some residents are starting to push back against the lockdown orders just this weekend there was a rally to reopen local businesses carl, the good news here is that a new drive-through testing site is now open in the area and the cdc is on the ground back to you. >> elon muy with the story that's happening around the country, the natural process trying to figure out how to reopen market. thanks. good morning welcome to "squawk alley." i'm carl quintanilla with morgan brennan and jon fortt coming to you live from various location ps market does want to test 2800. we got 2797 this morning, bounced off of that as we continue to look at various reopening scenarios, buffet's comments on saturday regarding stocks and the airlines and then renewed u.s./china tensions as well. >> we are going to begin this morning focused on the markets joys chang, jpmorgan's chair of global research, joys us now joyce, good morning. >> good morning, great to be

with you >> great to see at least your picture here and hear your voice. i want to start with the markets in general and warren buffet's comments his comments appeared to go against popular wisdom i think in how to manage investments he sold airlines low, didn't buy anything during the historic sell-off i wonder what you think from a research perspective how investors playing at home should -- what they should take away from that >> after having one of the worst months ever in march april has ended with one of the strongest rallies in about 30 years across a number of benchmarks the s&p 500, the nasdaq, and u.s. high grade. so i think that you should expect some consolidation this month. now there is just so much liquidity in the system. we estimate the central bank balance sheets will expand 17% this year. you don't bet against that we still think you should be,

you know, constructive, but consolidation is in order. the markets responded the fastest, the virus and the economy last and the data prints we see coming out are going to be pretty negative here. i would look for consolidation, although i think there's a strong level of support just from the measures that have come out from the central bank and another fiscal package likely to go through the congress in the coming weeks as well >> we also want to bring in neuberger berman chief investment officer joseph amado. good morning. >> good morning. good to be with you. >> great to see you. so looking at the markets, the s&p is roughly where it was a year ago, though arguably for different reasons. how much would you say the fed and monetary policy are playing into the levels that we're seeing right now and what should investors be wary of while factoring that >> well, i do think the policy that's been put forth on

monetary side and fiscal side has had a big reason that the markets have moved up, particularly on the fed side it's very much been a liquidity driven bounceback and i think what you want to be wary of is markets have moved a lot at the large cap level. at the same time it's very much a two tiered market. large caps have done as you said, they're about where they were a year ago. they're, you know, down modestly year to date and given the cataclysmic economic situation we're in now you would think markets would be down more very large high quality market of the segment, small caps have been hit very hard, you know, small cap indices are down 25, 30% right now even though large cap quality if you look at the large cap growth stocks they're down less than 5% year to date >> joseph, i want to get your thoughts on the fact that we have seen appetite for investment grade credit in

recent weeks, just saying that based on all of the capital raises we've seen across different industries and that munster offering from boeing just last week is that an area that investors should be participating in more? how should -- how could, how should they be doing that? >> so we are comfortable with the quality segments of the credit market. we think credit represents a better risk adjusted return prospect than large cap equities at this stage and as you point out it was a very significant amount of issuance, a record issuance grade we're comfortable with the higher quality segments of the high yield market. credit we think is a good risk/return tradeoff >> joyce, i want to get your thoughts on the tension we're seeing between the u.s. and china. they're ratcheting up again. how much is that priced into the market at these levels and i guess how much is that a risk where the economic data that's

coming in is so poor and there is so much uncertainty >> i think the mashgtsz worried this is going to become a bigger issue as the elections approach later in the year. you've had a number of moves by the trump administration that involves export controls, mainly aimed at huawei and a number of rep pa rags bills that have been proposed by members of the congress and on the republican side now i don't think these reparation bills are going to go into law but you can see we're moving to a more contentious phase of the u.s./china relationship i think this is going to be with us and come up as a campaign issue and seems very difficult to meets the phase one trade targets given the economic situation around the world right now. so i think that this is something that we'll actually remain in the headlines and in focus with market participants >> joseph, i want to go back to fixed income because i think that's an interesting area that

