ten-year note, where that stands now. ten-year at 0.638. it's a big morning for everybody. make sure you join us tomorrow that was a fascinating conversation with the treasury secretary. becky and joe, see you guys tomorrow "squawk on the street" begins right now. good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber coming to you live from various locations. stocks are taking aim at what would be the third 1% gain in a row as we get our first real parade of earnings with caterpillar, merck, pfizer, pepsico and more we'll talk to southwest and 3m later this morning oil bouncing off of $10 as some big players roll their june contracts into july. markets clearly looking closely at some of these reopenings, it does raise the question of how precarious this rally is >> it's incredible

if you say things are okay, not as great, and you're an industrial, because there will be an opening of america, people will buy you if you say things are in line and you pull your forecast and you're not industrial, it's a recipe to be sold. this is about hope it's about the idea that it can't be as bad as it is right now. you'll see that even with marginal retailers, people think a marginal retail hear to come back because america is open listen, you have to go with the flow for a couple days if you're a trader if you're an investor you have to take the other side of this trade as we get closer to the opening. i think people will be surprised how little these businesses will do and how worse they'll do once we go open it's not -- it is -- an opening other than auto builds won't

occur. we have to be ready for that >> your general thinking is we'll get a ford plant reopening, vw doing it, boeing in south carolina next week, but it's going to be a manufacturing bounce >> yes >> more than a service bounce? >> yes manufacturing bounce you look at a cat, you say they cut numbers, cut numbers, i want to buy it. can't be this bad after this i look at pepsico, i think pe i pepsico has had a very good quarter, it's easy for analysts to say their second quarter will be slower. this is as good as it gets i want to take the other side. let cat go up for a bit. cat won't see a flood of oil pepsico is levered to the stay-at-home market, which turns out to be here for good. it's levered to quaker oats, a division i have not heard of other than to be buried for

ages now they're back for breakfast levered to soda stream i don't know, when i had soda stream, it went all over my ceiling. you want to go the other way -- let the hedge funds buy cat. what happens on day five when they don't get a flood of orders because they're levered to the permian? so, david, you know the companies that don't need any more help from treasury or the fed, i think do better the bottom being when carnival was bailed out i don't mean to pick on carnival, because it wasn't carnival's fault they got bailed that may have been the bottom. >> yeah. i know that one in particular really has disturbed you for obvious reasons. you made this point as well in terms of the internals of the market, jim. that a lot of stocks have suffered far worse than the overall market, which has been powered by the names we know so well names that have continued to

benefit from this new world. but jim, i wonder, as you stay there at headquarters during the course of the day, get ready for "mad" have your conversations, i'm here, not commuting, not swimming, even more time on my hands to do my reporting >> but you're safer than i am. you're safer >> i am. i am >> i'm not safe. >> here's the way it goes. you talk to a ceo, they tell you i'm just getting ready for the worst. i'm battening down the happens frankly, i don't see -- a lot of these people we furloughed, we may not hire back. i'm cutting spending i'm getting ready for that then you talk to a market participant who a week ago was sort of negative, somehow now there's a quiet or reluctance, acceptance of this rally i can't accept it. the fed is on our side, because there's an incredible amount of stimulus, because people are starting to spend their unemployment checks and the extra 600 bucks. i don't know they're coming up with reasons

you talk to another leader of a business who is talking about how will i get my people back in how will i space them properly how many will i have i'm not coming back to my business until 2022 when i might have seen that level in 2019 it's dissidence. >> it is look at 3m we will talk to mike roman mike roman had excellent cash flow no problems with the dividend, but he cut he cut capex this is not a company you want them to be hiring other than for the n95 business then you have nvidia nvidia is an amazing company we had jensen wong on. what did he do he gave everybody raises because the business is on fire. advanced micro will have a blow out quarter. southwest, that's part of that cohort i don't want to touch so you do have -- i set up a new index last night

100 companies i found, 11.5 tri trillion worth of companies doing well $25 trillion of companies out there trading. 11 trillion do better in this vir environment. that's why the disconnect is not really a disconnect at all >> amazon is 10% of 11 trillion there. >> that will come down people think they'll go to nordstrom. i know listen, david, they hastened everything people are buying kohl's kohl's was the biggest gainer in the s&p. is kohl's sustainable? the only thing kohl's has over amazon, i have to keep the box out for 24 hours, unless i break out the liysol do you take the box right in >> i don't i leave it out in the sun for a bit. >> who came up with that with the light

the sun? >> then you do a dance around the box, say some prayers around the box, then you can open it. >> sprinkle zinc and pepcid? >> yes, i know >> i'm being facetious, the fact is i leave my boxes out for a day. that's about all if i'm going to kohl's to get nike, i think i would rather go to nike to get nike. they have a great site >> i know. it shows how much we're groping in the dark into how these retailers will open. some retailers in germany are free to open but why would you open if you are only going to do 10%, 20% of your regular traffic? people who try on clothes, you have to put those clothes in the back for a couple of days before you can put them back on the floor. doug mcmillan was on axios last night talking about what retail will look like in the future take a listen. >> the process is you show up through the back of the store

and there's a table set up with a person wearing a mask, holding a thermometer, as you approach this table, we're trying to maintain six feet of distance, we ask you a series of questions about how you're feeling, whether or not you have traveled if yyou pass that questionnaire, we take your temperature if it's under 100, you can go to work >> okay. >> so these are protocols that they've been working with for quite awhile >> it should be a pulse oximeter if you're below 50, you're about to die and not know it secondly, is everyone wearing masks? i see the people at southwest, the people who work there are wearing masks. when i mention that on twitter, we're a live free or die country. we think a mask is feminine. i love what doug is doing. he's right

there's probably three or four more steps he has to do. there's no contact tracing if a person next to me has covid and we don't know he has covid because he doesn't have the temperature, i want to have contact trace for when he does apple and google have unbelievable contact trace not using it because violation of privacy we do everything to fight what taiwan and south korea did we have a president who holds a press conference and makes me feel like everything is great. i don't know i'm done with everything is great. i'm checking out of everything is great scenario. i got the n95. i'm not wearing the stupid paper one anymore. i'm wearing the gloves if i'm going to walmart, i will make sure -- it should be like costco where there's a big line. i don't want to be next to anybody because i can't find out if they have it. >> well, guys, there are a lot of businesses beyond walmart that are trying to figure out how they reopen. far beyond retail.

if you are a business anywhere and you have workers, you are now trying to understand spacing, you're trying to understand exactly how logistically people are going to be in and out of a building. you're trying to understand that you'll have people in shifts this is starting to take up a lot of the time of senior business leaders now as they start to think about bringing people back to work. it may be a while. it may be over a period of months, but i can tell you office buildings and the like, if you're a company that somehow deals in flow and spatial use, you're probably in demand there. i don't even know if there are advisers on that if there aren't, there should be if there are, they should have a good year. >> wynne went to john's hopkins because they were worried about the flow of air conditioning they're worried the air conditioner will easily blow the

droplets to you. even if you do half the tables, the cdc study says you will get it if somebody coughs, which is s suboptimal basically any restaurant can take the ppp, and then a few weeks later be out because you have half the tables there isn't a business model in the world that allows you to have half the tables unless you can double the price i don't think the american people are ready for doubling of price to go out to dinner. my bar is closed but if you go on doordash, it says i'm open and i can't get them to stop maybe since i mentioned it they'll stop they keep saying we're doing the stuff. >> we've heard this many times, there's a lot of truth to it, we're in an area of the country hardest hit. it's hard to understand exactly what conditions are like in the

rest of the country, which have not suffered the way that the new york tri-state area has. there are plenty of people who want to get back to doing things in life. don't you believe that to a certain extent memories are short enough that people will be happy to go back, maybe they're masked up, maybe not, and that this idea of restaurants having to be half full is something we won't see or that there will be a willingness to line up and go back to disney world >> everywhere they go, they'll be reminded of what a constant this will become we have a picture of marriott, a release they put out yesterday of these electrostatic sprayers they'll use with hospital grade disinfectant uv light, disinfectant technology that kind of gun that you're looking at here in a second is going to be normal >> that's fabulous i wish southwest air would do that i guess we should talk to them and ask them

