another covid vaccine candidate that has begun clinical trials new unrest in hong kong. we'll get a live report from beijing. a glimpse of normalcy. millions tuned in to a golf charity event raising money for covid. it is tuesday, may 26. last week of trading for may "squawk box" begins right now. good morning welcome to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. joe mentioned this, we are indicated up by over 500 points. the dow indicated up by 222, the daz indicated up 68.

the nasdaq by 173. there are reports of a new vaccine in the works word of anything setting back the virus is great news. over the long weekend, people were out summer is around the corner. people are starting to feel that and that is showing up in the market again some big gains the last week of may treasury gains pushing up. 10-year up 0.7%. right now sitting at 0.695%. the big news is what's coming from that biotech company we've been talking more about. >> absolutely. hope everybody had a great weekend. u.s. biotech company novavax said it started the first human

study. the initial results they are saying in july the maryland-based firm saying upon completion of phase one, phase two will be conducted in several countries include ug the united states. that stock up more than 20% pre-market but really giving rise to markets across the board as well as to what becky was saying all of the folk fols out and ab this weekend giving some optimism at least for a period we'll see. maybe there is some optimism here joe? >> yeah, almost at 3,000 on the s&p. as you are pointing out, starting phase one trials. if we had a whole slew of people mad about moderna, that was phase one data

early data that showed of neutralizing antibodies of eight out of eight and this is gates. a lot of his money went into this i think there are some viral proteins and something they put in to amp up the immune response no reason to think that this is some sort of crappy response we'll know by july they could make a billion doses by next year a lot of people working on vaccines i think even with moderna, it is not necessarily the specific vaccine or data. it is just that we have some of the greatest minds in the world well funded trying to deal with this >> well-funded is the key. >> this is like a manhattan

project. look at you, you got a new background that has to help >> i'm right behind new time square can't you tell >> you know what, i was wondering. don't adjust your set. you are close. >> no, i'm in new jersey >> more signs of opening the new york stock exchange set to partially reopen today under new rules. only one quarter of the usual floor traders, roughly 80. they'll have to sign legal disclosures, have temperature checks, wear masks and follow strict distancing rules. nasent is a good word. i was thinking about if it does

get really safe. there are some cdc data saying mortality is under .3% a university study saying that the virus could be gone by september. >> the singapore study >> they just peter out can you imagine. i don't know how you feel but can you imagine what we'll do if it is all clear? i might go out every night to a restaurant >> i have to say, i have cooked dinner every night the last 10 and a half weeks i'm so desperate to go out or even get take out. the closer we get to summer, you feel the desire to just allow things to go back to normal and get out of the house and do

whatever can you do to get outside. one thing that concerned me over the weekend, the idea that cases across the nation dropped for two weeks but as things have started to open up, last week, they were back up. you can't look at one week and say this is a trend. but that is the concern. just watching those numbers and hoping we can please get back to life as normal but just watching it so closely too. >> penelope, if she sees another pot or dishes. andrew, you are probably the same way you are on dirty dish beauty you probably don't want to see another pan with stuck on food >> i'm okay. so far, we are okay. >> bark and order to all those

safe people living there where do you put all of them up? where is the staff staying >> there is no staff, joe. no staff >> you are the staff becky, what did they do put up a big screen behind you? >> yes it is really big in fact, i can change it around. do you want to see the magic i'm going to get yelled at for this do you want to see it? i might mess it up >> could you be out on a beach somewhere? >> i can only be what they've given me >> you can't change andrew's

>> no, i can't >> see i'll pause this one. >> that looks like time square that's a good one. >> how is that >> i like it. >> let me tell you about another story. coronavirus cases surging in brazil now totally 335,000 now second only to the united states in total cases. the white house is suspending travel into the united states from brazil effective midnight tonight. any traveler who has been to brazil will not be granted entry back to the united states. qualifications that came in last night. they are still second to the united states and we are saying, no thanks. stay home. developing story in hong kong carrie lam calling for calm early today after protests erupted over the weekend over

the proposed new national security law looking to quiet free speech. we'll go to eunice yoon with more on this story that broke on friday and we ended up talking to vice president biden as well. >> yeah. that was a great interview, by the way. in china, the focus has been in honk cob they have been attempting to make the argument that national security laws are necessary and ready for business the top military brass was quoted on state tv saying legislation would safe guard long-term prosperity attempting to reassure the people there that the city's

freedoms won't be affected and the chinese foreign ministry will be trying to address the concern of the community and that independent jude irkry would be undermined and setting things right for the business. many people unconvinced. investors and property plays which have a lot of offices across the city were trading today at the lowest level since 2009 investors are worried about people leaving the city and capitol outflows the biggest concern has been about what the u.s. would do next and will pull the trading status china has said it will take

count country me country me country mess your measures >> joe, a big sorts story over the weekend. >> i was out and about they had these large animals that can either be outside blowing off steam or inside. it is not a good side. >> like having kids or toddlers. >> they sound like they are going to kill each other sports star fans tune in biggest cable rating ever tuned into the coronavirus relief match featuring two amateurs and tiger and phil if you want to call tom brady

and payton manning amateurs. the event drew 5.8 million networks making it the most watched golf telecast. the four so many raised more than $20 million in covid relief they have like bunkers or it used to where it has wooden beams. if you get up against one of those, you have to play backwards or side ways we'll talk to michael rubin, a coowner of the philadelphia 76ers and fanatics and everything else. he can give us a good idea at the demand all these guys, they understand the demand

they have some work to do to make sure we minimize some of the damage on the virus. >> there is another covid trial and dr. scott gottlieb will we in on the novavax news next. it's not "pretty good or nothing." it's not "acceptable or nothing." and it's definitely not "close enough or nothing." mercedes-benz suvs were engineered with only one mission in mind.

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said yesterday, it started the first round of human study for a vaccine. with us, dr. scott gottlieb. cnbc contributor gates is involved with this. it is the beginning of phase one. we saw moderna had actual data just beginning the phase one trial. we always try to tie market moves to something a lot of times, it's in our own mind if you think they are starting the phase one trial? >> their starting the phase one trial in australia with 100 patients they are using insect cells to manufacture the protein.

different from the moderna approach using mrna and the pfizer approach. remember fipfizer, which i'm on the board of is also in phase one study. the oxford vaccine partnered with astrazeneca and j&j on line as well. this is good news. we have early data that show it should be possible to develop a vaccine against this >> so the insect makes a protein. what, one of the spike proteins on the virus you deliver the actual protein and how do you manufacture it in insects? >> it is biotech manufactured. they are using that cell line. it will be an injection based on

two shots. a lot of these may end up being two injections >> why the adjuvent? >> an interesting requesting one reason to use it is to extend the supply, sonofi is doing that as well also doing it in their protein-based vaccine. novavax is also proten-based it may be that just giving the protein or the anti-gen itself will not be enough to generate the antibodies why you are siege companies using that as opposed to the

mrna approach. >> two questions for you first, when you go back and look at all of the scientists trying to solve the aides epidemic. you remember there was a lot ever money and people all over that and we never got there. i want to understand why you think this time is different >> hiv is a more difficult virus to drug. coronavirus is a relatively simple virus, all things considered we understand the ways that the coronavirus rep indicats and we've targeted features. it doesn't mu tate nearly as much hiv within a much more rapid mutition the virus, it should be able to

be targeted by a universal vaccine. >> totally unrelated we all saw the images from the ozarks over the weekend. people playing, hugging. how concerned were you when you saw that >> i am concerned when people think this is the all clear. we do need to find a new normal. we need to go back too work and enjoy social activity differently. there is a question whether you are better off shrinking your social circle knowing you will not be able to fully social distance es smespecially if youe young kids

i think people should think of fewer social gatherings and when you do, wear masks certainly, you see people going out in big social groups, arguably with people you don't know you saw some of those pictures that's a set up for a lot of risk you are not using protection equipment or taking precautions. >> that's what i wanted to ask you about that the idea for two weeks as a nation, we saw numbers decline. the most recent week, we actually saw an up tick with people getting back out there. how much should we read into this or? a situation where you can't watch the week by week >> you with watch the week by week we now see a trend of the up tick of hospitalizations

it is probably a result of reopening. we expected cases to bump up that's why they reopened in phases and assessed the data florida has an up tick no hospitalizations, georgia, virginia, mississippi, ohio, arizona. all going up the national trend is a small uptick we have to watch this. the hope is a seasonal affect that will hopefully offset the increased social interaction that will cause cases to go up we get to july and august but we are going to see cases go up >> what is your thinking on the overall mortality rate i've seen 6..6

do you think it is under .5 at the moment >> the cdc model is about .4 if you look at the total population of new york and the fatality rate, it is almost .3%. it is going ble higher i still think between .5 to 1% even if you assume we are diagnosing 1% of the cases certainly an infection mortality rate of close to 1%. >> as far as hiv, that is an unbelievable apples to oranges comparison of something that

goes into your dna and will be there forever. i understand the question, andrew, it is just not even ballpark in the same sport >> i asked the question because i think there are so many viewers out there including myself who are not scientists who ask that question who are trying to understand the distinction. >> okay. keep talking never mind scott, thank you we appreciate it >> i think scott was making a quick point on that. >> i know. i know go ahead, scott. >> i was just going to say, i think the optimistic news is that the data we have in animal and human studies affirms we should be able to get a vaccine of this. we might need to go through juan more cycle in the fall until we get to a vaccine

>> all right thank you, scott becky. when we come back this morning, chinese cities use health tracking apps to stop the spread of the virus. one city wants to make things permanent and give residents a score based on alcohol consumption and how much sleep you got last night usaa was made for right now. and right now, is a time for action. so, for a second time we're giving members a credit on their auto insurance. because it's the right thing to do. we're also giving payment relief options to eligible members so they can take care of things like groceries before they worry about their insurance or credit card bills. right now is the time to take care of what matters most. like we've done together, so many times before. discover all the ways we're helping members at usaa.com/coronavirus