i know you've been thinking a lot about. given how low rates are, given how little we know about what the shape of the recovery is going to be and any bankruptcies, kind of rocks under water for some of the businesses, how should investors think about approaching fixed income investment-grade bonds and how they should be allocated into those >> i think you go with the areas -- >> sorry, joyce. that was for joseph. >> thanks. look, i think many investors have taken the approach of buy what the fed is buying and the fed has moved very, very aggressively to support the credit markets to ensure the credit is flowing which is a critical element of the recovery of the economy but as i said earlier, i think we're comfortable with the corporate credit market. you have both the support that the fed is providing, plus many of these companies have very durable business models, low levels of financial leverage,

and are in a much better position to get through this crisis and come out the other end, more competitive and stronger and able to generate higher levels of returns that plays well in the higher quality segments of high yield where again, the companies of durable business models, modest financial leverage in the case of high yield are in good shape. we're comfortable and would be overweight credit at this point as you think about the overall levels of asset allocation >> okay. and joyce, your thoughts on that as well, it tell me what you were going to say about fixed income >> i agree very much with joseph the bonds that are supported by the central banks are the ones to be in right now i mean we're more concerned as you go into some of the higher yielding segments of the market that don't have as much support. looking at the energy sector we think that you could see a default rate that goes above 40%

over the next three years. so we're looking at, you know, around 10% of non-financial high grade bonds that have been downgraded i agree with joseph, you have a lot of support that's there. the primary market has been very strong right now, but we're seeing differentiation amongst the different sectors. the rating downgrade has been concentrated in automotives and energy >> joyce, finally, it's carl, your research desk was one of the earliest to start tracking so-called alternative data out of china to sort of gauge their recovery now we're looking at a lot of the same metrics here in new york and the states. are you still using china's rebound as a proxy for what we might expect in america? >> well, i mean china was down 35% in the first quarter of the year, so you do have a v-shaped rebound now that is going to go forward. china can do a lot of things that democracies cannot do so their ability to manage a

second wave and you're seeing just with all of the restrictions being lifted, all the protests in the united states is in a far different place. china has the ability to use mass facial recognition, mass taking of temperature, cctv and tracking applications in a way that's very hard for any democracy to prepare for i think you really have to watch what the second wave looks like. you can even see that in other parts of asia, the second wave has been more disruptive in singapore than the first was and also in japan. so i think that china is quite unique in its ability to use a lot of surveillance techniques that other countries cannot use. we think the v-shaped rebound is going to, you know, continue there going into the second half of the year. >> all right we will continue to watch for those signs of a second wave joyce chang and joseph ahmado, thank you. we're going to take a quick commercial break with markets mixed to start this

monday morning the s&p testing the key 2800 level, currently a28t 17 the dow down 213 stay with us (soft music) - [female vo] restaurants are facing a crisis. and they're counting on your takeout and delivery orders to make it through. grubhub. together we can help save the restaurants we love. confident financial plans, calming financial plans,

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>> good. it's a great piece >> thank you. >> think about it in ways we hadn't really considered. >> yeah. >> the point is that we're empowering them because we need to right now. >> yeah. >> but what they do with that power is going to be a big mystery. >> well, it's an interesting thing and actually in the ensuing week if you saw tim bray, a high-ranking amazon executive, wrote a devastating e-mail going after activists at amazon and congress called jeff bezos to talk about these issues around anti-trust and possible misstatements around the use of information to facilitate their business against third-party sellers. there's a lot going on i was not just talking about amazon but all the companies in that they've given us delivery or contact tracing or money from their giant fortunes and this is all well and good, these are all good things and i have no quarrel with these things, except for the press release they love to put out about it, the excessive press releases

