i>>'m in the market dow futures indicated up by 363 points this comes after a gain of 529 points yesterday s&p futures are higher, so is the nasdaq wti a bit lower this morning the gang on "squawk on the street" is here to pick things up we will see you back here tomorrow see you later. ♪ good afternoon i'm carl quintanilla with jim cramer and david faber we are looking for an extension of tuesday's rally as more lifting of lockdown on restrictions are met can continued policy support from the europeans, the japanese. nasdaq within about 5% of its all-time high and oil is down about 2% art cashin says there is a bit of a stall here. what do you think? >> there's tremendous buying in

the stocks that have been trashed. the one i want to use as a metaphor gary kelly was on. he is the fabulous ceo of southwest air. i was wondering if it could bounce back. he said listen, we have to have someplace to go. suddenly we have universal wanting to open, disney open we have a lot of different people going places, trying to look forward to things suddenly you have a stock that did 70 million shares, they offered it at 2,850 it went down to 2,350 look at it now it blew through the 2,850. those who are coming on on top of the shares, buying at 34, better have something to hang their has the on if this stock goes to 33 we have so much hot money, so much stupid money in the market that i've got to tell you, i think people will get their heads handed to them >> yeah. >> david, jim mentions disney.

we'll talk to chapek later on this morning in the 11:00 a.m. hour about their plans to present the state of florida with plans to open walt disney world. >> it's an important moment. as goes disney, so goes the country to some extent the ability to open the parks. previously mr. chapek, the ceo who took over last fall unexpectedly or earlier this year i forget my time anymore talked about 20%, 30% capacity is what they would be aiming for at first i'll be curious to hear the update when you have him on. jim, back to the point, you were making which i think is an important one. there is a move from growth into value. value. your questioning and perhaps rightly so where the value is. you can move all you want into the cyclical names or the value names, but if they don't have earnings below them, i'm not sure how long that move lasts or

when we get back to the good old growth trade that has served so many investors so well for more than a decade now. >> i saw a lot of complete morons and idiots on my twitter, and they were saying forget that forget f.a.n.g., forget facebook because the president tweeted he may legislate social media god love him he's fantastic what a guy is that the most stupid thing you've heard i look at different stocks, i look at alphabet, numbers too low. netflix, numbers too low amazon, numbers too low. i look at apple, numbers too low. southwest, numbers are way too high the gaming stocks, are you kidding me there's people going into a casino, they're allowed to have half the number of people. this is not a show in the middle of a restaurant where i might actually pay more, these are

companies that are open for business at 50% of what they used to do i love disney, owned the stock forever, but 50% how about earnings power facebook's numbers are way too low. but the president might regulate it the president doesn't have the ability to regulate facebook the f.a.n.g. trade, i always say the same thing it's been dead for three years pronounced dead on this network or by the analysts you know what? this is lazarus. they ought to read the bible >> the banks were up sharply yesterday. they'll have a strong open yet again today, facebook, of course, is down. we'll see how long that can be the case, carl >> yeah. all-time high for facebook yesterday. longest win streak at eight since 2015 you had that story in the "journal" about the company's internal teams telling management their algorithms were

socially divisive, didn't get much traction. then you, jim, on twitter this morning seem a little bit down on just the color of the platform separate from what the president said about shutting social media down, it seems like you're not getting the value you once saw >> i like facebook, i think they might be -- andrew knows this, they might be able to get the 5% fee on retail sales. at the same time, i like facebook, do i want -- i want facebook to calm down. you get this setup on what we call an island reversal, it jumps up, then goes down this happened to take two last week up and then down i wanted it to cool down this announcement came out last week it's a great announcement. to have companies, brokerage firm after brokerage firm.

today citi came out. you can't keep building on a castle of sand i see a lot of quicksand underneath some moves. i wish we would just calm down and kind of just digest some of these things you can't have the airline move the way it is. the casinos. you can't have the cruise ships, yes, there's some f.a.n.g. too high but i do feel that people are kind of -- it's too happy days are here again, carl it's not going to work like that, not with 38 million unemployed 38 million a lot of people. >> jim, there's -- you know, i've said this before, because i continue to hear it. there are managements that are taking advantage of this opportunity to become what they call more efficient. it's unclear how many people are going to then not have jobs when this is at the other side. >> yes >> we saw boeing today the layoffs there.