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time now for the executive edge one chinese city with a proposal to permanently track people's health tracking electronic medical records results, lifestyle such as sleep and alcohol consumption. this appears to be the first sign the tracking apps may

become the new normal and a huge reason it will be very difficult to take similar measures here in the united states. the whole idea is a little crazy. a few things we've given up our liberties for if you use waze or other things that tracks your speed. the whole idea where insurance companies are asking you to sign up and say, okay, you can track what i'm doing some people have readily lined up for that. even though the get back is relatively nominal it is crazy and the beginning to give away a lot. if you are asking people to give up more, i think you'll have a tough time with it >> i'm okay being tracked. we think of everything in the prism of personal rights again

the whole shutdown and you watch the way each side frames the whole thing. it is so strange how polarized each side is on the discussion i'm okay being tracked >> you carry a phone, they can track you. we've seen the videos. they were tracking people at the beach in florida and how they went around the country and how they would couch those thins we've all given up more and more of our privacy with things like facebook and twitter >> i wonder how generational it is people younger than myself feel fine to give away stuff i might not feel comfortable with. >> they haven't thought through the consequences >> a piece that certain

generations have come to about privacy. maybe they don't understand the implications i don't know i've always been surprised how much people are willing to give away. >> if you watch dateline, people know where you are at all the time if your phone is on. you know how they say, i was here and they go, there is a cell tower here and you were like two blocks away from this cell tower where this person was kidnapped. they know where you are at right? >> got to wrap your phone in tinfoil, joe >> i wrap my said in tinfoil a lot of times more ahead on cnbc coming up when we return, more on "squawk box. take a look at u.s. equity futures that are surging on vaccine hopes.

dow up 526 points right about now. take a look at german traded shares of lufthansa. the company has reached a deal with german's government for a $9 billion bail out. the german government will take a stake in the company they are taking equity they have agreed not to utilize voter rights this is bound to spark a debate of how we look at airlines we are right back. 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.

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welcome back to "squawk box. let's get to this morning's big market move as we prepare to kick off the shortened trading week joining us now, citi private investment officer great to see you the market up pretty sharply this morning a gain of 530 points right now for the dow. people are feeling pretty optimistic how about you? how are you feeling? >> always great to hear dr. epstein come on line and tell us there will be a vaccine sooner rather than later, that is an important element. even if they do rebound, there will be parts of the market that will take a long time to recover. we'll see that in travel and leisure and areas that employ 3

million globally we want our clients to be rotating to small and medium-sized companies in europe and in asia where shares haven't recovered like the united states has recovered. there is a lot of value there. our message is, you have to be invested and have a large portfolio. this pandemic whether a year, two years, it will be a limited time frame staying the market and keeping invested in a core portfolio is what people should do. >> what sectors within small and mid-sized businesses in america are you focused on at this point where you think the gains have not come back in and the value hasn't been realized >> a lot of the companies you'd expect -- we divided the world into cyclicals, the areas of financials, banks, industrials, companies. even companies in some of the health care areas that service

let's say small to medium surgical centers things like the delivery of restaurant products and parts, things like that that are secondary industries that will benefit from the recovery. there are a long list that will benefit 20 to 25% of those we want our clients to own those. the other thing, if you take a look at mexico and brazil, these are markets down nearly 50%. when we look back to 2009, they recovered to almost half of their value. those two in particular do extremely well in client portfolios >> david, that's a bold call for things like financials and banks at this point. the thing out there is how much of a structural situation we'll

create by the number of people out of work or furloughed. the question is how many people don't bring those people back, how many don't recover how this is the serious problem for them going on particularly for small businesses >> you are right that is a huge issue we'll take a look at the likely course of the disease. we could see unemployment at 7% or 8%. we are not expecting all employees will be reemployed but we are also missing something on the other side, which is banks are well capitalized in the united states. when the government looks at the issues, they've done so by putting programs in place for small and medium-sized businesses between that and the government actions, we think they'll remain

healthy and good investments when you look at 18 to 24 months >> great thank you. good to see you. >> i'm glad you are looking so well and early set back by launch efforts from richard branson first, a look at the p-mkereart gainers in the s&p 500 we are coming right back (vo) our communities need help like never before

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welcome back u.s. equity futures sharply higher, up 520 points on the dow. nasdaq indicated up and i think we'll be close to 3,000 on the

s&p. the company started by richard branson botched the first try. a rocket release yesterday failed to reach low earth or bit. the booster dropped from the plane as planned but a problem with the main engine failed to deliver the payload to its destination. coming up, presidential candidate joe biden talked to us about taxes here on "squawk box" 'ldiriday. wel g into his proposals and what they'll mean for your money. that's next when squawk returns after this

more pharma news crossing the wire meg tirrell has more >> big deals this morning from merck. essentially making a partship on anti-viral drugs a partnership with ridge back viral on an oral drug that can

be taken as a pill phase one study shows it can be well tolerated and used with the covid strain another partnership they'll use on the partnership for ebola vaccine. human staudies are planned to start later in 2020. new news from merck. they are a requiring a company called themis that uses the measles virus as a vector. they are currently approaching rapid entry to phase one trials for covid-19 quite a lot of news there from merck. and the second piece of news for

iavi, this is a coming back together of the team that developed the ebola vaccine. a lot to watch here from merck what we heard last week that merck appeared to only be a couple of months behind other companies in getting into human trials a lot to watch >> meg, thank you. we haven't talked to you about the earlier news, i don't think, on novavax why 500 points on beginning a phase one trial? >> well, these are intense times. novavax is a company that has been working on vaccines for a long time. they have not yet brought one past the finish line it is a volatile stock again, just beginning human trials is only the beginning of proofing a vaccine works >> it has some of the gates in

premature on it as well. one of the biggest donations he's made, right >> i don't know about gates. they do have support for cepi, which is influential >> right $309 million i think from them thank you, meg meantime, when we spoke on friday to the former vice president and apparent democratic nominee for pro president, joe biden, he talked about a tax plan. >> let's raise the capital gains tax. let's reverse the trump tax cut, nobody making under $400,000 will have their taxes raised, period bingo. robert frank with more on all of it >> good morning, joe biden

saying there under his plan, no one who earns less than $400,000 a year would see an increase but studies show the middle class would see a raise. those more than $400,000 a year adding a new payroll tax on income over $400,000, limiting deductions, and raising the capital gains tax for those who make more than a million a year. more than three-quarters of all of this would be paid by the top 1% so it is a very progressive plan but corporate tax rate goes from 21% to 28% that is why the tax foundation, the tax policy center, and wharton all find that because workers usually end up paying some share of higher corporate taxes, you've got the middle class taxpayers who could see a tax hike between $180 and $200 a year so not a lot, but still an increase

and the tax foundation also saying this plan could reduce gdp by 1.5% over ten years as well as cost over a half million jobs andrew >> okay, robert. we're going to dig into that right now. great to see you for a closer look at how tax policy will play into the 2020 election, i want to welcome jared bernstein who is now a senior fellow on the budget and policy priorities and a cnbc contributor. and joining us is adam michael, the senior policy analyst with the heritage foundation. thank you, both, for being with us you're on the opposing side of what vice president biden had to say on friday. you look through those numbers is your issue with the capital gains tax on the individual tax basis? or on the corporate tax component of this?

>> well, thanks for having me on i think the biggest problem here is raising the corporate tax rate away from where we currently are which is in line with our economic competitors around the world as you noted, even left leaning tax analysis will tell you that the corporate tax is paid by workers at least in part and workers across the economic spectrum low age workers, all the way across and they pay that through lower wages. and right now is certainly not the time that we need to be discouraging businesses from expanding here in the united states from raising wages here in the united states and so i think that raising taxes on business or anyone for that matter is the wrong response to the current crisis that we're in. >> hey, jared. explain this and i tried to ask the vice

president twice about this issue wi which is why try to raise corporate taxes now? meaning we are in the middle of a pandemic, we will still be trying to recover. if he does win, we'll still be trying to recover, i imagine, next winter if not longer. why make that is center piece of a tax plan when clearly the goal has to be more jobs and we're now looking at numbers that suggest this might -- this might make that even more challenging? >> yeah. i think that's a good question i mean, first of all, if you actually look at the historical record, there's really no correlation between where we put the corporate tax rate and job creation that has much more to do with macroeconomic trends and conditions now are, of course, just as bad as they could be i'm very sympathetic to where you're coming from when joe biden becomes president, he's going to raise the corporate tax to 28% but he's going to do that based on the economic conditions as he sees them at the time.

>> let me go back to adam then and adam, would you -- assuming that there was more wind at our backs, let's assume the economy recovers or is in a much better place. let's assume the economy was where we were let's say in january or february. do you think that we should think about raising corporate taxes at all let me also suggest to you in the past three months we've learned that the government is now providing effectively a corporate insurance policy some people call it corporate welfare for every company in the country. and should companies be forced to pay for that in some way? >> i don't think that we need a higher corporate tax rate. as i mentioned, we're already in line with competitors including those in europe when you add in state rates. but i think going back to what we seen historically is that countries that are coming out of

recessions like the one that we're entering and the rest of the world is grappling with is that exiting these, if we raise taxes coming out of them, we actually prolong and deepen the recession. instead, countries that address growing debt, large deficits by addressing the spending side first, figuring out how to get our budget in order by reducing growth rates and spending, those are the countries that see faster economic growth, better recoverie recoveries so my fear is we're not going to learn the trends that we've seen in the past. and instead, try to balance the budget or pay for new spending through additional tax increases like the ones being proposed by the vice president and instead, we're going to shoot ourselves in the foot trying to climb out of the current economic hold -- >> so -- >> andrew -- >> adam, if someone comes to you

and just makes the blanket statement just without, you know, showing you the studies that there's no evidence that corporate tax rates have any effect on job creation and you know that a -- if we had a 40% tax rate here in the united states and you see companies moving their operations abroad where they're employing people abroad, not employing here, don't you think you should counter that when someone makes that statement and it goes without any argument whatsoever that there's no effect on job creation here based on a corporate tax rate can't you say something back to jared? i mean, that's why you're here on the debate. i'm not going to say it. but i figured maybe i'd let you try to counter that. >> you just said it. can i get in here? because we're -- >> it is a ridiculous statement. we know that when -- we know that when tax rates go up on businesses, they cut jobs, they raise wages much more slowly or

not at all and that's bourn out by any number of studies. i pointed to and you cited the tax policy center. it has built into their model the corporate tax is ultimately paid at least a portion by workers. and i think most of it if not all of it is paid by workers depending on the studies you're looking at >> there you go. >> it's incomprehensible to think we hike up the corporate tax rate and not lose jobs, not lose anything. >> just needed a little prompting. i mean, jared will say stuff if you don't counter the stuff he says, he'll tell you there's no such -- >> it's like he's doing ventriloquism going on over there. >> hold on hold on. no more ventriloquism. >> come on all right. thank you, adam. jared, we're over time >> it's unfair what joe did to you.