>> we'll talk more about that, what restaurants, hotels and airlines are going to be like in the coming months with the ceo, gary kelly, as they posted their first loss since 2011. don't go away. what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. mhm, yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. now offering zero commissions on online trades. we charge you less so you have more to invest. ♪

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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. it is unfortunate that there's a small number of companies that created a lot of publicity that took loans.

i think it was inappropriate for most of these companies to take loans. it is clear there was a certification. we don't think they ever should have been allowed to we put out an faq clarifying the certification and saying that if they paid back the loans in two weeks so that we could reprocess that money, they would have no liability. otherwise they would have liabilit liability. >> that's the secretary of treasury this morning talking about rules he says were clear when it came to ppp. still doesn't explain why the lakers got $4 million >> fabulous interview. one thing missing, i don't blame anyone for applying. i think they are greedy sons of bitches, but wasn't someone supposed to stop it? the bankers? how much did they make weren't they supposed to stop it the community banks? the sba? so these greedy companies come in, think they can get away with it, and they actually need the

money. there should have been a separate program use the carnival cruise program. there were checks. i love the treasury secretary. i think it was great -- i was afraid he might say, look, it's okay but, you know, there's people who checked off. there's john q whatever. if we're going to go the way we did in 2007, 2009, nobody went to jail or was outed, then they'll hate the banks again if president biden wins, there will be show trials. i think what you do is say here's who checked off on it that was a mistake bank of whatever should have not done it. the sba was disorganized you don't say, you know what there's liability. they should have been stopped. of course they shouldn't have applied. >> it wasn't illegal, it wasn't illegal. these are companies that conceivably thought they needed the money, were not aware there

was another program -- >> he just said he would pursued them if they had not taken it back so it may not be -- you think that's in retrospect illegal >> i don't know what law it is they were actually breaking. >> he said they violated it. i think banks were complicit i think banks gave loans to very good customers, because then they could keep them afloat is but you see any banks come out and say, yeah, we checked off on that one we thought that was a good loan. no, no names once again people get away with it america is sick of that. >> yeah. the larger issue may be that the newest program, the refreshment of the program will only fulfill those who already put in applications, there are still going to be many small businesses that are unable to avail themselves of the funds in any way. you might need to go back for number three, if that's

possible, which would seem to be less likely given the reluctant of congress to ink a new bell on more money that's -- we heard from a community banker yesterday, carl, or the leader of that group saying that very thing >> this is not about details of qualifications, this is about the entire framing of the program. the fact that the lakers thought this was okay to even apply for. >> was a great program i praised it every day i'm a chump. sometimes you get had. it's okay. i thought it was a great program. this is not about me not getting a loan, okay what it's about is that i thought -- >> we know that. >> i thought small business people might get the loan. i might get the loan in round two. small number of companies, carl, big amount of money. the treasury secretary, i think he got had i think he had every single -- i think he was totally forthcoming

and terrific i want to know who made the bad loans. >> yeah. >> somebody about. >> your comments yesterday went viral for good reason. we'll get to the parade of earnings today we'll talk about caterpillar and cummins and 3m take a short break be back in a minute. eighty dollars. 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. they gave me money when i needed it most. that's why aflac is here, to help with the expenses health insurance doesn't cover. i love that aflac duck. aflac! get to know us at aflac.com and sometimes, you can find yourself heading in a new direction. but when you're with fidelity, a partner who makes sure every step is clear, there's nothing to stop you from moving forward.

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welcome back to "squawk on the street." time for the mad dash as we get ready for the opening bell pepsi one of many companies to report earnings. it's your focus on the mad dash. >> i think that pepsi had a great corner much better organic growth there was a lot of pull through, and a lot of people feel the next quarter will be terrible. i disagree i think this company set up in a new way for people to -- the stay-at-home people, they love to snack it's frito lay they all love to have breakfast now, it's quaker that brand was in decline for years. suddenly it's a renaissance. they want to make soda, there's soda stream.

pepsico bought rock star, bang, mountain dew that will come back. this was an amazing quarter for pepsico. and if this quarter -- if this sells off because people say i want to buy caterpillar, buy this stock buy this stock they did not go for a loan i know that for a fact >> right i 3m also reporting earnings we'll be joined by ceo mike ron t nmainheext quarter. a lot more coming up stay with us every financial plan needs a cfp® professional --

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jim was commenting on the parade of earnings we've gotten. you mentioned pepsi, jim that was one company pulling their guide along with 3m and xerox and cat as well. >> when you speak to raymond, he says i don't know what's going on i think what happened is everyone should pull guidance.

the array of things that could happen with this pandemic is such that if you can really predict the future, i think you could look silly this is the greatest opportunity for these companies to say i'm done giving guidance i will go the warren buffett way. you figure out in your model what we'll do. 60% of my shareholder base is some dumb index fund why should i spend 15 days of my year trying to come up with a forecast that may be wrong any way if the pandemic comes back the first thing i said to pepsico, so glad you pulled your guidance who knows if people will be using the convenience store where you can get mountain dew i don't know will people will driving or not? in new jersey, what do we do i'm in new jersey now, i don't know what we're doing. >> nobody knows. >> if the guidance is in danger,

what happens to the range of estimates every quarter? and what happens to volatility once earnings season begins? if everyone withdrew their guidance, the analysts would have to work harder. on the conference call, they're trying to figure out their model so they can go to the ohio state pension fund, listen, this is what we will earn. maybe they will actually have to do their own model but this is the most uncertain environment we've had. we're at war with covid. we -- i feel like we're on peacetime footing but we don't have the manhattan project i feel like any of these ceos could say let me tell you, we'll have a good q2 did they speak to dr. fauci privately in a room and dr. fauci has his own thing he says when he's not stuck up in front of the president and can't say anything did they speak to brad pitt? who did they speak to?

you don't know does anybody think we're south korea or taiwan where you have some prospect? three places you can get tested in new york. three of them. isn't that solid >> it's getting better it started from a bad place, but it's getting better. >> it's time to speak truth about this stuff, right? >> okay. yes. our testing has been woefully inadequate, we're catching up. we're not setting records, and i doubt other countries are calling us to find out how we're doing it all >> no. i think it's terrible. >> back to corporations for a moment what i wondered is whether corporations -- because i heard this -- are going to use this as an opportunity to cut and to not necessarily -- maybe a ceo was thinking i could be leaner here

or there there will be an opportunity -- the lack of guidance so many other things going on now. so many companies will do things that they had perhaps not thought about in terms of cutting their work forces. >> some people have taken pledges that they're not going to do it you have to hand it to those people >> some. >> a lot of people are committed to seeing this through with their staff. i would have thought there would be more layoffs. there's a lot of doug mcmillans and jeff bezos and a lot of marc benioffs and a lot of jensen wong >> those are all companies in the midst of significant growth. not talking about that >> what are you going to do? hire people if you're nordstrom? remember, they were trying to buy it for 8 billion it's now 3 billion

maybe they should only be rack i don't know what should macy's do? i don't know what is -- nvidia is hiring. they have tremendous businesses, they're growth maybe that's what will happen. great growth companies and then the other ones that are just -- their demise is being accelerated by covid how can gary kelly not trim his work force >> there's the dow 24,500 at the big board, kevin fitsgibbons, chief security officer. thisdiscussion of guidance doe remind you of merck versus pfizer pfizer which did affirm, merck which pulled, but did cut the guidance >> that was something. merck actually was -- was just bad. i was surprised. here they have these numbers for keytruda and they beat my

estimate, that's their key lung cancer drug. and then a downbeat. that should have been one where they said we don't know. but they cut that made me feel like, wow, i have to go over this again and again. suspend buyback. lower because of covid if they lower because of covid and pfizer doesn't lower because of covid, i'm confused about what you're supposed to do with merck stock. look at the green on the board isn't that something >> what are you supposed to do -- the market -- the s&p is now above where it was last september. the end of last september, 2019, we were below 2,900 on the s&p we're now 2,915. was the world not looking as good at the end of september as it is now? >> we did have a crash we did go down to 18,000 from