pat yourself on the back one more time for being rich it's really important i think to understand the same problems happening before the enormous amount of concentration with enormous resources and data reach, a.i., et cetera still exists and has been accelerated forward significantly due to it. >> is your betting that government will be a useful check on power for these guys? >> yeah, because it's been so good so far. no, i don't. i think in good times they were not a useful check you have the one thing that i said last week on pivot, the only thing that would probably do something would be vice president elizabeth warren if she was vice president, she certainly -- she's part of a bill to stop mergers and acquisitions, and been very vocal about these issues and they're terrified of her you see something like that happening, but in general you have david sis ling and others talking about this, josh holly has been doing a lot of activity

and it's a bipartisan kind of thing in many ways i think the impetus will be to turn to these wealthy companies to try to bring back jobs and give them things like these liability waivers which are just incredible that the idea is that they are not liable if they're not -- not just tech companies but all companies if they aren't protecting their workers that's just -- i don't understand why we're doing that at this point without some strictures around those things >> kara, good to see you, and i love the topic i've been trying to ask our guests over the past several days about this, don't you think the breakup pressure on these giants would be reduced after so many people have seen how much we need them, but i do wonder this -- a, doesn't it justify the valuations that some of these larger companies had gotten up to this point, how well they've been able to weather it, and also might they need to worry about limits going

forward on how they can expand because that still seems to be on the table chinese competition, china seems to be bouncing back from this a lot faster than other places >> you want to be like china, i don't think so it's not even an argument. china has a lot to answer for in this covid-19 crisis, but we definitely don't want a government like that your previous guest was talking about this v-shape we're not going to have a v-shape thing unless we giveaway enormous surveillance issues and, by the way, people don't want to wear masks in stores it's not very american to be followed around in that way. people have a distaste for government, increasingly in this country. and so we're -- to get to a v-shape, sure, if we give power to the powerful and if we allow all kinds of unprecedented surveillance the question, i talked about before on the positive side of this is, what is america 2.0 what does it look like, what can we change things we need to? worker protections and worker

health care is one of the things that i think is going to spark a lot of voters to wonder. do we want to hand power to these more -- more power to these powerful companies i don't think anything has changed. it's been accelerated. if we felt that way before, we should feel this way afterwards, despite the fact of the economic distress. >> kara, what you said is exactly why i'm going to play devil's advocate for the conversation and say that perhaps coming out of this, the fact that people are so much more dijjized in their daily lives right now, they are focused on things like constitutionality, privacy, data, i mean getting zoom bombed, for example, because we're doing so many more of these video conferencing, you know, calls and what not, what if this actually pro pells americans to take more interest in their data and in their privacy and what that's going to look like longer term? >> i hope so we got cat bombed by my cat but i blurred the background i know it's -- i hope that's the

case i think people are quite aware of how much they rely on these things it could go two ways, they rely and like them, like great for delivery, i love delivery, don't have to do this or say hey, i'm really dependent on a small group of companies and that's probably not a good thing. i certainly know it's not a good thing for the formation of new companies and what's interesting i get pushback on this and i'm talking about capitalism, more companies, more wealth created, not concentration of wealth in the hands of the few and i think that's really what i'm interested in. i don't think -- they haven't done a good job. they have. they can because they have the money and they're wealthy and that is their duty as citizens of the country, actually i remember when companies were like this and so i'm glad they're doing this i notice in the column, i like tech i just don't want them to have all the power. >> yeah. there's a great profile of eric

schmidt in the times over the weekend regarding his influence and kara i wanted to get you to reflect on tim cook's commencement state for ohio state which took a personal turn for him. take a listen to this. >> when i joined apple in 1998 i couldn't believe my luck i was going to spend the rest of my life working for steve jobs, but faith comes like a thief in the night. the loneliness i felt when we lost steve was proof there is nothing more internal or powerful than the impact we have on others. >> what did you make of his general tone to the students there? >> it's kind of echoed steve jobs' own speech before stanford i think it was 2005, maybe earlier than that, i'm sorry, if i got the date wrong, he gave an amazing speech at stanford many, many years ago about five or six years before he died and it was really moving about death and the importance of understanding

