costs, but you'll had some, you had substantially more than you had at the beginning of the year, and your ability to operate in a normal fashion was clearly hampered by the larger population that was taken out of the economy. >> gary, thank you we appreciate it we're out of time. but hopefully we'll hear from you again. make sure you join us tomorrow we are over. "squawk on the street" is coming up next. good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. the bulls zeroing in on several headlines. moderna with positive phase one data on its vaccine. powell's 60 minutes interview seen as a beat and auto production resumes in detroit. oil at 32. you think this is largely about moderna?

>> yes look, there's no doubt about it, as becky said, things are better after than before. skeptics will say you can't ramp up this rna. moderna has been saying they can do 800 million to -- 600 million to 900 million vaccines, and i think therefore the move in the dow and the move in moderna makes sense. do i want to chase moderna no do i feel like things are better it's hard to believe that anybody could do this this fast, except for moderna i want to caution people, they have never really done anything. this is a very, very big deal. but there are people -- scientists i talked to this morning who say look, so far so good that's much different from the way i felt on saturday when i learned that the oxford test that everyone was so excited about did nothing. so this is not on prime mateates

is on humans if you're negative on the market, you have to rethink. people will say we have to buy value. autos are pumping. this is good news. >> you don't think it's a sell and stay at home kind of stocks day? >> i think everyone wants to do this, but this is something they'll be ramping up another trial in july. we might be seeing something in the first to second quarter. i know everyone -- people will want to sell general mills watch kraft, that will be the tell i used to have a barbell philosophy, you should have some disney, some general mills will the people say it's crowded? they always say everything is crowded when it's working. tomorrow you have to ask yourself will moderna be on the tape again with good news? the answer is no we'll be talking about the difficulty of making a vaccine

i in particular am focused on retailers this week. this is a walmart/home depot week this is not a kohl's or urban outfitters or l brands week. as far as i'm concerned, the mall didn't just resurrect itself because of moderna. the numbers will be bad. i'd rather be in target than i would be in, let's say, bed bath & beyond how about that >> some of those stay-at-home stocks may not perform as well as some other names you mentioned today because of this news, i guess. you made the point, moderna is a fairly promotional economy, not to take away from it, but joe on "squawk box" also making the point, it's eight patients so far. we're talking about a -- i mean, a vaccine, you know, you do at some point have to establish safety at large scale, 50,000 people in a trial, things of that nature. we are moving at speeds we have

never seen before and doing things that have never been done before, we're all hoping against hope that this does work in a larger context it does need to be taken in context. >> right we don't know how long maybe the antibodies last for three months maybe these eight people were kind of like selected by some of the drugs that -- like some of the drugs we heard about that got everybody out of the hospital quickly and it turned out they didn't. moderna is happy to come on quickly. that's great we always want to hear from anybody doing good but 8 for 8 is not 8 billion for 8 billion. so therefore the stay-at-home stocks, they sell off this week, maybe they sell for two, three days then the american people forget. i'll tell you what's more important than moderna is will the states that had bars that were packed this weekend have

breakouts? if they don't, a lot of these places -- you're letting the youngest people out. if there's no breakouts, then you can get something moderna or something j&j, we have so much money sloshing around the system it could be incredible you would do -- there's no social distancing in the crowds that i saw now, i live in nunew jersey, the worst state in the union, but some people are acting as if it's over. >> yeah. this week will be very big gm, ford and fiat resuming production in detroit. apple will open up 25 u.s. stores this week disney will open their walt disney world shopping area on wednesday, jim so you think we're still in a mode of watching the reopenings and bracing for an uptick in cases, which is also sort of hard to divorce from the testing that's getting better. >> i am concerned. look, we live in an area where there was a very big contingent,

bellmawr, i have a house near there, really having a great time on the beach. your hope is these are young people who somehow do not have parents and could be asymptomatic and not -- maybe not get it i don't know where were all those people three weeks ago? i feel the reopening is being trumped by the people who say you know what? reopening means all clear. now, in new york obviously -- i can't open my restaurant, i'll get arrested a lot of places are flaunting. a lot of places are saying listen, it was mostly nursing home people. a lot of people are saying it's a hoax these people were out in full force this weekend look, it would be fabulous if there are no outbreaks it would be fabulous if the eight people was a harbinger for 8,000 when we do the july testing. then we'll say there were trillions pumped into the economy, now we're having no social distancing, everything is great. the market breaks out to new

highs. >> right and meanwhile chair powell on "60 minutes" i think taping something not far after his comments that we carried live, talking, jim and carl, about the fact that the fed is -- no limits i guess is one of the keys even before we got the moderna news this orning, the market seemed poised for gains of what seemed to be some new language from him or at least said in a new way or to a different audience perhaps from questioners who obviously are not as deep in the weeds as we are in terms of fed parlance and policy >> i do think what happened -- he speaks to the regular people. the people at home kind of like when ben bernanke went on in march of 2009 and said this is over. we're not going to let more banks fail when i listened to powell, okay, it looks like by any means

necessary. they don't want more layoffs so you combine no more layoffs, moderna, fed cheief who was much more go, go in terms of making sure people won't be laid off anymore on "60 minutes" and number of upgrades a big week for stocks that could do well. europe was strong. there are -- there are a number of green chutes, what can i say? if moderna is for real, i don't want to say it it's just too early to say it's for real >> it is too early >> i don't want to do it >> it's hard to know where the starting gun is, jim, on promise like this. your point about upgrades, nvidia taken to outperform doubles the target to 425. that's a longer-term story on ai and data analytics, but williams-sonoma with an upgrade

on the idea that people will take their travel spending and use it in the kitchen. >> i love that that's one of the names you're supposed to sell off of good news from moderna. that's typical of what's happening. people are still afraid to go somewhere. but they still have excess money. they're not going out to dinner. they're not doing anything take some of the money, you can go to home depot or williams-sonoma website. the jenson wong nvidia upgrade stocks, reports from the 21st, it will be a blowout number. my travel trust belongs to the crowd that loves nvidia. my dog is named nvidia at the same time, again, up 20, it's like moderna. is moderna going to be up 30 today? probably if you buy it here, maybe flip it if you're a trader or short moderna because you think they're promotional, i don't know what you do

i don't know i used to say there's certain things you would do, there's certain societies that say you have to stop promoting that. that stock -- >> you saw -- jim, you saw the move in serento. did you see that move on friday on antibodies? they could potentially work. >> who are they? >> i know. that was quite a move. looking forward to talking to the ceo. >> that will be good until this serento, it was a fabulous town. you can go back now. >> i look forward to going back to italy as soon as possible >> i do, too maybe i'll let you have my house. maybe, maybe not >> maybe that will be the first place you and i spend some time together jim >> will we bring our wives or just you and me kind of hiking >> you know, i mean, either one.