29,000 we're having a legitimate bounce the financials were cut so badly, you have to think, wait a second, maybe they got a shot. jpmorgan was at 140, they went to 80. fighting their way back to 100 they are moving away from the defenses going against j & j. you have a steel company in nucor that was at 60, now it's at 40. we had a lot of stocks get crushed. the numbers come out, they're not as bad as we thought they're bad, but they're not as bad as we thought. remember this, i identified $11 trillion worth of companies doing well >> but not for a quarter that this was included in we're talking about the middle of march it's -- it's this quarter and the next one and what things will be like next year that i think is much more in play here, isn't it >> it should be.

if we rebound in any significant way. we have a parade of ceos we look at the survey, ceos typically don't get things right. we had a parade of ceos come on the show we will continue with that they say i don't see my business getting back to where it was in 2019 for 24 to 36 months we heard that any number of times. >> we have >> so i get the bounce or i get that we did come down a lot. we're now at a level that would seem to indicate at least the belief we'll be back to something like we were this time last year? >> if you use the honest discussion of u.p.s. today, which says things are not that good because of covid and the stock is down, down badly, you could say, yeah, you're right. there's a lot of companies that are just doing phenomenally well and do well in a pandemic. and what will you do are you going to sell them

next year they'll do well in a pandemic the pandemic is accelerating this work at home thing. look at you. you probably cook -- you don't cook maybe you cook but you stocked your pantry with the bad stuff. forget that. i bet you cook or you have stuff delivered. that's a new paradigm. all those companies that have been left by the wayside, general mills, conagra, j.m. smucker. i thought they were goners how about hormel those are doing so well. we can't take their -- people will stay at home because it turns out to be pretty good. you have some staying at home, some back to work. >> now you got zoom and oracle teaming up this morning. quest diagnostics is taking direct to consumer orders for its antibody test for 119 bucks. you can click on the button, add to cart. we're reminded every day half of the s&p are things that you would use if you were staying at

home all the time. you couple that with $8 trillio in central bank support -- >> look at f5 networks they are an okay company they help you work at home that's one of their business lines. helps you work at home that's incredible f5 look at nxp. nxp was supposed to disappoint they are heavily -- they preannounced a couple weeks ago. here they are, they announced and they're levered to auto. the stock is up 6. it's hard. this is an irrepressible market. skyworks is levered to the inevitable 5g. here it is over 100. there's secular trends that are working. they're working really well. anyone who is doing badly, if you're really terrible, your bonds get bought by the fed. so you're saved. david, how many bankruptcies have there been?

we have whiting? we haven't gotten anything we got whiting petroleum how many bankruptcies? >> it's early. >> diamond >> and in retail we're expecting it more in the oil and gas given the very difficult time that that's having. but jim, what aboutthe larger issues of -- we'll talk to mike roman from 3m. >> right >> they take their capex to about 1.3 billion. they had previously targeted 1.6 billion to 1.8 billion previously there's so many companies that are doing that >> but you take the -- the problem of the dividend off the table. there was a note last week that 3m's dividend could be in trouble. look at the stock. it's up 9. it's up 8. doing well i'm not worried about the dividend so we cut the capex, are you saying next year he will be hurt because he cut capex >> no, but you have all these

companies pulling back even ones doing fairly well are not spending as much not spending on marketing, not spending on advertising, cutting capex, that will have an impact, won't it >> it will it does not right now, but it absolutely will. i won't disagree with you. i would say if you own 3m, you own it for the dividend, not the growth it hasn't been growing in a long time and you feel better today if you're -- if we see something like this from apple -- i doubt they'll cut, they have a lot of cash -- they can raise the dividend and have good balance sheets, that's enough for people so i think the market is being satisfied by dividends look at this >> a piece in the "journal" this morning, more companies are canceling or suspending dividends than in the prior ten years combined so the dividend is more precious now than it has been in a generation >> exactly you need income. think about all the people in their 50s and 60s trying to

build some sort of portfolio that gets them some income and suddenly you have these companies and the dividend is good i like that. i think that's very much what is in play. look, let's go to where david is, i think -- let's see who has accelerated in the david world southwest air. we'll bring in southwest air's chairman and ceo, gary kelly before i bring in gary, he had a loss and that is not southwest's way, which means this industry is doing something that i'm sure he has not seen. gary, i will give you the floor. you do not have losses that's something that southwest doesn't have >> well, yeah. good morning, jim. these are obviously extraordinary times. and we had a great first quarter going. we had a strong january, strong february saw no signs of covid-19 issues until the end of february.

and, you know, the drop in bookings, the increase in cancellations, the drop in traffic in march was breath taking so here we are you know, the good news is that southwest is very well prepared. we had excess liquidity coming into the crisis. we had the lowest level of debt to total capital in our history. over $10 billion of unencumbere airplanes available. you have to be prepared for the unexpected and this meets that definition you know, this is a real challenge. >> you have 20% load factor and estimated daily cash burn of 30 million, 35 million. what can you make so we all come back and fly i know the employees are wearing masks. i want to fly southwest. i want to fly southwest. and i want to tell my wife i'm flying southwest, you don't have to worry about me. i'm not getting covid from

southwest. what has to happen to make it feel like that's the case? >> i think a lot of things have to happen for the country to come back to life much less air travel obviously we and the federal government have a role to play in this. i think people ultimately, if they're going to travel, they need to have something to be able to do when they get there disney world needs to open back up restaurants need to open back up you have those kinds of things then people need to feel safe. you know, we'll need to do our part there so we'll need to protect our employees, we'll need to disinfect our airports, our airplanes. our customers will need to know what we're doing they'll need to feel comfortable with that. all those things, i think, are very far along in terms of being able to deploy, you know, those

kinds of procedures. then as far as customers go, you know, we'll certainly "the daily rundown" we'll follow cdc guidelines we'll encourage customers as an example to wear masks. we'll have ppe kits that we'll offer to customers we'll have social distancing at the airports and on the airplanes. we won't have airplanes that are booked full. certainly not an issue now but in the coming months we'll want customers to be comfortable that they'll be spacing. so we won't -- we don't assign seats, but we won't book the airplane full. so i think you can assume that all the middle seats would be open if i'm traveling with my granddaughter and she wants to sit next to me in the middle seat, we'll -- we won't prohibit that but there are a number of things like that that need to be done we'll need to work with the federal government in terms of

screening customers to make sure, for example, that you don't have someone getting on the airplane that has a fever. i think that's going to be very important. we'll need to do what the rest of the country is doing quite frankly, and this too initial pas shall pass, it's a matter of fighting through this epidemic and getting to the other side. >> boeing max, phil lebeau talked about it earlier. when you think it will be -- it looks like it's october 30th can you call boeing and say, guys, here's some thoughts about covid that you could do. ultraviolet lighting, or some surface that covid won't stay on i think it's the best airplane ever made, but maybe if they're just sitting there, could you make it a little more

anti-covid >> i don't think that's reasonable here in the short-term there's too long of a development and certification cycle associated with that so obviously it's taking as long as it's taking because of issues they're dealing with but those are all good ideas, all things that will need to be explored in the future we were -- as a world, we were not prepared for this pandemic and i think there's tremendous learnings for this, from this, we need to be better prepared the next time around and hopefully it won't be for another century, like the spanish flu of 1918. obviously we've had issues in between. this is a doozy. all those are great ideas and need to be fully vetted. >> gary, it's david. it is certainly a doozy, some of those things you described in terms of new ways that you'll board passengers sound onerous

and potentially expensive. that gets me to your financial condition. can you update us on the government money that you are taking how that will work, and when you look towards the fall whether you think you'll need yet more money as some other airlines potentially may be >> the c.a.r.e.s. act provides two basic programs, one is a loan program, the other is styled payroll support so we have applied for the payroll support part of the program. our portion of that is 3.2 billion, 3$3.3 billion and that is funded in tranches over a four-month period so far we've received half of that or 1.6 billion. 948 of that is in the form of a

lo loan, an unsecured loan that has to be paid back. the rest is a grant. the obligations that the airlines have or that we have is to have no involuntary furloughs of our employees through september 30th and then there are other conditions besides that that's the primary one the loan program, the application for that is due this week our pro rata share of that is 2$2.8 billion it's a secured loan. it also comes with warrants, 10% coverage in terms of warrants. we'll apply for that we'll have until september 30th to decide whether we want to draw down those funds. it also comes with restrictions and conditions so we have 9$9.3 billion in cash as of last friday. we'll be raising more money.

