it is 5:00 in boston markets on edge over new concerns about getting the american economy going again >> those worries coming off jay powell's dire outlook on the road ahead and what he's saying about the prospects for negative interest rates send in the czar a former pharmaceutical executive and work on the vaccine. the future of work and ceos

on the rapidly changing world. no school in the fall? we speak with the head of america's biggest college system about just that. we are watching "worldwide exchange" here on cnbc >> good morning, good afternoon, good evening welcome to wherever you may be watching from. i'm brian sullivan. the dow continues to slide falling again yesterday. the dow has now lost 1,500 points from highs back on may 1. investors will be closely watching whether we are able to rebound now. futures not indicating that. they are down about 50 points. coming up, we'll show you a shocking list of companies names you know are hitting

multiyear or all-time lows some big names you can mention names you have to watch in the banks. they have been a big red flag nearly every day we crunch some data. the immediate loss of a publicly traded company now is a decline of 41% this year even as tech stocks have recovered. bank stocks have not one reason for that is likely this bond yields stay low, 10-year at .62%. asia is finishing lower across the board. japan, hong kong or china

the uk we'll get more to the key headlines this morning with frank. forgive me, i'm having my coffee got to get the brain going i know you'll bring us all the top stories. >> president trump is set to name former head of glachl owe smith klein as his vaccine czar. in a role shared between department of human services and defense. public health experts have warned vaccine development could strength to next year or beyond. president trump said the federal government will go after companies that did not deserve loans from the paycheck program. they have faced criticism for

giving money meant for small businesses to small businesses instead. tyson food lowering prices and plans to slash prices as much as 30% for sales made this week since the beginning of march, virus outbreaks have forced the temperature closure of about two dozen processing plants. those prices pretty much tripling since this pandemic started. >> i saw that price of eggs is at a 50-year high. jay powell becoming the latest in a string of fed policymakers to show no love for the prospect of moving to negative interest rates. recently began pricing in a small chance for sub zero rates in the new year. speaking yesterday, powell says that idea, at least at his level

is not on the table. >> we chose not to implement negative rates and instead pointed out forward guidance and asset purchases when we were near the zero bound. we said we would continue ruling on those tools that are tried and now a part of our tool kit >> president trump disagreeing with the fed chairman saying he strongly believes that the fed should have negative rates let's welcome in drew, chief strategist at meet life investment management. somebody whose job it is to navigate what would you make of negative interest rates >> brian, you know i've never liked very low rates i think negative rates would be

a mistake. they actually make it harder for you to achieve your goals? >> you can get that with negative rates you can get that with qua quantitative easing. if you keep rates positive for those thinking about the yield curve control or managing rates at the long end. you want to make sure everything you are doing is supporting the ability of banks at loans and in the losses that is what the fed will be focused on >> that's why bank stocks are so weak beginning to show the median return of 41%. some have done worse with wells

fargo hitting multi-year lows today. >> i don't know the reason we are seeing that. i do believe powell is aware of the pressure when the fed thinks about the negative interest rates. one of those things is how it would affect banks given the amount of support they are putting in but the more, the private sector can do on its own, the better. you don't want to put road blocks up. you want to make sure you have the ability to manage things >>jobs are at the forefront of everybody's minds. we are looking at signs of where things may be in three and six months it is tough. you study 1918, 1967, maybe

world war ii is there any guide post to indicate where we are going to end up >> in my view, 1945 is a reasonable guide post. it is not quite the same you do have some characteristics that are unique to now and every time the main thing is that september 1945, demobilization caused a 6% decline in employment in a single month the important take away is that it took about a year to get everything sorted away in the labor market it was a transition in the economy, wartime to consumer economy. everyone wanted a job, that kind of making sure you have that working properly what you've seen is that their

current employer will not have the demand we saw back in january. there will be a higher level over a longer period of time no matter how hard firms try to bring their people back, they will probably not need as many people when they do get back at least for a period of time >> we are learning to live with less now it is a pleasure to get your opinion. thank you very much. we'll talk to you soon when we come back, a potential sign of things to come in america as starbucks reopens stores across the uk the latest in the tale of tesla as the company issues a new warning to workers that are refusing to come back to work in

the factories because they don't want to get sick breaking down the bleak outlook of black gold. futures backing millions of ast back with more after this. helping people stay in their homes through mortgage payment relief efforts and donating $175 million dollars to help hundreds of local organizations provide food and other critical needs... when you need us, wells fargo is here to help.