ephemerality and i think, tim, is reflecting on that. he's a thoughtful man. i'm not surprised something like this would come out of him in terms of a speech, especially at this time. i think it's tasteful and adult and it's very much him, and so, you know, i think he's older, not as young as all the other internet executives he competes against digital executives and being reflective of the person he is. i like -- that's the part i like about tim cook, very much so he's a thoughtful man. >> yeah. people should definitely watch that one and the jobs' stanford speech. >> that's a classic. if you have not seen a speech and read it, it's a beautifully written and said speech and what's poignant, he's talking about recovering from his first bout with cancer and he died many years later, so it has incredible resonance now, and it's worth thinking about during

this time, absolutely. >> yeah. kara, good to see you. we'll talk soon. >> all right bye. >> kara swisher. >> words of inspiration and motivation are always welcome. in the meantime we're going to take a quick commercial break. getting a check on the markets right now. the dow and s&p are lower for a third straight day, off the lows of the morning the nasdaq is positive it's up about half a percent stay with us anaging multiple clouds for your business. when you've got public clouds, and private clouds, and hybrid clouds- things can get a bit cloudy for you. but now, there's the dell technologies cloud, powered by vmware. a single hub for a consistent operating experience across all your clouds. that should clear things up.

european markets are set to close in just a few minutes. seema moody has the breakdown. seema. >> with the exception of the uk, european stocks sharply lower and the airlines are in the spotlight following warren buffet's comments. all majcarriers are down. the government is looking into providing lufthansa financial aid. france provided aid to air france klm, a deal approved by the eu competition watchdog. the french and dutch governments hold 40% in that airline following a merger in 2004 one piece of economic news, activity in the eurozone sector contracted at 33.4 in april from 44.5 in march. the question is whether the loosening of europe's lockdown in countries hardest hit by coronavirus will improve the economic backdrop. italy loosening more restrictions today allowing restaurants to reopen for takeout, funerals with 15 people

or fewer and permission for outdoor exercise and alas veglog construction factories to resume schools, most retail stores remain closed along with movement across certain regions. back to you. >> all right seema, thank you. on that note let's get a further update on the virus with sue herera at hq. >> carl, thank you very much here's what's happening at this hour, everybody. starting this month, kroger will provide free covid-19 tests for all employees with symptoms. those workers will be given a self-administered test kit or an appointment at drive-through locations run by the company's health care division in april the company reported at least four of its employees died from the virus carnival cruises plans to restart north american operations august 1st. eight ships will set sail out of miami, port canaveral and galveston this summer and all other north american and australian cruises will remain

paused through the end of august. and lowe's will issue another $80 million in special bonuses to hourly associates part-time workers receive $150 and full-time associates $300. the home improvement retailer will require all employees to wear face masks while working. for more on our coronavirus coverage, always go to cnbc.com. back to you. >> sue herera, thank you we're getting breaking news out of the fda meantime and meg tirrell has that for us. meg? >> hi, morgan. this is about the dozens of antibody tests on the market for covid-19 right now the fda is revising its policy around how it reviews those tests. in march it kind of opened up the market to the tests saying essentially that manufacturers needed to notify the fda of their own validation of the tests but could enter the market without official use authorization. over concerns about some of how

well these tests perform and some of the marketing around the testsp the fda is making stricter those guidelines and essentially they said that they have observed, quote, unscrupulous actors marketing fraudulent test kits they say some claimed they falsely had fda approval or they claimed they could actually diagnose the disease and not just potentially detect the antibodies from the disease or they were authorized for at home testing. the fda says all tests out there need to apply for emergency use authorization within ten days and they're also setting new thresholds for how specific and sensitive, how well these tests detect true positives and negatives. 90% sensitivity for true positives and 95% specificity for true negatives fda saying there are currently 12 authorized tests on the market that do have that emergency use authorization and more than 200 currently under review and, of course, we know roche

the latest to become authorized. morgan, back to you. >> yeah. of course, roche shares are up 2%, 200 under review puts it into perspective meg tirrell thank you for bringing us the latest in what has been a busy couple days in terms of therapeutics and vaccine headlines. we are going to take another commercial break right now with the s&p down about half a percent. energy and tech stocks are the only two sectors in the green right now. stay with us - [narrator] soon, lights will come on.