>> when is dr. g. on when do you have them. >> the 10:00 hour. that stock is paraboliparabolic. david, you would have been eviscerating some of these >> yes yes. >> i think that's a fair statement. >> carl, i don't know. hope is springing -- can we wait -- maybe -- maybe there are no outbreaks there are a lot of us in the north who are -- >> maybe you want to talk macro, too. look at oil, carl. we're above 30 now we're in the 30s, up almost 10% on crude >> remember the last contract expiration that did not go well, jim. june expires tomorrow. you have production cuts that seem to have happened faster than some people thought obviously a huge return to driving. all the mobility data bears that

out. 32, right? we talked about the three handle last week. >> they did turn the spigot off. i asked mike worth the ceo of chevron, by far the best oil company i believe and it's done well, why didn't he go down there and bid $2 for it. it moved too fast, it's not what we do he said. but this time there will be companies that have storage space who will -- if it gets down like that, they'll snap it up i think they'll just go around the tanker they'll rent any tanker. they'll rent a princess tanker not really a tanker. >> how about the saudis disclosing stakes in boeing, facebook, city, disney, marriott, berkshire -- this is all going back to march 31st >> they were bottom fishing. i thought live nation, that's a real vaccine shot. isn't that you have to have that

work it's entertainment they didn't -- i'm surprised they didn't take warren buffett out of goldman he hammered goldman like you wouldn't believe that stock has been a one-way street now we have a sense. if you handle that order, it's not like wow, i have to get people to goldman. >> i know what buffett is selling but what is he buying? >> moderna >> anything? >> moderna >> i don't think so. no the unlikely >> a nice start out of the gate going for us here with the opening bell in just 15 minutes. if these gains hold, s&p and dow could wipe out their lseoss for the month of may we're back in a minute thanks for sharing your savage moves, and especially your awkward ones.

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minutes last night as jim said before the break, talking to a much broader audience there than he would on our air or in front of congress tomorrow, jim. where is the balance between remaining upbeat and trying to instill in congress at least some urgency about spending. i think you could say that he -- the big way people are putting this is we have to wait and see. i think he can do that he can be as optimistic as he was but still wait and see look, there's something -- there's big lines to get into bars in wisconsin. and there's big bread lines where i live in brooklyn it's like we're two countries. the food lines were incredibly long these are people who had jobs. so i feel like we're in two countries. and look, i want to be part of one healthy country. i want to be clear about that.

it does feel like there is joy in some places and there's incredible poverty where there didn't exist three months ago. i don't know i think the poverty gives powell the chance to say we have to be very vigilant about making sure that no more poverty, no more job loss he has to be circumspect because if there is a spike, we're right back in the soup remember what dr. poufauci is talking about, he was invisiting there would be a spike in the fall remember his testimony not that lock long ago where he basically said stay in your home. >> yeah. yeah even his comments about the flag and schools, got attention recently and got the attention of the president when this crisis began, certainly many of us would not have expected it would have gone down political lines almost.

partisan lines in terms of the view of it, but that appears to have happened to your point of being one nation as opposed to two. i don't know it's bringing us closer unfortunately >> no. the opposite i think that there are a lot of people who either feel that the democratic governors and politicians handled this wrong or actually just feel that there is a tremendous amount of quarantine, self quarantine and people were afraid of getting sick then there are a lot of other people who feel healthy and don't mind going out at all. that's kind of what people are saying, the south is -- and some of the midwest is about people being judicious, not going out if they have pre-existing, the people without pre-existing, it's their time to shine i don't know >> sweden made a plan going in that's kind of what you're describing there >> yes that's the swedish plan. exactly. >> you were very much encouraged not to participate

they did not close down the economy. but they had the plan going in they articulated the plan, they followed the plan. whether or not it's going to end up being the right plan to follow, at least they had one. this is increasingly -- the president tweets that -- it tweets as if he weren't the president. we ought to open up the country. he's president open it up he's putting tremendous pressure on governors to say, listen, it's over. or let's let people out. we open our country. we open our country is the opposite of what a lot of governors feel, including the governors in states who are expected to vote against him >> right but carl, we are reopening a lot of the country already we have a lot of states that are open, a lot more that are going to follow, carl, in the not too distant future, as long as things remain on a path and we

don't see a spike. >> yeah. absolutely that's why we have to keep on top of the case load and the new death count in states like texas who have been dealing with this for weeks. quick break. we'll come back and look at the opening bell on a day where tus getting the week off to a very good start you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. and its mission is to give you truly transformative sleep. so, no more tossing and turning... or trouble falling asleep. because only tempur-pedic uses proprietary tempur® material...

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welcome back to "squawk on the street." let's get to a mad dash. blue pill or red pill for you? >> take the red pill elon musk is back. he's hilarious as ever a little cryptic i suggest people follow when you take dayquil and nightquil adam jonas of morgan stanley, to be bullish or not to be bullish. today he says play to win but at what cost. he has a life, he goes out,

maybe he doesn't maybe he zooms people. he said lately we've been getting asked, adam -- adam, why stay with the equal weight why can't you be more positive on the stock can you imagine being an analyst on tesla and getting pushed? hey, adam, how are you doing he talks about capital intensity, china risk, short-term demand risk, competition from amazon. fremont to potential, union risk, better way to invest in tech and ev batteries. adam, why stay with equal weight why can't you be more positive on the stock he is unclear because those are some of the more bogus reasons to stay neutral that i've ever heard. >> jim, look at what -- this has been a double since the lows >> give me the mask. >> since the third week of

march, right a double >> you had to be in this this is one that the growth guys, you had to be in this, beyond meat, and you had to be in nvidia. the rest left behind people will want to sell these because today they want to buy ford motor, tomorrow moderna will say nothing 8 for 8? what is that about let's go back and buy tesla. they may buy tesla any way because they're taking that red pill it's extraordinary it's an extraordinary stock. no one knew, it just kind of happened i don't know kind of happened the opposite of softbank's vision fund, david >> softbank's vision fund has been having a more difficult time of it than tesla, yes that's a fair point. significant losses there, of course though they are saying that there are -- that investors -- that valuing the vision fund at

zero is far too pessimistic. >> only oil goes to negative, right? >> this -- meanwhile, i wanted to ask you, what does it mean for t-mobile, that deutsche bank gets more? don't you tell i'm sorry. >> no, listen. t-mobile is by far the most important part now of deutsche telecon. the merger with sprint has been completed. there were reports in the "wall street journal" that softbank is looking to sell additional shares of the combination. they rolled sprint into it obviously owned a good amount of it you could imagine they would want to monetize their stake to sure things up and help fund a potential buyback at softbank that elliott has been pushing them on. we'll have to wait and see jim, i've been checking around i heard a lot of the stories correct, but there's a couple

things that may not be let's wait a little on that one. >> yeah. i don't know by the way, t-mobile has been a complete horse that's another stock i developed an index of the stocks that work people say it will sell down because of moderna give me a break. will people suddenly start working at the office? i don't think that will happen with the 8 for 8 success, i think you could argue it's good for everybody. it's good for the market why not leave it at that >> here's the opening bell as you can see, pretty good breadth here as we get a look at the podium and the nyse will reopen the floor to some small groups of traders a week from tomorrow jim, what's our thinking on -- we have not set a policy yet in terms of our own exposure down there. but to what degree do you want to get back on that set? pfrnlg >> i'm not in a hurry. when you listen to what they're trying to do, what they're