it is our intention. it just doesn't pay to not have enough cash in an environment like this. you know, as i mentioned earlier, we started the year in a very strong position, we want to make sure we sustain that the cash burn number that you mentioned is really the spending it doesn't include revenues. so hopefully april will be the worst. my rough estimate is that we'll burn about 9$900 million this month. hopefully it gets better in may, and then better in june. then hopefully remarkably better in july. obviously we can't sustain this kind of cash burn indefinitely so, you know, i don't know that i would say it's so much after septemb september, the c.a.r.e.s. act

doesn't solve all of our problems we'll need to reduce that cash burn and that's probably a combination of continuing to reduce our flight schedule, so that we're not incurring the operating expenses associated with the flights, as well as just generating more traffic and more revenue we'll just have to see where we are after september 30th if the traffic doesn't materialize, then there's no choice but to downsize the airline. you know, it's just premature to make those judgments i'm interested to see where we are in the june, july, august time period and see how traffic is responding. but our president, tom neilen, we tasked him with the job of creating strategic plans based on various recovery scenarios. so we have to be prepared for

the worst in this environment because the traffic levels are next to zero at this point >> gary, you talk about the number of things that need to go right. disney reopening and so forth. a lot of people are talking about the airport process itself tsa, baggage, airport concessions. how would characterize their ability to implement procedures that also affirm confidence? >> i think everybody will be in a position where they can implement procedures you go to grocery stores, gasoline stations and whatnot, people have -- have already put in place social distancing techniques, and screening techniques so, all of that, i think, has to be done. i don't think it has to be done in perpetuity. i think once this pandemic has worked its way through, you

know, you look back at the spanish flu of 1918, it was followed by the roaring '20s so it's -- i don't think we have to assume the world has changed forever more but we certainly need to do everything we can to defeat the virus, and that will include these kinds of measures here, certainly for the near future. >> gary, one of the things that's great about capitalism is that the companies that are incredibly well-run with good labor relations sound financials, never have losses in any year, should try focus on the companies that maybe have these big losses all the time or go bankrupt, and your industry is regarded as an essential industry, so you never seem to be able to overtake those who didn't, who were bad actors so to speak, when we all grew up and learn being businesing abous does it bother you, that you play by the rules and it doesn't

work >> you know, herb kelleher used to, used to joke that yeah, we have to beat these guys five times, you know, so, so it is humorous that, in a way, the way you asked the question but oh, no, i mean, there have been a lot, jim, lots of failures over the past 40 years. so you know, the industry and, you know, post recession 2008 and '09 has actually been very healthy. so it took bankruptcy with a legacy carrier to arrive at that, but you know, we have stronger competitors today than we have had in the past, but i get your point nonetheless, you know, every industry is going to have winners and losers, and what we bring in to this in addition to our preparedness is great customer service, our folks do a marvelous job at running the operation, and we have a low cost structure, and you know,

what we haven't talked about is just, you know, in addition to making sure that customers feel safe and comfortable returning to airports and airplanes, they're also going to be looking for a low fare this is a low fare world, and we're a low-cost, low-fare company. we've got a great route network throughout the united states, so we just want to make sure that we manage through this very carefully. we don't want to be too cautious but we certainly don't want to be overly aggressive and put ourselves into bankruptcy. so we have a very deep leadership team here i'm very, very proud of them, in addition to all of our employees are doing a great job, so we're as prepared as anybody can be for this crisis, and you know, we're determined to come out on the other side of this very healthy and very strong. >> well, gary, i bet you do. it's gary kelly, ceo of southwest, symbol luv. always great to see you, sir,

thank you. >> it's great to be with you all. >> always very straightforward is mr. kelly of course, hoping for what he said is "a remarkably better july" but preparing as he also indicated for the worst as well, as you need to. speaking of preparing, of course 3m as we mentioned earlier cutting its capex taking aggressive cost reductions as well we're going to be speaking to that company's ceo mike roman in the next hour of "squawk on the street." these days, it's anything but business as usual.

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the president yesterday talked about his relationship with 3m. take a listen. >> i also want to thank 3m, because they really stepped up behad a little dispute at the beginning but that got worked out quickly and they've been doing a great job 3m, they really have been i want to thank their great ceo. we had a little skirmish, but it worked out well, and they're doing a lot of work right now on

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let's get to jim and "stop trading. >> a lot of people trying to figure out what will survive in troubled areas ralph lauren, iconic name and also calvin klein and pbh. if you have an iconic name you can get through this period i think. people when we finally beat this, they'll want to spend and i think that the ralph laurens of the world will be the beneficiary. you got to get to the other side, but you can see ralph lauren's up $4 today why? because i think people are saying it's going to make it, and we're going to spend once we're doing better so that's what the market's trying to figure out right now what's iconic and what's

unnecessary and ralph lauren's iconic >> interesting, jim. ft's got a piece about warehouse space for apparel, which is filling up almost as fast as warehouse space for oil on tachker tach tankers around the world good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer, sara eisen, david faber live from separate locations jim will stick around as we talk to 3m's mike roman in a few minutes. let's get consumer confidence with rick santelli >> reporter: 86.9. 86.9 is our april read on consumer confidence, the lowest read since may of 2014, if we look at some of the internals actually aren't out yet. richmond fed another number that's coming out and this is also an april number, this one is easy. minus 53 this series started ed ied in r

of '93 and the lowest level minus 44 minus 53 is a new low for this run. i can't see the subtext on expectations and present situation from the conference board but suffice it to say that it is amazing economists call was 87 they were darned close on this one. so even in an economy of course impaired due to the shutdown to combat the coronavirus, economyists can still do some good math. carl, back to you. >> all right, rick, thank you very much. we'll see what kind of impact that has on the markets which are obviously coming off of the session highs, sara, but for a moment there, it did appear that it could still happen. it's still very early. we might get three 1% gains on the s&p in a row >> absolutely. after another strong session where we closed near the highs yesterday, carl, i mean, you start to wonder what's driving the action in this v-shaped rebound in the market. if most people are not expecting a v-shaped rebound in the

economy so far, well, obviously there's a lot of hope out there for the testing and the treatments with the new announcement yesterday from the white house, companies like cvs, kroger and walgreen also ramp up their testing capabilities there's more announcements about states reopening and what that's going to look like and of course there's more support from the federal reserve that came out last night and said we're going to go in deeper into the muni market to help keep that market functioning. so those are the three pillars of what's been driving the rally. though jim, i've been looking a lot at the state reopening information, it makes you dizzy because they are all so different. you look at a state like georgia, and then a state like ohio, i mean, both republican governors but going in completely different directions in terms of what's being allowed to open, salons and restaurants in georgia, now well there's no date for that in ohio. they're going to open manufacturing and construction and they're going to open retail restaurants, texas versus california, totally separate new york, very different new jersey still has a