soon, people will be walking back through your door. soon, life will move forward. we'll welcome back old colleagues, get to know new ones some things may change, but we'll still be here, right here, so you can work on the business of getting your business back. at paycom, our focus will always be you and we'll see you soon.

i just decided that i made a mistake in evaluating, an understandable mistake, a probability weighted decision when we bought that we were getting an attractive amount for our money when investing across the airlines business so we bought roughly 10% of the four

largest airlines and we felt for that we were getting a billion dollars roughly of earnings. we weren't getting a billion dollars of the dividends but felt our share of the underlying earnings was a billion dollars and we felt that that number was more likely to go up and down over a period of time and it would be cyclical, obviously, but it was as it if we bought the whole company, but we bought it through the new york stock exchange and we can only effectively buy 10% roughly. we treated mentally exactly as if we were buying a business and it turned out i was wrong about that business because of something that was not in any way the fault of four excellent ceos i mean, believe me, no joy being

a ceo of an airline. the companies we bought were well managed and they did a lot of things right. it's a very, very difficult business because you're dealing with millions of people and if something goes wrong for 1% of them they're very unhappy. i don't envy anybody the job of being ceo of an airline. i particularly don't enjoy them being in a period like this where essentially nobody -- people have been told basically not to fly i've been told not to fly. the airline business -- i may be wrong and i hope i'm wrong -- i think it changed in a very major way and it's obviously changed in the fact that the four companies are each going to b r borrow perhaps 10 or $12 billion

each, you have to pay that back in earnings over some period of time >> just a remarkable sound bite from warren buffet over the weekend, guys, in which he talked about his thinking regarding airls. it's evolved many times over the past few decades it was always thought airlines are tough because it's a public safety story, labor negotiations, exposed to fuel, it's international, trade agreements to worry about, but the risk factor of a worldwide pandemic, while probably in there in lots of perspectives, it's hard to imagine this was going to come and haunt the industry the way it has. >> even if we had known that something like this could happen, i'm not sure we could have predicted how it would impact different industries like the airlines, i tell you, listening to the oracle of omaha, warren buffet, on this moving, just to me spoke to how confounding the market moves have been. we're used to with with warren

buffet at times like this when markets are down, pumping money into areas where people think boy, that sure looks risky, but to see him selling the airlines, keeping $137 billion is it of cash on the sidelines during this time, i mean hey, even he, even he gets some calls wrong at times like this. >> yeah. we're talking about a man who has made many billions over and over again by investing at a time where other people tend to sell and looking for those places of value and deep value in the markets so when he makes comments like this it has ripple effects. i will say this quickly about the airline piece of this, remember the rumors earlier this year that berkshire could be looking to bailout or strike a deal with boeing i would suspect that's off the table. precision cast parts is a supplier that has exposure to the drop in demand for new aircraft and the drop in

aftermarket repairs with so fewer flights in operation right now, it's really been a one-two punch for aerospace. covid-19, before that, the 737 max grounding, which is still under way right now, we were talking about a multidecade boom cycle for aerospace not that long ago there were two types of events that could have derailed it. this is it the one area where it's holding up, precision cast parts is defense, that's something to watch. remember when elon musk wasn't going to tweet about tesla stock price as well, that ended friday in a series of tweets that sent the stock plum netting, one which said tesla's stock price is too high in my opinion. was that tweet illegal former tesla board member steve wesley joins us now. thanks for being with us. >> you bet i think we have some better news at tesla than the airline industry >> i think you're right. but let's start with these tweets from elon musk. there had been agreement, a deal in place with the fcc when you