saying, look, there's not going to be a gigantic when an ipo occurs brokers hanging out with each other save three or four around a post but i think that until -- i agree with the question that was asked, until you get a vaccine, do you want do anything? why put yourself at risk i think i've got the best mask i got a few left the n95s i feel good when i have it on. i feel bad when i take it off. that's simple. >> yeah. you were mentioning going back to work -- sorry, carl >> i was going to say, we got lots of pictures from the production floor at aston martin in wales this morning. people on the line in masks putting cars together. we'll get some of those out of the automakers the president is going to detroit on thursday. citi is bringing people back to the hong kong office

these are issues that people are wrestling with, and people may have more discretion than others >> yeah. businesses are thinking long and hard about how theywant to go about bringing workers back, whether it's to the factory floor and how that will work or to the office buildings. jim was mentioning it earlier. for us, when i'm ready to get on the subway every day again is when we'll be feeling comfortable going back downtown. not sure when that will be but, jim specific to the commercial real estate and those who rent office space, there's two competing arguments. one is you'll have socially distant spacing in offices so you will need more space but it's being overwhelmed i think by the number of executives i've spoken to who are basically talking about a new world of work in which some segment of their work force

works from home. they look to shrink their footprint overall and then it goes to economic demand. i don't know what the vacancy rate in new york city will look like come the fall it's not going to be good. the prospects for it getting better over time are not particularly strong either one reason why shares of some are down sharply, but up sharply today on vaccine news. >> also maybe some hope for retail jcpenney, trying to get right back in a smaller footprint. i think the competing views are interesting. what i think is missing out of these views, if they would somehow lower the rent than it would matter no one ever thinks no one ever lowers the rent in the country who is driving the lower rent? starbucks saying listen, if you want us -- i don't understand how the real estate investment trusts constantly talk about how

they don't have to cut rates look at what their stocks have done they should have cut rates because empty doesn't pay the bills. and these guys have been really not great actors as far as i'm concerned when they say that, you know, they're not going to -- they're still going to guarantee this and put good dividends in the pocket of their holders. give their customers, their actual -- the guys who have retail, give them a break. no one ever lowers rates >> but the question becomes how much of a break? as you well know, a lot of them have debt, debt that's been secure t securitized, backed up by reins coming in, whether it's retail, office space so, yeah, they have some room, but they may not have as much as you think in terms of the ability to lower those rents or where the marketplace will take them regardless. we may end up -- i don't know if it's bankruptcies but

restructurings of some kinds and buildings will undergo that. >> you're right. you're right tanke tanger, this was a good company. tanger is now at six you look at a real company for years and years, but what these guys did, they levered up. the guy who didn't, simon. he has a pretty good balance sheet. i wait to hear, david what you'll say about the taubman acquisition. to me, it's game on. but maybe -- do you know anything new on it >> i done. you know, you have any number of people who will participate in event investing now or the old risk arbitrage who have gone over that contract with a fine tooth comb who are looking at anything that might be used to mr. simon's advantage to try to

either get a reduction in price or walk away but they are not finding that at this point, jim. doesn't mean mr. simon won't be aggressive in trying to figure it out or he will at least slow walk this deal, take as long as he possibly can in terms of closing. he obviously has to wish he would have waited just a couple of weeks because it would have made the difference, after waiting so many years to buy this company we know they had interest in it for a decade or more >> the stock is up nicely today. the cruise ships, because of moderna. moderna has eight people, so let's book a cruise. apache, we're not going under, right? s.o. green, we're better than you think. and look at delta. wow. i guess we'll be flying. i don't know i think that when you fly to certain countries, there's a two-week quarantine, it's not great thing for when you have a week off >> how will we get to italy?

we have to fly we can't we -- we can't cruise there. actually, you could cruise there. you could go around -- you could -- no. we're not going to do that i'm trying to bring my daughter home from spain in july. i said listen, i think you might need goggles she said why don't you just buy me a hazmat suit >> international travel, even when you get off the plane, going into customs, depending on the country you're going into will be no picnic. >> no. >> given some -- the quarantine policies of certain countries. i do want to ask about levels here getting back to this level, 2,932, this is the third test, the high of the move, drw was saying was 2,955, that was late april. how badly do we need to bust through this >> we have to. it's key i think you can't keep having these. you do have -- this is a really big week for earnings.

huge and walmart is a dominant stock. psychologically home depot is a dominant stock lowe's, htarget matters all the team who felt certain stocks that are doing well will start selling off, i go back to nvidia it does report this week, but there's no sign that nvidia is done in part because there's a big gaming cycle and in part because they have those inference chips that can understand slang ultimately those inference chips will replace people at a party there's always people you don't want at a party, you can hand pick your holograms and program them to say you're a great guy i love you that's how you would finally get friends. remember you said on air you don't care for friends this would be it for you david, this would be great david, you need a hair cut >> i do.

>> you know, believe it or not -- >> i need a hair cut and i do -- and i do have friends, i swear i do. man, you have taken that one statement and played it so many different ways, jim. >> i have. >> you'll never forget it, will you? >> i'll never mention it again just like you told me never to mention bob bakish from viacom, how is that stock doing? how did you know that two for one split? how did you know that? >> i did not know that that stock is up nicely this morning after they reported that not terrible quarter recently. and, listen, the surprise name look at disney up 7%. >> so heavily shorted. people bet against them. next thing you know they'll have a saliva test to get in. why do people bet against -- when iger came back, wasn't that a strong signal that you shouldn't bet against disney i thought it was

>> came back he never really left your point is that he was reported to have taken more responsibility again as you might imagine, given he's there, he's actively involved as is mr. chapek as the ceo talk about timing. what a time to take over as ceo. >> the stock is hot. stock bottomed there were a lot of shorts ahead of the quarter because people feel if you're getting rid of a dividend, shouldn't the stock be down didn't do that if you're a short seller -- imagine if you bet i'm going to bet that disney eliminates it's dividend but the stock went up huge there's a level of buoyancy, then we hear about the fed no one mentioned how the fed is pumping in money i had an outfit on this week, draftkings this is one -- you have to love this there are no sports, right can we all stipulate there's no

sports except for maybe -- >> no sports >> this stock is now up 186% jason robbins was on talking about korean baseball, okay? really, they'll bet on anything. i'm waiting for them to bet on ra raindrops. look at this stock this is what people are afraid of they're saying give me a break a stock about gambling with nothing to bet on? but then again, there's some nascar this weekend. you know, there's golf they bet on golf, you know they bet on golf >> yeah. >> pretty amazing. >> jim, i watched the interview you did. it's worth mentioning this was a special purpose acquisition corporation again. by the way, man, we're seeing a lot of those everybody wants to do a spac if you're a hedge fund, you want do a spac. it's all the rage now to do these special purpose

acquisition corporations that is one of the more successful ones. >> it is i guess we should move on. >> all right >> fidelity did say last night, guys, nearly $5 trillion in money market funds that's 16% of market cap a lot of dry powder out there. it's increasingly evident this morning. every dow stock in the green let's get to bob pisani. bob? >> and the important thing, guys, we have a triple whammy going here we have generally positive comments from the fed chairman, that moderna vaccine news, and we hahave metals rallying what is the s&p worth when you have hopes for a vaccine sitting near the highs for the day. important where we're at now let's show you the s&p the last three months 2,939 was the old recent high.