>> look, i'm speechless. joe is playing ventriloquism up there. look, my point is that the historical record is very clear on this point. >> oh, my god. okay >> there's no change between corporate tax rate and the jobs. that's a fact. >> right high taxes for individuals don't matter, either, jared. let's just go to 85% >> we'll never get anywhere if we're just shouting over -- look, here is my point >> we can't tax our way back to prosperity >> sorry, this is just -- >> jared, i need to apologize to you. >> we got to go to a break, guys

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futures surging on another american biotech company starting trials on a possible vaccine for coronavirus. meantime, tensions between the united states and china flairing up as the world's top economies point fingers at each other. we've got the details straight ahead. and the summer travel season is here. or is it an update on air travel and signs that things may be getting

better for the sector as the second hour of "squawk box" begins right now good morning welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. we're about two and a half hours away from the open this monday morning. looks like things will open up much higher about 500 points on the dow right now. it's come down just a little bit now on that. s&p 500 looking to open 55 points higher. on the nasdaq looking to open 150 points higher. all of that on the back of good news which becky is going to bring you right now on a potential vaccine. becky? andrew, thanks some new covid-19 developments breaking just a few minutes ago from merck the company announcing the acquisition of austrian vaccine mak maker. merck also revealing a partnership with a nonprofit on

two separate vaccines and a collaborative on an experimental oral drug for covid-19 patients. these developments follow news that u.s. biotech company novavax has started as well. the company expects initial results on immune responses in july the biotech firm says upon successful completion of the phase one, the phase two portion of the trial will be conducted in several countries including the united states. joining us right now is dr. scott gottlieb he is former fda commissioner, cnbc contributor and dr. gottlieb, good to see you. it's only been about 45 minutes since the last time we talked to you. already some new additional news on other potential either therapies or vaccines coming to play here too. what do you think of this news first specifically this news from merck, let's say. >> well, look. this is good news.

we all assumed merck was in this game they use a virus that's basically a cattle virus and substitute in a protein for the ebola bug. in this case they're going to do it with the coronavirus bug on the surface of that virus. and it codes for the spike proteins it codes for development of the spike proteins, to develop an immune reaction to the spikes itself basically a similar kind of approach, but a completely different kind of vaccine platform and one that merck knows very well so they have a head start on doing it here. >> i mean, it's exciting to hear this on top of the other news that we talked about this morning with novavax if you look at novavax, it's up by 24% but a much smaller

company. but what's exciting is to think that there are so many different potential places that could be developing a vaccine like this what does that make you think in terms of the odds of at least one or two of these things striking >> well, look. and different approaches as well so you have the major manufacturers are in this game the big pharmaceutical companies. and they're each taking a different approach i think that's very good the fact we have so much variety in how we're going after this virus. and so if one approach doesn't prove successful, doesn't seem to produce enough of an immune response, we have many different approaches the mrna approach at pfizer. the approach sanofi is using and now merck's attenuated approach switch a virus that affects cattle, livestock primarily. that's what they used to develop

an ebola vaccine one of these is going to work. and one of them is going to work to produce enough to produce a protective vaccine if you look at what the chinese are doing by contrast, they have one approach using a vector. an older viral vector platform approach that a lot of people have seen that virus so they have some cross immunity to it which isn't good meaning when you give them that vaccine, the bodies attack the vaccine construct. then there are other approaches with activated virus maybe faster to market potentially but probably won't produce the same immune reaction that some of these newer approaches that the western manufacturers are taking >> hey, scott. let's just say in the best case scenario that all of these approaches work and all of them give you some level of immunity. which one would you want which one would you personally want as a vaccine just based on the safety factors >> well, look.

i don't think it's going to be winner take all here i think we need multiple manufacturers in the market. i think unlike the flu market, these are going to be more differentiated there are going to be vaccines that are more targeted to an older population because they might produce more some that you might have more of an assurance around there. so you might use it in a younger population it's going to a bit of mixing and matching and using these in different places i think there's room in the market for multiple manufacturers here to be successful >> so scott, the old style egg cell manufacturing which took forever, that's one side of the equation what is the fastest? which one of these would be the quickest and easiest to duplicate exactly what you'd want to make vaccine moderna's is pretty easy isn't it pcr? you can make millions and millions of that quickly, right? >> yeah. they all should be scaleable there's going to be limitations

on the manufacturing at least initially because there's components in these vaccines that are harder to produce and so in the case of an rna vaccine you need some lipids but things like the adnal viral vector vaccine, you should be able to produce at high output once you get a manufacturing facility running same with sanofi's vaccine sanofi produces a billion doses of vaccine a year. that company knows how to produce vaccines i think all of these are going to be very scaleable every company said they could be producing billions of doses into 2021 that's probably right. once scaled up, they can churn them out in pretty high quantities >> a billion just a billion anything, just a billion packages of something is a lot. you know, not for nothing. i love vice president biden, but these guys may need some type of profit incentive eventually if

they're doing that i don't know maybe some day anyway, thank you. appreciate it, dr. gottlieb. we may see you again i'm not sure when. but not soon enough. >> hopefully for more good news. thanks a lot >> we like that. stocks are coming off a week of gains it's a rebound in our economic sensitive sectors. industrials, energy, and financial stocks all outperformed the broader market. joining us now is barry knapp, managing director of ironside economics. and mike santoli barry, i remember you at the depths of despair and you weren't really buying into it at that point are you surprised we're back to almost 3,000 on the s&p? >> i wasn't buying into it >> you were not buying into the depths of despair is what i said, right? >> i know. i mean, that's right

you know, if you think about what happened, we had a greater than average decline in the market relative to post-world war ii recessions. we had almost double of the m magnitude of the multiple. and the timing of the bomb on march 23rd was about right for a recession that's likely to end in june. a hundred days roughly so the whole thing played out pretty much as you'd expect. furthe furthermore, when you look at what's happened since then, there's this thought that tech has led the rally. none of that's really true small caps are 3% better than the s&p from the lows. the sector -- tech is actually fourth behind energy, consumer discretionary materials. the only sector that's kind of lagging that should be doing better is the banking sector otherwise this looks like early stage cyclical stuff you've had this whole debate

i wrote about it two weeks ago i called it billionaire's row. all the billionaire investors that, you know, thought the market had moved too far that valuation was way too stretched. my perspective on that is that valuation always looked stretched in the early stages of a new business cycle a that's the tricky dynamic. i've tried to stay with it and stay long through this whole part of this period. and, you know, so far so good. it looks like the beginning of a new business cycle and returns are pretty healthy at this point. >> mike santoli, fundamentals line up with where the market goes eventually, it seems like there has been some positive things happen over the past six weeks as we've been scratching our head and attributing it to the fed. whatever excuse you want to use for bearing bearish in the face of getting back to 3,000 on the s&p. some of the fundamentals are

starting to line up whether it's the vaccine or whether it's businesses reopening or whether, you know, i don't -- you know, the flattening of the curve. all those things have gotten improved over the past six weeks. you think there are still people out there saying we're testing the lows people said we were going to slowly grind lower from 2300 on the s&p. they're staill saying, that, bu i don't think it's happened. >> i don't think there's a lot out there outright saying there's a path right back to the lows in any quick way. but i do think there's still a lot of resistance to the idea that the market, quote, deserves to be where it is. so the market has been feeding off the suspicion that it had gone too high too fast that probably is going to continue i was joking on friday -- half joking, really saying the market has got to keep going up until people stop asking why isn't the market down more you can't discount the positions

element. but those fundamentals, yes, there's going to be momentum toward a reopening almost all states are going to do something incrementally it just seems as if there's not going to be a quick way to decide that that was wrong so in other words, it's going to -- we're going to see what happens. business is going to get back to trying what it can and i think the positioning of investors was such that nobody was quite prepared for that. i buy what barry's saying. if you date the moves from the low on march 23rd. sure small caps got pummelled more than the s&p did they only regained about half of what they lost where the s&p has regained 65% of what it lost. it's a way of where you're measuring. in terms of the cyclical sectors that are working again and that are kind of carrying a little more even though we open up today, the nasdaq's got the ties in its sights.

if people just didn't believe it and are being punished for it. market loves a reset i think, you know, kind of the mother of all really rapid resets in terms of, you know, earnings and everybody getting a free pass on this quarter and next >> so barry, do you think we'll eventually have one of those rearview mirror looks at gdp or something that is just as is mind boggling as what we saw on the way down do you think we could have a double digit gdp increase at some point in the future >> i do, joe and i think one of the issues that people are missing about this there's a little bit of conflating of the long-term risks of policy which i absolutely agree with. you know, getting out of all of this extraordinary fiscal amount of policy is going to be a problem. in 2021. not in 2020. but the issue that people are skipping is recessions

accelerate creative destruction. so we have a number of trends that already started like mobility, integration of technology in the service sector i always make the statement about buying a cup of coffee at newark airport from a human being. you can't do it any longer, right? so that creative process is going to push through the health care sector perhaps through education and housing which has been the three biggest drags on u.s. productivity for three or four decades this is actually going to really accelerate that process and on the other side, we may have much stronger productivity growth over the last two years, productivity accelerated from 1% that was driven by the service sector this is going to be more than that so there are some positives coming out of it the tech sector performance is really indicative. >> all right they're playing us out, barry. thanks mike santoli, thank you. ship slap. but you got the cnbc sign up back there