welcome back we look for signs of new economic growth in america, we turn to coffee starbucks offering a potential

hopeful sign to companies opening across the uk beginning today. the question is, if you open, will they come steve is joining us live from london steve, any signs of life at starbucks? >> a lot of signs, actually. brian, you will soon be able to get your decaf spiced vanilla latte. starbucks opening 150 stores for take away only and drive through. they are saying we've been working on this since we shut down staggered times to collect orders customers encouraged to order on line and wait in designated areas. the idea is that they can be fully open in june they have plexiglass and other

things in place. they are reopening over 100 stores and retail outlet's burger king reopening. mcdonalds are trialing a system as well and a bit of subway. a phased reopening for monday next week as well. trying to get back to normality it is one thing for companies to open and for customers to want to go there. we couldn't get a decent coffee anywhere what we are seeing is the rest of the work going and the tube

network at rush hour with a 7% increase and pictures in the press of workers not social distancing on the tube lines a lot of people getting back to work this is the a3 we are seeing a lot of traffic coming on. we didn't see anything a few days, a few weeks ago. now a huge amount of traffic coming in and out of london. a lot of people who can work from home getting back to work here in the capital city back to you. >> we appreciate it. best to you and yours. we look forward to the follow-up about customers. on deck, no school in the fall our conversation with the chancellor of the california state university system on his decision to keep campuses closed through 2021

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welcome back here is a question everybody is concerned about. will your kids be going back to school in september? they won't if they are one of 23 california colleges. the california university system announcing they will shut down through the fall semester. forcing 500,000 students to attend virtual classrooms until at least january 2021. we had a chance to catch up with the chancellor and asked him how they came that decision so early. >> we got to this decision because the health and well being of our students and employees is the most important factor in any decision as well as continuing to make opportunities for students to make progress to that

all-important college degree we decided to make that decision now so families and students can plan and for staff who will over the course of the summer will be doing even more to make sure the delivery of our curriculum in the fall is engaging and vibrant much very much like in person and doing it primarily but not exclusively virtually. >> i wonder, you are going to see students drop out. saying i don't want to be on line that's not the experience i want at san diego state or wherever what is the hit? you are a multibillion dollar business >> i will tell you, the enroll ams for next fall or up across every one of our 23 campuses so i don't have any evidence to say we are going to be losing a

lot of students. frankly, it is in their best interest to lean in. even though people are looking forward to that college experience to not do it for one term or perhaps one term by the time we get to august, it may be the case we are able to open more than we think now. we are worried so much about the second wave that will come in the fall that most of the experts in the science and data that inform our decision making indicates there might be an even larger wave in the fall than one get we are getting on the backside of. we are preparing for virtual with the hope of being able to pull back once we get to august and september a little bit there will be exceptions on campus for in person activities that can't be done such as clinical training, man quinn training for nurses or hands on

for physical and life skincienc and engineering stuff. there will be fewer students in labs and resident halls may have one student on them instead of three or more. we wanted to set expectations and make sure people could plan both on the faculty and staff side and also on the student and family side. >> do you see this -- i'm sure you've read the articles by the quote/unquote experts. do you see this changing learning not just with your schools but schools in general and the value proposition and tuition requirements in general, chancellor people say tuition has to come down >> in california, our tuition is

$5,500 the year. we are one of the most remarkably affordable, high call universities that exist. we still need to employ the same faculty and staff. in fact, our costs go up with the added it components. >> i guess the concern is, there is a chance we never get a vaccine. if we don't, we'll have to have almost all exposure to it down the line that's not my opinion but the so-called herd immunity. when will you make a decision about the spring >> probably somewhere in the september/october range. there is the lead time between making the decision and the necessary planning and activities between now and january. you are right, in california right now, it is about a 2% to 3% immunity.

most experts think you get to herd immunity at 18 to 20% that is months away. you are right about the vaccine. dr. fauci and others have been saying this, those who do this for their entire careers this has been very hard to do. i hope i'm wrong we needed to be prepared to go in this direction so we could have the most number of options for students to serve california's future and their future >> thank you to the university chancellor on the tough decision to stay closed through the fall. >> ahead, whether stocks are overvalued w future down 24 points. we are back after this these days staying connected is more important than ever.