the april 29th high. we've been struggling to get over that. haven't been able to we're sitting right there. we can get over that, we'll go back to the highs we had in march. we were descending in the early part of march, nice to get over 2,939 on the close if we can this is all about reopening hopes. hopes for a vaccine, travel and entertainment stocks, you want to watch them on days when there's optimism, they're all up you can see that look at the airlines up nicely, too. those airlines, awful lot of cash burn going on with them any kind of hopes that things might be getting back to normal in even a modest way will help here sectors, banks had been enormous laggards, boy, is there catching up for the banks they're rallying that's nice to see today tech is lagging. if you look at the mega caps, a lot behind this recent rally has been the mega cap names. we're not doing much with the mega caps. that's interesting that means some of these may be used as sources of funds to buy

other things the mega caps in the second quarter, we are talking about 26% increases in facebook. we're only halfway through the second quarter look at these numbers for the mega caps. if these start flattening out and the markets keep moving up, that would be healthy rotation today. so again, we're halfway through the second quarter what are we up, 10%? 11% for the s&p 500. put up the major indices in the second quarter this is largely a mega cap tech rally. don't kid yourself look at growth there, up 15% value, which is mostly banks and a few energy stocks, look at that, way light. a dig dispersion between growth and value. today is the halfway point for the second half. everyone says this is the worst quarter. we'll see what's going on. if you look at the sectors, energy is rallying tech is the big rally. you see banks down, transports down, reits down you get the point. this is an unusually wide

dispersion in sectors after just six weeks of performance so a lot of catching up to do here what's interesting is the trader sentiment. it's mostly bearish. people are not terribly enthusiastic because they're concerned about the rollout and the reopening. retail sentiment is high those numbers, 53% bearish, yikes, that's high equity etfs and mutual funds, it's been choppy but mostly outflows the last couple of weeks. a lot of talk about high levels of cash on the sidelines is this bad news as you know, these are contrarian indicators. this is good news. what we call the pain trade is higher the trade that would cause the most distress to the most traders right now is higher. that's being exhibited today i got my first hair cut in three months i had my barber come over, sat in my backyard, out in the fresh air, with him wearing a mask, and me sitting there

i got it done. three months finally worked >> al fresco, that's the way to go you look good, bob thanks bob's point about the relation trade has everybody watching back-end rates let's get to rick santelli hi, rick >> hello, carl whether it's reinflation or reinflating the equity markets, we do see rates starting to perk up just a bit. it's mostly long maturitmaturits two-year, up 16 basis points, higher than friday's close because it did close towards the higher end of the range. ten-year notes, up four basis points let's look at a chart starting around april 1st the reason this is important -- stocks are flirting with some midpoints here that are significant. if you look at where stocks were before the big coronavirus break in march, where the lows were, you know, there's 24,000 plus in the dow, hovering near midpoint.

the same could be true for the highs in the fixed income space as stocks do make these bounces. so for april, it was 77 basis points was the high yield close on tens. at 68, you can see that's the immediate area traders will be looking at for resistance. if you go back to march where we had the full effects of the coronavirus on the economy and rates, you'll see that after the initial drop of 54 basis point close on the far left there, the highest yield close we had was right around 120 right around mid-march that is your second bogey for watching as these markets may normalize on longer maturities with the near-term deflationary pressures, the reflation trade and the stock reflation trade are further down the road for the fixed income space finally, if we look at how the year-to-date pans out, let's not forget that treasuries and the ten-year closed at 192 at the end of last year the high yield was established the first day of the year.

there's a lot of bogeys, a lot of moguls we have to get over. the near-term looking around three quarters of 1%, right around 75 to 77 basis points is the large term resistance. carl, jim, david, back to you. >> thanks for setting us up on that jim, morgan stanley today says this is one of the key questions -- not just for whether banks take leadership again, but for markets at large, these back end rates they have a ratio of cyclical to defensive equities, which normally tracks the ten-year but is now spiking higher. their question is will the ten-year yield follow that >> look, the achilles heel of this market that nobody talks about is not the cruise ships, it's not some retail, it's wells fargo. it's the banks and they're screaming today. i think that really matters. when you talk about the banks, they have -- their stocks have to act better. their stocks are saying default, default, default if they can make money off of the rates, that would be

terrific if we get some good spring housing market, that would be great. david, you're worried about this, too. we watched wells fargo get cut in half. that's a gigantic bank >> yeah. we watched it last week, jim, as its market cap approached briefly may have fallen below 0 $90 billion. it's had a significantrally of the lows i guess we're talking over 10% since we're talking a market cap above 1$100 billion hard to imagine for a bank that once sported a market cap of a quarter trillion, did wells. also levered to the consumer you made the point, oil and gas not an unimportant part of their portfolio to some extent just overall concerns about the viability of those groups and sectors and how much and how big the writeoffs will need to be. >> you did have the saudi fund

come in and buy citi, which has been a terrible stock. terrible -- what ruined these stocks in terms of -- maybe not ruined the company, when they were not allowed to buy back stock, that was it they turned out to be houses oft i can't believe how badly they acted. were they really the bottom bid at all times i don't know it seemed like they were >> goldman is the -- leading the group of the performing the worst. buffett decided to tell. a decision he took ten, 11, 12 years ago. during the crisis that he got that deal that only buffett can get. >> look, i guess it doesn't matter what price he got out it was a pretty bad price for some of it >> guys, we'll watch this open the point a few moments ago was to expect resistance around 2950, 2975 we're a shade below a. back in a moment

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take a look at some of the dow gainers quarter to date. home depot 35% home depot reporting tomorrow along with walmart andths iseek.er we're back in a moment (soft music)

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let's get to jim in stop trading. >> i love alaska it's just so much fun to go to there's a $699 cruise that you can book for next year, may 21, for norwegian cruise if you believe in mo der in a and like cruises, this is a $2900 value that's going, and it's on the norwegian bliss. it's a beautiful ship. if you think that cruises are done, think again with the deals. and you can cancel this is, to me, a great bet on a vaccine, and i think that when you see that you can cancel and the trips are mazing, and the boat is beautiful, i've been on it, i say to myself, what is that stock doing this low and with the fewest co-vid numbers of attack when you look at the cdc page and also the miami herald

i don't know maybe hope springs i term a-- eternal and this is the one you want to buy. >> hope is the right word because we don't know yet. given that, what are you covering tonight >> i'm covering avaya, they do the zoomny right? they do it it's fantastic and a much higher resolution and then i've got john miller. look, are we going to be able to open the country if you can, get the grand slam at denny's, and scott sperling, we're talking about how much hospitals have spent and also the ways to treat co-vid people. which are not being treated correctly in other places. david, i'm never going to mention again you said you didn't have any friends and you didn't like friends. >> that's not the quote. >> finished. >> all right i'll see you take care of yourself. >> take norwegian cruise lines

on the way jim, we'll see you tonight >> you too, carl >> "squawk on the street" continues in just a moment (vo) our communities need help like never before and wells fargo employees are assisting millions of customers across america through fee waivers and payment deferrals, 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.