>> yeah. >> did you color that yourself that's nice. >> no, but i know the artist >> you did you stayed in the lines. it's really good we'll see you later. thanks >> ship lap, not ship slap when we come back, michael rubin co-owner of the philadelphia 76ers is going to be joining us to talk about the real estate space and how professional sports leagues plan to reopen. speaking of sports, sports starved fans tuned into the coronavirus relief match fee featuring tiger woods, phil mickelson, tom brady it drew 5.8 million viewers across its four networks making it the most watched golf telecast in the history of cable television woods and manning held off a late challenge to beat mickelson and brady. the foursome raised more than $20 million for covid-19 relief. "squawk box"ilbeig bk. wl rhtac

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welcome back, everybody. coronavirus related shutdowns have worsened economic hardship across this country. and many hav alleviate the financial burden joining us is the executive

chairman of phan gnfanatics and part owner of the 64ers. michael, i want to thank you for being here but more importantly i want to thank you for the efforts that you are really kind of pushing forward to try to make sure we are taking care of some of the neediest with. the top selling of the super bowl ring from robert kraft, talk about what happened >> robert kraft donated his ring from the super bowl where they came back from being down 28-3 and nobody thought it was possible to come back and win that game. he thought that ring would be symbolic of where the country is right now. and was incredible even for us and overall it's been terrific as you said, we've raised over

$50 million so far there's been nearly 500 athletes, celebrities, artists, sports owners, businesses that have gone all in and have made incredible challenges. we're excited. we've still got a lot more to go >> is that the second super bowl ring that robert kraft lost? because didn't putin steal one of his rings too >> that is the second one. there were a lot of jokes that maybe putin was one of the bidders. but i can confirm putin was not the buyer of the super bowl ring it was somebody other than putin. >> yeah. he doesn't give money for those things other things you've been putting in there, i think the second highest item was dinner with -- and a jersey from tom brady. is that right? >> yeah, it was with tom he plays his first game in tampa bay. he donated the opportunity to go to the game, get his cleats and his jersey from his first game in tampa and then go to dinner or work

out with him after the game. that got $800,000. one of the real interesting things has been how many business types have come in late walmart did a big auction where they gave multiple opportunities and it's still going today where you can actually bid on the opportunity to go in and meet with the ceo of walmart and his team to pitch your product to. that's been a really successful auction. microsoft, go spend the day with the ceo and talk about your business american express has an auction that ends today. you can go to the ceo of american express on a two-day golf getaway they've gone all in. >> i'm thrilled to hear that i think probably the excitement generated by the sports items is indicative of just how anxious people are to get back to that form of normal in our lives. that sort of, okay at least we can count on sports. we can watch these things. when do you think we get back to actually having games that you

can at least watch on television if not live? >> i heard you mention on the lead in, the golf match this past weekend it was incredible. all-in challenge was the primary from it. that had incredible ratings. almost $20 million i do think that shows just how much the whole world wants sports to come back. my gut at this point -- i spend every day speaking to people about this i think you'll see sports come back in july it will be without fans to start, but i think you'll see most of the major sports come back everyone is working to do this in the safest possible way for everybody involved again, that will be without it but i think it will happen in july i think there's a lot of momentum and i think everyone's really -- they just want it to happen and that's, you know, i think you see the momentum of the country shifting for this to really happen in july. >> you know, not every sport's equal in terms of the contact it requires football probably one of the one that requires the most

maybe major league baseball a little easier to say, okay you're not going to necessarily come as quite in close contact is that me thinking incorrectly though do you think the rules are going to be different? or does every sport have to develop their situation? >> i think every sport is working closely together to figure out how to make it safe for the players and their families everyone is involved in putting the sport on i think realistically speaking it's not practical to think that athletes aren't going to get corona if you're playing sports again. mathematically with thousands of people playing, it's going to happen i think people need to be comfortable. the players need to be comfortable. everyone involved needs to be comfortable. certain people aren't going to get it and how do you deal with it make sure there's people safely quarantining while the rest of games go on. there's been a lot of effort around that. i do think it's going to be all sports at this point you're going to see the professional sports all coming back in july

certainly that's what everybody is talking about i think that's what's going to happen >> you kind of alluded to it there, but are the players leagues the biggest holdup that you're trying to do this those are the people kind of putting their lives out there and saying they'll be the ones if you just said it's hard to play sports and not potentially get coronavirus, i mean, that could be the biggest sticking block. >> i want to make sure you understood what i said i don't think it's -- when you have thousands of people doing anything, i think you probably have lots of friends that have had corona i've had friends that had cor a corona just mathematically if you have thousands of players playing different sports, just mathematically somebody's got to get corona i think you've got to come up with a system that allows for what happens when someone gets corona because it's going to happen i think the biggest thing i've heard from players, i think people want to do it in the right and safe way i'm not, you know -- i'm not -- i'm seeing people working well together

i think the players associations and the leagues and ownership are really working to make this happ happen it's not as much of a battle, more so how do we work together and do this in a safe way for everybody involved >> michael, thank you very much. it's great to see you. thank you for the efforts on everything you're doing to try to raise money for people going without food at this point we really appreciate it. we'll talk to you again soon >> absolutely. been my pleasure thank you. coming up when we return, a lot more on "squawk. an outlook for the airline travel season kicking into high gear or at least it should be as we head to a break, a look at the airline sector itself. you can look at some of those stocks they're all up on the backs of this news about a potential vaccine. 'lta autt tens wel lkbo iafr this dad, i'm scared. ♪

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welcome back to "squawk box" this morning a developing story in hong kong where people are reacting to china's vote this week on a new security law with unease and protest. the u.s., uk, and european union expressing concerns washington is warning that hong kong could lose preferential trading could still see a, quote, immediate second peak if they don't stick to following social distancing and other safety guidelines and news about a number of potential vaccines, dow up about 500 points right now

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the summer travel season's kicking off. there's signs that air travel traffic is up. phil lebeau joins us with the latest it's hard to impress us. they're up from such low levels. but it's something >> they're better, but you're right. they're really, really down compared to where they were a year ago in fact, when you take a look at the number of people screened by the tsa, for the first time on thursday and friday, we had more than 300,000 people here in the united states screened by the tsa. keep in mind, you're coming off to a year ago it was about 2.4

million, 2.5 million you see just a little bit of an uptick there at the end. it moderated a bit on saturday and sunday we'll get the monday numbers in a little bit we checked in with a number of airlines as well delta said the levels up 15% so that's an improvement compared to where they were three, four weeks ago. compare that with load factors of 15% or 20% in april and the weekend load factors were double the levels -- the best since mid-march. so if you go back to the middle of march, that's really where they're at right now and that was in the midst of that big decline weekend passenger levels down more than 80%. nonetheless and you guys have been talking about this all morning long you see the airline stocks indicating higher. some of that is the optimism on the news about more coronavirus vaccine trials that are in the

offing and the other thing at play here is people are looking at the airlines saying they've been so badly beaten up. as things gradually improve this summer, will we get a better sense of where this sector is going to be let's say in the fall that's really when -- that's the point that everybody's looking at what happens in the fall when they have to -- when they no longer have to guarantee the employment of employees on september 30th >> thank you >> thank you for that report meantime, no doubt fra note out jpmorgan strategist highlighting the pandemic, it's provocative creating a new head wind for the market joining us right now on the news line is the head of quantitative and derivative strategies at jpmorgan jumping right into the political hot water here

effectively taking on the data and the politicians for closing us down. you think we got to open up much quicker. >> thank you you know, i wouldn't call it jumping, but we are looking at the data we are looking at what's happening with the pandemic, the progression of the virus because that's the single most important thing in the market right now. some of them now open almost a month ago did not see the significant increase in the u.s. and also you see decline in the growth rates in some of the other countries. that brings a question of certainly dynamics of reopening, how fast we should reopen, what type of activity we should reopen we highlighted the risk basically because if you keep the economy closed much longer, you know, eventually the damage becomes too large even for the

sort of measures which are truly unprecedented. >> let me ask you this two issues you seem to take issue with california and new york in your report for not opening you think that they should open already if not sooner. do you look at new york and california as being fundamentally different? new york clearly is different in part because it was the hardest hit in part because it's a city that relies on public transportation your numbers also at least when looking outside of the united states seem to be reflective of countries that have been countries that wear masks. you can see from the images after the ozarks over the weekend, we have a problem with masks. >> i would say there are different drivers in different countries. you know, shown on the graph some countries didn't close at all. if you look at japan, largely

didn't close seeing some of the lowest infection rate you see some of the examples -- >> marco, they're wearing masks. marco, they're weari ining maskn japan. >> yeah -- >> it's an apples and oranges argument >> you know, i don't know what you're yelling about but i never mentioned anything about masks in my report or this interview i mentioned what's happening with the economies and what's the dynamics of it >> the reason i'm taking issue with it is if you're going to take issue with the data and show us data from japan and say, japan opened and the united stat states saying one country is wearing masks and probably one of the most disciplined countries in the world. and the united states which is possibly one of the most undisciplined countries in the

world. >> i mean, yeah. again, i say i have to say i don't understand the question. we show the data that show that states within the 50 states did not see increase and just simply didn't happen. we show that in report which has a lot of repercussions so you similarly see that across the world. >> so what do you tell people like dr. scott gottlieb or -- >> -- infection rates. i'm not referring to the masks here in any way. disagree on the numbers?

numbers are numbers. there's nothing to disagree on the numbers. these are facts. so i'm not sure of what you're talking about. >> well, i think if you were to talk to dr. scott gottlieb and we can talk to him at 8:00 again this morning certainly there have been concerns and reasons for social distancing and reasons for keeping things closed and for having a phase one, phase two, and phase three approach which clearly you're suggesting you believe the data does not warrant it >> again, i show the growth rate these experts have been saying that the infection rates explode in the united states. that did not happen. data did not show that actually data showed some decreases in numbers across the states both are the facts we talk about the facts. we don't talk about the opinion and politics >> okay. maher c marko, it's a fascinating story. whether you disagree or agree

with it, i read it with great interest thank you for joining us >> thanks so much. when we come back, all 50 states beginning to reopen in some way after the coronavirus forced a shutdown. we will hear from former president of the american enterprise institute, arthur mpiten about the economy, coetivess, and u.s. relations. "squawk box" will be right back. ever since we've gone mobile on the now platform, something's gotten into the office. i hear you.

