time so, markets will be a leading indicator of this. we'll have to see where things go >> thank you have a great memorial day weekend. we want to wish everyone a great memorial day weekend andrew and becky and that's it for us today you were right, andrew, another huge show like you always say. "squawk on the street" is next >> good friday morning welcome to "squawk on the street." i'm carl quintanilla with mike o you live from different places we have improved after dr. fauci made some positive comments on moderna's vaccine data oil did fall below 31. watch for thin trade today ahead of the long weekend as once again we're asking what will it take for the bulls to put a

three handle on the s&p. there is no such thing as a triple top >> yep that's in play the fact that basically no such thing generally as a market that kind of repeatedly tests that upside ceiling and doesn't punch through. i think you look below the surface and say what would cause this move to stop aside from the fact that we are all looking at what are acknowledged to be some resistance levels, the 200-day moving average, some exhaustion, technical levels out there the leadership stocks don't give much back. a lot of comeback in the most cyclicly attuned stocks at the center of this economic crisis it seems like sentiment is while you can see some speculative froth perhaps in the call numbers and some of the day trading data in general, it doesn't seem like people are overcommitted to equities. that leads you to the question what would stop the move not keep it going. there would be no injustice if

this market fell 5%, 10%, but it is not showing you the signs, aside from some wear and tear on the market breadth numbers that it will do that. valuations and the current macro data, the market is saying that's not relevant in the immediate moment >> yeah. absolutely then, david, we continue to monitor sort of the state of reopening with more incremental evidence that this is working at least somewhat satisfactorily as our own parent, universal, is targeting june for reopening universal orlando. >> yeah, which would be an mornt milestone. and also points to disney's potential opening as well. shanghai opened for them, but those parks such an important component of disney's overall earnings, and not unimportant for our parent company, less so certainly. and we're watching closely we're waiting and watching to see if infection rates or hospital rates in any of these

states are open after a number of weeks rise. so far things look to be fairly good other states are waiting to get the go-ahead so we can all fully participate in the economy once again at least to the extent people are willing to. that gets back to the overall question as to what things will look like even when we have a return to openness, and what segment of the population will choose not to participate because they feel like they're still too much at risk given the fact that we do not have a vaccine certainly or any early therapeutics that can be used to get rid of the effects of the virus should someone get it. >> cowen does some good consumer trackers, they ask people would you feel more confident going to venues that have officially reopen they ask them every two weeks. the latest numbers, incrementally the last three surveys have shown consumers are a little bit less confident in things like retail, concert

venues a slight uptick in whether or not they would feel comfortable sending kids back to school. that's going to remain a question mike, it gets back to this issue of states like georgia, things reopen, unemployment, jobless claims continue to tick higher, which raises the concern that maybe it's not the lockdown itself, it's the closure of the businesses structurally that will face a difficult sled as -- if you have employees and consumers in tight quarters, is the relief of the lockdown going to be the solution >> yeah. i think it's going to be a key question as we get to the point when the formal legal lockdowns are eased. and what's going to be satisfactory for the market. when you go from zero to something, the market can seize on that and say the direction of change is positive but where does it settle out there's information on the mobility data that it flattened out after a comeback of people getting out and about more

i look at a basket of entertainment and leisure stocks that is pej is the sector etf. it's restaurants, hotels, media with some movie theater type exposure it went from 45 down to 20, now back to 29 so it's regained 40% of what was lost in a month. that doesn't tell you that the market is immediately jumping to the point that says we're back to normal but how much is enough when these theme parks open, what is capacity what percentage of capacity will be satisfactory on a financial basis to keep the story moving forward that the economy is reawakening and is trending towards normal >> bob chapek, new ceo of disney during their conference call a couple weeks ago when disney reported earnings talked about 20%, 30% capacity, ramping up from there

and part will depend on demand i come back to tilman frititta and his rantestaurants, a numbeo others saying it's not about capacity, changing tables, spacing things out, but people not showing up that will continue to be one question another comes back to spending, many people if they were able to access the unemployment benefits and the additional benefits as a result of the c.a.r.e.s. act has been made largely whole. when you look at credit card spending, a lot of people will tell you it hasn't changed as much as they anticipated and there is contention that some of the money is going into the stock market believe it or not and that retail investors have been fairly active with certain names as a result of being flush. hard to imagine that will change

at the end of july when it appears unlikely this additional benefit, the full 600 bucks will be extended. but it's in place right now. >> for sure. if you think about maybe people consider that a reallocation of entertainment budgets. it was a subset of the data in terms of what people did with their stimulus checks that had to do with, you know, what bank transfer activity, where it went, and opening broke ranlrags you've seen daily average trades at online brokers go vertical. it coincided with all the industry players going to zero commissions. so it's not clean data that says at the moment of the shutdown, this is when it all started. but there's no doubt that level of retail activity has picked up the question is how you interpret that traditionally you would say, well, these are inexperienced players.

they'll run into a buzz saw. i know tobias levcowicz said if a new generation came in and are not scarred by previous losses, maybe that's a flow towards equities we didn't anticipate. you see it in individual stocks for sure >> you do. it's another unexpect ed result of the virus we'll see how long it lasts. when the casinos fully open up, perhaps people will choose that route instead of day trading or whatever they're doing with their accounts >> i saw some pictures of the hard rock seminole today where the poker tables have a wait of 100 people waiting to get and sit down to the plexiglass we've been talking about how the

election would creep in as a potenti potential risk to the market vice president joe biden was on "squawk" this morning. the headline is he would take corporate taxes back to 28, he talked about health care, amazon, cap gains and what he makes of the stock market bounce >> the vast majority of american people are suffering now they don't measure their public health, their physical security and their economic stability based on the market. >> all right so, i guess this is where it sort of begins it's really his first high profile appearance on our network. we'll start to have to fold that into risk premium. >> yeah. of course he did answer or at least was asked the questions involving corporate tax rate we heard his comments as well if people were watching on amazon and if he believes the company needs to pay taxes versus the profits it makes amazon has had an

extraordinarily low tax rate they are aggressive in seeking out opportunities to lower their tax bill wherever possible carl, it's going -- it's the beginning as you say of sort of some focus at least on the potential changes that a biden administration would bring in, what the impact would be on corporate america, and 28% is not where we were, there are those who still question whether or not the enormous tax cut that was passed and the addition to the deficit that came along with it was worth it. did it generate enough jobs? now so many jobs have gone did it jeb rate enougenerate en the time that's a question and one that will be discussed at lent in this shortened campaign season that we seem to find ourselves in now >> right we'll see if it's a virtual campaign on both sides as well then you fold in china, guys, these concerns that the national

peoples congress is going to result in some kind of security legislation. some call it a power grab on the part of china over the hong kong legislature. for more on that we get to eunice yoon in beijing hi, eunice >> hi, carl. it's exactly that. a hong kong activist has been accusing beijing of attempting to silence the city with a new national security legislation. he's calling for protests across the city now, this is all because china's leaders today had tabled a proposal of new legislation at the national peoples congress here in beijing that essentially from china's perspective is meant to protect what chinese officials have been describing as a defenseless city. the new legislation would tackle secession, subversion, terrorism, foreign interference, it would set up beijing-backed intelligence agencies in the city and improve the one country

two systems style of governance which up until now has allowed hong kong to more or less run its own affairs since hong kong was handed over from the uk back to china the secretary of state, mike pompeo, issued a statement condemning what he believes is unilateral action on the part of china, that is disastrous, he said, and would be the death nail of hong kong's autonomy some have described this as a turning point or an end of hong kong as we know it their fear is that this new package of legislation, which is likely to go through in a week at the end of the national peoples congress, that this would mean that the rule of law here will be totally undermined and that hong kong's position as a global financial center would also be breached

so, there's a lot of concern about this clearly it was playing out in the stock markets today. the hong kong markets dropped by 5% what i thought was interesting is that real estate stocks dropped by 10% because of the fears that people as well as money are going to leave the city guys >> that would have huge implications around the world. thanks for that. we'll talk to you later on a lot of earnings to get to. we'll talk about nvidia, alibaba, we'll tell you what fauci said about moderna and more futures are steady we're back in a moment

i am totally blind. and non-24 can throw my days and nights out of sync, keeping me from the things i love to do. talk to your doctor, and call 844-214-2424. find a stock basedtech. on your interests or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.

