it was valuable. >> oil is a fascinating one. >> i thought it was worth more than zero for sure >> but look at -- compare oil to stocks because that tells you a lot. both these asset classes suffer from the collapse in global growth but unlike oil, stocks have two things going for them. one is people can look through with lower costs because there's no physical delivery aspect like oil that complicates life tremendously and then the second thing is the central bank put is much stronger than the opec put it's fascinating to compare and contrast stocks. >> right and the relationship, oil with gold with the price of a good suit, which i -- i'm going -- i'm definitely going to men's warehouse with oil at zero

because i don't need to spend more than, i mean, 80, $90 on a suit which would be better thank you. >> take me with you. >> okay. what do you mean, you always look -- >> thank you, joe. >> that's not going to work for you. i've looked at your labels they don't say sai sims. neither do this next gentleman here mr. hugo himself ralph. ralph cram done. >> i'm wearing lululemon pants today. >> i'm wearing lululemon pants. >> do not start doing -- >> the abc things. >> do you? so do i? >> that's what you've given up it's when you've given up -- it's like sweatpants. >> you've given up. >> we return. >> when you've given up on pain is when you wear them. >> when we return, the number of coronavirus cases closing in now on 3 million worldwide we're going to discuss possible drug therapies and break down

some of the news out of regeneron, hopefully promising there. check out shares of beyond meat right now. stock soaring over the past week of food plant closures that could reduce pork and beef products the stock is still well off of its highs from last year just this morning it was downgraded to sell and ubs 'ltall about it. you're watching "squawk" right here on cnbc we'll be back in a moment. there's tv. and then there's x1,

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regeneron out with an update on a covid-19 drug trial meg tirrell joins us i hope you can specify -- it was an ra drug, wasn't it? something to try to deal with the immune system's response there are other companies that have similar response. is it the same mode of reaction? presumably all of these might have trouble becoming drug candidates for covid >> reporter: potentially, joe. so this is a rheumatoid arthritis drug called kepzara. it inhibitsan inflammatory pathw pathway. roche also has drugs in similar trials regeneron started this trial

really quickly in the united states with the partner sanofi we're getting the first results from that trial today. they're a little bit complicated. the drug appeared to show potential benefit in the patients, those receiving ventilation and high oxygen. but it didn't show benefit for severe receiving oxygen but not on a ventilator or a high level of oxygen they're continuing into phase three with the sickest and the highest dose of the drug a bit of a mixed response here it's something that dr. george ancopolous told us, this is why you do controlled clinical trials this is some of the first data we're seeing in covid-19 there is still reason to hope. you did see a potential benefit, but that's going to need to bear out in phase three this is a completely separate

program from the one regeneron is developing. they are still planning on starting that trial in june. guys >> meg, thank you very much. in the meantime, the fda is warning against the use of hydro chloroquine for treating covid patients in an out-patient environment. this follows a study from the jama that showed some covid patients treated with hydro chloroquine or chloroquine developed irregular heartbeats this news is not surprising to you if you've been watching. michael ackman joined us a month ago with very similar warning. >> virtually all of these drugs that are being considered or being used have the potential to prolong the heart's qt interval and in doing so increases the patient's chance for the heart to spin electrically out of control into a potentially dangerous heart rhythm if that doesn't revert back to

normal, then that patient will go on to experience drug-induced sudden cardiac arrest and worse drug-induced sudden cardiac death. dr. michael ackerman is back with us this morning doctor, thank you for your time. it's good to see you again >> good to see you, becky. >> what was your reaction to the news in the journal from the american medical association obviously this is something you've been on the lookout for. >> unfortunately, we're not surprised. we were with you and we put out this warning from the mayo clinic and mayo clinic proceedings on march 25th. hard to believe it's been over a month ago. in the brazilian study in the paper you talked about, at least with the brazilian corona cocktail, which was a high dose of chloroquine, 600 milligrams twice a day plus azithromycin or the z-pack, that is absolutely

deadly there was over two times the mortality rate in those patients randomized to receive the high dose cocktail rather than the standard or the lower dose >> what does that tell us about the cases here in the united states there are some tests that are being run right now where patients who are in the hospital are being given a different cocktail but similar enough. one with hydro chloroquine with the z-pack i didn't realize the z-pack could create bigger problems with the heart irregularity. >> both of those we mostly use high zocky chloroquine along with azithromycin. both of those can annoy the heart's electrical rhythm, elongate the qt rhythm last friday at the same time leroy jenkelson showed the same thing, 11% of the patients

treated with the american version of the corona cocktail prolonged their qtc into the red lighter tori that we warned about with their qtc going over 500 milliseconds subsequently the fda through its adverse event reporting system started to accumulate not only cases of qt prolongation but the tragedies where the treatment themselves was causing the sudden deaths of the patient and that prompted the fda on friday to put out a warning, a med -- a safety med watch alert saying, please do not use hydroxychloroquine or chloroquine in the out-patient setting. do not only use these medications under a clinical trial or in the hospitalized setting because the benefit has not been proven for the sick covid-19 patient but unfortunately the tragedy of treatment-induced sudden death is being seen already. >> you had warned us at the time

that, look, you're not an epidemiologist, not somebody who's familiar with covid-19 but you do know what this does to the heart. have you spoken with doctors at any of these facilities that are running these tests? a month ago when we talked to you, you thought it would be safe to be running the tests in the hospital as long as doctors would be alerted to the potential problem. do you still think that's the case >> yes this issue of qt prolongation, we can navigate along with it if the medications work we can do qt monitoring by vital sign or ecg or smartphone ecg or looking at the telemetry we can find out who are the patients who are showing, telling us that they're reacting, that they're a qt reactor and that these medications may not be a good idea so i still think these trials should continue. we need to know the answers. currently there are no medications with proven benefit

for the sick covid-19 patient. if we can do the studies and monitor for the unwanted drug-induced side effect and change course or correct things if we need to. we have to find those and detect those who are showing a reaction to these medications. >> you answered my question then, doctor in a critical patient in the right setting with nothing else to try and if it's just to test the efficacy for hydroxychloroquine, give it a shot, even at this point if you could monitor the qt -- the cardiac response you'd say -- i mean, that's -- doesn't sound like what we really heard from the way we're characterizing this. you'd say still give it a shot because we've got nothing else as long be as you can monitor what happens to the heart? >> i think in the sick patient be, that's really a great question, because in the sick patient we are just not seeing a signal of efficacy in therapeutic benefit in