see a tweet and a reaction in the stock price, was it material >> look, i can't comment on legal issues here, but it certainly wasn't smart let's take this from the top in general, elon has done something smart with the tweeting he is communicating directly with the user base, getting them excited about new products and talking about the future of the industry and that is part of the allure and mystique of tesla, that the auto companies just don't do but, when elon talks about building great vehicles, he's terrific when he verges off into his personal life or makes political statements or for god sakes talks about the share price, that is a place he should not be >> you're a former board member and an invest in tesla, is the share price too high right now >> well, look, i'm not sure tesla shares are worth 700, much

less 729 this morning, what i can say is he beat q1 forecasts, he's profitable for the third quarter in the row, he's growing faster than just about any auto company in the world and innovating faster than anyone. so right now, he's doing pretty darn well. he's setting the standard for how to run an auto company however, competition is coming faster than ever volkswagon is putting a $25,000 car on the market next year with a terrific range and it looks great. the chinese are coming quickly it's going to have to go faster than the others to keep his place on the top of the mantle, but elon may be difficult to work for he may challenge the sec out of the middle of the fairway, but in terms of how to run an auto company he's tough to beat. >> steve, i want to ask you, again, not so much about the tweets themselves, but on what you think they mean for investors. so i think tesla was trading at about 750 a share before elon

tweeted on friday, went down below 700 bucks a share after the tweet, 686 or so it's back close to 750 today if nothing else, he's introducing a lot of volatility into the stock if you're an investor, you say that it's great that he tweets about the product. do you only pay attention to those tweetses do you have to factor in what he might do to the stock? does it factor how you can trade it do you hold on to it and close your eyes? what. >> look, tesla's share price was up to 780 on friday. it dropped 80 points that's $15 billion i think the board needs to talk to him and say look, talk about the company, talk about the future you understand this better than anyone leave your personal life out of it leave politics out of it did he lose $15 billion for the shareholders on friday probably did however, you got to hand him

credit, he's got a loyal base. shares back up to 739 today. i think overall, if you look past the little daily bumps he's expecting apparently his sixth child in the next few days, is he a little stressed out, maybe he is. long term, the world's moving to electric vehicles, he's beaten everybody else to the punch. long term, we're heading toward a cycle of autonomous vehicles and he appears to be ahead there too. you have to hand it to him he is not your textbook ceo but in a tough market, where most people are down and his shares are up, you got to say he's doing something right. >> does he listen to the board like a ceo that's -- that's perhaps more accountable to a board? i mean you would know that you say the board should talk to him. something tells me there are some board members talking to him, and he's tweeting what he want anyway. >> you have to say that's an ongoing struggle i stepped off the board a few

years ago. i will say this to every corporate ceo and i served on the board the first and second largest public pension funds in the united states, it's one person you don't want to be in a fight and that's the sec they've been fined once. he shouldn't want that to happen again. i'm sure the board ispressing him now. long term i think tesla is going to do well the big fight will be against volkswagon and the chinese and interesting to see if tesla is continuing to bring products to market including the new long haul semi truck and also the new roadster i think they have some bright days ahead, but they're going to have to stay sharp to beat the competition back the chinese are playing for keeps. >> steve, on that point i wonder, you know, sort of it's becoming a tired question, but if oil and gas remain irrationally cheap for several years, what kind of head wind is that on volume

>> we've talked about that for years. price of gas comes down a buck everyone is going to stop going to electric. not true tesla sold more vehicles q1 this year than last year. the entire world is going electric and the simple reason for that is the cost of lithium ion batteries has gone down 90% over the last ten years and it's continuing to go down. so that, combined with the fact that the cafe standards, the miles per gallon equivalent of an electric vehicle like the tesla model 3 is 123 mile per gallon equivalent, there is no internal combustion engine that can match that expect the world to go electric. the question is, who is going to win the battle to bring the first truly mass market car to market and that means something the 25k range. volkswagon looks like they may be getting close to that that will be a battle to watch and the chinese are right behind. >> that was my question for you.