there are times when our need to connect really matters. to keep customers and employees in the know. to keep business moving. comcast business is prepared for times like these. powered by the nation's largest gig-speed network. to help give you the speed, reliability, and security you need. tools to manage your business from any device, anywhere. and a team of experts - here for you 24/7.

we've always believed in the power of working together. that's why, when every connection counts... you can count on us. welcome back to "squawk on the street." a lot of focus on moderna and its potential vaccine, still in early phase trials for treating covid-19 let's get to meg tirrell who has more for us on the story including anthony fauci weighing in >> that's right. people were waiting to hear from dr. fauci on the moderna data because his agency at the nih is the government partner on that vaccine, and also because he's been the main communicator of the data he was the person to report the first data on remdesivir this morning he went into details about whathe's seeing on the moderna data on npr here's what he said. >> having looked at the data

myself, it is quite promising in the sense of that in the phase one study, the first step towards the development of a vaccine through its multiple phases, the vaccine induced what we call neutralizing antibodies as opposed to just binding antibodies neutralizing antibodies are antibodies that actually can block the virus. they did it at a relatively high tight titer, even better than we thought and at a moderate dose of the vaccine that's why we thought it would be good news >> guys, he did say he would submit that or that data would be submitted to a peer review journal soon the world should get to see them in more data and now thoughts are turning to how these vaccines will be tested to prove efficacy in big trials one concept has been floated which is controversial it's known as human challenge

trials, where people are exposed to the live virus in order to test a vaccine's efficacy. some of the pros they say this could speed up vaccine development by months and that it does enable testing even if the outbreaks subside by the time the vaccines are ready to be tested it would be done in young, healthy, low-risk volunteers but on the con side, this is something dr. fauci pointed out, there is still the risk of severe disease or death from this even though they are young, healthy folks volunteers there is no great rescue therapy, despite remdesivir, and it may not prove efficacy in the most vulnerable groups like the elderly. still more than 24,000 volunteers have signed up to potentially participate in these trials from more than 100 countries. this is not an unprecedented idea they've done this with flu studies. the place where people were isolated, they referred to it as

hotel influenza. we'll have to see how this shakes out back over to you >> wow i was not aware of that, that many people willing to volunteer. we talk about a vaccine, there are so many efforts under way to find these antivirals that could be taken early in infection, if not even prophylactically. those may be available sooner, perhaps. i'm talking to a couple of companies, i know you are keeping close track of this. regeneron's efforts and many others where does that stand versus a vaccine in your mind >> so, the antibody approach that regeneron and other companies are working on is moving along quickly regenron plans to be in human clinical trials in june. you're right, that could be a double barrelled approach to treating the disease and potentially preventing it. this could move fairly quickly we'll have to watch those trials as they start to enroll and

progress that is moving faster than a vaccine for sure in terms of the antiviral approach, which would be more like a pill that you could take, that seems like it is taking longer companies are scouring drug l u libraries to find good compounds, but that will likely be a longer term approach. >> a lot of different things to keep track of. we appreciate you doing it for us thank you. >> thank you >> carl, over to you >> all right we'll take a quick break here. a lot of names to get to hope to check in with jim at some point in the hour to talk about nvidia's print last night. big implications for gaming and data centers stick around 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. i am totally blind.

and non-24 can make me show up too early... or too late. or make me feel like i'm not really "there." talk to your doctor, and call 844-234-2424. memorial day weekend is just ahead. a lot of discussion about who will be driving, gas prices. crude has given back some of its gains for the week currently down about 3%. we're back in a minute at mercedes-benz, nothing less than world-class

service will do. that's why we're expanding your range of choices. many dealers now offer optional pick-up & delivery and at-home maintenance, as well as online shopping with home delivery and special finance arrangements. so, whether you visit your local dealer or prefer the comfort of home you can count on the very highest level of service. get 0% apr financing up to 36 months on most models, and 90-day first-payment deferral on any model.

welcome back as you see, we're going to do a mad dash why? because it is seemingly an impossibility for jim cramer to take even one day off, even one vacation day before a long

weekend is something he simply can't find it in himself to do so, let's talk some nvidia a stock you loved for a long time and have been quite rewarded for it as well. reported earnings after the bell >> remarkable. david, it was remarkable i searched for sports analogies, it's not michael jordan because he retired maybe ted williams during that year he hit 400. usain bolt this thing had everything. the main thing you need to know is the new gpu is basically the most exciting thing for writers, and they're going to use their core base gpus to engine the internet it's behind -- all the inference you hear -- anything that is recommended to you, anything like -- you go to amazon, you buy something, and then something else is prompted, that's it. if you find a movie that you

like, another movie is prompted. that's them. these guys have got it at one point he was talking about curing covid, because it's the chip that the scientists want trying to figure out how to be able to keep talking -- i talk about this idea of artificial intelligence boom that's what it is. it's not of this world, david. it's not of this world it's not the 386 to the 486, it's something bigger and i'm trying to grasp it >> understood. it goes far beyond the data center, as you say, the ai for things like covid, but gaming, again something that has boomed for a long time, and only been enhanced by this current stay-at-home period, their ability to provide these graphics unlike anything they've seen is also fueling the business >> exactly so when you look at a video game, you can't tell the

difference between a video game character and a movie character, but he doesn't want to stop there. he wants to make it so you can't tell the difference between a video game character and yourself you can suggest i want a beachscape, but i want it to be like man "a. throw in a little french impression, and it creates the picture you want, you talk to it it's not of this world jensen is of this world. he's a regular person, but we're not able to come prehelpedcomprm things that he talks about somebody asked about op x, and he apologized, because it's awkward to talk about the mundane things that analysts want to talk about when jensen is on a jag like he was until

last night at 7:00 eastern >> what about the stock itself 38% revenue growth, some say that is reflected in the stock price which has been nothing short of a rocket ship for some time since that period in '18 where they had some troubles seems like not as long ago but is it currently valued at a level that you still feel is cheap? >> yeah. i remember when intel went from 386 to 486 the stock would go up every day. and we were like what is going on he talks that the only other change was the intel 86 micro processor, and the processor built with the 86 component. he's beyond that now he's saying this new architecture has a trillion dollar total addressable market, trillion

you know, this oxford project that competing against moderna, that's powered by nvidia it is. the reason why everyone is so excited about it, it can make so many computations. nvidia makes the computations. i want everyone to read this you'll know why i forgot the beach and don't give a darn about it because of nvidia >> definitely one of the highlights of the week, jim. we've been waiting for it. what a print last night. there's the opening bell while we have you, can we just take a little more of your day off and ask you whether or not you think stocks are tired having tried three times to get past 2980? >> no. they're not tired. there are a lot of algorithms set to fauci and moderna