good monday morning. welcome to "squawk on the street." we are live from separate locations on a morning where the markets are ripping higher on several positive headlines reopening auto production in detroit. moderna with positive data in the phase one vaccine trial involving humans all of it adding for fuel for the bulls.

and now numbers from diana >> after the sharpest one month drop in the history of the index in april, home buying sentiment jumped up to 37 according to national association of home builders still below 50 it's negative territory and well below last may easter tory construction has continued and buyers are coming back either virtually or in person as states lift stay at home orders of the index's three components, current sales conditions rose six points to 42 sales expectations in the next six months jumpeden the points to 46. all negative but record low mortgage rates are helping 30-year fixed another new low and the supply is at a record low. builder sentiment is strongest in the west, weakest in the northeast. >> diana, thank you.

as carl mentioned we are off to a strong start here in the first half hour of trading with the s&p up over 2 .5 or right at a 2 .5% gain chairman powell's comments on 60 minutes over the weekend one reason, but another key one, hopes for a vaccine. that involves the company moderna. we have that news after an interview with the company's ceo earlier on "squawk box." meg? >> good morning. these are the first human trial results we're seeing of a vaccine, and they are encouraging but they're early. this is a small trial. it was done in relatively young and healthy volunteers so there are going to be more questions to be answered in later stages of the trials what we saw in this phase one study was a dose dependent response, meaning the higher the dose, the more of an immune response the participants

generated. after two doses they say all patients developed antibodies to the virus. some stopped the virus being able to infect cells they observed antibody levels similar or higher than those generated by people who recovered from covid-19. overall, they said the vaccine appeared to be generally safe and well tolerated there are some immune infection site reactions, fatigue, fever at the highest dose. things you see sometimes with vaccines and they say now they plan to start a phase 3 trial in july this timeline is incredibly compressed they just got into human studies in march the way they're doing this is overlapping the trials so they're starting the phase 2 based on the safetiy from phase one. and the efficacity data

generated from phase one to try to guide the doses they'll select for the trial if all goes well, the next question is manufacturing. they signed a deal to try to manufacture up to a billion doses per year of this vaccine and we talked with the ceo of moderna about that this morning. >> we are already working on scaleup. and we say we could go up to a billion doses per year with this new data we just got at the end of last week, we're going to increase our investment in capital equipment, in raw materials to make as many doses as we can. we know every dose is going to matter >> so guys, even as the companies are trying to figure out whether they can make vaccines that work against covid-19, a huge question is the sly of the vaccines if they are successful and the company's

chief medical officer saying demand is going to outstrip supply at the beginning. it's going to be a major question >> meg, thank you. that certainly is having an effect on the markets. dow up 7 00 at the moment. strong rally to kick off the week with stocks across the board in the green today jonathan joins us from and samantha azzarello jonathan, how much is the market banking on a vaccine here? >> i think we're overplaying the near-term news if there was absolutely no news of a vaccine, the stock market would probably be up today the same way it's been up the last month or more. this is really a story of stimulus coming from the government and if you look at the overall news flow, i'm not sure that it would by itself warrant the kind of move we've

had right here >> samantha, are you as skeptical as jonathan? >> i mean, i think the volatility right now is tied to a bunch of different things whether we're going up or down it's vaccine news. it's treatment news. it's jay powell speaking we know that i still think there's a little bit of a disconnect between the real tide of the economy, what's happening with the macro data, in particular the labor market, and then what's happening on the financial side given the spreads tightening the market is up, and conditions are loose. i think we're just monitoring that gap between one and the other to see where things go over the next couple months. >> yeah. jonathan, samantha mentions the gap. we have an s&p down 9% now for the year when i look at 2021 and what your expected earnings are for corporate america, i mean, what kind of a multiple am i backing into

when am i going to be potentially disappointed or will i not be >> fewell, first, this year the expectations are for $125 of s&p profits. that's down 25% from last year and the number is falling further. that basically puts the market multiple at 21 what's so important about that is before we went into this crisis, the market was trading at a multiple of 19 times. and people were complaining or concerned that the market was overvalued at 19 when we have today, a market that's much more expensive and the risks are obviously substantially larger and if you continue to have the estimates fall which they are, the market may, in fact, be really at a 22 or 23 we've never had a recession that we've left with the market leaving at peak multiples. and so you -- you know, i'm going to disagree with the other

person on the line, but there's always things that are positive and negative in the market on every day. but the reality is that 21 times multiple given that right now we've had tens of millions of people put out of their jobs in a collapsing corporate profits and even if the trials go super well, we're not going to inoculate the entire american public probably by the end of this year at the very earliest, and that means that this expectation we have for this bounce in the economy and the ease of reopening is just probably unrealistic now, there are a bunch of things to be positive about but the news flow right now is probably not in the top of that list >> but jonathan, i mean, this is what so many people have argued and you've missed this entire runup in stocks. on the flip side, i could argue that yeah yarks we've never had

a recession where multiples like this we've never had a recession that was sort of engineered by society and the government for public health and then was let to reopen. you know, with a number of scientific advances on treatments and vaccines which could all affect the rate of growth which i'm wondering if the market is more focussed on the rate of growth and not just a sudden snapback and, therefore, higher expectations for future activity. >> well, if you take a look at the kind of stocks that are winning, it's the kind of things that you would expect to be winning when things -- when conditions are not good. you're not seeing the banks leading the market that's what would normally happen if you think you have a potential robust snapback. you're not seeing industrial and consumer companies winning you're seeing businesses in the tech space that don't depend on the economy are the ones doing super well, and noncyclical

companies in areas like consumer staples and in health care that don't need the economy as well and we're not only talking about those that are a play on the coronavirus and cures, but health care suite in general so this -- if you look at the level of the market, it says it looks like it's game on, but if you look at the kind of companies that are winning, it's companies that are able to withstand this and are healthy and not the cyclical companies that should be doing well. if this was healthy, small caps would be beating large caps. if this run was healthy, value would be beating growth and that's not what's happening. >> samantha, jonathan's skepticism points to a larger debate what do valuations mean in an era where so many key companies have pulled guidance and when there's $5 trillion in money markets earning practically nothing. are we have an era where valuations matter less than flows? >> i mean, the standard logic