shelter-in-place order it underscores how difficult this is going to be and to track both economically, but also just for people to figure out how they're going to separate in this new normal, and i'm curious jim what you think that will mean for the economy and the markets. it is pretty confusing >> what i was hoping would happen buduring the interregnum the pause, we'd have contract tracing to we'd know who was next to us that might have had it i thought tests would be readily available. it's still not available to speak of at least in our area and it's almost as if i think georgia believes this is like the spanish flu. remember october of 1918, the spanish flu was horrendous and then it ended. i mean, maybe the georgia governor thinks it's going to be like the spanish flu, that it's done now is that preposterous when you go back to october of 1918, they were going to, they thought november was going to be the worst month, then december was going to be horrendous and

the winter bad and it ended. so i mean, maybe it's a polyanna world down there where they're basically saying, you know what? it's going to end, and we are so far ahead of everybody else. sara, before we say that is ridiculous, you have to go back in history and realize that everybody who thought it was done in october was laughed at in 2018. so i mean, maybe that's, maybe -- >> we don't know >> we don't know how little do we really know about this thing isn't it amazing every day like we thought moderna the vaccine would be maybe this year now it's going to be a yearfro now. that's not what we thought moderna would have it. i don't think anybody's safe until we have a vaccine but i admire this level of opt michim. >> you see it in the markets and what's underpinning it is the extraordinary level of support which we talk a lot from the fed and also from the fiscal government david, i know you follow the

credit market. delta, a company caught in the center of the storm, yesterday managing to offer $5 billion, they upsized the offer because there was so much demand they set out to raise $3 billion. they raised $5 billion in cash, what 6.75, so obviously they're paying up for the five-year debt but clearly a sign the market is functioning and healthy which is a very different place than where we were a month ago or so. >> without a doubt, the fed has helped there i think the yield was higher because i don't think it was priced to par, sara, may have been priced around 97 or so, 97.50. you are talking about a very attractive yield there, also was their gates in places like london and other very high trafficked areas typically used as collateral for it so seen as safe. a number of people were happy to step up for that piece of paper, weren't they, and obviously companies that are in a position to potentially sell whatever they may need to do so

you know, if they can get to market, whether it is as straight debt, straight equity or some sort of convertible as well >> we also have this new tracking index jim, i know you've made one on "mad money" as well but cnbc does a testing and tracking index which is interesting it includes not just the j&js and roches and fuji film and small companies working on anti-virals or imknew know therapies or asthma medication so much is being done. that index is tracking with the overall market right now, which i think continues to show you that there is hope that all of these companies throwing all of their resources at this is going to help and fueling a lot of opt michlt in the market during the depths of the crisis in march the two are moving in opposite directions showing money was camped out there

hiding out in some of the b biotech names. >> more than 11 trillion for the market cap do better in a pandemic than without it a lot of people set up got a windfall losers have small market caps. the notion of the disconnect, aren't they trading hair salons? we're not, we're trading vaccines and essential surgery, so i think that people have to recognize that our companies, 11 trillion of our companies have been set up for when the economy is not good, because they've been through not good economies, and i'm not, there's no banks on my list but every thintech bank we accelerated to paypal and

mastercard and visa. >> is pepsi in your bucket we're going to talk about that in a little bit. >> which one >> that was a pretty strong quarter. >> oh, yes look at these ones, f5 nxp. i mean, wow. look, anybody, this move to go at home requires a tremendous amount of technology in cyber security, and pcs and wide area networks it's just fabulous for nvidia. work at home, when you have 95% of your employees, which a lot of banks have at home, you can't just have them with the pc so you could argue that some of this is going to end and that zoom is not as secure as others as webex and cisco, but i think people are discovering it's pretty good at home. and the companies kind of like it >> let's continue now -- yes, and we've seen some of the stocks react accordingly let's continue the conversation now on testing and treatment, especially on the treatment side, which is so key for this market northwell health is out with a new study on covid-19.

it's testing heartburn remedies in new clinical trials on the coronavirus. joining us is michael dowling, includes lennox hill hospital in new york city. michael, so good to have you again. >> thank you so much >> i already looked for pepcid ac it sold out on amazon and so are a bunch of generic versions. what you can tell us about this testing? is this another hydroxychloroquine it sold out completely on the hope and now we've been getting more and more word from the fda that it's not working? >> motidine it's very difficult to get at the moment we have enough of it to do the clinical trial, and this is a trial we are doing and have about 200 people enrolled at the moment it originated, the idea originated in wuhan and scientists have a reasonable confidence that in this trial it

may make a difference. it's one of many trials we are doing but we believe in the next two weeks or so we will have some potential results to be able to tell whether or not it is working or not so it is worth doing but as you said at the beginning, it is very difficult to get at the moment i believe amazon has sold out. once the word gets out this might be something that could help, there was a run on the supply we do have enough to be able to do the trial and do it successfully >> how many trials do you guys have going on in your hospital system >> we have about six or seven trials going on at the moment. we are working on drugs, you know, with regeneron, some gilead trials, and we're doing a trial on plasma, and of course the one that is getting the current attention is the one with famotidine. >> is there anything you can tell us about which one may

appear more hopeful at this point? >> well as always, you can imagine i asked my researchers and scientists this every day because everybody wants to know, tell me which one really works but obviously they're very cautious, not definitive at all. there is hope and whether the famotidine trial will show something positive but it is way too early to say definitively and i would like to know myself, but they won't even tell me, because i don't think they know yet. they don't know enough to be sure and the worst thing to happen would be to get information out there that is not clear, and may be incorrect. we have to wait until we get the real results back, which should be in a couple of weeks. >> michael, it's david faber just for a moment i'd like to divert to your business, we know hospitals around the country have not been having elective surgeries. yours obviously have been crowded, others perhaps not so much what is the financial state of

the northwell system right now what are your expectations in terms of getting back to a more normalized state of business, where you're actually going to be able to take patients in, who are paying real money into the system >> well, we are in the process right now of what we call recovery we have put together a series of work groups and task forces to get us back to business. i don't think we'll ever get back to the normal that we were, that was common with us before, but we are, we have always been doing surgery, all during this whole period of time that was life-threatening, things that had to be done, but there is a pent up demand now other surgery needs, and that are urgent and for surgery that is real urgent, we do our best to do it, but it is limited at the moment, and over the next couple of weeks, hopefully we will be able to expand that. remember, all of our hospitals were pretty much all 90% covid

the staff that was applied in the past to dealing with surgery cases actually redeployed to deal with covid, so there is a very complicated process here to be able to get back into regular business as much as we possibly can. it will take many, many weeks to be able to get back in some kind of a sequenced way to bring back that pent up demand that is out there, and we are doing that very, very deliberately. you've got to be cautious. you got to make sure you comply with social distancing in the waiting rooms. you've got to make sure you have the right staff. you've got to make sure you do the right kind of testing that may be appropriate beforehand. in many ways, i will say that the recovery and allthe components will be just as difficult managing the covid cases over the past six weeks. this is not an easy transition, and obviously we are still under

the regulations of the state says there is still no agreement to allow us to do elective surgery yet so that restriction has not been lifted and obviously we have to comply with that restriction, until it is lifted but it's a complicated process, but we will successfully do it, and but as i said to repeat, if there is a life-threatening situation out there, that there is urgent surgery that needs to be done or urgent care, where a patient's situation can be put in jeopardy by not doing it, we will find a way to do it >> michael dowling, thank you. we'll get you back on soon many more questions. ceo of northwell health. >> thank you so much i appreciate it. thank you. >> we've been telling you a number of times this morning of course about earnings from 3m and we're very happy to now have its ceo mike roman joining to us discuss those numbers. mike, always good to have you on