it's crazy any time you get anything positive, it still does matter i know that the biden comments are viewed as, well, okay we see what rich people are kind of going to get hit the people who are -- that's not enthusiastic, but not ill-advised. i think david said something that's important so many people play at home it looks like they're playing like grand theft auto but also playing call of duty but also call of nvidia i just heard fauci say buy moderna. that's like saying blue horseshoe. it's gotten to that point. a lot of people at home want to play i think things are okay. i just do think they're going to -- i think things are okay. i think when we got that unemployment number yesterday and things did not collapse, you

saw again that the stock market has nothing to do with the economy. it doesn't you can't have 40 million people unemployed and have this thing we're watching have any rationality other than the fact that the companies that we're trading are not american companies that are related to whether you will go to the movies or go out to eat. they're not related to small business nothing to do with small business at all. david, i've been thinking so much about what you said yesterday about what point does the unemployment bleed into this stock market the answer is that unemployed people work at companies and you never know if they lived or died but they're not involved in the stocks we trade. >> they may not be, but eventually their spending creeps into things. one would think. if you're a client of microsoft and -- or a client of these

companies that are doing particularly well, you would still think those companies that rely on consumer spending might ultimately be impacted if that spending does start to finally decline as a reflection of a continued extraordinarily high unemployment rate. >> the banks that's who you should watch. that's the intersection. that's the credit card that's when the stimulus ends, people can't pay that's the forbearance that's how many months can you go without paying rent the battleground for this stock market, it's not nvidia. it's wells fargo because that's the most people and most small businesses who are in jeopardy -- i watch american express those are two stocks that might have to reflect the real economy now that even the cruise ships don't. now that travel and leisure people are talking about flying. those two stocks are measures of

credit what you're talking about is if the public runs out of credit, if that happens, we'll have a rude awakening then you get into a druckenmiller world. we're not there though everything is being kept aloft by the treasury, by the fed, by unemployment benefits, by congress and another $3 trillio stimulus you're keeping aloft the credit card owner, because the credit card person laid off doesn't want to pay that bill and you're keeping aloft all thereits tha we know are in jeopardy. that's what has to happen, jp morgan, wells fargo, citi, put them on your screen, they'll pell you about what is going to happen more than anything else >> financials now down a third of a percent we'll see you next week. >> thank you, guys thank you, michael thank you, david thank you, carl.

thank you jensen >> we'll see you later >> mike, i want to piggyback on jim's point about banks. it seems like every fed official to a name has taken negative rates off the table. boe's comments notwithstanding as david points out, credit card spending held in there we kind of know why. now we have mcconnell and mnuchin suggesting that we will need another fifth stimulus bill should they be doing better, the banks? >> yes, negative rates are taken off the table as much as the fed officials are able to do it, but it's zero for the foreseeable. sozero indefinitely is not good for the banks. then you see the bond market trades, ten-year treasury yields backing down again to the 6 area it seems the general environment here we basically have given everybody permission to skip payments it's a public service at this

point. so somewhere there's a loss accumulating in this economy you snoknow, the banks or credi card companies are on the hook for it i kept saying if people thought this would be an off to the races recovery and really quick, those stocks would be rallying more than they are they're far under water. i don't know if they should be higher i could see a case where general rotation into value, ant anti-momentum stocks, if that were to get rolling, that would carry the banks with it. the banks are the instrument of this whole support policy that we have out there. it's not clear that that's necessarily a boon right now capital markets have been screaming. really hot on the issuance side, the trading side that should cause relative performance among the new york-time banks. jpmorgan, it's back to where it traded three years ago

citi is back to where it traded nine years ago it's not really gaining a lot of traction in terms of people thinking that it's a quick hit for that industry at least >> another thing is the constant murmur ringin murmur ring murmurings, the negative interest rates, that would not be good for the banks. >> no. even the chatter of, well, should they slow down and stop the dividends, that's the market's way of saying if the two-year treasury note is at 0.15, there's not a lot of room between 0.15 and zero for all the stuff between two years and overnight. i think that's kind of a simplistic way of looking at it. the way you would project out

the probabilities would get you dipping into negative because who knows what will happen in the world. if the ten-year goes down to 0.2 in some disaster scenario, well, is that going to imply that the fed will be forced towards negative i don't know if that's true. i think it's more a byproducto the overall rate structure as opposed to an affirmative prediction by people in the market that we're going negative >> yeah. >> speaking of banks, david, one former banking executive has a pretty specific view on twitter this morning blankfein tweets hospitals are not overwhelmed. most of us will be exposed any way since we can't sequester until there's a vaccine and we know which groups neprotection there's an increasingly large school of thought that is tracking exactly with what lloyd is saying. >> yeah. ricky sandler, the hedge fund

manager joined us yesterday with his point of view that is somewhat similar to what you're hearing from mr. blankfein, perhaps going further, calling for herd immunity, urging young people to go to concerts i didn't come back to him on this, but almost saying that certain governors in states are trying to stay closed to hurt trump's reelection chances but to your point, carl, this is -- this is a larger and larger cohort of people who say, hey, we can't keep doing this for very much longer we have got to hoopen up. those at risk will have to not be a part of this economy. but once again, that's not an unimportant or -- or that's not an insignificant amount of people they also have enormous spending power. you pointed that out, carl >> yep >> one wonders when they make

these calls how many people will show up even when we do fully open up. >> agreed. and you know what? this weekend will be a good sort of case study. at least on aviation got some numbers out of tsa posted pass-throughs for yesterday's traffic, 318,000 it's down 88% year-on-year, but it's up 88,000 from the day before memorial day, long weekend will be an excuse to fly. we'll see how robust appetite is to get on an airplane. there's a whole debate about help hepafilters, how many times air is exchanged on a plane. we're watching social psychology in realtime and it's playing out in economic activity >> for sure. the market seized on all those things we're down 95%

now down 80% when you look at restaurant reservations, it's the same story. i wonder how long that will be effective to support this story that the reopening will happen perhaps sooner and more smoothly than we previously thought it is a real world experiment. what the equilibrium that we reach before a vaccine, i think, is what we don't know. the market is willing to bet it will progress in a direction of more activity rather than less it will be weeks or months before anything adverse happens that undermines that idea that we'll be doing more. that's the bet that is cautiously being placed across parts of the market. >> nvidia with jim earlier was a key stock. another that reported earnings is alibaba they had the conference call as well the numbers looked good, but the stock is down.

that may be in part of what eunice was talking about earlier in the show in hong kong alibaba also listed there. of course the continued concerns about the rising tensions between china and the u.s. as for the numbers, total revenue up 22.3% year over year. that was above consensus total ebita, no depreciation in there, 16% above the consensus numbers. they had better revenue, higher commerce, ebita margins as well. and their guidance implied at least a 30% year over year growth rate. that was higher than many of the analysts who follow alibaba had anticipated. but that's not adding up to a higher stock price as you see this morning they did comment on that latest bill that we were discussing yesterday that would conceivably de-list some chinese companies if they had foreign ownership or if they did not prove otherwise.