would say that valuations always matter right? and we would say that looking forward, we will get to a place where valuations matter again, but i would agree with that sentiment. right here, right now, i think there's a lot of red herring data we look at the valuations but don't know earnings estimates. that p is moving and shaking a lot. even just kind of to take it back to the economy, i disagree with a little bit of the logic around this idea that the equity market can go forth and run on its own merit and steam. the heart and soul of the economy is the consumer. it takes us back to labor market data i agree it's not as fun or exciting to dig through. it's still important i would say this around the consumer believe it or not, the income replacement they've received from the government has actually more than offset losses. now, that's a bit of a generalization, but we look at data like sub prime auto loans and yes, the default rate ticked up that's the bottom of the barrel

but not as much as you thought and we also look at rental payments who is making their rental payments on time this time last year that was about 82% of people making those payments on time you might be surprised to know that this time, this year, it's only about 80% it's only gone down 2% the point i'm trying to make is the consumer is still pulling their weight even though they're not spending their wallet for the most part given the income replacement is holding things up. my concern is what if that goes away, or the longer this goes on, it's not as feasible, and that's a big risk. >> samantha and jonathan, thank you for joining us dow is up 660 points >> yeah. almost got up to 800 799 points at session highs. when we come back, don't miss the ceo of sorrento therapeutics

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patients testing has also increased 32% with 8% of tests coming back positive in wisconsin. when we compare the three-day average of cases it's seen a 66% spike in cases last wednesday the wisconsin supreme court blocked the governor's stay at home order, accelerating the reopening of bars and restaurants there since reopening on may 9th, nevada has seen a 17% increase in cases, a daily average of 4 114. testing has increased 51%, and 9% of tests are returning positive results and when compared with the 7-day average of cases it's seen a 5% decline in cases in nevada david, i think to sum it up, though, according to a lot of the wall street notes over the weekend, one of the reasons the market's in a better mood this morning is there hasn't been a huge significant spike in hospitalizations and deaths in a lot of the key states that reopened, at least not yet and people are looking at that

as so far as a positive development. >> right it certainly is seen as a positive some of the health experts will tell you it could be as much as three or four weeks after reopening that you see that potential spike. so we will continue to monitor it closely of course, the hardest hit or one of the hardest hit states is new york governor cuomo beginning a phased reopening for the past weekend on saturday. one city began resuming manufacturing, wholesale trade, curb side retail and agricultural work. if all goes to plan, most offices and person retail and professional services will resume business in about two weeks. joining us now, following the first phase of reopening is the mayor of ithaca. nice to have you with us this morning. >> thank you so much i really appreciate it >> what are your expectations for phase one and what are you seeing on the ground in terms of

reopening? >> sure. we are cautiously optimistic i am very proud. we are very proud in ithaca to be really an economic engine for our region we're the fastest growing economy in the state we're one of the fastest growing in our country we have the lowest unemployment. better jobs figures than new york city, and that's been the case for about six, seven years now. we shut down our economy very quickly and did a tremendous job of social distancing our people here listened to the scientists, took it seriously, and we ramped up our testing capacity so, in fact, we've had zero co-vid deaths even though we're in new york state, and we've been testing our testing capacity is through the roof all those things tell us that now is a safe time to begin reopening, and particularly around construction, we think that's positive.

we cannot be this economic power house again unless the rest of the nation and frankly the rest of the world gets the virus under control, because a big part of our strength is our inner connectedness, and if we're -- if our students can come back to the united states or if parents in california will feel comfortable sending their kids to cornell in the fall, then our economy won't get back to where it was. >> yeah. well, there it is. you mentioned cornell. ithaca college, also important to your overall economy, adding hundreds of millions of dollars. what is your latest read on cornell and the likelihood of it reopening at this point? >> yeah -- >> students on the campus. >> right cornell university, and ithaca college have made the decisions not only to shut down this semester and the summer but they're all waiting to see if they can reopen in the fall. again, much depends on not only what we can do here. it's frustrating we feel like our police

officers, our firefighters our municipal workers have done their jobs our county officials have done an incredible job. our hospital doubled the kpazty almost overnight we had so much excess capacity that we spent two bus loads of doctors and medical people and nurses to help we're ready to reopen, but the federal government just has not done their job there's not a testing scheme that's national that will put people at ease and make them feel comfortedable traveling around we're waiting, cornell college, ithaca college, they're waiting to see if it's going to be possible for the nation to send all its students back in the fall there's so much that's outside of our control, but we do hope they come back because without the students spending, it's not just pizza shops and bars and restaurants, it's barbershops, nail salons. it's accountants it's law firms i mean, the ripple effects of

all of our students staying home and not coming back to campus would be crippling >> mr. mayor, have you done any work on what type of financial hole that puts you in if the universities don't open and what you need >> yes yes. that's been the cause of many sleepless nights over two months i took office at the height of the great recession. i was first elected 13 years ago. and i closed a budget deficit that was $3.5 million large. it was the largest deficit in the city's history we worked really hard to close it we're now facing a budget deficit of $15 million five times the size of the largest we've ever had and that assumes, honestly, that budget deficit assumes the students are coming back in the fall if students don't come back in the fall, we're in real --

cataclysmic trouble. that's why the bill the house democrats passed last friday, a tremendous bill that would have helped us -- we're in a finger trap right now we can't reopen the economy in this economy not if we have to furlough a quarter of employees we've had to close down our youth services how are people going to go back to work if they have nowhere to drop their kids off. we need the federal government to get the engine running first with more stimulus frankly, if they feel like as the senate republicans seem to feel like they've done enough stimulus, they're not paying attention to main street come to ithaca and stand on the street corner an ask yourselves does this seem like a stimulated economy to you >> finally, if cornell's decision is the most important one for the town, when is the drop dead date by which they

need to decide one way or the other to have a school year begin or not >> likely early june they've joined together with a coalition of other colleges in new york state to figure out what they need, what they need from the state and the federal government and what they need to be able to do locally. it's a complicated patchwork that includes indemnity for the college, if they reopen and something goes wrong and the virus spreads and includes a testing regime that is really more robust, far more robust than we have now and really, we need to know if those things are going to be in place by early june. i would say the first, maybe second week of june is the drop dead date to decide. >> yeah. well, mr. mayor, these colleges are under enormous pressure to open as well the lack of foreign students who are typically full payers, the lack of a summer school, a high margin business. room and board which even though it's not margin is am mortized over the course of the year in terms of revenue

they very much want to, if, in fact, have to open as well, don't they >> absolutely. and every school is in a different place. cornell, $7 billion. every school is in a different place. ithaca college has a positive, enormous impact on the world it's in a precarious position. if they don't reopen, wells college is 40 minutes up the road has announced they don't reopen in the fall, they'll never reopen again that's the level of seriousness, and as i said, talk about the effects. if all the students don't come back, sure, that effects the university's bottom line, but the dining halls is full of food sourced from local farmers what happens to farmers if they don't have access to that same market it's a troubling state of affairs. >> yeah. and one that we're going to be watching closely certainly appreciate you kwoining us this morning as well thank you. >> thank you so much i really appreciate it