hospitalized covid-19. back's up against the wall, nothing else to try, could we continue to try the corona cocktail perhaps. we really need to lean on our infectious disease experts and say what other options do we have if we are going to use them in the sick patient, we really need to be on the a game. we're starting to put together the perfect storm. on the other hand, i'm really quite excited to learn from the clinical trials about what the use of a medication like hydr y hydroxychloroquine might mean in the relatively healthy patient in the setting of post exposure prophylactic therapy we could have a completely different answer there where what if there is benefit with hydroxychloroquine that kind of person is a completely different safety profile host where we might have a lot more safety margin to be able to use a medication like this if it helps prevent the development of the disease so in the sick patient it's not

looking so good for therapeutic benefit and the risk or the potential where the treatment itself could do sudden death is definitely there and it's definitely there, unfortunately, as we predicted together on this show over a month ago. >> remdesivir you have to use early on, too, before it's in the lungs. >> right at least in recommend dmdesivirs not a qt signal or sudden death potential. the efficacy signal isn't as exciting as first blush from the early reports. >> dr. ackerman -- >> in the meantime, we have to do the things that work. >> you are being far too generous we didn't predict this here a month ago. you predicted this and brought this to our viewers. we do appreciate your time and appreciate the heads up and we hope you'll come back as you see

further developments. >> i look forward to joining you again. have a great day. >> you, too. coming up, should be able to do that, he's at the mayo clinic it's the mayo clinic we're going to talk global markets, oil tensions and the lierpening of america with putz prize winner tom friedman stay tuned complete financial plans. they're all possible with a cfp® professional. find yours at letsmakeaplan.org. seeing the break in the clouds before anyone else. together, we'll weather this storm.

live shot at times square right there. breaking news to bring you apple reportedly delaying mass

production of its 2020 flagship iphone by about a month. that's according to a new report by the wall street journal the company is dealing, as you all know, with the covid-19 pandemic which is both weakening global consumer demand and disrupting the manufacturing process in asia. the journal is saying apple is pushing ahead with its plan to reach more the super cycle. a lot of focus on what's going to happen come this fall when the phone is supposed to be out. still to come on "squawk box" this morning, "new york times" columnist tom friedman will talk about the reeng opinof the u.s. economy and so much more after the break to bank safely from home. deposit a check with your phone or tablet. check balances, pay bills, transfer money and more.

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welcome back, everybody. another big week for investors plans for reopening the country and oil in focus yet again let's talk about all of this and joining us to do that is "new york times" foreign affairs columnist tom freedman we need herd immunity from trump and the coronavirus. tom, good to see you. >> great to be with you, becky >> tom, that follows up on akol lum you wrote. leadership is not just important, it's exponentially more important what are you tracking? >> i was interviewing one of the people i think understands leadership best, doug sideman, the founder of lrm the point doug was making, in a crisis like this, people are looking to a leader to lead them you're uncertain, frightened what were the attributes they were looking for is what we were

exploring. one thing they were looking for is leaders who trust their people with the truth because that's really important. when i put all of my hope into you, i want to know that you are telling me the truth back. leaders who trust their people with the truth are trusted more. they also look for leaders i think who are humble, who are ready to say i don't know. you know, i hadoug made the poi, you listen to dr. fauci, i don't know, even like your previous guest, you listen to him more afterwards that issue of trust is so important. doug was saying that trust is the only legal performance enhancing drug and when there's trust in the room between you and a leader, between each other, more good things happen than bad things happen >> hey, tom, let's talk about how business leaders have been playing a role in this and how things have kind of been rolling out from that perspective

because we ran a new commercial that they put together earlier today talking about a lot of moves that corporate leaders have made. it has been a highlight to see some of these leaders stepping up and changing production, trying to make sure they're addressing this however they can. trying to take care of their people in down times how do you think corporate america is responding to this? how do you expect that to play out? >> i think they've responded generally well i think we have a lot to be proud of i think the thing you have to keep in mind though, becky, is we described this as a war president trump has said i'm a war time president when you're up in a war against nature, that's a different thing. when we were fighting the germans and the japanese we could outmobilize them when we were fighting the japanese we could out innovate and out spend them when you're up against mother nature, it's a very different fight. she's just chemistry, biology, physics. you have to be really humble about her. if you disrespect her, she will

kill you or someone you love, number one number two, you have to be incredibly coordinated when you're dealing with her. thirdly, you have to be rigorously science based if she's just chemistry, biology, physics, you better be as well. the administration when it's been at its best have really adopted that approach as well as the best businesses. >> we had dr. scott gottleib on. he has an op ed saying america needs to work on producing a vaccine and producing it here in this country his point is wherever that vaccine is produced or the ones immediately after that, what's probably going to happen is the local authorities will want to make sure they take care of their population first it's an interesting dynamic. it does make you start thinking back to nationalism, kind of taking care of your own. we've seen that play out in the

u.s., fighting to make sure they have ventilators do you think he's right on that? >> becky, it's a race for herd immunity how do we get our people immune? there are two ways to get "the herd" immune, one is through a vaccine and the other is a process of exposure where people develop the natural immunity in the vaccine race, i see that as a race betweenmoore's law and covid's law. covid's law is about the speed at which this -- the exponential rate at which this virus spreads. moore's law is the exponential growth it's a proxy for innovation. we've always done well with moore's law, but i can tell you, becky, the way i start my day now every morning, i'm not a scientist, i'm not a doctor, i'm just a reporter. i do reporting on what i see out there as the three big tests going on

one is the swedish test. the swedes basically have said, we're going to go for natural herd immunity. and so the book is still out it's quite interesting what's going on there they've had more death, but they think about 25 to 30% of stockholm now has herd immunity. this is assuming that immunity works here you cannot reacquire this infection afterwards and we still don't know that. second test is singapore, china, new york city. suppress it. try to break the chains of transmission get it under control and buy time for a vaccine or therapies. the third approach i would say is georgia where people say, i cannot stay home anymore i have to work i'm going to go out and take my chances. it's a less controlled process so as a reporter, i'm watching all three of those while i listen to your show and see who's doing well on therapies and vaccines >> i mean, if you're at home

weighting it, that gets us to the point where we are in the new york city area you're at home waiting for a cure or a vaccine. vaccine's going to take a while, and it does beg the question of how long you can actually keep people locked up at home and what happens in a place like new york city if you do open up again, particularly with the subways and the people really crowded on top of each other it's different than being in rural georgia. >> yeah. there's no question about it i, as you know, we did it on this show and dr. david cass helped trigger this debate five, six weeks ago now. i believe we have to find a way to harmonize our desire to save lives and livelihoods. deaths of despair by crushing the economy will in the end kill so many more people than the virus itself so i think we have to take it seriously how to harmonize those.