alibaba says it is closely monitoring the development of this bill. they think it's important for investors to understand practice and issues raised under this proposed legislation they go on to say their financial statements are prepared in accord against can u.s. gaap, they have been an s.e.c. filer since 2014. they hold themselves in the highest standards of transparency, but that doesn't mean there's not a lot of focus and concern about those continued tensions and what it would mean if you saw a bill like this passed >> our thoughts are definitely with the people of hong kong you and i know several -- it's been a tough year already. we hope it doesn't get any worse. we'll watch the markets here on this final day in which the nyse is trading remotely or virtually. let's get to bob pisani. >> looking forward to that on tuesday, carl. we're pressing 3,000 and just having trouble with that that's right where the 200-day moving average is for the s&p 500. having a lot of trouble with

that i'm optimistic about the broadening of the market that trend continued this week looking at the sector leaders. bank stocks up today the russell is outperforming on a relative basis industrials, retail. these are part of that broadening of the market story energy is underperforming, oil is down. there is that fxi, the china etf. a lot of these china etfs down 3%, 4%, 5% you heard eunice yoon talking about serious things going on in hong kong. hang seng was down 5.5%. that was the worst day in five years. you can see some of these real estate stocks trading over in hong kong, these are all big real estate companies. they're all down obviously a lot of concerns about potential for capital flight keep an eye on chinese banks the fxi is about one-third china banks. a lot of potential implications. a lot of new national security laws being proposed and maybe china abandoning that growth target is an issue

people are asking how come the markets aren't down? we have been talking about the four things moving the market. the reopening going smoothly, monetary fiscal stimulus, treatment and vaccines and trade tensions with china. the reopening, the fiscal stimulus and the treatment are the top issues fauci was talking about being more competent on the vaccine. the big story is the broadening. the stuff left behind is pulling ahead. transports, the russell 2000 the equal weight s&p 500 outperforming the s&p 500. if you look at the individual sectors, banks up almost 10% industrials, energy, retail outperforming there. of course health care underperforming. that was a market leader this is rotation and broadening of the market. finally want to note, ipo market still going on we had a successful ipo

yesterday. inari, a medical devicemaker for removing blood clots, they upsized this twice this will open quite well this morning. there's other stuff sitting out there. we're still waiting, waiting for a while for albertson's, they're sitting out there. anticipate that happening. warner music group, zoom info technologies vroom. the ipo market will be potentially opening up very, very soon. back to you. >> yeah. good to see select quote yesterday. see you in a bit, bob pisani early close for bonds today. let's get to rick santelli >> hi, carl. yes. the treasury market continues to focus on a lot of issues obviously issuance but also the level of the equity markets and the growing chorus, you heard mr. blankfein today gives a whole new meaning to heard on the street if we look at a one week of note yields, unchanged on the week. the further down the curve you go, you see a rise

30-year bonds right now on that one-week chart, up four basis points on the week it's not a lot and they've been relatively contained do remember the central bank is buying a whole lot less with regard to quantitative easing than several weeks ago that is a big deal hyg, this etf reflects the high yield investment camp. look at this chart up close to 3% this week on the dollar side, the dollar index is up a bit today. it's sort of held at 99 area, as you look at a one-week chart, we are down three quarters of a cent because it closed so strong last week. these over1 100 closes are rare and there's talk about china, supply chains, what's going on with hong kong, with australia the name calling look at the dollar versus the yuan the right now the dollar popped to the best levels in 7 1/2 months carl, back to you. >> thank you very much take a quick break here. watch for thin trade as we get

ready for this three-day weekend. we're back in just a moment. at leaf blowers. you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading commission free today.

dti pulling back on track for the fourth straight week of gains. brian sullivan joins us to talk about the energy brand scape a heck of a month. is this more supply or demand? >> i think you hit it. i think it's a combination, and you referenced something earlier which maybe tells the story. you talked about the tsa data

showing 333,000 going through the check point. way down, but it's coming back, i think, faster than many of the market expected. same way with driving data we look at the high frequency indicators, the tsa precheck stuff, all the driving data from tom tom. what we're seeing is people are on the roads more. they're flying a little more again, a long way to go, but jet fuel is about 35% of what we use refined products on. driving has come back to almost normal levels in major metropolitan areas around houston and atlanta major comebacks there as well. i think we have two sides to the story. demand is coming back quicker maybe than the market expected and supply is coming down, perhaps, a little quicker than the market expected. the u.s. probably off about 1.5 to 2 million barrels a day in terms of supply right now. we literally flipped the script in 30 days but let's be here $30 oil is not good news for

anybody, but it's better than negative $30 oil, i would assume >> yeah. brian, i was just going to jump in and say clearly 30 was around the low for the range. right? in early 2016. i wonder beyond supply and demand, the other factor is just the positioning issues and the blowup in the futures market in the last expiration had to clean out anybody who just was a nonphysical or nonprofessional uninterested owner on the long side i wonder how that's swinging things around. whether it's causing overshoots. >> well, okay. did you see the dto this week, mike i missed it by a day shame on me. the dto was a double inverse short sale etn, exchange traded note put on by deutsche bank the dto imploded

it went away it had an acceleration, that's the technical term for basically it's over. it just stopped trading i think on tuesday or wednesday. if you owned it, you got wiped out. the dto is gone. we've talked a lot about market structure and some of the instruments. and that's kind of what we've been seeing. is that uso, that other etf that got all the attention, it used to hold 100% of that front month contract they spread it out, i think that has helped calm the markets but for those guys in the dto, you literally woke up one day and whatever you had in it was gone. it went to zero and you got no notice >> brian, that's good insight. maybe we'll talk later about what biden said about keystone "squawk on the street" continues in a moment. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions.

fidelity. confident financial plans, calming financial plans, complete financial plans. they're all possible with a cfp® professional. find yours at letsmakeaplan.org.

coming up later, the ceo of expedia. lots to talk about with travel in the meantime, study cautious trade on this friday before a long weekend you got the dow basically unchanged. the vix right at 30. back in just a moment.

>> i think amazon should start paying their taxes i don't think any company should be in a position to not pay taxes and make billions of

dollars. i think companies should be in a position where they start paying their employees a decent wage and protect their employees. >> the former vice president on squawk earlier this morning talking about amazon there's been some discussion today about whether or not amazon would be more in the cross hairs in a biden or trump administration >> amazon has been a focus of the trump administration as well given jeff bezos, the founder of amazon not a favorite of the president. it appears on either side of the aisle, they're going to take their share of criticism at amazon it's not as though they're breaking any laws. it's simply always very aggressive in seeking out the best deals it can including the one that i certainly argue would have been a great one for new york city that didn't happen it would have involved tax breaks there as well, mike, but

overall, the revenue contributed by amazon and the jobs would have been something that new york's floundering economy would probably have welcomed >> exactly even just in the regular financials, it makes full use of the tax code basically accumulated losses and heavy capital spending and all the rest the effort really not to show tremendous bottom line profits that's the source of the near zero tax bill as opposed to some other activity >> mike, thank you for keeping us company i'll see you later mike is joining us as cramer has been out welcome to "squawk on the street" with david faber and sara eisen coming to you live from various locations before the memorial day weekend stocks are mixed for the final day of trade on pace for the best five-day effort since the beginning of april. let's bring in jim stewart to

talk about the market action as well as the sort of retail investor activity which has been i guess some would argue surprisingly robust. why do you think that is >> well, you know, we -- i've seen this many, many times over the years. that the retail investors, no matter how many times you talk about it, they sell low and they buy high it's the full -- that's not entirely fair. they do sell low they don't necessarily buy at tops but they do buy well off the bottoms. by the way, it's not just retail investors. the same thing at m&a. they're always going for acquisition when the market is robust there's something psychologically that people need a feeling of greater comfort i was thinking earlier today there are some people, and i have a list of names who got so angry with me when i said you know, i think it's a good time to buy in march.