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futures been solid most of the morning but we're down not quite 500 points of pre-market gains this morning dow is indicated up 488 points the nasdaq up 147. it was up quite a bit more than that earlier up 170

s&p was up a little more, but it's up still solidly over 53 points some new covid-19 developments breaking within the last hour. in this case, from dow component merck. the company announcing the acquisition of austrian vaccine maker themis also a partnership of a research nonprofit on two separate vaccines and a collaboration with privately held backs on an experimental oral drug the trading floor of the new york stock exchange is set to partially reopen today that floor has been closed under the new rules only one-quarter of the usual floor traders will be allowed. traders will have to sign legal

waivers and undergo temperature checks to enter the floor. they'll also have to wear masks and follow strict social distancing guidelines and rules that have been put out there but again, the floor at least partially reopening today. andrew coming up when we return, u.s./china relations looking to set to worsen in the u.s./china trade deal may be in jeopardy. we're going to speak to harvard kennedy professor arthur brooks. as we head to a break, here's a look at this morning's s&p winners and losers

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now let's get -- or at least discuss the latest on high tensions between the u.s. and china. let's welcome arthur brooks, american enterprise institute president emeritus professor now author of a new column for the atlantic that's the great thing about you. why would you go to a place where you're preaching to the choir? go to are somewhere where there are basically 100% of the people need to be converted arthur, thank you for joining us we didn't mention french horn player emeritus from the

barcelona sim symphony as well >> yes, indeed >> we can talk china we haven't talked in so long, i mean, american enterprise institute and then think of the fed balance sheet and the amount of money that we're spending are we going to make our way out of this some day, arthur >> yeah. we tend to make our way out of these big messes capitalism is the way to get yourself out of any economic mess it's a mess, to be sure. but there are all kinds of incredible opportunities that lay ahead of us. all of our friends who favor a more collectivist approach are looking at the current situation as an opportunity to raise taxes. while those of us who prefer a more government approach can think of this as a way to radically deregulate which would be great for the economy to divest of a good amount of

federally owned assets to pay down some of the debt that we're accruing but it's a lot we can do to get out of this. the key thing to remember is that democratic capitalism is the best for economic lows >> it's bad to waste a crisis. you can see it sort of happening. and once we -- some of these steps are put in, they never get taken out. certain people on the political spectrum want to use this to do a lot of different things, i think. you can't really bring it up then you're being coldhearted. i don't know you see it happening though? >> yeah. i mean, i think it's pretty normal anybody who's a good political or policy entrepreneur will look at the current situation and say, look. what are the changes we need to make legitimately people are saying where do we want our economy and our society to be? how is this a hinge point -- we

should be seeing this. >> you're so antiquated. don't you see that the government is saving us so socialism is the right way to go we aren't capitalists anymore. this is all about government saving us. so how can you with a straight face say that this is about capitalism when once again you need to be bailed out we will see when this is all over it's only capitalism that's going to bail us out people are saying, well, look. the american system is in shambles who actually thinks it's going to be anything but the western industrialized entrepreneurial economies that are going to come up for a solution to this crisis and we should be thinking that way to say, look okay i understand why we have the welfare state and the government but this is a great opportunity for us to understand better our entrepreneurial economy. look what can we actually do right now to roll back the regulatory state such that new

entrepreneurs when you come out of this has more opportunity to thrive what can we do boldly right now to make it easier for entrepreneurs to come out of this and by the way, the other point is this. how do we pay back the $5 trillion one way to do it is to add a lot of punitive taxes forever. but you know the federal government owns a lot of assets. how much and what could we actually find that we could put into private hands to pay back some of this which would actually be good for the economy to begin with? let's be creative. >> arthur, i don't think anybody's debating capitalism or the virtues of capitalism. i think there's a question about free market capitalism i think you're talking about regulations to some droe a i think we all want more entrepreneurship and clearly you look at the efforts of vaccines and we cross our fingers and hope that those capitalistic efforts, if you will, will save us but statement

what joe mentioned, i think he was saying it sarcastically in part for my benefit is we are relying -- you know, we talk about wanting a more limited government we are relying on the government at this point. we are relying on the federal reserve to both print money, the treasury department to hand out money in ways that we haven't in generations. and isn't that an indictment, really, not of capitalism at all. i don't think this is about capitalism i think this is about how do we find the right balance between taxing people and paying for things, in this case a form of insurance, if you will, for all of us? and what is the right balance to actually encourage economic growth, encourage job creation, and also be able to pay for what we're doing. because even in the best of times, arthur, and i know you'll agree with this. the data is -- it is what it is. even in the best of times we don't pay for what we're doing >> yeah, no. that's right and the truth of the matter is i don't think any of us object to

the existence of the welfare state or a government that does redistribution i think personally the greatest achievement of capitalism is our ability to support people, brothers and sisters, people who are less fortunate than we are that we never even met in fact, it's only capitalism that's made that possible. but it's true. we've been irresponsible in spending more than we can actually afford to and pretending that we'll be an economy that can print money forever and that people will take our bonds forever and that's foolishness this crisis is a day of reckoning for that the question is going to become is the right way to deal with this extraordinary circumstances where we're doing more of what we've been doing wrong but we're doing more of this for logical reasons in a big way the way to get out of that to go into a european style welfare state that is way more redistributive it has much more punitive rates than taxation. are we going to find a better way to actually deal with these

circumstances. and in point of fact give federal assets that some people say we shouldn't own in the first place. >> getting baa to china, that's how we introed this. you have some type of prescription for how to deal with his obviously it's very important for both countries to have a -- should we get some type of re m renumeration from china for everything that's happened and are they continuing to be bad actors in a lot of different settings >> for sure china is a bad actor in all kinds of settings a lot of people said we should default on debt that's owned by the chnl rn chinese. there's no viable way to do that or to make it -- they're going

to tell you we need to reorder that relationship. it's amazing we have this disease vector imposed on the world -- unraveling the world economy. now to get masks and protective gear, we're relying on china that's really dysfunctional. the problem we have in our foreign policy today is that we do sort of the opposite of the teddy roosevelt idea of speaking soft and carrying a big stick. we don't have a stick and we're walking around screaming how we don't like china that's the wrong way of doing it we should decouple parts of the relationship like protective gear and medicines we should do it quietly. and we should do it in a friendly way that's the adult way to do it. instead of tweeting our way through foreign policy which is not going to get us any place. >> funny you said it because i

remember your last book and i love your books, but i can't live by your last book was it love your enemies or something? >> yeah. >> are you not on twitter? they do not love me, my enemies. and i do not love them i don't have one iota of favorable personal feelings for a lot of people. and i can't -- i'm sorry, arthur this day and age, what are we going to do about this am i wrong >> well, a little bit. i hate to say you're wrong because i love you, joe. >> i'm kidding my daughter writes things we've all got to come together politically. it's like, i do not want to come together with those people >> i know. >> i'm not going to. no >> it's okay it's okay, joe you don't have to. here's the deal. loving your enemies is not the same thing as agreeing with your enemies. it's basically figuring out that your enemies -- we're being

driven apart by this stupid polarization and that doesn't mean we have to agree. but we have to have a competition of ideas. >> do off twitter account? >> i do. >> are you not on twitter? >> it's full of love, joe. full of love >> you're blocking a lot of people mine is full of love because i've blocked everyone else anyway, arthur, i'm kidding about all that i withish we could come together >> i know. >> it's just that both sides are nasty. nasty, nasty >> yeah. agreed >> anyway, it's been too long. hope to see you -- wow that's a picture of you with the pope the other pope there's two popes. anyway -- >> yeah, it is >> thanks. we'll see you later. >> see you later >> thank you becky? >> kidding or not, maybe when we come back, allianz chief economic adviser move ham ed el arian joins us

and later mick mulvaney will be our guest. again, take a look at the futures. dow's up by 523 points the s&p is up pretty significantly too. a gain of 57 then the nasdaq up by about 150 points "squawk box" will be right back. 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,