the competition piece, given the fact that we have seen the automakers around the globe pouring so much money into investments as of late to try and move forward with their electric vehicle and autonomous plans, what is the pandemic, the consequent economic downturn we're seeing unfold right now? what does that do to all of those plans? i guess, more broadly, the trajectory for mobility and future trends? >> look, every automaker in the world is selling fewer cars. first, we're in the middle of a recession and i don't think that's going to turn around any time soon. maybe by next year, once there's a cure, who knows. for the next six months it's going to be dark times for the auto companies second, this may be as big if not a bigger factor, young people are moving to ride hailing. as the cost for that goes down, the services get better and as we move toward autonomous ride hailing, these create the real headwind for the auto industry what auto industry needs to do to stay competitive is realize

they're not just creating vehicles, they're creating an experience and since they're selling fewer units per year they need to start to drive new revenue sources in the cars, in cabin experience, entertainment, perhaps advantages by working with the energy companies to arbitrage power back and forth tesla made an interesting announcement about that last week too >> yeah. finally, steve, given the fact that you have spent years in politics in the past in the state of california i want to get your thoughts whether th commentary from elon musk in the past week about the push to reopen the economy, or even the fact that we're starting to see some lawsuits play out whether in california or another states right now challenging the constitutionality of some of the enforcements and mandates that have happened. i want to get your thoughts on how that ultimately evolves and what it means in terms of

setting precedence for governance moving forward. >> that's a broad question i think we have in the united states i think it's a good thing is, 50 states, they're all incubators for democracy each with different plans for how to solve and beat the coronavirus governor newsom has said is we will not open up until june. mr. musk has said good god, i want to keep my company profitable and get people back to work. there's a grinding of the gears. we'll see how it shakes out. once again, whether it is a battle with the head of the sec or the governor of california i think mr. musk and other auto company ceos would do well to follow the law, keep costs down, and continue to innovate i don't think the governor is going to change the game plan for any one company, even tesla, one of the brightest success stories in the economy >> steve westly, thanks for joining us >> thank you

want to get to governor cuomo going over some of the caseload data from the weekend take a listen. >> the total number of hospitalizations is down you see that curve coming down you see that mountain that we went up and now we're on the other side of the mountain you start to see the shape of the mountain the decline from the mountain is not as steep as the incline, right. and the big question for us in new york and every state across the nation has been, how fast and how low does that decline go, right? how fast does the decline actually happen? and what is the lowest level that the decline will reach? unfortunately, you see that we were -- we were hoping for a quick up, plateau, at the top,

which is what they talked about, but a fast decline you see the decline is, again, not as steep as the incline. but it is a decline and that's good news. net change in total hospitalizations is down net change in intubations is down that's always good news. when a person is intubated, roughly 80% of the time there is not a got outcome. the fact that the intubations is down is a good -- is good news and then the other end is how many new cases are coming in the door every day how many new diagnoses in covid cases and that number is also declining. so not only are the number of people in hospitals coming down, but the number of new cases coming in the door is down that's good news because it had

plateaued at about 900 statewide for a few days, but this number is down at 700 and that's a good number i would take this with a grain of salt as they say because this is reporting from yesterday, which was a sunday, and sometimes we get different results on the weekend remember this whole reporting system is just been put in place. this never happened before this is now every hospital in the state reporting every day for the first time so it's a plus or minus across the board. this is the number that haunts me every day and this number is not declining anywhere nearly as fast as we would like it decline. still 226 new yorkers who passed away and so we don't become immune, we talk about these

numbers, it's 226 families, right, that's 226 wives or brothers or sisters or children that are now suffering the loss of a loved one we remember them in our thoughts and our prayers. >> governor cuomo looking at some of the caseload data from the weekend as he continues to make the point that mitigation efforts have not resulted in the decline of hospitalizations that we were hoping for in the early days 2820 is off the session lows for the s&p as we're looking at a third day down for the dow and s&p, something they've not done since march 5th, 6th and 9th