i said it on this show and they were just furious saying that's reckless we're going off the cliff. i said look, i don't know what we're doing. i'm just saying we're so far below where we were. it's got to be a perfect time to buy. i would love to call them up and see what they're saying. i'm not going to do it i don't want to gloat. that's not the point, but i wonder what people are thinking now or whether they are thinking we see the pattern over and over >> when people look at the disparity of the move referred to as robin hood traders or investors versus the giants with negative views, you think the billionaires are right >> well, you know, i don't try to make predictions, really. i just look at where things are and where they've been, and we

went way low the market highs in march, and that's always in my experience, if you're a long-term investor, that's always a great time to buy. not in the next week or month, but eventually it's a great time to buy, and the same thing is true as i was saying a year ago, it was time for people to look at their portfolios and think about rebalancing. the market was up maybe five or more percent that's another threshold i think when it's time to make sure your stocks haven't gotten out of line if you've done that now, you ought to be in a very good place. you ought to be right about where your asset allocation ought to be, and you ought to be prepared up or down. but i feel now you know, it's a buying opportunity it was in march. that i can say almost with certainty. there's still a lot of unknowns about the pace of recovery, the speed with which we get a vaccine. and while the news has been good this week, which i think is why

the market has gone up a lot, that idea, as i say, i don't call it easy money, but a lot of the big gains have probably now been made in the market. >> your thoughts on the increasing tensions between our country and china. some of it may simply be a result of the election campaign, trying to shift blame, perhaps, but it is having a real impact or certainly could, it would seem on both country's economies, not to mention the markets. >> i agree i've been concerned about the trade wars for quite some time i just feel right now -- i find it frustrating every other country in the world, we face a common enemy. it's a biological phenomenon, with this virus. typically when everybody has a

common enemy, that's a perfect time to bury petty differences, at least for the time being, and join forces to vank wish that enemy. and this seems to me as a golden opportunity for both the leaders of the united states and china to say look, there's something bigger out here that we need to deal with before we worry about some of these issues that are on the table. so let's make some compromises and find common ground we can go forward and put it aside for you. let's beat the virus and see what we can do working together and then let's come back and deal with these things, and i just can't believe that wouldn't be a great message for both sides. we seem to be going in the opposite direction, and now we have china taking advantage of the fact that it's things with the u.s. -- they feel are about as bad as it can get so they're making moves on hong kong they're rumbling elsewhere they're saying we might as well

do everything we want to do that the u.s. dislikes because it's already bad. it would be great if there was incentive for the countries to work together, but i feel i'm kind of wasting my breath. >> yeah. what about the leadership of this country i don't know if you saw vice president biden's interview on cnbc just a reminder here that we're a few months out from an election are you getting a clear picture about reopening the economy under a trump versus biden, what that would look like and what it would mean ultimately for the markets and for getting back to work >> well, it seems to me that looking at it broadly, the reopening has now been politicized and we have the trump/republican side throwing it open no matter what happens and the biden democratic side

saying be cautious and that has taken on this sort of ideological kill which is the republicans care more about profits for companies than they do about human lives and the democrats have the thing, well, we care more about a few lives than we care about the -- an we care about the livelihood of the vast majority of this country. it reinforces the preexisting ideas that the democratic party doesn't care about economic prosperity and republicans don't care about the well being of citizens, especially minorities and less affluent. i think it's too bad this is not really -- i think -- i don't really think this should be politicized this is a virus. i think there was a good comment at times next week pointing that out. again, it should be a common enemy. and i think the approach to the

opening should be data driven which is what thankfully i think a lot of mayors and governors are saying they're looking at the numbers, and it's going to take an area by area, region by region approach to decide what measures need to stay in place and what can be done. but i think to politicize this, i hope it doesn't work with voters, because i really don't think it should be a political issue. >> yeah. speaking of reopening -- >> jim, stay there i want to get to news regarding gm and the efforts to ramp up production running into supply chain issues perhaps phil has more for us phil >> look at shares of general motors general motors will be slowing down the plans to ramp up production in north america primarily for pickup trucks and what's happened here is there are part shortages with suppliers in mexico. by the way, this is not only going to impact gm it's likely going to impact the entire industry. that is causing gm to slow down

plans to go up to full production within four weeks essentially what's going to happen, instead of adding a second shift or a third shift at certain plants next week, it might get pushed out to the week after. again, general motors slowing down plans to ramp up production but let's be clear they're not shutting down production they're just not going to be able to ramp up as quickly as they originally planned. >> phil, thank you for that. and for backing up some of the earlier reporting that had been made around this jim, quickly, your thoughts on i guess material scarcity which is something that we've never had to deal with as a country. but now a lot of these chains are either bent or in some cases broken at least in the short-term what do you think that means for consumers, for inflation >> yeah. well, it's interesting that in discussing this whole crisis, it started out with supply chain worries and shifted on the demand side and now we're seeing

the supply chain disruption. they're popping up we're going to see that from time to time over the next few months i don't have any doubt about that, but i think it's going to be a short-term phenomenon short-term at least until these production is back as a result of the virus being under control. i think it was interesting we're seeing some of it in the real estate market this week which i thought was really interesting in that sellers have basically taken properties off the arket didn't want to sell in this environment. in an interesting way, that's a supply problem and we're seeing very firm housing prices so i think yes, it is going to keep prices up we're not going to see the huge discounting we saw in the 2009 going on, because there are going to be these constraints just when demand is going to be picking up again and that is inevitably going to

have to work its way through the system there are going to be disruptions, and some pricing activity related to this, but it will be a relatively short-term phenomenon >> let's hope so given -- i mean, try to get a new car with the model and make you want right now is not the easiest thing. if you have the money. jim, we'll see you soon. have a great long weekend. >> you too great to chat with you after the break, expedia ceo peter kern in an exclusive don't go anywhere. markets down 'rba itwown about .4%. wee ckn o minutes. these days, it's anything but business as usual.

that's why working together is more important than ever. at&t is committed to keeping you connected. so you can keep your patients cared for. your customers served. your students inspired. and your employees closer than ever. our network is resilient. our people are strong. our job is to keep your business connected . it's what we've always done. it's what we'll always do.