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breaking news. futures pointing to a surge for stocks at the opening bell fast-moving developments on the vaccine front. helping to power the pre-market trading. it all comes as the country continues its reopening process. but videos of crowds this holiday weekend has some wondering, are things moving too quickly? we're going to speak with former white house chief of staff mick mulvaney and a businessman at the forefront of not one but two industries disrupted by the

coronavirus. stephen ross joins us to talk about real estate and when we'll see sports coming back the final hour of "squawk box" begins right now welcome back we're going to take and show you a live shot of the new york stock exchange the trading floor actually is reopening today, beginning a phased reopening with a small subset of brokers. good morning and welcome to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin

i think andrew might be at 30 rock or where is that shot from? do you know? it's just a generic -- anyway -- >> it's a painting i don't know >> my shot -- this is real here. and actually, once in awhile there's people around. we had a guy out there last week that was knocking ining on the and pointing at me going like this and then he was doing something else with another finger right? >> i can guess it wasn't this finger, right >> and a sign said andrew sent

me no, he didn't do that. he was not no, not that i know of i don't know that you didn't send him he didn't disclose that. the dow is up about 510 points premarket. indicated. nasdaq indicated up 133. s&p indicated up 55. treasury yields at this point are as you can see about 0.68% i'm ready to go out. i'm ready to go out. i'm sorry. i'm ready to go. i'm ready to go. >> okay. we'll see you. andrew and i can handle the next hour >> no, i'm ready to go out i think new jersey and new york, we're in a unique place. has there been any phase to anything here? there's a lot of places where people are at restaurants and stuff like that. >> beaches are open this weekend. the beaches are open the parks are starting to open you can golf again that's been for over a week or

two, you've been able to golf. things are slowly starting to reopen smaller stores are now allowed to be doing stuff you can pick up >> we're behind. >> we're behind because we should be. we've got so many cases that you've got to make sure you shut it down as much as possible before you reopen. but yeah i'm with you i took a bike ride yesterday loved it it's exciting to get out and about. >> you nut >> i know. living dangerously let's tell you about some of the fast-moving developments in that race to find a vaccine for the coronavirus. we've got news from earlier in the show from merck. meg terre rirrell is here and he details on that. >> good to see you everybody was waiting to hear from merck because they have a tremendous track record when it comes to infectious diseases and vaccines i spoke to ken frasier by phone just now he said they've been working on it from the beginning. three deal from merck being

announced this morning one to develop an antiviral drug from a ridgeback biotherapeutics that's already gotten through phase one. this is a small molecule pill that would be needed to take through testing to prove it works. but that could be helpful. also two different vaccine candidates one with its partner called iavi which is a nonprofit that's behind their proven and approved ebola vaccine and the second from a company they've acquired all themis which is using the measles vaccine as the vector. that is planned to start human trials within weeks. so that one's a little bit ahead of the other vaccine speaking with them this morning, there are essentially three principles they were looking for in choosing these different programs one, that it could be deployed broadly. and three that the technologies have already been proven to work in people.

he said that the manufacturing also is going to be a major challenge here they're already working on the scale up and hope to have hundreds of millions of vaccines ready at some point. he said they will need a partner potentially to do that we'll get to hear more directly from ken frasier in the 4:00 p.m. hour today when he joins us on "closing bell." also, just want to talk to you about the other vaccine news out this morning from novavax. the stock up a lot in the premarket. just on the news they are starting human trials of their approach for covid-19 in australia. that ceo will also join us at 11:45 this morning this, of course, a less proven company. but, you know, clearly some potential promise starting human clinical trials. but a long way to go, guys back to you. >> meg, thank you for that joining us right now for more on the markets and what the latest vaccine developments can mean, allianz's mohamed el arian

great to see you this morning. it's taking off on the reopening that took place over the weekend and just how visible that was and on some of these hopes, optimism about a potential vaccine. you have as we know been urging caution for investors. and i just wonder on a morning like this whether you think caution is still the right approach. >> thanks. today is good news across the board. i think it's important that i acknowledge it and two things in particular opening so far are proving to be relatively healthy and importantly if you look at the high frequency data, people are engaging the marketplace has embraced it

and what i like about this morning's pre-open action is that the risk on is across the board. it's not just stocks it's fixed income. it's currencies. and it's commodities so it's really good to see it across the board risk on tone which we haven't had really for quite a while. >> well, let me ask you two questions. one is about what you're seeing in terms of some of the high frequency data coming across in terms of how the public is engaging with the economy. do you look at that as pent up demand and i don't want to say a head fake, but pent-up demand from the last two months and you're seeing a lot of spending does that get sustained? you look at the examples in china and that it was -- you could argue there was this sustainment of things getting better but clearly not as good as those first week, week and a half when people sort of ran out of their house to go buy stuff. and how do you think the market is going to think about that and layer on top the vaccine

news and the time line for that. >> so first when you reopen, you look at two things one, are you reopening in a relatively healthy fashion so you look at hospitalization you look at infection. now, there's a lag there so we still got to wait for that data but so far it looks okay some pickup in cases, but nothing dramatic but let's keep an eye on that. the other question you ask is how willing are people to engage so you look at mobility data you look at credit card data you look at restaurant reservation data you look at tsa data you yourself circulated a book today with various indicators. everybody is now looking at these. and they point to engagement so the first thing you've got ask is can i reopen in a healthy fashion? and will people believe it will they overcome the human

risk we don't know who has the infection or not which leads to the second issue which is vaccine the vaccine is the best way to overcome this human counterpart risk so the faster we get to a vaccine, the better. this is not going to be a smooth process. there's going to be ups and downs. but keep an eye both on the health side and on the engagement side. and that will give you very good sort of view as to where we're going. >> so i think the question, though, for those out there that are trying to understand whether they should be in this market, out of this market, how in this market they should be, i hate to say it, i think at the early in this month, you definitely wanted to be in this market. you might not have known it. the question is as things run up, you know, if you're preaching caution before, do you say to yourself now i preesh more caution or do you say i should preach

less caution >> so my caution was based and i've said it over and over again on not betting on the whole market but betting on a subset of companies that have actually done really well which have balance sheet, good management, and were on the sunny side of the covid shock. the big question for people out there, do you rotate do you trust this rally enough to believe it will have breadth? and if you believe that, then there are bargains in many other segments that have really, really lagged. so that's the question you've got to ask yourself. are you willing to go broad at this point and pick up the lagging sector this is about a rotation are you willing to do that that's where every investor has to do is decide where they are >> but that's the question for everybody who's been a beneficiary of being in a narrow band of tech stocks effectively, do you see people rebalance

their portfolio and get into what might be described as industrials or cyclicals that might have been untouchable two or three weeks ago >> and banks there's so many sectors that where untouchables are at least lagging in a serious way look, i personally don't but there's a reason for that. i do not like betting on things i don't understand i cannot predict the health progress and i cannot predict moral hazard on the policy side. i feel confident doing that. so it's a matter of choice you know, my investment has been bet on things you understand and you feel you can predict i don't feel i can predict when a vaccine is going to come in. and i really don't like the moral hazard trade where you're just depending on the government or the central bank. but others have played that really well. and i respect that >> can i throw one other wrench into this conversation which is china? because one of the things we've

seen over the last 72 hours or really since friday is this news out of china about hong kong and what you think the implications of that geopolitically are going to be on china and therefore effect i haively on their econod on ours. is that going to turn into a head wind? >> it is a massive geopolitical factor because understand it brings out two contractions that are very difficult to solve within china and hong kong, this notion of one country/two systems. which was supposed to last for 50 years since 1997 and now is being really questioned. and for the outside world, it's the how do you reconcile china's regional and national ambitions versus its global responsibility this is a big issue. does it matter for markets today? no why? because the global economy isn't functioning like a global economy. the global economy is still shut down so we can go quite a while on

just a domestic economy. and we will because we're not going to restore international relations as quickly as we're restoring national relations so it will matter for the long-term but not in the short-term >> it's so interesting you say that because you would have imagined that the market on a normal day, had that been the headline, we wouldn't be in the green we'd be in the red but you make an important point. we appreciate your time, your perspective and insight as always we look forward to soeeing you very soon. >> thanks. hope springs eternal it can turn around. coming up, a man deeply involved with two industries slammed by the coronavirus. real estate and sports related companies. stephen ross also the owner of the miami dolphins what about the dolphins? what about the nfl hope does spring eternal anyway, he'll join us next as we head to break, check out the price of crude it's all the way back to $34

wti is on pace for its best month on record. stay tuned you're watching "squawk box" on cnbc

welcome back to "squawk box. that's spacex. the so-called crew dragon will launch atop a falcon 9 rocket at about 4:30 p.m. eastern time from florida's kennedy space center a little cloudy today. it's cloudy here but should be something to

watch. all that power maybe we'll take it. what time is it tomorrow, do you know when is that scheduled we'll take it if we can. >> questions raised about whether it could even take off >> with the weather. >> yeah. right, right >> let's check out the future -- >> it's sunny here >> what's that >> it's sunny here >> i want the clouds to burn off. there's some low clouds. i just checked the weather for awhile it's been beautiful. not a bad weekend after saturday wasn't great futures indicated up about 500 and change got the nasdaq up 145 and the s&p up about 56. check out shares of some of the biggest u.s. banks in premarket trading. it seems to be broadening out a little bit in terms of the risk on trade becky? >> all right, joe. thanks the real estate world obviously

has undergone potentially years worth of changes in just a few short months because of the coronavirus. not only are many retail shops still closed, but tenants have gone out of business and some renters have not been able to afford their monthly payments. joining us now to talk about this industry-wide changes taking place here, one of the founders of the largest real estate developers in the country stephen ross who is the chairman of related companies and also the owner of the miami dolphins. it's been a long time. great to see you >> good seeing you though remotely >> let's talk a little bit about how things are going right now when it comes to the real estate industry particularly in some of the places that have been hit the hardest like new york city what are you seeing that tenants are willing to do on both sides? >> today, part of the real estate industry that's really the most hard hit is retail in your hotels. i think most corporations are

looking forward to coming back to work, paying the rent and i think, you know, people have gotten by working at home, but i think everybody really wants to get back to work. and the residential, you know, people -- a lot of people have kind of moved their second homes out of new york city certainly but i think most people are really looking forward to coming back to the office we all want to see life back to normal you know, we hear about the -- that's certainly encouraging words for i think all of us. >> yeah. in the meantime, what are you seeing in terms of what people can do in terms of paying rent let's start on retail because that's been the hardest hit. how many of your retail customers are actually paying rent right now >> all the retail, most the retail in this country is shut down so some of the larger corporations, the companies are paying rent.