you do these closures. i have a lot of finding a mobile light. he put them on that. the economist driving company that was blocked by intel. what i've known, we need to take an inventory of the total number of beds, icu units in the country. we need to strictly quarantine and sequester those most likely to be killed and that part of the population is becoming immune immunity still works and if they get the disease are least likely to be killed by it and would experience it in mild and asymptomatic ways. by all of the data so far seems to be 75% of the population. you slowly feed them in and try to acquire herd immunity but you

have to be very strategic about both ends. who is most likely not to be l felled by this put all of your resources by who is the most vulnerable and develop a herd immunity that way. it's the swedish approach. we'll have to see which one wins in the end. >> hey, tom. this goes to the issue of leadership that you were talking about earlier. it's approaching it in this way. is there a way to separate it about potentially more vulnerable trying to get the essentials and the supplies i'm dealing with my own parents right now. we can't even, you know -- with all of the things -- resources that i think i have, i can't get

that all organized so it takes leadership is there a model of estimation that you see >> i don't see it yet. you want to see something on what they were talking about in israel or even the middle model, the singapore one. the thing about people just don't understand because we've never experienced this kind of thing before mother nature is just chemistry, biology and physics. you can't talk her up, you can't talk her down. you can't say, mother nature, i've been tired for a while, she will do whatever chemistry, biology. you've just got to see that to show that kind of seriousness. >> tom, thanks for your time this morning

it's good to see you >> always, beck. thanks so much. coming up, still to come, senior advisor to president umtrp, kevin hassett will be our guest. "squawk box" coming right back to keep me moving the way i was made to. it nourishes and strengthens my joints for the long term. osteo bi-flex. find our coupon in sunday's paper. it started when fitbit showed her... zombies make her a zombie so she set a bedtime reminder.

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and delivering self-install kits to your door. nos comprometemos a mantenerte conectado. we're committed to keeping you connected. for more information on how you can stay connected, visit xfinity.com/prepare. boeing's ceo dave calhoun is overseeing the company's annual meeting today where he's expected to discuss big changes for the dow component. phil lebeau joins us now >> reporter: joe, this is a big week for boeing. annual meeting, first results on thursday and may 1st, friday that's the deadline for the application for any government assistance in the pool of money that's been set aside for companies like boeing. so as you take a look at shares of boeing, yeah, it's down more than 60% but at the annual meeting which is a virtual annual meeting today, nobody's getting together as they usually

do in chicago. dave calhoun is going to outline in broad strokes what they're looking at in two bridges. near term bridge for the short-term liquidity and a longer term bridge for the fact that you have an airline industry there will be a new outlook for demand we may not get specifics today that may come on wednesday when the results are reported the 737 max, as we reported on friday, the 737 max, that is creeping to the right. we expected to be ungrounded now it's more likely you're looking at an ungrounding. at least their target initially or not rate now depends on grounding. all of this depends on what happens when they work with the faa or regulators around the world. take a look at shares of boeing since dave calhoun took over on the 13th they announced on saturday that they are ending their joint venture deal, the $4.2 billion

deal for boeing and emb r embral be making small planes boeing said a deal could not be put together embraer says boeing broke the agreement. that will probably play out over the next few months. don't forget, we get the first quarter results. that is when we're going to get a lot of the details about what we expect with boeing near term and long term. >> okay. phil, thank you for that we're going to be joined right now to continue this conversation she is an analyst at jeffries aerospace and -- she is at jeffries the aerospace analyst. the thing is when you think about what comes short term and long term. whether they are going to have

more government money and you're effectively funneling it >> following at the end of the balance sheet, 10 billion in cash, we think they're going to end up q1 and so they burned through in the quarter in the supply chain so in some form they were providing stimulus and some sort of bailout this is a long cycle business. the cash flow is cyclical. it is impacting the industry >> in terms of the government loan, he says he doesn't want to dilute the shareholders, he doesn't want the government to have a piece of it, what do you

say about it >> the airlines you repay certain conditions, where you can't have that. i don't think we need a bailout in equity. the rate we think we're burning cash at. so with 15 billion they proceed with grants and warrants which effectively or not, would you be in favor with that >> i don't think that's a terrible solution. part of boeing's issues are max based, right, and the second is covid. we've seen capacity down 80% for

q2 so part of boeing's problems aren't necessarily because they did it to themselves that's why i don't necessarily believe in equity dilution >> so your argument is because covid has happened, the government should -- there should be some form of straight corporate welfare. it's a cyclical industry the outputs, right, it tends to go up and down, we're going to have to see some support for that. >> why should the shareholder be protected. why should the shareholder be protected? they have a market cap of $72 billion. >> i don't think boeing would have needed any sort of bailout had covid not happened, right? their cash position would have been fine even if the max stayed grounded for a certain period of time >> i appreciate that

lots of companies are going to ultimately go out of business. my question is why are shareholders of boeing a special class relative to the restaurants? >> we've seen that throughout. the best in class airlines, the share price performance has been in line. i agree with you on that all airlines, all issues, it's an industrial-based issue. >> then my final question, it goes back to the first question. assuming that business may very well be slow come this fall and the airlines as we talked about, if there's any form of social distancing, you'll have more for

the airlines if that happens, what happens to boeing >> that's what's interesting by 2023 we'll have the same number of people, that's what we predict, flying by 2029. we have such a massive cut and huge retirement in our fleet the fleet instead of being 20,000 by 2020 today, and what was in 2019 is 25,000. it decreases by 6% we're cutting to have more seats versus narrow bodies how do you do that you have a pretty bearish outline and not factoring in any sort of social distancing. i do think that we will eventually see a recovery and you'll see some changes with the model and removal of the business class seat or we saw an italian company come out on friday and talk about glass hubs over seats.