across america, business owners are figuring things out. finding new ways to serve customers... connect employees... and work with partners. comcast business is right there with you. with a network that helps give you speed, reliability and security. and enough bandwidth to handle all your connected devices. voice solutions like remote call forwarding

and readable voicemail. and safe, convenient installation. when every connection counts, you can count on us. get the connectivity your business needs. call today. comcast business. expedia shares down about 2% let's get to seema with the ceo of expedia >> that's right. peter kern in his first broadcast exclusive since becoming chief executive thank you for joining us today >> my pleasure good to be with you. >> the market fixated on your comments that cancellations are stabilizing, green chutes are emerging can you point us to the metrics you're looking at that suggests that travel is rebounding? >> we have good signal across the globe on what's happening and because we participate in virtually every part of the travel market, we can see it very quickly

what we've seen is that as governments, local or federal,ette, across the world, have opened up countries or said they're going to open up countries, we initially see a surge in search activity as people start to think about the opportunity they will be able to travel, and then typically following that, as people get closer or a country or a place opens up, we'll see them start to book and we see the booking trends continue. the cancellation part was a different problem where you had a ton of consolidated cancellation in a short period over the end of march and through april as all the countries of the world slowly closed down, and we were dealing with all those people who couldn't travel during those weeks or knew they wouldn't be able to travel in the coming weeks. that was a compressed period since then we've had a stabilization happen as you know, people are keeping their travel booked for later in the year they're less worried about it now because they think they'll

be able to travel. things have settled down on the cancellation side and we're seeing positive trends on the booking side >> encouraging sides meanwhile, every company in the travel space as gone to the debt market to address liquidity concerns what's unique to expedia is you took on two private equity investors. they both have board seats i'm curious what conversations have been like with the firms and what changes they're pushing for internally >> first, they've been very constructive partners. we were looking at virtually every form of additional capital to bolster our balance sheet, and the best solution we could find the government plans, some of them have gone into place. some of them have taken longer we didn't feel it was worth waiting around the markets weren't robust for

us we did what we thought gave us the best cost effective solution and the amount of capital we needed to have ample to get through the crisis those private equity friends of ours who are a piece of that, we're happy to have them along i'm sure they'll support what we're trying to do i think they invested because they support what we're trying to do with the company, not because of a different plan. we expect them to help however they can >> it's the biggest deal since the pandemic emerged which is another separate topic i'm curious if more m&a is in the cards. it's been a strategy expedia has used acquiring big brands. is it a strategy you'll continue to use especially given your background in private equity >> i think we used acquisitions as a very effective tool for a number of years, but i think as we sit today, and if you listen to our call, we're highly focussed on simplifying the company. how the company operates

the technical platforms on which it operates. how we address having multiple brands and how we optimize for all the brands and so i think we certainly will continue to have our eyes open to things. but we will have a much more disciplined view that things have to fit into that operating model as opposed to just interesting travel businesses that exist out there in the world. i think we've used it well in a few cases we may have overused it. we're going to be a lot more disciplined about what fits the mold that we want to go forward with, and hopefully we're not going to get over our skis here. we raised a lot of capital as a defensive measure, but we do think presuming the economy continues to come back, and travel continues to come back, that we will have excess capital and will almost certainly be capable to look at those things. >> as for cost of revenues, they

grew 28% you did have a higher provision for bad debts. i'm curious if you have any ability to see forward and have the expectations in terms of whether that's going to get better, people's ability to pay is going to improve or whether it's going to be a continued concern given the uncertainties in the economy >> yeah. david, i think what we saw in the bad debt side was a function of the crisis, and you have to remember that a large part of our business is a b 2 b business we have business customers for whom we power their hotel travel or various parts of offline travel agents, all kinds of things we just took a view that it was very hard to predict what position a lot of these businesses would be in and there would be a lot of noise and the whole cancellation process and chargebacks and all kinds of things happening in the consumer side. i don't think it's a trend i think it was our position of being careful right now. because a lot of things were

hard to predict, but look, there will be fallout from what's happened obviously there will be travel companies that don't make it there will be supply partners that don't make it there may be some vacation rental companies or individuals who don't make it through the other side, and that's part of the human crisis that's going on you know, from this pandemic, and from the economic problems the world is having, but we think that as long as things are stabilizing and improving, that is not a long-term ongoing problem. there may be some dislocation from it, modest, and some noise as we get through this period. but i think it's -- there's no reason to assume that's something that should remain consistent >> the last couple weeks we've seen large travel companies start to formalize their efforts to convince consumers it's safe. cleanliness programs, what kind of grade would you put on at

least the industries in trying to reassure consumers to come back >> i think the industry has been moving very quickly. these are complicated issues it's a combination of what's the right science, what's the right message? what gets people comfort, and of course, we also have the issues of not everybody agrees, not consumers don't all agree on what they want in terms of safety, but i think the industry has done a terrific job. we're building products and ways to help highlight the safety measures that different suppliers, hotels, airlines, et cetera are going to take i think we're all going to have to be very transparent about that to give people the level of comfort they're looking for, and it's important to keep in mind, not all consumers are created equal here some whether they're younger or just less risk averse, they will be willing to travel regardless. we're already seeing lots of travel it's not anything like last

year, but significant travel and of course we all know lots of people who are staying home and not going to a restaurant, not going outside, not going to grocery stores so i think the industry is doing the right thing to try to make people as comfortable as they can be, and lots of protocols in place and processes. it will be something we all have to get used to hopefully it will be something that doesn't last terribly long, but it's -- i think in broad strokes whether it's airlines or hotels or even vacation rentals, we are setting up really good protocols to protect people, and make them safe, and then as they go out in the world, they'll have to help keep themselves safe >> peter, it's sara. the last earnings call before you were ceo was a colorful one where your chairman called the company bloated. he criticized the culture saying it was all life and no work.

he compared it to amazon i'm wondering how big of a job you have this in turning around the corporate culture and how much of the problems were due to not just the drop off in travel as a result of the pandemic but internal problems as ell >> to be clear, i think we have a terrific work force and great employees and they have done incredible work, particularly during the crisis to help consumers and suppliers and i really can't commend them enough that being said, what our chairman alluded to on our last call and called out, you know, it have his way of expressing the fact that we have become a very large company, very complicated, many lines of business did things multiple times in different ways we had structural impediments to being a fighting machine, and so we even before the crisis took action on that

we started at the end of last year we restructured a large chunk of our technology base into a big platform which has been amazing work in a few months a week ago we restructured our retail organization to consolidate brands under two leaders. consolidate technology under a another leader we have taken away, and that's what i've been working on mostly is internally focussed on simplifying the company and making our people much more able to work efficiently, to put our best minds on our biggest problems and impact as much of the business as possible so our chairman always is good for a quote. and we love him, but i think the company is full of great people, and we are going to drive through this, but we had to help our people get there that's what we're working on >> in the meantime, prior to covid-19, peter, the burning question for travel is how do you beat google at its own game.

you came in as ceo you don't have a background in travel you're from private equity and media. what's your fresh take how are you going to beat google, especially when it makes it hard for a company like yours to drive organic traffic >> first, i think google is a problem. it's a problem for everyone who sells something online and we all have to struggle with that we can all debate the fairness of the auctions, et cetera, but i think in our case, we have a ton of opportunity for a number of the reasons in terms of our complexity we haven't been as good on some of the basic blocking and tackling things that allow you to rely less on google and so we've used google and performance marketing as our primary lever of whether we could grow at a certain rate or not, but we haven't been great at merchandising or great in understanding the customer we never had data across all our brands to understand if a

customer had been in another brand and moved to a different one. we often competed in performance marketing auctions our own brands against themselves so we have a lot of our own work to do, and to my eye, that means we have a lot of up side that is wholly not reliant on google or performance marketing. and, therefore, we will be able to, we believe, be less reliant on performance marketing long-term, definitely focus on more profitable growth even when it's coming from performance marketing. and simple things like retaining customers longer, making their lifetime value greater because we have stickier products, and they want to come to us all the time directly. those impact our ability to get return out of performance marketing. so all of those basic internal building blocks which we are in some cases good at but not great at and in some cases deficient at, we're working on all of that, and we're going to drive that through our business. it's not about whether one needs

performance marketing or whether one needs google it's how effectively are you using them are you being efficient and appropriate about how you spend money against that can you spend the money better ways and part of the ways are internally fixing our operations so that we are really good at the things that keep chers coming back. and that's what we mean to do right now. >> maybe more of the capital you've raised will help you with that approach. peter, thank you for joining us. we appreciate your time. >> my pleasure thanks stay safe, everybody >> peter kern, ceo of expedia. sara >> thank you, seema and peter. now for our etf spotlight. looking at industrials today ticker xli, under pressure down more than 20 % for the year one name we should mention is deere reporting an earnings beat up double digits for the week. the company said it expects global equipment sales to fall 30 % to 40% this year due to the coronavirus.