>> today the oil rally. wti up almost 35 % from a week ago. surge in oil prices pushing the energy group up. etfs all in the green with the energy companies benefitting from the rise in crude oil at the highest price in weeks pumping out the overall market to sthp s&p up sharply so is the dow. nasdaq is up about 2 % stay with us on "squawk on the street." at mercedes-benz, nothing less than world-class

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good morning welcome back i'm sue herera nearly 254,000 air travelers went through tsa on sunday that's the most since march 24th, but it is still down about 90% from the same day last year at the low point of the pandemic, air travel was down more than 95%. in new mexico, it is still illegal to go out in public without facial covering. violators can be slapped with fines of up to $1,000. it's part of the state's restart plans that allows all houses of worship to open at 25% and the vatican is reopening. guards in suits are taking temperatures of visitors with everyone required to wear masks across italy and stores, restaurants and churches are

also beginning to reopen today you are up to date as always for bcom coronavirus coverage, go to cn.c "squawk on the street" continues after a quick break. home and here to help. here's a tip: get half-off the amazing iphone 11 on at&t, america's fastest network for iphones. second tip: you can put googly eyes on your stuff to keep yourself company. uh for example, that's heraldo. he's my best friend. oh, sorry nancy, i forgot you were there. get the amazing iphone 11 for half-off on at&t, america's fastest network for iphones.

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especially in times like these, strong public schools make a better california for all of us. our next guest sites "gone with the wind" in his latest piece called on coronavirus debt, heed the wisdom of scarlet ohara. allen, good to see you >> good morning. >> i'll let you explain the reference, but your larger point is you're not spending your days worrying about the level of at least public debt right now. >> right and that's the reference, the famous statement, i won't worry about the debt today i'll worry about it tomorrow

both parts are important it is not something to worry about today. we have a lot of relief spending it's sometimes called stimulus, but it's relief. people are in terrible distress. it's analogous to a giant hurricane hitting the whole economy. that never happens, of course, but a pandemic does. it's relief spending and we need it badly people are suffering all over the place in a variety of ways the tomorrow part is this is adding enormously to the national debt. i guess the right way to put this is it merits watching there are no warning signs yet that we're pushing the limit of the united states government tomorrow on world market none at all. but we should keep watching. and make sure there aren't, because that's going to be -- if it happens, that will be the

constraint >> right you do say no such yellow lights are flashing the markets will warn us with higher interest rates and a sagging dollar, but where is the line at which we can declare a warning declared >> well, there's no magic number but i would say as soon as we start seeing treasury borrowing rates inch up, and it's not going to -- they're not going to go up by 100 basis points in a day, but if they start moving up and if the dollar starting moving down, i don't mean for a day or two the dollar is always going up and down, but over a protracted period of time, those will be warning signs. there's not a magic number, but you know the old saying is you'll know it when you see it i think we will. >> allen, it's sara. what does that mean as far as what tomorrow looks like austerity in this country, higher taxes and how soon do you think we're

going to be facing those realities? >> not that soon but maybe starting in 2021 i think it's less austerity. we'll see, but i think it's less austerity than it is what's called adult behavior. i draw the analogy in a op ed which you referred to between now what will happen and what happened after world war ii. we finished up world war ii with a debt to gdp ratio depending on exactly how you measure it from one year, something about 103%, 105% of gdp. that was in 1946 by 1975 that number was down to 22 % of gdp.

how did we do that not so much by austerity not by running budget surpluses year after year. but keeping the deficit modest so the national debt while growigro growing year after year was growing slower than the economy. oh so the debt to gdp ratio went down from 103 to about 22. that's a lot and that's how we did it, basically. >> right but a lot of what you're discussing, allen, would involve rates staying low and to your point, i mean, psychology can change quickly when it comes to the view of a country's indebtedness, even as it may be hard to imagine the u.s. if our political dysfunction and our inability to have sort of a functioning discourse among our parties continues, you could imagine a day in which people say wait a second, i don't know anymore about this country's ability to repay and the way that i thought of, and higher

rates with our refinancing needs, that would be disastrous, wouldn't it? >> it would. it would you can and you use the word i think imagine. yes. you can imagine it unfortunately with the way our politics are today you may recall i think it was in 2011 that for a purely political reason, battle between the congressional republicans and president obama, we got a downgrade from s&p there was never any question could the united states pay the interest on its debt that was never remotely close to question but there was a question at that time whether politically the republicans were going to deliberately cause a default on the debt i never thought it was likely. most people didn't think it was likely, but something like that could happen again unfortunately, sadly, we could imagine it happening

>> so -- >> politics, not the mathematics of the debt that drove that. >> yeah. and also we actually saw a major rush into the safety of the u.s. government debt after the downgrade of u.s. government debt that tells us how special the u.s. is there. i want to ask about the central bank jay powell this weekend on 60 minutes made quite an impression i think when he said he are not out of ammunition, not by a long shot, certainly was the right statement to make, and you can see the power of his rhetoric, but are they out of ammunition not by a long shot what does that mean to you what other ammunition do they have >> well, technically speaking, there's no limit on how large the fed can blow up the balance sheet. and we say blow up the balance sheet, that means either buying assets or making loans that amounts to the same thing.

so whether it's buying assets, we call it qe, or we call it lending facilities the fed has been standing up left and right. if you ask, well, how much of that could they do the answer is in principle, there is no limit because the central bank, unlike anybody else can create money. t doing that by creating electronic images on bank's books. that's what printing money means these days and there's no technical limit the limit is prudence. all right? so the thing you want to watch and what powell and the fomc will watch is whether it gets to be early warning signs, hopefully they'll come early, that banks are now using this fodder, bank reserves we call them, to extend the money and credit in ways that could be

inflationary that historically is why the fed has limited the supplies of bank reserves and tried to limit the size of its balance sheet. right now the sky is the limit that was the sense of what jay powell said, and we have a debt economy. so the notion that any of this for the foreseeable future is going to be dangerously inflationa inflationary, i think is fanciful now, there may come can a day sometime down the road, maybe as soon as next year, i wouldn't expect that, but maybe, where the fed needs to throttle back it starts to see signs that banks are taking these reserves, building them into money and credit, and the economy is starting to boom, and the danger, therefore, is we're going to inflationary, a rise in the inflation rate if that happens, the fed isn't going to need to throttle back >> finally, allen, you know, the

argument you make sort of fits with some equity bulls who argue money supply explodes, but inflation expectations remain well anchored and stocks set new highs. is that an extension of your logic here >> yes i just like to demure on the stocks -- one thing i try never to do even in private, much less on the air, is predict the stock market so i'm not going to do that. but yeah, the rest of what you said is true, and it could, indeed, lead to that kind of a stock market, sure >> allen, it's an interesting piece. thank you for coming onto talk about it we always love hearing from you. talk to you soon allen blinder. >> thanks, bye >> a programming note as we head to break later today on "closing bell" don't miss our interview with jo

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our traders break down what to watch on tdirang nation. more "squawk on the street" coming up.