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futures are flat right now as markets remain on edge around the reopening of the american economy. oil prices are on the rise a bit. does it mean demand is picking back up? more on black gold and a black eye potentially for tesla. the company threatening its workers who refuse to come back to work.

you are watching "worldwide exchange" here on cnbc welcome back good thursday morning. about 5:30 here today. hope you are having a great start to your day. we'll get to more on that tesla story and what they are telling workers who are nervous about returning to the factory we have two trading days left on the week it has been a rough week every big name hedge fund manager has come down and slammed stocks the dow already down 4.5% just this week. oil has been a bright spot hard to imagine we are calling

26.5 a bright spot a record rate of oil shut ins and u.s. production has been larger and faster than expected. we'll get to more on that with jeff curry in a minute as the market has split, some very big-named stocks are on the move take a look at the list of stocks ge trading at lows shares under $6. the average analyst of targets on ge is 40% higher than right now. analysts either have to start cutting targets or stocks turn around walgreens and we've talked about rates and housing. wells fargo stock down and a new low, boston properties

real estate fears and almost every airline. american, southwest, delta with new lows united hit one a couple of days ago. ge at $5.50. issuing a warning for the oil market saying if the world sees another spike of covid cases, oil could take another hit there is some good news. the iea director says there are some signs of growing global demand >> caller: the oil demand, we see some signs of recovery with the easing of lockdown measures especially with load transportation and petro chemical giving life to oil demand let's welcome in jeff curry, one

of the people in the world who really understands the supply and demand good to chat with you. do you and your team see signs of demand picking up >> absolutely. i think the rally in price is a combination of lower than expected supply and better than expected demand. it is a little better. we give you the idea previously that may will be down relative now looks to be down around 60 one thing we need to be cautious about is that merging on the lockdown, we got the immediate demand we referred to. the question is, what does the trajectory look like it is much better. putting it all together, we now see demand somewhere around 16 million for the month of may

supply down 12 leading to a surpluz of around 4 million barrels a day. the data has turned the corner in the u.s we do think the market globally will be in a deficit by early june >> you know, wir talking about higher prices. it seems almost funny in a sad way. $26.30 for wti is a terrible number for many u.s. producers many of your colleagues talk about this all the time. what does the world look like for producers under $30 a barrel >> the key is that prices need to stay at this level. we feed to build up inventories. production that has been off line, keep it off line another

quarter or two we built almost 1.1 billion barrels of oil you need to draw that down the way we think it will happen. you stay in that million barrel range. fourth quarter, the price can creep up to around 40 and draw more of the less expensive like on-land storage. we won't see on line inventory until then >> have you been encouraged on the pace of production decline and drilling in the states >> i'm not going to use the word encouraged i will say it did happen faster than expected but let's point out that the violence of the rebalancing was far greater than what anybody thought possible.

we all thought the negative prices of what we saw historically, the magnitude of the decline, the viciousness and inability to create oil disrupted that we didn't think we'd be turning the corner until the end of may, june we are right now almost the middle of may. this market appears to have turned we are in the inflection right now. >> the cure for lower prices is low prices the cure for higher prices is high prices. everybody makes these extreme statements about production drops. they are not high by in means, we know that but everybody is desperate for the dollar right now. do you think opec and the g 20 will adhere to their agreements?