under pressure with the overall market today, the sectors that are doing better are defensives. like staples and utilities only a decline of about a quarter percent. ayitusn quk the street."

tempur-pedic's mission is to give you truly transformative sleep. so, no more tossing and turning. because only tempur-pedic adapts and responds to your body... ...so you get deep, uninterrupted sleep. during the tempur-pedic summer of sleep, all tempur-pedic mattresses are on sale!

good morning i'm sue herera newly reported cases around the world hit a new high yesterday of 106,000 driving the rise are increases in latin america and asia. in the u.s., new cases have levelled off even as epicenters

like new york and new jersey see declines for more on the current hot spots go to cnbc.com >> a new study on hydroxychloroquine shows it led to more deaths the drug raises chances of heart arrhythmia it follows a warning from the fda. president trump promoted the drug for use against covid-19 and says he's taking it as a preventative measure another increase in u.s. travel travel. it's up 36% from last thursday and the highest one day total in nearly two months. it's still down 88% from the same day last year you're up to date. david, back to you okay i will take it, sue. thank you. coming up next, jim fitterling is going to join us. a major flood at their midland,

michigan plant concerning a number of people he's going to be discussing their moves to make sure nothing bad has happened we'll hear from him after this

the city of mittland, michigan is under water after flood waters overtook two dams protecting the city. almost 10,000 people have been evacuated. dow chemical head quartered in the city also affected with waters reaching an on site containment pond and most workers evacuated. let's bring in dow's chairman and ceo to discuss jim, we appreciate you taking the time in the middle of the crisis first, tell us what happened >> good morning. i'd just like to acknowledge the great response from the city of midland. the county governments and everybody in the great lakes bay region after the two dams on the lake

collapsed, we had a massive amount of water come down the river which runs by our midland operations we were able to evacuate 11,000 people in about 12 hours with nona single casualty and i think that speaks to just the great work between the public and the government officials here and the emergency response any time we have a flood on this river, it raises concerns, but our teams stud up quickly. on tuesday before the dams broke, we had taken the decision to cease operations and get ourselves ready because we had already seen the river outside flood stages before the dams broke. >> have any chemicals escaped? >> no, sara. any time we have a flood situation, we immediately begin working with the epa and the state environmental quality department, and we did in this

case as well we took precautions to shut down the plant, shut down all operations and obviously everything as well contained we have one pond on the site, a containment pond where we make a brian water which we use that has been contained. and now that the water levels are down, we're taking a look at mechanical integrity of that that seeps to be intact, and we're into the cleanup and recovery phase now and working through our checklist including with the regulators as we begin the process of restarting operations next week >> so as far as you know, there's no toxic chemicals being released either into the environment, into the waters, into the soil. is that something you're going to continue to sample and look into >> there's no threat to the safety or health of the community.

and so our knowledge, there's nothing that's been released part of our checklist as we come back up is to sample areas where the water has been flooded we'll be doing that with the regulators once the flood waters recede and in some of the areas that people have a concern about, along the river, we also do annual sampling and we have every year since 2010 in the areas. and we'll continue to do that. the pond that had water come into it does not contain hazardous materials or chemicals. it contains salt water that we use for ground water remediation. >> what do you say to critics that say dow and the city itself, the county should have been more prepared for these severe climate scenarios given our changing climate and what's been happening with storms and could have done more to prepare and prevent this difficult situation for residents there which were already dealing with

shutdowns and pandemic concerns. >> the city and the county and dow have been very well prepared we had a 100-year flood in 1986 and made tremendous improvements since then we had another flood in 2017 which was a larger scale than that, and we were able to handle that so every time we have an event, we take additional measures to shore things up, and the city and the county did as well and they've handled this relatively well. this was a worst case scenario with the two dam failure upstream, and we've been able to navigate it, i think, very, very well >> jim, it's not that far of a line between this discussion about midland. i was born in midland. the pictures are so sad, and a discussion about infrastructure spending we're heading into hurricane season is there any chance this is at least giving some fuel to the discussion about repairing and restoring infrastructure in this country?

>> we've had conversations about that with the governor, and with senators and representatives here in the state. obviously we know that as we were in the co-vid pandemic situation, there was talk of a stimulus package, perhaps, for infrastructure we know that we need to get that on the table and we know that this needs -- these dams need to be rebuilt and the infrastructure needs to be rebuilt we're hopeful we can be part of putting a positive program together to get it back in shape and get it in better shape than it was >> back to the flood itself, i know there's a super fun cleanup site down river from the plant and i'm curious. there seemed to be some concerns that the flood waters could sort of spread pollution downstream and over the river banks stirring up the sediment any sense as to whether that's possible or has happened

>> we don't think there's a concern on that, david we addressed that in the 2017 flood with the epa, and we've worked with them on all the modelling for that as these flood waters recede, that's part of the area that will get tested again, and will be in there with the epa testing that area. we've worked closely with this in all of this, right through the high water stages here so we feel like that we know what the situation is and things are going to be in good shape. >> are you talking about the concern about dioxi in specifically which was the problem to begin with this, and can be a harmful chemical for people could lead to cancer, miscarriages and other problems? >> i think the areas david is talking about that are part of the cleanup and the dioxin contamination people are concerned about.

with the work we've done with the epa, the flooding previously has not had an impact on that. we'll be testing that area as the flood waters recede. >> finally, jim, we just had you on a few days ago to talk about your plan for reopening. you put out a comprehensive 53-page plan about bringing the plants online. i'm wondering how much this sets you waback and coming back at a time like this changes the plans. >> we were an essential operator through the pandemic we've been operating through the beginning of the pandemic crisis i don't think that this sets us back the flood sets us back, obviously, but we're in the recovery and startup phase right now. so next week we'll begin a phased startup of the operations this industrial operation in midland dow, dupont, sk and

others and we're working with all of them to make sure we have a phased startup first the power plant and then water treatment plant. we were in the phase of bringing more people back to work the governor continued to allow reopening of more of the industrial sector. we were in a phase to continue to bring more people back to work and we'll continue on that phase. >> jim, we appreciate the update and we know you're also contributing $1 million from the foundation to the relief efforts. jim fitterling, ceo of dow >> thank you >> markets not too far from the flat line. although, the sector performance, somewhat defensive with staples and utilities leading. nvidia, all-time high today. back in a minute

♪ of all the places you're looking forward to where will you go first? ♪ wherever you may go lexus will welcome you back with exceptional offers on exceptional vehicles. get zero percent financing and make no payments for up to 90 days on all 2020 lexus models. experience amazing at your lexus dealer.

is a cleansing summer shakeout in store for the markets? one strategist makes the case on resqwkn e re" mo "ua othstet coming up.