the program. certainly want to talk to you abo about respirators as we have in the past the broader subject of 3m and decision to suspend guidance, to cut capex and cut spending why did you feel the need to suspend guidance and cut spending to a certain extent as well >> yes, good morning, david. thank you for having me on maybe first i'd like to take a moment to say how much we appreciate and admire our heroic nurses, doctors and first responders for all they're doing to fight covid-19. it's a big focus for us and i couldn't be more proud of our 96,000 employees around the world and how they stepped up to lead the fight against covid the big topic on our earnings call was also the outlook as we go forward, and we did withdraw our guidance, there's a lot of uncertainty out there, very fast-changing dynamics as we come into the quarter, as we exited q1, and so it's just not

having clear view of where we are going. there's some -- in lieu of guidance, we laid out that we would give monthly updates on our organic growth, but we did also highlight that april 2 date we saw down mid teens, so that trend and that slowdown that we saw in the americas particularly coming out of march really guided us to be managing our operations generally, focus on execution in the face of what we see in our end markets so we see that slowdown so we are managing costs. we are adjusting our operations. we are, and our capital we continue to invest in areas like respiratory production and other priority areas that are growing and have high demand but we see slowdowns, other areas we're delaying capital, slowing down

managing our costs and operational production to the levels we see in the market. people may look at the recent news cycle there's unlimited demand for your respirators but autos is an end market elective surgeries talking to northwell health, an important part of your business as well. what are your expectations in terms of when those kinds of things start to come back, mike? >> yes, and you're right it's been two sides, high demand and home improvement cleaning solutions, high demand in areas like biopharma, where we're supporting the development of vaccines and therapeutics so there is covid related demand upswing and then we're seeing the impact in auto, a little broader in areas like our office and stationary and office supplies businesses and we're seeing slowdowns across a number

of areas, so elective surgeries, elective procedures is one of the areas we've seen a slowdown in health care and also seen a significant slowdown in oral care as people aren't going to the dentist, not just in the u.s., but in areas around the world. so as we see economies recover, we would expect elective procedures to come back, and we would see a pickup we did see the slowdown in those areas, and in particular, a sharp slowdown in oral care. >> mike, there is an expectation i'm sure that those businesses will eventually come back, as difficult as it may be right now to predict exactly when. but on the respirator side, there's going to be a demand for those that stays with us long after even this crisis ebbs. do you agree with that you have now gotten up to or will be up to it as soon as june, i think, of 50 million a month in terms of u.s.

production is that something you see going forward for years to come? >> yes, so we, david, as you know, we ramped up our surge capacity, which got us to 100 million a month by the end of march, and then we're adding additional capacity in the u.s., as you noted, to get from 35 million to 50 million, and we're going to increase again as we go into the end of the year, against the demand we see in covid coming out of covid. i think we'll see a longer tail to the demand and we also expect to see increased demand in consumers as we go forward and get through battling the crisis and directing the vast majority of our production to health care workers, we'll see consumer demand be there. we'll see industrial demand be there. we do see a continuation of strong demand, just to size it for you. our respirator business we're talking about, n-95 is a part of, that's 2% of 3,mm's revenue.

we had 150 basis growth in that business for first quarter, second quarter, so we're not quite doubling that business but we expect to see that kind of demand continuing as we go through the year >> mike, it's jim. good quarter i have an n-95 it's what i wear and it's great and i feel very safe about w it. i got a bunch feb 26, amazon had a lot. what i'm trying to figure out is the time line here april 3rd, you tweeted that you've gone above and beyond to manufacture as many n-95 respirateors as you could in the u.s. market and the president says we hit 3m hard today after seeing what they were doing with their masks. what were you doing, and there was a lot of first responders who got angry at you you were selling them through distribution i imagine, that's how you sell the masks, 3m is not a retailer my father ways whole saler for 3

zw m for years. you ran out because they're so good but i don't understand, how did the president think you were supposed to or was he supposed to just do national defense, the defense act and have fema call you saying we're taking everything, no more to china, no more to distributors it mystified me how he thought business works >> well, jim, i would say we're working very well on partnership with the white house and it has been a very strong partnership in getting us case in pint to get the 166 million respirators coming in from our production overseas that took a partnership with the white house and that's been very, very strong. i made remarks in our earnings call this morning i highlighted all the aspects of that, every piece of this has been important and including the white house helping us get in a position to bring product back into the u.s. from our overseas operations and fema with the logistics and air bridge to get it here, fda to

extend the emergency use authorization. so it's not simple we had to work on multiple fronts and we are, we really are working well together. there is a timeline to respirators in the middle of covid, and if you look at it, when we started the year, a majority of our respirators n-95s were going into industrial users. that's the normal business for us, 90% go to industrial users, as covid and the crisis came up, we shifted that to really the opposite, more than 90% into health care and the only pieces of that go into industrial are really to support key industries like food and biopharma production and utilities it really is a flip and that takes work to adjust to that we did it quickly i would say in the u.s. within days of the emergency use authorization. they were 90% into health care so i think it's just complicated to really ramp up not just going our surge capacity online but then to bring product from supply chains all over the

world. it took a partnership and i'm really pleased with where we've gotten to it at this point >> mike, you make so many things that are really indispensable can you make a commitment to have n-95 factories here it would be so great if we knew no matter what, no one could hold us hostage. i know how you feel about this i am sure you agree with me but i know it's hard to do but how about a commitment like that, so that we never have to say you know what? 3m has to go to beijing, 3m's got to go to canada. make it here, mike >> yep, and that's our model, jim. you know, we, when companies move manufacturing overseas, we didn't leave the u.s we produced everything we sell in the u.s. largely in the u.s. facilities in fact, we're an exporter we export over $5 billion in products every year out of u.s. fact factories, so we have the capabilities here. we have surge capacity in the u.s. for n-95s

we didn't anticipate that the m demand we're seeing in covid we're bringing more production online, adding the 35 million a month that we produced in march, we'll take the 50 million from our investments we accelerated as we came from q1 in june and working with the department of defense to double that again as we get to the end of the year. our goal is going to be ready for the next crisis, to be ready to support the fight in the pandemic, and be able to do it out of factories in the u.s. >> interesting choice of words there, mike, "the next crisis. gardner had a study, cfos earlier in the week, where they said only 8% of cfos have a second wave factored into their planning scenarios, and only 22% say a second wave is the most likely scenario. what is the next crisis? >> yes, and carl, we made the decision to put surge capacity in, coming out of sars we learned we were going to be

expected to be there for demand and really lead the way. so we added surge capacity then, and we brought that online on h1n1, in the wildfires in california and australia, in the japanese tsunami and so those are the things that we want to be prepared for, and it's not a comment on covid and how covid propagates it's really about being ready for that surge in demand from whatever crisis may hit and personal protective equipment is going to be front and center again as any of those situations arise. >> so mike, it's sara. you mentioned that consumers are going to want it we all want n-95 masks, obviously health care workers go first, but when are we all going to be able to get that >> sara, i think that's going to depend on the demand, as it plays out here you're seeing we are still prioritizing everything into health care, and the front line health care workers and that's the foreseeable future for us.