>> okay. sheila, always nice to see you thanks for your perspective. appreciate it. becky, over to you >> andrew, thank you. when we come back, former council of economic advisor chairman and current senior presidential advisor, kevin hassett will join us to talk about the government's payroll protection program, reopening the economy and much more. then new jersey governor phil murphy will join us with the impact of the coronavirus in his state and when he plans to reopen for business. what he's hoping to hear from the federal government as well futures this morning are indicated higher dow futures up by 221 points the nasdaq up by 107 the s&p up by 28 last week was a down week. first time in three weeks that we've seen a down week for the markets. the dow has been up three weeks in a row leading to what are now once again green arrows. stick around, "squawk box" will be right back. you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge

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stocks pointing to gains the dow and s&p 500 are on pace. the biggest week for tech earnings are near. apple, amazon, facebook and alphabet are all set to report for friday we'll tell you what you need to watch for your portfolio two big economic fallouts for the coronavirus at the national and local levels kevin hassett will join us then the governor of one of the nation's hardest hit states, new jersey's phil murphy the final hour of "squawk box" begins right now good morning, everybody. i'm becky quick with joe kernen

and andrew ross sorkin you will see green arrows across the board. dow futures indicated up by 200 points you're also seeing gains for the s&p 500 and for the nasdaq watching those gains kind of build on the last few trading sessions that we've seen as well right now s&p indicated up by 26 nasdaq up by 103 if you're watching oil prices this morning, those are down pretty sharply wti in particular under some pressure as there are tankers waiting off shore. all over the place trying to bring in more oil to places that can't store anymore. wti down by 20% to $13.45. joe? >> thanks, becky kevin hassett's back at the white house as senior economic advisor to the president it's like g3 they keep pulling you back in, don't they, has ssett was this voluntary why would anyone do this good to see you.

the coronavirus crisis will end up causing unemployment numbers the same as the great depression i want to get what your forecast is for that. it just is so frightening and earth shattering we should get that out on the table. where does unemployment -- we're shut down so it shouldn't be a surprise >> right. >> what's the actual number for total unemployment and how bad do we get? how bad is the second quarter for gdp? >> thanks, joe i know it's a somber time. you mentioned me coming back it's an emergency situation and i thought i had pretty much moved onto the next stage. >> thank you for doing that. >> i know you would have done the same if the president asked you. maybe things wouldn't be going so smoothly if you were here rattling about. >> you never know. you never know >> you've got lots of good ideas. i think the way to think about it, sadly, is that all of these ui claims, unemployment insurance claims that we see add up to unemployment and a heck of a lot of them happened after what economists called the

survey week. the really bad news that we've been seeing are spread out over a couple of months but i'm expecting when we see the unemployment rate for -- it's going to be the first week of may, we're going to see a number that's going to be maybe 16, 17%. right now if you take what happened at the end of the first quarter, we're getting that first quarter gdp number this week, then you're looking like it's pretty likely you get a negative number. second quarter gdp will be the biggest negative number since the great depression a lot of it is going to depend on weird assumptions that the bea makes about whether a school that is shutting down, whether that counts towards gdp or not that could end up moving the number up or down 10%. you're looking at something minus 20 to minus 30% in the second quarter the question is what happens next that's what we're focused on at the white house. >> you're talking to doctors and scientists about what's next if we don't know about a second wave, we don't know about

reopening and even economically once we do reopen we don't know how consumers are going to feel, you know, when they reopen do you get 20, 30, 40% of the business returns, 60%? we don't know. it depends on which business obviously. so is it looking like something between a v and a u? is it looking like an extended u? what do you think the bounce back looks like? what's the third quarter going to be? >> the third quarter should be pretty positive. if you think about it if all the folks are sort of locking in place and they start to move about, then they have to go up from however far you drop. the third quarter is very likely to be positive i think the sort of puzzle is the incomes are staying relatively high but output is going to zero. so when you see the gdp released there are going to be all of these things thatadd up to eac other. they're going to be far apart. i think if the virus does start to go away in a way that makes it so that most every state feels comfortable that it's safe to open up, then we really could

be looking at a pretty rapid recovery because the incomes are still there. if there's a pattern in the data that we've noticed because that's what we're doing every day, right, as we've built the system to monitor the economy, one of the things that we see is really interesting is if you look at a typical county somewhere in the u.s., then it might be a county that has something like a defense plan where the workers still have to go to work or it might be a county that doesn't. since this crisis began. what's the different disease spread outcome look like as to other places where they weren't essential workers. at the beginning of this there was rapid, rapid spread. the variance has really, really declined over time suggesting that people have learned from doctors birx and fauci, that

plaintiffers and other essential services have figured out how to do it in a much more safe way than they were doing three, four weeks ago. it suggests to me, anyway, looking at that, that if we had let everybody stay open three or four weeks ago, they wouldn't know what to do and the disease would have spread much more rapidly. now the variation because they have lost of essential workers, the variation is nonexistent people have figured out how to get back to work and do so safely as far as herd immunity. in the summer it seems to ameliorate almost entirely where we get a vaccine and if we have a great therapy. if it was totally safe and people didn't think that there was any chance of getting it, the restaurants would be

teaming. i'd go to a degreesy spoon and wait in line to go in there. i'd go to a movie theater and wait in line to see "beaches." any of these things. a sporting event i'd go wait in line to see a curling event. >> everybody's dying to get back to that. >> the pent up demand is incredible that's a long, long way from where we are right now >> yeah. >> there's a lot of middle areas that aren't anywhere near that that are probably more likely than a complete, you know, safe environment to go back to. how do you factor into that? >> right the way i think we factor in is something we've discussed a lot, even started to prepare guidance about, is that the way that 9/11 changed a lot of our practices you used to walk your mom to the plane and waive to her as she's boarding then they set up only the person with the ticket went through

i think a lot of things changed in our liefts that are going to be changed forever but the new changes, the new practices, they'll make us safer. so i think, you know, what's going to happen is that we'll figure out what practices we need to engage in in order to operate safely usually when i was here before we had nothing but good news to talk about this is veally a time where we're going to see bad news after bad news the bright spot for me in all of this is one that despite the partisan sniping you see, we got together and we took some very extreme action passing unanimous consent to the senate and so on i think the patriotism is going to come true despite the bickering around the edges we're in a pretty good place so if we see policies are necessary, we can be confident those will happen. the federal reserve has stepped up as well taking extreme actions with the main street lending program and everything else one reason why is you guys cover

markets. you can see markets have been reasonably calm through this giant black swan event it's like a black swan if you're going to make one of those old japanese horror movies and the markets are kind of saying, oh, okay, we can deal with this. i think it's because policy actions have been smart and sensible and timely and that gives people confidence that as soon as the virus is under control or at least diminished enough so that states according to the guidelines can open up again, then we can go back to being about where we were in january. i don't think the reinhart rogoff debates during the recession, is it going to take ten years to recover, we'll have that debate again once we get past the crisis stage. my view is we won't make the policy mistakes that extended it last time. >> kevin, question for you during this whole bailout situation over the past several weeks the government,

journalists,even some of these big publicly traded companies are still going to furlough or fi fir fired. it's either going to take the money through the company and pay the people or they're going to get unemployment insurance. which is the better alternative? >> economically the worker stays with the firm. they don't have to find the worker, retrain them they're ready to go.