>> one of the key reasons why, it was really impacted by the agreement. we have saudi arabia and other things going into it there is a larger entity policing these than what we've seen historically. the fact that saudi arabia came out and cut an additional 1.2 million barrels a day which will do nothing to the price today but bring forward how fast you normalize those inventories. as a result, you think about the need to get the market normalized back to $40, $50 a barrel i tend to think the compliance is much better than what we've seen historically. >> what does that tell you about 2021 i know it is may, we are talking about next year. the equity markets are based on the commodity market

what are we looking at for next year, jeff what it tells you is that these producers when they have to bring on a supply in 21, you'll be back to that june next year, at that time, you'll have to bring on that supply will they have 5:0 tess to the drilling and issuing debt and other market influence the answer is probably no. they haven't had enough before, they are unlikely to have that interest this time around. when they grow production, they'll need to grow it out of cash flow. which means you'll have to see higher prices. our target is $65 a barrel our prices could spike up towards 70 you need to get those cash flows

up and rig counts up and start to grow production >> can't let you go without this we always talk to you about oil. you have a commodities team there, leave us with some optimism where can our viewers globally make some money in commodities right now? if its not on oil, where is it >> two we really like gold. you have countries around the world printing money that bids up the price of gold, which we've seen over the course of the last month when we look at the recovery in china, it is very uneven it has favored manufacturing and had less of an impact on goods and services and weakened the demand for gold and jewelry. that demand coming back in konling months will be the next

leg up from 1700 to 1800 we look out months beyond, and the inflation starts to improve. you have a lot of stimulus in the system and you will end up destroying capacity in some is of these places. as inflation picks up, that puts another leg into the gold. one last thing i will say. i said before the recovery in china was uneven and favored manufacturing. same thing in the u.s. and europe you want to belong capital goods. cap ex like iron ore or coper. two big ones gold and cap ex commodities. >> great stuff there

leaving us with great ideas, particularly gold. best to you. talk to you soon coming up, what are the two or three key lessons that every ceo needs to take away from these challenging times. we continue our conversation about the future of work and leadership as we go to break, more companies cutting their dividends. pressure mounting as fiat and peugeot saying their dividend will not be paid those two companies scheduled to merge and issued a multibillion special dividend as well dow futures coming down a bit as well "worldwide exchange" is back after this

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as more and more states try to reopen, some companies are asking employees to return to work and others finding comfort in the work from home model. >> tesla's head of hr issued a stark warning to california employees. if you choose not to work, you could lose unemployment benefits if they choose not to return, you could no longer be furloughed musk opened the facility in

defiance of orders amazon pay will revert to the regular pay scheme paying increased wages and double overtime as the pandemic led to a boom in business. and cisco ceo said coronavirus may permanently change office space as we know it. some may eventually return to the office others may work from home for good >> many employees will continue to work from home. many will get back to the office and some that will do a little of both. i think it will change things like how we think about talent in the future. this is confidence that we can hire talent anywhere and they can participate productively as part of teams. >> and reversing to that open office plan back to cubicals

with plexiglass separating us. >> got to buy up those old telephone booths we'll just stand up and do our work >> the future of how things look for all of us businesses charting their path forward. normal could look different in many ways. we are joined now with more from our expert from the harvard business school. good to chat with you. what are some of the less ones that ceos need to take away from this crisis to be smarter and better working through it, if not coming out of it >> good morning, brian great question i'd like to break that into

maybe two pieces what are the things a ceo should do now and next? if you think about the things we should be thinking about now, first, you should know the difference between your 2020 response things you are doing today and you did in 2009. playbooks have similarities and differences. condi rice said recently in her world, all she had to do as part of the bush team was to convince people to get back on airplanes and ensure there were no terrorists in our instance, in every part of life, we have to ensure the consumer feels safe and secure secondly, there are things ceo as work with get your cash under control.

get the hard decisions made early and quickly. simplify your business as fast as you can last is the big distinction they are making in great in roads and communicate the company i see are making good progress especially internally with their people let me jump in there many of our c suite viewers have gone to harvard business school. you've taught them on value creation models. that same thinking are value creation models the way companies make money and manage business and their assets

going to change from this? i think not only the way we create or capture value we see significantly. imagine what it took to earn a five-star review you are running a restaurant or retail store you know how to capture that review if you assume you run the same strategies, i believe you'd see the consumer has moved on you. the messaging the consumer wants to receive much the product forum, the value equation. the call gorys hategories have you have to think about how you are going to recapture that

value. >> automation had been increasing before this i know you go to china all the time are the supply chains at work here, the speed of acceleration going to work here if we come out of it at some point, we'll look a lot more mechanical i think you are right i think automation is on top of every ce o's agenda we can see the need for automation a recent supply chain challenge in the food sector we had demand shock. half of food is sold away from home the other picked up from super markets. most grocery is sold in a store and not on line.