at the same time you see many have filed bankruptcy. niemann marcus, j. crew, it goes on from there. and small businesses, smaller retailers, the restaurants i mean, that's really where t the -- once we get back to normal, you know, impact on them is tremendous. many of them probably don't have their wherewithal to reopen. >> so what happens next, stephen? >> i mean, that's really the question i think, you know, people today are really concerned, you know, with the health and getting through this but when it's over and hopefully sooner the better, obviously you know, a lot of people won't be able to go back to business and this is what's going to slow down the economy it's small business not being able to really operate and the amount of bankruptcies that might incur

you know, a lot of them are not able to pay their rent and you're going to have such a flood of cases in going to the bankruptcycourt. when you have so much activity and over such a long period of time, and these aren't really the type of bankruptcies that were induced by bad practices or this all driven by the pandemic. you know, there's probably going to be a lot of bad law i think this is really where i think congress really has to look at things and how do they get those back together? because our country can't really move forward if you don't have small business being active and employing people and, you know, this is something i think has to really be addressed. but, you know, it's hard to address that now when people are really concerned with, you know, just getting food, if you will,

even when you look at the unemployment rolls and how they've grown so much. you've got to deal with the basics you know, i think we have to really start thinking about now that people are going back to work what are we going to do with small business? what are the people going to do to be employed i think that's really the biggest issue that's going to come out the is. >> hey, stephen. it's andrew here question for you about hudson yards. i think the last time i might have physically seen you was us sitting together when hudson yards launched this was a multibillion dollar project. clearly the shopping mall is going to be a challenged business i know you still have residential properties that are going up there when you think about new york, new york city, the future of new york city, what the values of these properties look like, how have you models changed? >> well, you know, so many people are talking about that people won't want to live in

cities you know, i'm very, very optimistic about the future of cities sure, we're going to have a little short-term kind of, you know, withdrawal about how people react to this basically people today want to live in cities the growth in cities they talk about in the next 20 years over 60% of the world will be living in cities. and young people want to be in cities today that's the major trend so all this talk about how people will be moving out of cities, i don't really thin that, you know, once things settle down, i'm very optimistic about how the city wills do. i know when we built hudson yards, we talked about building a live/play environment. that was the reason. i always said that hudson yards would be an example, maybe not at the same scale about what the future should be of cities in new york creating these live/work/play environments scattered around

the city i think hudson yards, you know, when i look at it, if it had been a little bit more mature, the people who live there would have really been very ek stacst that that's where they chose to live and work. because you wouldn't be dealing with congestion. you'd be having a lifestyle that wouldn't be as impactive as we are today. i think you're going to see a lot more of that type of development in the city. and, you know, we have a lot of condos to sell now and i think, you know, people will see that. because we have over 50,000 people who will be working in the hudson yards area. so it's -- i'm very positive i think cities will see this going forward in the future. >> let's talk a little bit about the nfl. i saw something recently i think from forbes that suggested that if the teams find a way to play but they don't open stadiums, that the nfl has about $5.5

billion in revenue it could potentially lose i think they put the miami dolphins, your team, as potentially losing more than a third of its revenue because that's just based on 2018's numbers, the amount that came in from having the ticket sales, from having parking, from having the concessions. what is the plan as far as you can tell right now as far as the nfl and what direction do you think it should take >> i think there definitely will be a football season this year the real question is will there be fans in the stadiums. i think right now today we're planning on having fans in the stadiums but i think the nfl is looking at and is very flexible so that we will be able to start on time and really, you know, bring that entertainment that's really so needed to all of us in this country. i think there's one thing that we miss our sports i don't think a lot of people realize that until they no longer have it but certainly the nfl i think will be ready to go. and i think we're all looking

forward to it. i know i am. we've got a lot of things down here either way, i hope there will be fans in the stadiums >> great stephen, it's really great talking to you and obviously a lot of different moving pieces right now. we'd love to have you back again soon >> thank you very much pleasure stay well. >> take care andrew coming up when we return, a special interslview with former white house chief of staff mick mulvaney we're going to talk reopening the country, the economy, the trillions the government has already spent battling coronavirus and mh mosoucre stay tuned "squawk box" returns in just a moment

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still to come this morning, former white house chief of staff mick mulvaney on what he thinks the appetite is in congress for more stimulus money. futures this morning up big. in fact, the dow looks like it would open up 540 points here. here are the biggest pre-market gainers in the dow leading the way you've got boeing which is up by almost 6%. stay tuned you're watching "squawk box" right here on cnbc

welcome back to "squawk box" this morning right here on cnbc. check out the futures rite now we are in the green in a big way. all on the back of that news about some vaccine development propelling the markets higher. also the reopening images over the weekend and so many people that seemed to be out and about. but do check out shares of gilead sciences. its drug remdesivir is effective at helping covid-19 patients recover more quickly

that's according to a peer reviewed data published in the new england journal of medicine. recovery time was cut by a third compared to patients receiving the drug compared to those given a placebo. hertz, the car rental company filing for chapter 11 bankruptcy protection over the weekend. this is after talks with its creditors was unsuccessful a big amount of their income comes from rentals at airport and that has been decimated by travel restrictions. >> yeah, andrew, just another one of those issues that maybe if you hadn't drawn out the dots becomes clear to you just how many other businesses rely not only on people traveling, on people going on vacations, all kinds of different things like that i'm sure we'll continue to see more still to come this morning, mick mulvaney on reopening the country. plus much more on the markets.

as andrew mentioned, the futures up big this morning. dow at this point up by almost 550 points s&p futures up by 58 the nasdaq up by 137 points. and check out two names associated with the vaccine and with news there today. first up, merck. it's got a pair of new partnerships with -- working on vaccines for this. that's a big deal. that stock is up now 3.8%. that's a dow component then there's novavax launching trials of its vaccine. that stock up by 14.8% i've seen it up by more than 20% this morning we'll continue to watch that "squawk box" will be right back. don't forget to subscribe to our podcast. you'll get interviews, original content, and behind-the-scenes access look for us on apple podcast or on your favorite podcast app and subscribe to squawk pod today.

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the memorial day weekend saw more americans getting outside u.s. is still far from the all clear, though, on the coronavirus. that's something we heard earlier in the show as we were talking to dr. scott gottlieb. joining us now to talk about the state's efforts to reopen as well as the national effort, mick mulvaney, former white house chief of staff, former director of the office of management and budget. mr. mulvaney, it's good to see you this morning if you were headed back in the white house this morning as chief of staff, if you were let's say, what would be on the diet you think reopening would be one thing maybe more stimulus and how to do that. what about china and ongoing concerns about whether to keep the trade deal in place and to go on? all of the above on the agenda >> yeah. i'd try to get the word out, joe, about the cdc report that came out last week that sort of clarified how difficult it is to get this virus from touching

surfaces that was -- that's to me in my mind, that's a game changer. it's a dramatically different piece of information that we had. the government, the economy shut down in large part because people were so afraid they'd get something from touching a button on an elevator or getting a package delivered to their house. the fact it's difficult to get this disease from touching stuff, the cdc put out last week, should reset how we look at this. if we are careful about social distancing and putting on masks and so forth, we should be able to go back to work sooner rather than later >> so that would change the calculus for how nationally we approach reopening how would you do that in practice with all the different states >> just talk to folks in your office people were scared people did not know how they got the disease. they said, well, goodness gracious, can i get it from the mailbox? if i get something at the grocery store, am i going to catch this virus it looks like the primary way

this transmits is from people speaking to each other, coughing on somebody else, sneezing, that kind of stuff. you can control that much easier to control the projectiles coming out of your mouth. the particulate matter it is stuff you touch which you do every single day. if you combine really effective use of masks, what we should be doing washing hands and so forth, that really you get a chance to go back now opposed to waiting around for a vaccine or treatment. >> so you think we should be opening more quickly after this cdc report >> i do. i flew in an airplane this weekend. and i would be completely comfortable sitting in a center seat on an airplane. maybe i'm the only person who said that. i knew if i had a mask on that worked and the people next to me had on a mask that worked, then logic would dictate something very difficult for me to get that disease from them in fact, probably hard tore get from them than during an ordinary flu season. i think we've lost perspective on this a little bit, joe. we've overreacted a little bit

keep in mind, i think year and a half ago, two years ago, some place just shy of 100,000 people died of the ordinary flu that's not to say covid is the ordinary flu but my point is almost 100,000 people died years ago from the ordinary flu and people didn't shut down. allow us to get back to work safely >> would you tell democrats or the house no more stimulus you were a budget guy. what about some help for the states and for the cities? >> yeah, i put my ideological sort of beliefs in one category and say i would be there saying we don't need it then also put the practical. people have got to understand how washington works and having an ideological conversation right now is a complete waste of time there's going to be another stimulus package of some type. the question is, what? the question is how? the question is are we going to the next time around to fix some of the problems in the previous stimulus package

for example, are we going to pay people more to stay home than we're going to pay them to work? that needs to be fixed are we also going to look forward. again, having a conversation about whether or not we should be doing now is not practical. but looking forward, what do we do in the future to help repay the debt what do we do in the future to hep draw the government back what do we do to allow business to reinvent itself what can we do for deregulatory action >> so you worked with the president as closely as anyone knowing the way he thinks about things, what do you think's going to happen with china given you hear his comments and, you know, there's tweets and bluster and then policy. how do you think this finally comes out with the trade negotiation? >> yeah, one of the great things about the president is what you see is what you get. the man you see on tv, the man you see at the rallies is the

same man you see in the oval office and what you see is what you get. when he says he's not happy with china, he's not happy with china. we had hoped during the trade discussions that one of the key pieces to the trade deal was to have china finally stand up and say, you know what we're going to be one of the great nations of the country we are going to be in that first tier of nations. what does that mean? in that context, we had to get rid of things like forcing technology transfer, forcing joint ventures, estt cetera here we are a year on and they're not acting like a leader of nations hiding information we're where we are because china didn't tell us about this disease in the critical first 60 days the president is angry about it. he's not the only one. you talk to world leaders all over the place and they're re-evaluating their relationship with china because it's hard to have the same type of relationship with an open country than with a communist dictatorship >> when you used to advise the president on things, would you

push back on some of his instincts that maybe not everyone thinks are protective whether it's, you know, over the three-day weekend there were a lot of tweets and there's a lot of other things going on did you ever -- did you stop trying to change his -- some of the stuff he does? do you throw your hands up and say he's going to do what he's going to do? >> two answers to that the conventional wisdom the president does what the president wants to do and doesn't listen to anybody, that's completely false. some of the most energetic and informed conversations i've had any my entire life were in the oval office where you would expect them to be. everything from trade to coronavirus to foreign policy with iran, really, really good debate the president would sit back and take in that information so to the extent we do that, absolutely we did that on the other end of the spectrum, listen, the president is the president he got where he is because of who he is. it's going to be very difficult to change who he is.