they'll have to change their practices so maybe restaurants are going to have to move tables further apart, construct and hypothesizing. the workers will have more to do even if customers aren't coming in there will be problems you have to say that the program has been a tremendous success. they've leng have lent money to with 10 or fewer workers they've made loans in the beginning and the banks were making loans to their own customers. if you weren't a customer at one of those banks you were shut out. now 5,000 banks are offering the loans. so a lot of the early problems were happening because we were trying to get the money out fast because we're very, very distraught by the potential of the surge in bankruptcies that we would see if we didn't make these loans available. given the surge in initial claims that we've seen, normally

there's a pretty strong relationship between initial claims for unemployment insurance and bankruptcy we would have lost 1 million firms if we hadn't had these policies sure they've got some glitches, but they've helped us build this bridge that gives us the potential for a v-shaped recovery. >> kevin hassett, thanks. >> great to be back with you as well. >> thank you >> i won't be there any time soon, i'm leaving it up to you. >> thanks, joe >> wishing you well. thanks becky? joe, thank you right now let's get a look at the front line battle with coronavirus and restarting economies at the state level new jersey governor phil murphy. the garden state has the second highest number we really appreciate your time >> honored to be with you, beck. >> governor, can you give us an update on where things stand on the ground right now, how things

are going. >> we're still in a fight without question we've lost just almost 6,000 of our blessed residents. a lot have tested positive there's hospitalizations that's very encouraging. still not as low as we like. intensive care and we're in the paradoxical period that dr. fauci warned us of where some of the data looks good. positive test curve is flattening without question. yeah, we're still losing folks in some cases several hundred a day. but we are beginning to sort of fight our way through this we're not anywhere near out of the woods yet but there's no question at the same time that we're making progress. the fact that folks have stayed at home, stayed away from each other has been a huge success so

far in new jersey. >> how much more improvement would you need to see before you feel like you can start to open the state, at least relax some of the restrictions that have been put on? >> we're going to go through actually later today the principles that will guide us, but we're going to have to see meaningful reductions in things like positive test results and more importantly hospitalizations the positive test results piece is a little bit squishy because we're testing -- i think we're the fourth highest test staed se in america we've come from nothing. we still don't have the answer to the question what's the denominator. we know on hospitalizations. we know for sure if somebody's in the hospital, why they're there. so we need to see meaningful reduction of those curves and god willing they'll come within the next several weeks, but we're not there yet. >> i believe what i was reading over the weekend suggested in new jersey at least something

like 43% of the tests that are given come back positive and that number, i think, has to come down closer to 10% before we can feel like we're doing adequate testing, is that correct? >> well, like everything else with covid, it depends who you ask. the key thing for the 43% is that we have tested overwhelmingly because we have limited supplies from the federal government we've tested overwhelmingly symptomatic folks so that number is disproportionately higher than any estimate of what the general population would look like and that's an important footnote in that number if you were testing asymptomatic and symptomatic, we hope to be able to do that sooner than later, we have to at least double our testing capacity until we feel comfortable that we have the system in place to start to reopen. you include asymptomatic folks, that percentage positive is going to go down dramatically. >> governor, you've canceled school through may 15th here in this state

traditionally our schools go until the 20 somethingth of june do you think there will be a chance schools will be back in session this year? by this year i mean this school year >> yeah, yeah, there is a chance we have not made that decision we have tried to take this in bites. we wanted to have as much information at our disposal as possible and so you're absolutely right we've canceled in person schooling and we'll give guidance before may 15 as to where we see the rest of the school year for a new norm distancing whether or not you have a downturn there is a chance to get back. >> i've also heard we have about

four to six weeks of revenue on hand before the state starts to run out of cash. i know you've had some disagreements with the federal government on the money that has been allocated and what it can be spent on. what are your biggest complaints about the restrictions around what this money could be spent on and what you think it should be spent on? >> yeah. so we're probably not unlike a lot of american states, i might add both red and blue, but we're running short. we're at the front line. our costs are going up serving folks who have lost their jobs, small businesses that have been crushed. folks who are in the health care system, et cetera. our revenues have fallen off the table. so a couple of things. the c.a.r.e.s. act, we're still trying to find good, common ground as to how we can spend that money i had a good conversation at the end of the week with second mnuchin. his team and my team have been at it. over the weekend we're still not there yet, but how that money is interpreted, you know, for

instance, your entire education system has been transformed because of covid-19. your entire public safety reality has been transformed we believe those are eligible costs that need to be addressed. so there's one piece of this is how do we interpret the cares act. the far bigger piece is going to be that we need a lot more federal assistance senator menendez in our state and senator casady in louisian have co-sponsored a bill that will bring $500 billion in direct cash assistance to states that's exactly what the doctor ordered. with all due respect to senator mcconnell, whose comments about bankruptcy of states have found irresponsible, the alternative is not bankruptcy. the alternative is we have the living day lights out of the very services that our folks are now desperately relying on and what is the biggest health care crisis in the history of our

country. so we need federal help for interpretation of the cares act money and we need more money direct cash assistance coming from congress or the president. >> meaning, what, in four to six weeks when we run out in the state, you won't be able to pay firemen, you won't be able to pay policemen? what are you talking about >> yeah, that's exactly what i'm talking about. god willing we'll be able to both interpret properly the c.a.r.e.s. act disbursements and we'll get another big slug out of the feds, but that's the sort of armageddon that we're looking at i don't say that with any amount of joy that's exactly the wrong thing we'll be doing but we'll have no choice. >> governor, i completely understand what you're talking about with these payments that need to go out and those people on the front lines and those who are taking care of our kids in particular to make sure that they're still learning, but there have been other examples illinois