indications apple sales in china are getting a bit of a bounce we'll get that story today hey, josh. >> that's exactly right, carl. apple sales appear to have enjoyed a bounce in china. apple sale in shipments total

around 3 million in april according to preliminary estimates. a roughly 30 % increase compared to a month ago it's the number of i-phones it sold to retailers in china estimates higher demand. apple sells to a number of retailers. it's not just apple. in april overall smart phone shipments in china rising 94% versus march reaching nearly 41 million that's according to a state-backed think tank. for investors this is a hopeful sign for the company china a key part of the company's supply chain, an important end market apple fans in china, analysts point out are higher income, white come can lar workers when i spoke to cook he said what we saw in china was there was a significant, very steep falloff in february that began to recover some in march and we've seen further recovery in april and so it leaves us room

for optimism there are risks for apple and other companies in china, of course about the chinese economy and strength of the consumer spending there and trade tensions are raising we know as well between washington and beijing with big american tech companies possibly caught in the middle back to you. >> okay. josh, i'll take it thank you. josh limpton coming up, an exclusive with antonio neri don't go anywhere. more "squawk on the street" straight ahead 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.

i am totally blind. and non-24 can throw my days and nights out of sync, keeping me from the things i love to do. talk to your doctor, and call 844-214-2424.

there are times when our need to connect really matters. to keep customers and employees in the know. to keep business moving. comcast business is prepared for times like these. powered by the nation's largest gig-speed network. to help give you the speed, reliability, and security you need. tools to manage your business from any device, anywhere. and a team of experts - here for you 24/7. we've always believed in the power of working together. that's why, when every connection counts... you can count on us. the labor department as a breakdown of the u.s. unemployment situation for the month of april some of the numbers are eye

popping. unemployment rates rose and total employment fell last month in all 50 states and the district of columbia 43 states set record highs in unemployment the highest unemployment rate was nevada, at of three statess that went over 20% the others were michigan and hawaii the lowest rate by the way was in connecticut, at 7. 9% the national average for the month of april was 14.7% unemployment later today on "closing bell" don't miss an interview with chris alman with public pension funds coming off their worst quarter ever that's 3:00 p.m. eastern we'll be right back on "squawk on the street. stay with us ♪ ♪

♪ it started with a few fifty dollars here. eighty dollars. a hundred dollars. i had good health insurance. why isn't this covered? well, then they started getting bigger. eight-hundred dollars. eighteen hundred dollars. i saved for this. but not that much. i'm glad i had aflac. they gave me money when i needed it most. that's why aflac is here, to help with the expenses health insurance doesn't cover. i love that aflac duck. aflac! get to know us at aflac.com

iit's not "acceptable oor nothing." and it's definitely not "close enough or nothing." mercedes-benz suvs were engineered with only one mission in mind. to be the best. in the category, in the industry, in the world. now, get 0% apr financing up to 36 months on most models and 90-day first-payment deferral on any model. mercedes-benz. the best or nothing.

let's get to rick santelli and a friday edition of the santelli exchange. hey, rick. >> happy friday, if there is such a thing thank you, carl. i would like to welcome my guest carlos gutierrez, former secretary of commerce under george w. bush, and if i was to go through his whole resume i would use my time up thank you for joining us today. >> good to see you. >> let's get right into it boy, i'll tell you what the largest exporter in the world is surrounded by snakes in a way, picking fights with australia, hong kong power grab turned many of the big economies that it does business with sort of against them and, of course, they changed some of the things that are ritualistic to the chinese at this point when they have their get together, they didn't create any growth targets and there's lots of stimulus in the system, talk half a trillion, is the largest exporter in trouble here, mr.

secretary, in the grand scheme of things? >> yeah, there's no question that there's a lot of decoupling going on, not just the u.s., but japan put $2 billion in their stimulus plan to bring companies back from china, so it's happening throughout the world i think the most aggressive part is coming from the u.s this move on huawei, we've always considered that to be the nuclear weapon, the nuclear option, this started from a tariff war and now it's decoupling and spilling over into geopolitics just to bring it down to the ground level for your viewers, rick, as of september 14, any u.s. company that wants to sell to huawei or wants to sell to a supplier of huawei will need a commerce department license. if you're not selling to huawei today you will need a license now. that's going to, if not cripple huawei, it's going to weaken

huawei in a very significant way. it's going to be a debilitated company. that's why we've called out the nuclear option the question now is, how does china retaliate. they've talked about an unreliables list and that's where we read names like apple, qualcomm and others, even boeing, where if you're on the unreliable list you really get bad treatment and then your risk, your business is at risk in china the question is, will china do that because, you know, it's not to their interests to see all this decoupling. it will be fascinating to see if they react that way or if they wait what we know is that they're going to do a lot of forward buying so that after september 14th, they've got plenty of inventory to survive several months >> now, mr. gutierrez, here's the thing, everything you're

outlining certainly seems to suggest that the phase one deal agreed upon not that long ago is probably in trouble, but yet, yesterday economic adviser kudlow and the administration and word from mr. lighthizer that phase one is still on track even though there may be some subtle delays to covid-19 and in the back of my mind i think part of that is thingsthey need, they need food, but do you think they will continue to honor the agreement? doesn't that speak volumes about how they may approach some of these issues you've just outlined >> yeah. i think that's a real long shot and, you know, one option is that maybe the administration is using this move on huawei as a tactic to get the chinese to the table and deliver on the phase one agreement. it doesn't seem tactical this seems like continuation of the policy of decoupling

i don't believe this is intended to get phase one moving, i don't believe that phase one will come through as it was designed the chinese are using a force clause which is covid-19, so i would not get overly excited about phase one. i think there's so many bigger issues and the relationship has been so stained that it's going to take a long time to get back to the table >> let's take a hypothesis here and be optimistic that science is going to come to the rescue sooner rather than later regarding the covid-19 and from that perspective and considering china and all the supply chains that may be questionable future impacts is it safe to say onshoring could make some of the difference slow to be accepted by people at large whether it's big deals with new

pharmaceutical arrangements by the government or onshoring and manufacturing those will make up ground as the economy here slowly opens >> yeah. no question. some of the policies are intended to bring back manufacturing, pharmaceutical manufacturing, even if you're a u.s. company you can't sell to the u.s. government if you're importing from china that will force companies to come back. insourcing is a trend and whether we can argue whether it's good or bad, i think the important thing is to recognize that it's happening and to understand how to manage through it but we are going to see manufacturers come back and that will creates u.s. jobs there's no question, that is the way of the world and it's the u.s. doing it, so many other countries are doing it, so the international trading system as we've known it is really almost nonexistent today. >> and it's going to make many central banks quite happy, mr.

gutierrez, at the end of the day i can't imagine on the back side of this onshoring movement that there's not going to be higher inflation and considering all the debt that the u.s. and the world is creating, inflating their way out seems like the only solution. is this all going to ultimately be a marriage made in heaven, your final thoughts? >> you know, i think in the short term, inflation is probably not in the cards. i would see more of a, you know, just recession -- >> deflationary in the beginning. longer view. >> we have to deal when we get out of this, we have to deal with a deficit that's higher than it's been since world war ii that is going to crowd out money or create higher interest rates. you can't deal with something of that magnitude without creating some inflation, the amount of money in the marketplace is huge

as that velocity increases so we'll have inflation i would look at late '21 late '21, '22, '23 for periods >> we are out of time. back to you. >> all right rick, we'll see you later on, rick santelli, thank you very much good morning welcome to "squawk alley." i'm carl quintanilla with morgan brennan coming live with separate locations some cross currents on the final trading day before a long weekend. dow down 165 the reopening continues in areas like orlando there's more people flying for the first time no state has a 5% daily case load growth. on the other hand, these china headlines overnight, the national people's congress, th