welcome back activities like haircuts and dining will look very different as businesses begin to reopen. kate rogers spoke to franchise owners in georgia on some of the steps they're taking to safely do so. >> that's right. and there are so many things to consider like liability, protecting customers and their workers as well and if customers will feel ready and safe to come back in. at great clips c they've added in awe position, hair traffic controller >> we will have turned our shampoo bowls into hand washing stations so we can cawash hands easily between customers we've had the plexi glass. we'll have spots on the floors all the chairs will be taken out

of the lobby we had to create a new position, the hair traffic controller, pun, it's kind of like a receptionist on steroids >> meanwhile, restaurant owners, at tgi fridays says they're grappling with mask requirements he's planning to provide masks for workers and guests >> loot of us have to earn the trust of our guests again, and we're going to start by having everybody wear a mask, making sure everything is wiped down as it comes out to the guest in terms of the salt and pepper shakers, bottles, things of that sort >> they were able to access ppp loans but they've been conservative with using them as they're awaiting more guidance there was a release on friday about forgiveness guidance and said more guidance will be

coming for both lenders and borrowers in the future. >> hair traffic controller, kate thanks for that. kate rogers joining us this morning. when we come back, the ceo of sorrento therapeutics on the company's positive test results involving the co-vid antibody. dow is up 760 or so. we're back in a moment ♪

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shares of sorrento therapeutics skyrocketing since announcing a breakthrough with its covid-19 antibody last week. stock is up another 30% on top of a 200% rise friday. co-founder and ceo dr. henry ji joins us now tell us about the significance of your discovery? >> so we found a very potent antibodies that complete preventing the virus infection with a live virus which is significant because the quantity is very low. it gives you the instant immunity potentially if this gets approved. especially this one is very good for the population that is immuno compromised or elderly or

the section of the population that don't want to get immunized. >> dr. ji, what is the difference between this potential antibody treatment and what we're seeing in trials from regeneron, amgen, lily, which appear to be a lot further along in the process both as far as trials and also manufacturing? >>. >> actually, we are almost at the same stage right now nobody has the neutralizing antibody in clinical trials. all are going to be starting in the next few months, including regeneron, eli lilly and amgen we are at the same stage almost and we will see the more the merrier. the reason you want more neutralizing antibodies from different pockets so you have redundancy and see which one pans out and certainly potentially could be sinner in

guestic. using neutralizing antibody has the effect to say if the virus mutates some of the antibody may not work after the mutation, so if you have a different angles from different antibodies attack the same virus, you may have the redundancy you need and also you have the antibody potentially generate body resistance to it after prolonged use, so you want to have multiple parties all coming here with different of neutralizing antibody that will help us tremendously >> doctor, it's david faber. there are those who say and focused on this and say it isn't that hard to generate an antibody, it's what comes next in terms of a timeline where you can get to a place that you can manufacture it significant scale. regeneron saying they have that down to what could be six months, but a lot of people say that won't be the case and my

question is, how did sorrento do it in enough time to be relevant >> yes you know, we have a facility in-house and we'll start manufacturing in 100,000 doses up to a million doses in the next few months and meanwhile, we have a collaborator with discussing right now they have much larger scale which in the potentially providing in the millions to tens of millions of doses each production round, so we're prepared to meet the vast demand in the next few months >> what data do you have to suggest that mutations in the virus wouldn't render this antibody ineffective >> at this moment right now, we know the virus completely preventing the virus infection, this antibody, prevents the virus infection completely and what we see in that is that we

have other antibodies as well that works as well and if you're putting the two together or three together as a cocktail, forms a shield preventing the virus mutation so that one of the antibody does not work, the other one or two still works that gives you redundancy in the same product >> are you making any assumptions for dosage and how can you be confident in those assumptions at this stage of development? >> because we can tell from the initial experiment what is the concentration that potentially works to complete neutralizing the virus and we up the dose right now and we believe if we can get around a milligram a kilo, 100 milligrams per person, which is easy to handle and that will be potentially efficient

quantity that makes the manufacturing much easier. we are not talking into 100 milligrams which you need 10 grams. . >> but for how long? as i understand it when treating a covid patient with antibodies it's a temporary treatment, right? it's not a cure. >> typical antibody half life is two weeks, however there's technology right now, you can engineer the antibody to up to two to three months time there is also technology right now we are employing as well, testing, using the dna format so that the potentially inject the same thing as the moderna, injecting the mrna into the muscle, let the body muscle produce it, let the dna in the

muscle, let the body produce it and that can potentially last over a year or longer. >> and i just want to understand the timeline, dr. ji these results are pre-clinical do you have to test it in animals before you can start human trials and what is the timeline look like there >> so we are intent to get it into a human in the next two to three months, especially for getting into the patient just getting into icu, and start treating the patient this antibody not only can do a potentially prevennion as well as a treatment so you go as the treatment in the icu setting, you can get into human very quickly in the next two to three months after that you move up and potentially gets into healthy people. >> wait. so are you saying it would be useful as a pro fa laxist and those infected or one or the other?

>> i think it's potentially a work both ways we're starting with the treatment in the patient population that gets into the icu and we are moving to a prevention as well and -- >> so what is -- >> vaccination is to generate neutralizing antibody. now we have a neutralizing antibody in hand >> sorry to cut you off. what is the soonest we could see your antibody cocktail ready for use? >> potentially in the next two to three months, that means some time in around july/august window >> got it. dr. ji, thank you very much for joining us today from sorrento therapeutics >> thank you for having me. >> carl, another 29%, these bioteches have been amazing to watch once you have an announcement like this >> yeah. indeed on the heels of that moderna

news and again, david, covering it with jim in the 9:00 a.m., we're going to have days like this where we see progress and maybe down the road another day we where see caseloads spike in a state reopened and the market will have to juggle the bipolar diet of news, which is going to be, i think, the norm for the medium term. >> yeah. we don't -- exactly. i'm still with you there with the s&p, guys, up almost 3% moves in some stocks well above that, this is really quite a rally we have under way here, as you say, carl, in part perhaps responding to the prospects of a near term vaccine. moderna talking about. but to your point as well, we're going to keep watching the data and see how the reopening goes, whether there is a spike in cases that will need a response, that certainly would not be seen positively if it were to occur >> all right guys, we'll see you later on

sara, see you this afternoon welcome to "squawk alley." i'm carl quintanilla with jon fortt and morgan brennan coming to you live from various locations. the dow and the s&p have gone positive for the month of may, given this rally here. getting close to 2950 levels that have been tested before, actually twice in the last few weeks and we'll see if we can bust through this time bullish headlines, you have powell on 60, we mentioned moderna, detroit reopens not just big cap techs today, apple up 2%, but wells fargo up 5% and oil has a good picture as well, industrials, energy, cyclicals, a lot of things working together in concert in ways that are somewhat unique in recent weeks. >> yeah. you know what's really working, i noticed, expedia and booking holdings, travel names that for obvious reasons have been beaten down, both up more than 10% as is trip adviser. so that hope along wit