sent anote requesting $10 billion to bail out their under funded pension plan. that starts to seem ridiculous we have our own under funded pension plan here in new jersey. is that something you would ask money for? what do you think of illinois's move to ask for just that? >> listen, i got elected to fix the economy, both to make it grow again and be fair again we had spent over two years stabilizing just the sorts of things you're asking about we made historically high pension payments we had historic high surpluses and rainy day funds. we had things going in the right direction. and to quote the immortal mike tyson, everybody's got a plan until you've been punched in the face we've been punched in the face i'm not looking for help for stuff we've been working on that we had inherited, the structural deficits that had been building up in new jersey for decades, in particular in the last

administration that's not what we're looking at i'm looking at revenues that have fallen off the table. i'm looking at expenses to deal with the unemployed, the folks in the health care system, the small businesses that have skyrocketed. that's explicitly what we need help with. >> you are also working with other governors in this region, i think six or seven states have banded together including new york, connecticut, new jersey, maryland to try and figure out what's going to come next, pennsylvania what are you hearing from those governors and are there parts of those alliance that would like to open sooner than others >> that's a very good group. it's from massachusetts down to delaware in the relationships that are the dearest to us, are the ones clearly who are our neighbors. none more so important than new york and governor cuomo. we have coordinated as an informal manner in closing our economies. it occurred to us, hey, why not put a little more formality

around a regional council as we look to take the steps to reopen in fact, there's a meeting going on of the council right now. i don't think you'll see us taking in each case identical steps, but i think you'll see our steps harmonized our enormous overlaps from new york city into the northern and northeast counties in new jersey that have been hit the hardest, have been crushed, as i said, with almost 6,000 deaths every county in our state has fatalities, but the bulk of them are up there so you are going to see a deep amount of coordination again, not necessarily exact lock step actions but coordination on schools and norms as it relates to testing, as it relates to what a restaurant or a bar should look like, et cetera. so far it's been very productive these states have been very good

to work with we're the densest state in america in the densest region in america so this stuff is important and i'm happy we're a part of it >> governor, could you see separating the population, if you will, in new jersey that commutes into new york city and uses public transport from everybody else who effectively is driving to work and driving their kids to school because clearly from a risk perspective it's the public transport, it's getting into a city where there's obviously more surfaces, more ability for the virus to spread and how do you sort of break that dynamic because even if you have a parent who's going into the city taking a bus into the city, taking the train into the city, then going back and forth and then coming back out to new jersey, that's where the risk gets presented in a way where of course new york city makes all of this that much more complicated. >> yeah. i mean, all considerations are

on the table without question. and how we go about that we not only have a regional council that i mentioned a minute ago, but we're going to announce a council that is advising us explicitly for new jersey matters within the next day or so. and those are the sorts of issues and questions we're talking about. we're not necessarily unique in any respect here, but the three communities -- by the way, there's a lot of overlap in these communities that have been crushed in terms of sickness and fatality our older folks in our state, folks with co-existing health care challenges and co-morbidities and folks in long-term health care facilities without question, in many cases that's an overlapping of the same individuals but trying to find a way to protect them is going to be paramount. there is an element there without question we are part of the metro new york saga here, and that includes the six counties in our

northeast that are -- that contribute the most amount of commuting in and out of new york and how we mannedle that will be a big piece of this without question what the answer is, i'm not sure yet. but without question, that's one of the challenges we've got. >> governor, i realize you have to go. very quick last question for you. we spoke with the ceo of labcorp last week who is talking about the new in-home tests that they can now do for coronavirus it's not legal lear in the state of new jersey. is that something you're conversation lo considering and changing >> we're looking into everything labcorp has been great it's one of the processing firms we've laend on most heavily. we need to at least double our testing capacity rutgers has a very promising saliva test which we believe and they believe can be scaled again, labcorp, bioreference, quest, other players here. we're talking to everybody, including the white house. we have some amount of optimism

that we'll be able to see a big y up tick in our testing capabilities in the next month. >> governor murphy, thank you for your time today. we truly appreciate it good luck in the rest of your battles in this. >> thank you very much thank you, becky coming up, what to expect from a huge week for tech earnings. reports are due for all of the faang companies except netflix investors are hungry for any and all updates. rbc's mark mahaney will join us. news just out of general motors. the company suspending buybacks and dividends. we're going to talk about it right after the break. and... let's get started.

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welcome back to "squawk box" this morning we have big breaking news that just crossed the tape from general motors this morning. dividends and buybacks phil lebeau joins us >> reporter: they're looking at a share repurchase this is all about preserving as much cash as possible. something we've talked about with other companies and industries the automakers as they sit there and look at, a, we're going to have basically no production in april, limited in may, we have to save as much cash as possible general motors, the annual share or annual dividend, $1.52 a share. it's dropping or suspending its share repurchase program also extending a revolving credit facility for 3.6 bld. guys, we've heard about this

time and again, this is all about preserving as much cash and having as much liquidity as possible as we try to deal with the impact of covid-19 becky, back to you. >> phil, thank you very much when we come back, we'll be talking markets with black rock's global chief investment strategist the futures this morning are pointing to a higher open. dow futures up by 225 points we've been roughly through this morning. s&p 500 up close to 30 points. nasdaq up by 102 look at the opposite fortunes when you check out the price of crude oil specifically with wti. wti is down by 23% this morning. all the way down to $13 a barrel a sad state of the energy industry claiming another victim over the weekend driller diamond offshore filing for chapter 11 bankruptcy. this oil picture we've been watching tells you that entirely our reminder for you, you can watch or listen live on the cnbc

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welcome back to "squawk box. show you the futures right now on this monday morning looks like we're going to open up higher. 247 points higher. s&p 50031 points higher. 32 points higher nasdaq 104 points higher let's tell you what's going on with tyson foods taking a full page ad out in "the new york times" and the washington post that the supply chain is breaking, it says chairman john tyson says the closure of meat plants means that millions of pounds of meat will disappear from supply chains he said there will be limited supply in grocery stores until the plants can reopen. of course, we heard about the spread of covid at some of those plants so keep your eyes on this story because it's not just a meat

story but something that a few people are concerned about across the wider supply chain over the coming weeks and months coming up when we return, a lot more on "squawk. what we're likely to hear and what analysts want to hear from america's biggest tech companies when they publish quarterly results this week. we'll talk about it, microsoft, apple, amazon. combined market cap, $4 trillion stay tuned, you're watching "sawbo ocnquk x"n bc since 1926, nationwide has been on your side. we've been there in person, during trying times. today, being on your side means staying home... "nationwide office of customer advocacy." ...but we can still support you and the heroes who are with you. we're giving refunds on auto insurance premiums,