nu near term as we ramp up production is to go into that. there will come a time where there will be demand and it will maybe normalize and we'll see demand from industrials coming back, we'll see demand from consumers and we'll be in a better position to serve that demand it's difficult to see the dime of ti timing of that where we sit today. we're focused on serving front line workers and first responders >> mike, back to capex and your decision to reduce it between what would be as much as $300 million to $500 million for this year, the remainder of it. so many companies are trying to make the same calculations are you planning to increase capex next year by a commensurate amount reduced this year how do you think about that? >> yes, and david, i think our capex model that we were coming into the year saying 1.6 to 1.8 billion, and that was in line with return to growth that we talked about in our global markets. so that would be more normal for

us it's a mix of, you know, they installed the base and serving that install base and investing in growth capital and investing in new technology. that's probably a more normal model for investment, as we go forward. pulling back this year, we are really balancing two things. we're balancing a slowdown in demand we're balancing an increase in demand in respirators, and we want to be ready to be able to ramp back up, so we're managing this very carefully. some of it is delaying some of our capex we had planned because the growth in end market demand isn't there. so it's not a one-time decision. it's something that we'll stay agile around and adapt to, as we see what happens we withdrew our guidance because the uncertainty makes it difficult to see we have to be very much ready to move as we see things change and that's true for capex as well. >> mike, a lot of companies are

trying to understand what the workplace is going to look like now. you have 96,000 workers working in offices, working on factory floors how is 3m adjusting to the new reality in terms of the workplace, and how far along with you in that process >> i would say it has been an adjustment, and there's been some real strong benefits from it we have about half of our employees working from home. we've implemented new protocetos and procedures in our plants some of that is representative of better capabilities to remotely work and collaborate. our model collaborating around innovation, we're looking at how can we bring people together deployablely and innovation. i think we'll get hit with benefits from that as we go forward and even as we return to the workplace. it is something we talk about every day, we're thinking about how do we return to the workplace. it's probably a question that's

most often asked by employees, what's going to change how are we going to come back to the workplace, what will be different. there's a lot i think to learn from and take stock of as we come through this, and the tools that we've employed, the digital capabilities that we'v accelerated, those will be benefits as we map out how we're going to return to the workplace. >> mike, it looks like to me, there was a time when the conversation would have been dominated by pfas, by th problems groundwater when i look at what you released is a significant litigation related charges, benefits, deals with some of them. you had a settlement with wolverine. is pfas, it's hard to quantify but is this groundwater issue behind you and is something that if i tell people on "mad money" that dividend is safe, cash flow is great and i've stated issues on pfas but they've addressed it, is that fair >> jim, we are continuing to

proactively manage pfas. it is not behind us. we are working on it all the time, even during covid. we're guided by three principles as we do that, guided by focusing on leveraging science, taking corporate responsibility and providing transparency there are multiple dimensions to that we talked a lot about what we are doing where we manufactured and disposed of pfas products, continued to manage that we have taken a couple of actions in q1, you mentioned the wolverine settlement which was part of the reserve we took in q4 we are working with epa and state level organizations to continue to move forward it will be something we continue to manage. >> finally, mike, china, coming back online. you have an important presence there of course. what are you seeing in terms of the economy there and a lot of companies seem to be looking at

supply chains differently, even more differently than they did during the fight in terms of trade. are you doing that as well >> david, we are seeing some signs of recovery in china, broader base return to growth as we come into april, so early days of second quarter it's really across health care, our industrial businesses, of course safety business is part of that, but also our electronics business, showing some signs of growth and consumer business as well. so china we're seeing some positive signs there china, like the rest of our model around the world, we invest in capacity in china to support customers in china, not to export out of china we entered there in '84 and building production and we produce in china most of what we sell in china and very little of it is exported outside of china. that model served us well and it will be the foundation for what we've talked about in the u.s.

it's how we really serve customers around the world, and we don't expect to change that in fact, this covid price has just reaffirmed the strength of that model as we managed this dynamic, fast changing marketplace. >> yes, important point of course as you say, many mother companies dependent on the supply chain not as much for 3m. mike, always appreciate your taking time with us. thank you for joining us >> yep, and thank you, david, and just a reminder, we are leading the way in fighting the battle here and with covid in the u.s. out of production of n-95s, the largest producer of n-95s for us are in the u.s., and will continue to do everything we can for the health care workers and first responders on the front line and thank you for having me today. >> yep you're very welcome. of course, those are the people that we think most often of during the course of this cri s crisis mike roman, the ceo of 3m.

carl, over to you. >> jim, what's coming up tonight on "mad" >> centene is getting clobbered today and new ceo of nucor, don't want to be pessimistic i felt pessimistic at the beginning of the show what's going on look, we have to be even i think that's the way it is be even. >> all right, jim, thank you >> okay. thank you guys >> see you tonight jim cramer etf spotlight we look at home construction, the ticker is itb. rising today up over 35% from the lows hit earlier this month, but still down almost 20% for the year so far. top holding in this etf, d.r. horton, leading the way higher on better than expected quarterly results, up 9.3%, but the home builder did say it began to see the impact of the pandemic on its operations and housing demand in late march and into april we're going to take a quick commercial break here. stay with us here on "squawk on the street." dow is up 150 points

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featuring the emmy award-winning voice remote. access to your favorite apps, including netflix, prime video, youtube and hulu. all without changing passwords and inputs. the most 4k content and movies and shows on any screen. the best entertainment experience all in one place. good morning, everyone i'm sue wherrera. cancer patients are three times more likely to die of covid-19 than noncancer patients, according to a study of more than 640 people with covid-19 in china. "the washington post" cites an expert to calls the study important, but says far larger studies need to be done to

confirm those findings quest diagnostics is now offering covid-19 antibody tests directly to consumers. no doctor visit is required. the antibody test can be bought online, followed by a blood draw at any quest service center. and in north carolina, a dog has tested positive for the coronavirus. that is winston the pug, and he appears to be the first canine to test positive the discovery was made when his owner's family participated in a study at duke university, and three of them also tested positive and a california teenager has come up with a way to help the hearing impaired communicate during the pandemic. 17-year-old isabela appel is making face masks with a clear final center to allow deaf people to continue to be able to lipread. app appel, who is deaf herself, came up with the idea after watching her friends struggle to communicate. fantastic story. as always, for more coronavirus coverage, you can always head to

cnbc.com carl i'll send it back to you >> all right, sue, thank you very much. as you all know by now, the debate over how to reopen the economy is differing state by state. joining us this morning is the governor of connecticut, ned lamont governor, good to have you with us good morning >> good morning, carl. >> you guys have shelter in place orders i think through the 20th of may, and now you have this advisory group on how to reopen the state, with some of our old friends actually like formerly of pepsi. when do you see yourself refreshing some of the guidelines >> well, first of all, we kept over two-thirds of our economy open we never closed down manufacturing. we're a big manufacturing state, as you know, jet engines, sikorsky, helicopters, submarines, big construction, public health, media, finance. we kept all that going so now we're looking at some of the smaller retail

we kept that open, but mainly for drop shipments i think we can see that opening in the near turn, so most of retail would be able to open up in the next near term i'd like to think and that leaves us with just those places that are tough to social distance, for example, bars, maybe close indoor dining, things like that >> and what is the future for those types of businesses? are you beginning to see outlines of how they, too, can sort of join the party >> well you know what we've done, carl, we've asked them, give us your best recommendations and how you think you could open in a safe way, and you know, the restaurants say i have big outdoor dining maybe you let me start with outdoor dining as long as the waiters wore a mask and even wore gloves so we're getting some good ideas to help inform our decisions over the next couple weeks >> do you get the sense that states like yours are being influenced even at the margin by

other states who do have a faster reopening schedule for totally different reasons, with totally different demographics, but are you thinking about the fact that it might get your constituents to start saying hey, why aren't we doing that as well >> there's some that feel that way, but i got to say, i think the overwhelming majority in connecticut say i want to open up but i only want to do it safely i don't know how you can have a massage and do it social distance i don't know how you can have a tattoo with social distance. i don't want to risk things, risk the chance of going backwards like i see happening in some asian countries so i think we have a broad consensus we're on the right track but there is a track to open the state. >> mayor lamont, it's sara in the mitch mcconnell recently said fiscally strapped states should be allowed to go bankrupt what kind of drop in tax collections are you expecting as a result of this pandemic?