now, we didn't try to change the president. we tried toic ma sure the president got the best information that he could have and i'm completely comfortable with secretary mnuchin, kevin hassett. the president is getting really good information about this topic. you don't try and change the president. you try and help the president be successful with this. >> so what's our answer as a budget guy, how do we get back to some type of fiscal sanity in the coming years do we raise taxes? do we try to -- just try for more growth? i mean, a lot of times people propose supply side and there's a lot of people that go, that's your only answer i mean, usually capitalism, that's what you're looking for is growth to help. but that's not in a lot of circles that's not going to cut it just this tax cuts and less regulation what do you think we need to do? >> i'm going to try not to be too political here let me see if i can do this as

objectively as i can if the democrats retain control of the house or add control of the senate, taxes are going to go up. no question about that that was going to be the case before we got where we are today. so again, i say the real challenge now as we look at this bill, if there's going to be a bill and there's going to be pressure to raise taxes, what can we do to pushback on the tax increases and what can we do to set the table now for reeling in this oversized government a year from now because i can tell you the arguments that are going to happen a year from now some federal agents unit just got a huge kick to their budget because of a stimulus package is going to come in next year when budgets get back to normal is and they're going to say you cut our budget 75% and there's going to be great wailing and gnashing of teeth on the hill from those so-called reductions washington abhors a spending cut. they can't do it right now we need to figure out a way to hard wire into whatever comes next a way to reduce the size of

the bureaucracy, regulatory state, prevent the increase of taxes, and get a way for spending to get under control moving forward because you're not going to do it right now >> hey, mick let me ask you this. i've said this repeatedly on the show even in the best of times, we overspend and don't bring in enough revenue even to pay for the things i think most americans actually want. even if you say we want to cut things, i think most americans -- the reason we haven't is because it would be a massive political fight to do it and i'm not encouraging that we should be raising taxes especially right now the one thing we need is jobs and to recover more than anything but do you think longer term that there is an argument to be made that perhaps there should be higher corporate taxes at least to acknowledge the fact that we've provided this remarkable insurance program some people call it a welfare program for every corporation in america right now. >> there's ten things i'd like to say to that good question.

let me break it down to as many pieces as i can. i agree with you to the extent we haven't paid for the government that we've had. we haven't done that for the last 30 years. by the way, i think it's one of the big risks here in the stimulus package is that people have lost sort of perspective on what government costs. we're at risk of training people to believe that government is free that they can borrow whatever -- we can borrow whatever we want to with no consequences whatsoever and that is extraordinarily dangerous. i think everybody on this show would agree with that. we have to sort of break that cycle and say, look. there's costs associated with what we're doing and when you spend $2 trillion to $8 trillion, there's going to be a cost to that at some point. it's not free. i disagree saying we're not giving people what they want we're giving people a lot of stuff that they don't want but to your point about corporate taxes, look. the one thing we've pruchb proven in the last three years is the supply side works one of the great stories of the

administration ten years from now, put covid aside, the economic articles would be about supply side working. look what we had the last three years. we had really solid growth rates. tremendously low unemployment and no inflation if inflation is too much money chasing too few goods, you solve that problem by making more goods. that's what the tax policies did. that's what the deregulatory agenda did we've proven, i think, that supply side works. i'm happy to have that argument moving forward but i don't think raising corporate taxes is part of the solution when it was part of the problem in what we fixed a year and a half ago >> mick mulvaney, thank you. we -- you're going to -- there going to be a convention down there or not have you talked to the president about that it's still going to happen, isn't it >> yeah. i think what you're going to see is the republicans are desperately going to want their convention they're going to want it live and the democrats are going to

fight over themselves not to have it. joe biden is a disaster when he speaks to people so you'll see the m ares pushing to have their conventions, the democrats pushing not to have them >> that's pope francis we saw pope benedict earlier >> i put theirs >> we have the whole thing covered. >> we do we do want to cover all our bases. any way, we appreciate it. >> sure. coming up, we'll check in with jim cramer as we make our way towards the opening bell and then talk markets on this holiday shortened week tomorrow don't miss our exclusive interview with at&t incoming ceo john stankey as hbo max goes live. "squawk box" will be right back. when the world gets complicated,

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. welcome back to "squawk box. a little more than a half hour until the opening bell and we just heard that new york governor cuomo will be ringing it the floor has been shut for more than two months. we'll get to cbs cbs headquarters where jim cramer is now. great to see you hope you had a good three-day weekend. the market looks like it's about to rip this morning. you buying into the rip? >> look, i always think that there comes a time between 10:30 and 11:00 where there's exhaustion, the flippers come in you can pick i think listening to the discussion of your whole show, it's about opening it's about who will do better. the cyclicals. do you stick with the same stocks no one is saying you should sell that's typical of what's

happening. i think people are just bullish about themselves and what's happening. maybe they're planning trips maybe they're ready to go out and going out. whether you think that that's foolish or not, they're spending that does matter >> and so the question is then -- you tuouched on this -- the idea of rotating a narrow band of stocks have been fabulous, but the question is do you find the banks, some industrials, other unloved industries that may turn if you believe we are seeing a turn >> i think someone has to pay the price of all the bankruptcies i have intuit tonight a lot of companies are not doing well the forbearance of mortgages doesn't that in the end hurt the banks? i think you could say that's why they're down can you imagine when they report

i think the numbers will be hideous. i don't want to be in anything where the numbers are being cut. >> okay. jim cramer, we'll see you in just a couple of minutes >> and david's here! david's here he's allowed to be here. social distancing of course, because we're still people who practice that old thing, social distancing i know it went out of favor. i'm still kind of a believer >> i love it i love it, david's in the house. david's in the house we'll see all of you, we'll see you, david and carl distanced all appropriately and we'll see you guys in a couple of minutes. >> thank you, andrew >> becky, over to you. that's my favorite shot. when they do that two-shot and they're across the studio from each other i hope they take that shot constantly while they're talking. there they are

that's my favorite shot. all right. let's look more at what's been happening with the markets you'll see the dow at this point is about the highest levels since the show started it's now indicated up by 585 points been watching that closely s&p 500 is up by 62. the nasdaq indicated up by 144 and, joe, the bet we made on that first day, first trading day of may, where were the markets at that point when it looked like there was no reason for anybody to come in and buy >> we used 2,850 on the s&p. it's not going to be that -- andrew's story will be he's happy to pay because the markets are up and he wanted that the whole time it's going to be cheap it's taco bell but i want a 12-pack we talked about a dozen doughnuts or a 12-pack and i want some fire sauce fire sauce >> a 12-pack of tacos?

>> i'm not going to eat them all. i microwave them the next day. it's not great because the lettuce gets soggy -- >> wilts >> yeah. but i want a 12-pack they're so cheap, andrew it's like six bucks or something. >> our guest is now good mi mike, we were just talking about jim cramer with the concerns he has and the things he's noticing is that people are feeling more positive about markets overall we have heard that throughout the morning. you are looking at this differently. you think there are changes put in place that are accelerated by the pandemic and you are changing your long-term views and strategies as a result you want to explain? >> yeah. i think in some ways it is aligned with what jim was talking about. you know, we think that looking ahead over longer terms, strategic horizons, that changes we've seen, the price boost we've seen over the past handful

of months means that investors should be leaning more into risk assets, both equity and credit but at the same time, a little more cautious perhaps with respect to nominal government bonds. the role they've played looks to us more challenged over the longer term horizons >> yeah. it's obvious as a lot of the globe has gone into negative interest rates many of the government treasuries have. but you're concerned about inflation. you think the market is discounting that now and you're concerned about a potential rise for inflation given how much we're borrowing? >> i put it differently. central banks we think will appropriately tolerate some higher inflation as we look out the medium to locker ternger te. the damper could be put on the

decades long disinflation that we've seen that means over that strategic horizon, inflation risk may be higher that goes to the theme around nominal government bonds, looking for hedges in portfolios in other places, places like inflation-like debt, that makes a good deal of sense >> mike, the market is watching today news on potential vaccines for this i take it you're keeping your eye longer term figuring that eventually things will get back to normal but we'll still have all these after effects to deal with >> yeah. one thing i would zero in on on the shorter term, and clearly the development is on the public health and medical side will be extremely important for setting the pace we think as well the economic policy response especially in the united states has been absolutely essential for the market regaining some confidence as we look ahead over the summer, we're worried that the risks of policy fatigue could set in in the u.s. we have clips around the small

business lending program, unemployment insurance, state and local finances it will be important that the will that the policymakers mustered to date continues ahead so they know the policy is sitting there as a backstop to support the markets. >> mike, thank you for your time it's great to see you. that does it for us today. join us tomorrow right now it's time for "squawk on the street. >> the nyse reopens for business today with floor traders returning to their posts we're not joining them just yet, but we're hoping to safely be back at post nine in the near future good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber coming to you live from separate locations. futures up 580 as the bulls have multiple tailwinds vaccine news, accelerated lifting of restrictions in europe oi