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welcome back to "squawk box. we are getting into a huge week for tech earnings including from alphabet, google's parent company, facebook, microsoft, amazon, apple. this morning wall street journal is reporting apple is delaying the mass production of the 2020 flagship iphones by about a month. the company reportedly still pushing ahead with plans to release four of those iphone models later this year here's a super cycle with them with 5g coming this fall mark mahaney with us our own jon fortt co-anchor of

"squawk alley" joins us. facebook and alphabet, you're going to be hearing an advertising story, i imagine apple, for example, is going to be -- and a microsoft will be a very different kind of story >> that's true i think the expectations are going to be lowest for the ad names. the question is going to be how bad will the june quarter outlook look i think market's expecting them to be able to talk about trends down 10 to 20% year over year. this will be the first negative revenue growth quarters ever at the other end of the spectrum, the really high expectations for this quarter is going to be amazon this will be a week of haves and have notes >> john, what do you make of this it's a best case scenario. at least if this report is to be

believed, apple is still on track to produce four new iphone models in this kind of cataclysmic global crisis. we've heard from satya nadella who over at microsoft that the challenge has shifted to a demand challenge rather than a supply challenge so right now there is the expectation that they should be able to build new devices and new technology in asia the question is how much demand is there going to be in places like europe, the u.s. for that when people haven't been able to go out, go to stores the fact that apple did launch the new iphone se to what seems to be decent demand over the past few days and that is shipping the fact is, hey, even if they're not expecting the same demand, they're planning to deliver a volume of iphones. investors should see that as being a positive >> hey, mark, how much can we use facebook, for example, and

google or alphabet as a proxy for the rest of the economy? and what can we read into that given that it's an advertising-based business, given that they have tentacles into so many other companies and what can we read into those numbers as a result? >> andrew, i liked your setup. these two companies, google and facebook have probably about as good of a read into consumer mindsets as any company in the world. think of all of the search activities on google google knows exactly what people's intentions are at any one point in time. the visibility they have, i think there's a real opportunity for google to enlighten everybody about what's happening in different markets around the world as people come in and out of home lockdown situations. so i think there's an enormous amount of insight that they have my guess is they're going to first see this real falloff in ad buyer demand, real rise in consumer anxiety

interesting in the back half of the year we're focused on the quarter the back half is when we'll start to see the real impact of all of these layoffs on the company's core businesses. they should have some insight into that as well. >> that's what i was going to ask you in terms of for investors out there trying to understand whether they should own these particular stocks, amazon may seem like the no brainer though i don't know what you -- how you feel about the valuation, but when you look at the different valuations of these stocks and whatever your expectation is for the duration of this and whatever you think a recovery looks like, how do you line them up >> yeah. so what we did, andrew, we laid out two baskets. we have a defensive basket and a rebound basket if you think this covid recession crisis is going to be enduring well into 2021, you want to stay defensive, you want to stick with names like amazon, netflix, akami that is reporting tomorrow if you think there is reasonable ground for strong rebound in the

end of this year, you go to the rebound basket facebook, google, even booking.com. names like that, and uber. so it depends on how long you think this crisis is going to last, hard for me to know, hard for anybody to know. i think i know the baskets that you want to play under either of those scenarios. you hedge yourself by taking shares in both baskets these are good, high quality names there. you can buy the stocks on sale you're going to make money over the next two to three years. amazon is not on sale. facebook and google i think are, particularly facebook. >> hey, john, one of the questions as you think about the enterprise customer, microsoft, aws side of amazon, for example, and everybody thinks that none of these businesses thus far have been touched in any meaningful way some of these businesses are online, all in the cloud what are you hearing when you talk to executives at these companies about the longer term when you start to think about some businesses that are going to make it, some businesses that won't and what that means to the

enterprise customer and the enterprise base of their business >> well, andrew, it's interesting because we're getting lots of different reads on that. we just had intel earnings last week, and bob swan over at intel told me that cloud demand remains strong because people are really relying on that to get so much done that they used to get done in physical locations. right now we have a surge in certain types of cloud usage that i think is making up for a downswing in other types of enterprises that would be running through the cloud. you can imagine all the retail locations that if they were operational would be storing data in the cloud about in person transactions that are not happening. so i think there is a bifurcation. ibm said that especially when it comes to software, certain types of enterprise transactions really ground to nearly a halt in march and they're unclear about how that's going to continue, but at the same time intel was able to give a

projection and guidance in how its data center group was going to do based on demand there. i think investors really have to look at what types of business these companies are doing. when it comes to microsoft, they're probably going to say that their xbox live business was particularly strong. satya nadella has told us at cnn that their demand is similar to a holiday season there are certain types of enterprise software that you should expect from microsoft to have slowed down how in the second half does that start to balance out i think that depends on some things that the companies don't know yet, such as people returning to work, companies gearing back up to a regular level of operations. that's where we've seen companies not really willing to give guidance for the second half for those kinds of reasons. be listening to microsoft and others in just how they talk about those sorts of issues as they're reporting earnings, as they're giving guidance or perhaps the justification for

not giving guidance, andrew. >> right john, thank you. mark, thank you. both stay healthy and safe thanks, guys. >> becky, over to you. andrew, thank you. when we come back, we'll get jim cramer's first take on the markets as we approach the opening bell futures have been higher all through the morning. dow futures up by 210 points nasdaq up by almost 100. s&p up by 28 stay tuned, you are watching "squawk box" right here on cnbc. don't forget to subscribe to our podcast. you'll get interviews, original content, and behind-the-scenes access look for us on apple podcasts or on your favorite podcast app and subscribe to "squawk pod" today. a hundred dollars. i had good health insurance. why isn't this covered? well, then they started getting bigger. eight-hundred dollars. eighteen hundred dollars. i saved for this. but not that much. i'm glad i had aflac.