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demand for web grocery sources has skyrocketed with more people stuck at home and ordering in. fresh direct, one of the biggest beneficiaries of the new normal. now fresh direct co-founder and ceo joins us good morning >> good morning. >> thanks for being with us. it's long been a struggle for fresh direct seems they continue to be. i tried to get slots, afford delivery not been able to honor fresh direct but at the same time there's a will the of people trying the services from lots of different providers. what will determine who comes out stronger on this end and you think consumer behavior is permanently changed? >> i do think that service matters the most yes, a lot of people are struggling a spike to a lot of grocery

chains who are trying to amp up their service and all of them are struggling to handle the demands with lots of out of stocks and service issues and orders incomplete. i do believe over time that will wear on customers. i think the winners of those are really going to get ahead of this curb and make sure they are invest ing in the infrastructur or do the demand well. that's important to customers in the long run >> what about labor? i know there's been some moves among fresh direct union at some points you're hearing more and more from the realm of grocery whether it's amazon workers saying we need to be heard more. we had a target employee on just last week. what's the smart move for management now in dealing with employees to make sure the employees are taken care of and maybe that labor costs are also kept under control >> it's great point. it's a really balancing act at

the moment the front line workers are the one exposing themselves from a health risk perfective as well as all the demands every one has to work in slightly closer quarters that does present a challenge for those dealing with that. you see it across almost all online businesses that people are raising their voices around this concern customers are unrelenting. the right companies will focus on easing employees an it's better to basic sure they are happy than taking every last piece of business from the customers. i'd be very sproupportive of the employees. the other key piece seems to be the inventory piece especially as we get reports of farmers tilling over their crops and having to dump dairy in the fields and we're seeing meat processors close down their

facilities and halt production temporarily. starting to see that show up in food prices as well. how hard is it for grocers and online grocers that are already juggling with some of these infrastructure needs and huge tidal waves of demand to be able to get the supply chain moving in a consistent and normalized manner right now >> yeah, it can be a real challenge. in fact, i think what i hear from a lot of people and both the manufacturing side and the retail is that they are starting to cut back on some of the broad selection of items that they offer. a lot of manufacturers are putting their projection lines against the more popular items that can keep up with that demand at the sacrifice of skew proliferati proliferation. it's very sporadic a lot of people are moving stock of what you can. offering less stock nap is a very big concern online.

>> jason, if we all agree that groceries will take a share from food service and that's not going to change for a while, do you forsee fresh like brand new entrance into the space. is it mostly going to be players who have a toe in expanding their business >> that also is an interesting question there is a keened up interest in it a lot of the incumbents tend to be a bit slower and the vc community can act faster

>> do you think there's a renewed possibility for premium grocery again? i think it was amazon, others were charging hundreds of dollars for a subscription to grocer i used to look and think there's no way i'm paying that i'll just go to the store. now i might pay it does it look bad given the context? >> it all reverts back that customers are willing to only pay a tecertain price for convenience. as companies invest more of their infrastructure, they can leverage that to offer the service at a better price over time i don't think you'll see that kind of gouging and price and you'll see the spike down further in terms of keeping prices relatively in check

>> thanks for being with us. >> thank you we got half a monday under our belt the earnings machine will ramp up with dupont, ford chrysler and disney let's get to the half. thank you very much. welcome to "the halftime report." we begin a new week. a big one. more headline earnings coming down the way a jobs report on friday and the reaction to what warren buffet had to say over the weekend. we'll kick it all around jim, steve, pete and bren is back she's managing partner at requisite capital management i hope everybody is well today we begin by checking