what's the financial status of connecticut and how would you respond to mitch mcconnell >> i'd say senator mcconnell, physician heal thyself, look at your home state of kentucky and before you sit around pitting red states against blue states here in connecticut we've had a $450 million hit in revenue just this fiscal year, because unlike other recessions, sara, where it's mainly the income tax that gets hit, in this recession it's the income tax as well as the sales tax but we're relatively well positioned. i have a $2.5 billion rainy day fund i just described to carl the big pieces in our economy that we have kept going throughout this, so i'd like to think we'll be able to get through this, but we are going to need some help from the feds they don't want states across the country slashing spending, slashing social services, and raising taxes. that's the wrong thing to do in

a recession. >> governor lamont, it's david faber. i think your budget director anticipated you could see 1.4 billion in lost revenue for your next fiscal year this demand is not just going to come back overnight. sales taxes and obviously as you point out income tax the most important single component of your overall revenues, how are you looking at the future in terms of the rebound to get back to where you were a year ago >> yep, very cautiously is the answer to your question. i mean, i could open up restaurants. i can open up small retail we can get that going, but what are the consumers going to say in they're going to be voting with their feet as well aren't they it could be a while before you see our sales tax revenues get back to where they were. that said we're a state less dependent on the service economy, a lot less dependent upon hospitality, so i think we have some advantages in getting through this >> but i guess, governor, if you

do get the help that you need, and other states need, should it come with reforms that you have to take, speaking to the mismanagement that a lot of people do criticize your state and other states for having. for instance, the 5.5 billion that goes to pensions and health care for retired state employees when only 4 billion hems the poor that's just one example that "the washington post" points out. >> yes, no i saw that. what they should understand is everybody i hire is in a very different salary structure than those folks who retired ten years ago, big contributions to health care, defined contribution as well as benefit hybrid plan. our new state employees all pay for themselves what happened in the past, we've got to deal with, but my instinct is now is not the time to inject politics into what we need to do sales tax and income tax have collapsed. that's for health care related

reasons. the federal government gave us guidance to close down a lot of these sectors of the economy, especially the service sector, so they've got to be part of the solution >> finally, governor, your own alma mater, harvard, yesterday said they are going to have collapses in the fall. we don't know if it's going to be virtual or physical, but you know, you started your own career in telecom. i just wonder if you think the advances we're seeing in the technology we're using at this very moment is going to change things for college towns and all of the small businesses that rely on having higher education institution in that town >> i think this last two months is going to change things forever, in a positive way, like you point out, tele-education, distance learning, not to mention telehealth, not to mention telecommuting. i think everybody's going to rethink their model. i think universities will be a part of that there will be a mix, i think, of how much in-classroom, how much

on ampus, versus what you can do remotely. a lot of this i think is good for the state of connecticut, only in the sense that you know for the last 20 years, young people all had to be in a major metropolitan center or else they weren't where it's happening today you're finding out through telecommuting you don't have to be in new york or boston for your job, at least you don't have to be there five days a week and maybe if you think that a stay-at-home may be part of a protocol, as pandemics happen like this in the future, having a small backyard and single family home may have some advantages i could think of disadvantages, governor, not having the universities in the state open and receiving students physically on campus, university of california, yale, so many other important institutions what are your thoughts about colleges and universities being able to open in the fall >> i want them to open in the

fall we have one of the great university systems in the country, best advice to come into connecticut to get educated it would be a shame they didn't come, they didn't come because it wasn't safe i got to balance that or i think you'll find the university presidents are balancing that. obviously if you're more of a commuter campus, less risk if you have big residence halls, a little more of a risk but i'd like to think that through testing and perhaps anti-biotics and maybe a vaccine will be on the back side of this come this fall >> governor, good to talk to you as always. you've been really good about coming on air and keeping us updated. i hope to talk to you again soon thanks >> appreciate the opportunity. thanks, everybody. >> take a look at stocks we are higher at least the dow and the s&p 500, after a day of gains yesterday, though they are slipping s&p is actually heading toward the flat line. nasdaq is negative retail is a stand oout today.

we'll take a quick commercial break. stay with us

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welcome back to "squawk on the street." how did the los angeles lakers, autonation and even some billionaires get a hold of that ppp money? it's a good question and the question as well, what does it mean for small businesses that didn't robert frank has that story for us robert >> david, you summed it up perfectly earlier when you said none of this was illegal the treasury secretary mnuchin blames the borrowers not the guidelines for why shake shack, auto nation and the lakers got that money from the small business program the rules, well the rules had three big loopholes that's going to make it tough to prove any criminal liability for the borrows who don't give this money back by may 7. the definition of small, politicians said for companies with 500 employees or less but it followed the rules of the sba which says that it varies by industry and it could mean that an employer could have up to

1,500 employees for various industries including mining, manufacturing, transportation, finance, or scientific and health care which is why a lot of biotech firms got the money secondly the definition of necessary. this is key. the guidelines said the companies only had to agree that, quote, current economic uncertainty makes the loan necessary, which you could argue is true for almost every company right now. it wasn't until after they received these loans that the sba put out new language saying the companies had to, quote, take into account other sources of liquidity which, of course, would effectively bar public companies from getting this company. third and perhaps most important is the franchise loophole. this is one that the hotel and restaurant industry lobbied hard to allow each location owned by a big company to apply as a separate, small business, so lawmakers said this was aimed at franchise owners like those for mcdonald's but it did allow tbs hotel magnate monty bennett to

get $120 million applying for each hotel and how auto nation received its over $77 million by applying for each dealership again, that franchise rule did not change for the new round we'll see whether we get more of the same in this second round or whether companies just by virtue of becoming public are not going to apply this time david? >> yeah. you know, robert, also i believe ppp was announced prior to that change from the fed where they expanded the main street lending program as well, which conceivably how is certainly available to some of those companies that may have or did avail themselves of ppp loans. >> that's a great point and i think we will see when the fed does disclose the names of the borrowers under that fed program we will see people that dipped from both of these bowls here. i think that's going to be interesting to watch all of this was legal. the companies did follow the

guidelines we'll see what treasury does to companies that don't give it back >> yeah. public approach is all we can give them at least thank you. >> yep. >> robert frank. don't miss the ceo of novartis who will be joining us mi ushtlwk alley" which will be congp ory. stay with us nce 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, assisting customers with financial hardships, and our foundation is contributing millions of dollars to charities helping with covid-19 relief. keeping our promise to be on your side.

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welcome back to "squawk on the street." i'm eric chemmy. stocks on track for another day of gains as most sectors are higher with industrials among the top performers in addition to 3m's earnings beat rockwell and cummings posted better than expected

results and those stocks are up. one notable weak spot, ups, despite a beat on revenues the company missed on the top line and withdrew its guidance and also suspending buy bax and expects to reduce capx by a million dollars. "squawk on the street" returns in two minutes feed a healthy lifestyle, with pure protein. high protein. low sugar.

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welcome back food and beverage giant pepsico out with earnings giving us another look at consumption during the coronavirus lockdown. the company did beat estimates and had strong organic sales

numbers, up 8% one of the key things investors were watching, as they are across earnings this season, use of cash. here, pepsi said it is maintaining its share buyback because of its strong position i asked cfo and vice chairman hugh johnston about that and here's what he said about that decision >> as a company, we really do have more than adequate liquidity. the debt markets have remained open to us, commercial paper as well long-term debt and we feel like the commitment that he we made to shareholders in terms of cash returns, dividends and buybacks, is something if we can maintain it we will and we can maintain it. our intention is to do that. we're not taking money from governments or outside parties, so we feel quite comfortable maintaining the share buyback and we have more than enough liquidity. >> as far as the underlying business, snacks are doing particularly well as johnson said people are grazing at home more, meaning that they're

snacking more. beverages, not as well there was an initial boost in terms of the stock up as people ran to the grocery at the early onset of this pandemic, but so far since then, johnston said that demand has tapered off and the company is projecting a decline overall in sales for the second quarter and like so many companies this earnings season, they did suspend their annual guidance because johnston said the economic uncertainty that lies ahead of us is too great, even if they are benefiting overall from some of the trends like having breakfast at home which helps the quaker oat business and they are doing better than coca-cola on the away from home business. it's not as big as coke, restaurants, stadiums and all that business, about half for coca-cola. carl >> yeah. certainly not the only company to pull their guide with 3m and xerox and caterpillar. good morning welcome to