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investors are bracing at least looking with great interest at these corporate reports that are due this week

the s&p 500 companies are set to report along with more than 1/3 of the dow components. this could be when wall street really starts to get a picture of the early economic damage from the pandemic. joining us now is mike pyle, global chief investment strategist, blackrock. stocks, global stocks, neutral global government bonds, neutral. cash, neutral. but credit you do have modestly over weight, and within the stocks you're over weight u.s. equities, which is kind of interesting. you're looking for quality i think cautious or at least neutral on most asset classes would describe your viewpoint at this time. >> first i think this is a moment that is extremely heightened uncertain fund amount

technicals in the area there are a handful of themes that will guide investors through this you've articulated that. up the structure up the credit equity up in equity including high quality equity really seeking out strong stocks in particular of the kind we've seen in the united states and to some extent in china in terms of equities >> how about japan >> that goes to that policy theme. we think the policy capacity that china and the united states have to throw at this crisis is much different in skill. a lot of the names in china it leads us to prefer the u.s. and nonjapanese asian

exposures, particularly those rooted in china over other exposures. >> will you go down in quality for credit do you like corporate bonds more than u.s. government bonds >> yeah. so we have a very strong preference right now for high grade preference now for highgrade credit in the u.s. and europe. also given the degree of the ecb policy backing us up, italy and spain have a strong backstop and there's a strong rational for those. u.s. high yield is at the cusp we prefer it we think it's at the edge of those policy backstops, and so it's one of those places where we do think stepping down in quality just a bit makes sense because of what the fed is communicating, but we realize that's at the periphery of the themes we've been articulating >> why not europe? european equities, it's just a -- kind of a problematic -- i've always had trouble with figuring out how you run the eu

with all these disparate economies, but you don't like european equities because of policy the countries seem to be emerging maybe before the united states in terms of the pandemic. >> yeah. i would say three things one, you know, the composition of the european equity market much more tilted towards value names. names that are cheap, names that are exposed to more industrial export oriented parts of the economy, financials. the u.s. equity market much more up in quality, much more exposed to those types of businesses, business models that will be resilient. secondly you highlight the top down point, europe historically has not been able to muster the same degree of policy support that we've seen in the u.s. and china, and that bottom up and top down leads us to think europe will be a challenge exposure >> you have a viewpoint about, let's say, the s&p and what kind

of range we see for the next 12 to 18 months >> so, typically huge tug of war under way between on one hand a set of fundamentals around the virus itself, around the economy, around corporate fundamentals that have just much bigger uncertainty around them than we've seen historically on the other side we're seeing policy support that is also historically unprecedented i think to our way of thinking, the key thing we need to see over the coming period of months is whether or not policymakers can continue to insert significant stimulus on the monetary side and the fiscal side to continue seeing the u.s. through what could be a long road back to normal. if that happens, that's the type of sign post we're looking at that suggests the s&p will be something we want to be constructive on over the medium to long term >> you certainly don't think cash is trash either even though you're neutral, you call it a robust buffer against

what could happen to correlated assets like stocks and bonds i guess. >> well, it certainly has been, and that is -- we expect that to continue to be the case moving ahead. i would highlight that, you know, at the end of the day we think this is an uncertain environment but still one where thoughtful targeted themes about being up the capital structure, being up in quality, seeking out those high quality backstops will pay off for investors over the next 6 to 12 months and beyond >> all right, mike pyle, thank you. we hope to see you again soon. thanks is becky? >> thanks for having me back. let's get over to cnbc headquarters, jim cramer joins us from there now. earlier this morning we were speaking to michael ruben from

phanatics, he thinks there will be a certain population that will be too scared to come back. >> i think that's a good read. i question whether it will be 30 for retail and not lower i think a lot of retailers won't be able to get a break from the government i also think the problem for retail is amazon, it's walmart, it's target, it's costco you can't compete against them it's like when walmart first moved in and wiped out the mom and pops, now amazon wiped out everybody. i think when it comes to restaurants there will be a reluctance unless there's half the seats. if you take out half the seats, 10% of the restaurants can survive. i think we'll be in a new world with restaurants, unless you can double your price, which is very hard to do you'll probably go under. the ppp can give you as much money as you want, but in the end these are businesses no longer viable. i think people have to recognize they've become labors of love.

there will be far fewer restaurants, maybe they can raise prices, it's a very different world that's coming, unless you think that all of this is nonsense and you're immune and that we in new york are completely out of touch with the rest of the country. >> yeah. we spoke with the governor of new jersey earlier today, too, and i was surprised, he sounded a little more optimistic than i expected in terms of whether they'll be able to open schools before the end of june he seemed to indicate that is a possibility, but he also admitted they need far more testing than what we're doing at this point right now 43% of the tests that new jersey is giving are still coming back positive that's a huge indicator that there's not enough tests out there. >> right my old friend, tj rogers, has a good op-ed piece in the "wall street journal" talking about sweden they opened the schools. the pediatric numbers are very good we all know that, but we have -- i think we have a cdc that

actually knows things and that good plans that are completely obscured by washington and by the administration i think there's really good data that shows there's certain age groups that shouldn't be fearful. then there's other age groups that should be quarantined but that's not the way that the president is playing it. i think we're coming to an end of the era where we're ignorant. i think that that is going to be because the organizations, like the new york city health department and like cdc are going to be allowed to tell the truth, which is quite different from what we've been hearing there's a very different change coming >> we'll see you in a few minutes. good to see you. by the way, tonight on "mad money," don't miss the ceo double feature, the heads of nvidia and betterment will both be joining jim "squawk box" will be right back. and ready to help you find opportunity.

so. let's talk. edward jones. it's time for investing to feel individual.

welcome back to "squawk box. look at shares of boeing right now. they are holding their annual meeting today, it's happening virtually as so many of these meetings are these days, ahead of the first quarter results due to be released wednesday morning. boeing is also pulling out of its more than $4 billion deal to acquire an 80% stake in the commercial jet business of brazil's embraer the two sides failed to agree to reach a settlement, but embraer accusing boeing of wrongfully canceling that deal. a final correct on markets about a half hour before the open on this monday morning. if you look at what's happening, dow would open higher, about 194 points higher. s&p 500 looking to open up 27

points higher. the nasdaq looking to open up about 95 points. let's show you what's happening in europe and then show you the oil boards so many people are focused on wti. green arrows across the board. the ftse in italy up over 2.2% they try to reopen their economy. wti is at 12.70. join us tomorrow "squawk on the street" begins right now. >> good monday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber live from separate locations futures are green to start the busiest week of earnings season. we'll get boeing, caterpillar, microsoft, tesla all headed our way in the coming days with a fed statement on wednesday and more states set to reopen today. june oil down 21 as the space between stocks and crude remains exceptionally large. >> i think that the crud