all of that has changed. food service went away restaurants went away. grocery moved to an online supply chain all of those are very different. managing and coordinating that in a rapid way, a hard thing to do automation is the way that manufacturers, retailers and distributors will get there and be able to balance and rebalance on the fly we saw in these last weeks companies already in automation. they have ai, machine learning, tremendous tools they are able to rebalance manufacturing and get products on the shelves no doubt the lessons we need to take from this will be

different. the harvard business school, a pleasure to have you on. on deck, overvalued or ready to run more? a new voice in the growing debate about whether stocks are set to rise or fall. w futures are down just three. we are back after this high protein. low sugar. so good. high protein. low sugar. mmm, birthday cake. pure protein. the best combination to help you stay fit.

make it tough to take care of yourself, that's why you can rely on nature's bounty... to give you the support you need... to stay motivated keep active and sleep well. add a little more health to your day... with nature's bounty. . futures now are basically flat this week, we've heard from a number of investors who say the markets are not only overvalued but in drunkenmiller's case, even more. >> we are trading now at around

17 times the consensus on bottom-up earnings from 2021 the average of about five years. those may be too high or too low. that gives you an understanding of what analysts are thinking. might be extended given the fact that we have bad news to go over here i don't find it as overvalued as david or stanley do. going to our guest, tony ross. the debate is moving markets it is interesting. i'd like to question all of these men and say, how do you know if something is overvalued when we don't know what the economy will look like in 6 to 12 months. what do you think? >> that's a great point. by the way, with all due respect for bill, the consensus is

coming down quickly. we are probably looking at $125. when you think about where multiples are much higher than indicated. to your question, brian, we have to understand what is going on in the real economy. we are expecting to see in the second quarter gdp down 40%. four-zero. when you think about the contest of reopening states, even if we had gray income, we are still looking at the level 20% below where we were last year for the rest of this year. on top of that, best case, we don't expect to see a vaccine until the middle of next year, we expect to see significant improvement that is not realistic. on top of all of that, we need

to see a fiscal response that will extend what we will see we will need another $5 $10 trillion to keep the economy afloat all of that is highly uncertain. whether we get that policy response, receive push back from republicans. how much of that will we rely recover. to think starbucks lost half of the revenue, that is probably not realistic. >> i hate saying this, we probably have to price in the very real possibility a vaccine will not be created. if not, it is not created for years to come. when you look to investing, you would have to put that scenario and the possibility to rolling reshut downs, if you will, into

your equity valuation analysis do you not >> if you are going to do a broadly weighted analysis. we are assuming we are going to get a vaccine sign sealed and delivered by next year, they are running ahead of where they should be because the market is discounting a much stronger recovery in the economy this year and a policy response that will continue to provide the support we've already seen remember 40% down in the gdp is taken into account all the crash transfers that have happened in the federal government in the small businesses and under employed >> quickly, we are running out of time on the show. you said underweight equities, so quickly, do we sell and raise cash or just not any new buying, quickly?

>> we would sell and raise cash and make sure to the extent we are in equities we have a buy as towards tech sector companies that have value. they are doing well. in falling markets and rising markets. >> sage words, thank you for spending time with us. thank you all. dow futures are down dow lost 4.5% this week. will we rebound. i will see you tomorrow on "worldwide exchange. squawk and the gang picking up coverage now have a great one

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big warnings from billionaires on the markets even though activity from retail

investors have doubled reopening america, the wisconsin supreme court striking down the stay-at-home order and others taking early steps. one major beef supplier cutting meat prices to keep burgers and stakes on the dinner table. thursday, may 14, 2020 "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc been watching u.s. equity futures. they are not telling much of a story now. dow has gone up about 15 points to down about three points now s&p down nasdaq up about 27 p