that's a unique situation in some ways. i believe there's a contention that can be made that employment levels will not be near where they were prior to when this pandemic began you have the stock market, you have the economy, are the two completely separate? will it matter that we're a consumer-led economy and we'll have a 10% unemployment rate at year end that may be optimistic in some peoples view or is that going to be reflected in stock prices, at least in certain parts of the market >> it's clear from the auto zone i love that company. they' their numbers were down 20%. then the stimulus checks hit they were up 20% that's kind of bipolar insanity. but the fact is when people got the money in their pockets, they did things they were bored. what happens when that money runs out what happens in july when the $600 runs out from unemployment? then you have an economy searching -- people are

searching for jobs i know in the little business i'm involved in, we couldn't hire anybody that's not sustainable in maybe other areas. new york has become a poster child for an economy that doesn't know what it's doing david, you were dead right when you see this work at home, you know what that is? that cuts out a layer of people or else they would want everybody back you think everyone is good-hearted, doesn't want everyone to get sick a lot of companies are saying did you see how expenses, how down they are? i'm reading about companies, by the way, travel, they saved so much by not having travel that they could make their quarter from expense side. so beware. >> that's a great point. carl, that is the other side of it in that perhaps the market is already sniffing out the margin improvement that jim is talking about from t & e being so much lower that could also go when you look at the airlines, you wonder when business travel come

back in a robust way will it be ever what it once was? there's a lot of savings that will be higher than they had been >> you have a situation where revenues will be down, but expenses will be down. that's not why we pay up for stocks it's not >> that's true >> i mean, you know, you think back, guys, in late march we were worried about a second wave in europe and asia signals that those things are happening are slight new york cases are down 90% from the high korea, the cdc there suggesting there's been no reinfection, meaning immunity may be reasonable to expect the question is how much is all that improvement worth when do we get to this next phase of worrying about second order knock-on effects >> i think the numbers are extraordinary about how better different countries, different

cities got it's fantastic we want everybody to be healthy. we don't want spikes i think when you come back to david's point that is so important, this little interlude dramatically changed the way ceos think about expense structure. expense structure is people. expense structure is rent, but it's people. i think the behaviors were so quickly learned and are not going to be unlearned as quick we have workday tonight, sal salesforce on thursday some of the big trade down retailers coming i think you'll be surprised to see how much those companies saved jobs they cut down expenses or how much you spend they may be the winners. i'm not a believer we'll jump back into an economy that's roaring. i can't. not when 50% of most of the things we love to go to is not allowed. how do we go back to where we

were >> last night you made changes to your covid index. is that what you were trying to get to >> yeah. we wanted to have companies that can do well. you want to add an etsy. etsy is part of this my company is not coming back, i'm a small business i want to have some money in it. my company is a small business company and it's not coming back i can't afford the rent. what is chegg? chegg is online textbooks. because i await to hear that colleges are going to open these were the great ecosystems of spending and jobs, places around college towns, could that be gone? that's why i keep thinking more stimulus i know that's come very out of style in 72 hours, but when i think about the kids who are supposed to go back to school and they may not, that's an ecosystem that provided a lot of spending in the country.

it's going to be obliterated we had to make changes in the index to reflect the fact that some things are not coming back and are more stay at home and less exactly related to the disease itself you have a couple of second tier vaccine companies, cut them out. they're not the ones when you have a merck in there doing it you want to stick with the majors the moderna insider selling, i will reiterate what people have said, it's horrendous, it's heinou heinous. >> we talked about when they did that, the equity offering that they also did soon after those results on the eight patients or the early look at the eight patients came out. we sort of questioned the timing of that as well. back to colleges i'm certainly focused on that as so many other parents around the country are. i think it's unclear these schools are not going to do

their very best to make sure they can open with students on campus now, life will be different. and it may impact, as you say, the overall economy of those surrounding areas to some extent students will not be going out, for example, which would be a key thing. you are going to, i think, see a lot of schools open in some fashion. >> for $80,000 your kids does zoom for 80,000 she's zooming >> some computer-related schools won't because of remote. there will be questions. the schools are facing, as you say, parents will not want to pay tuition bills as a result of it being remote. they already lost summer session. room and board, which can be amortized over the year. there's so many reasons universities and colleges do need to figure out a way to open it's important as you say for the over all economies in a lot of states. >> sure is worth talking about. >> yeah. maybe purdue is a canary here,

mitch daniel's op-ed in the post talking about why it's so important to open in the fall. a quick break. a lot to get to. news on tesla, an important launch out at spacex and nasa. dow at the highest since march 10 s&p since march 5th. we're back in a moment (vo) our communities need help like never before and wells fargo employees are assisting millions of customers across america through fee waivers and payment deferrals, helping people stay in their homes through mortgage payment relief efforts and donating $175 million dollars to help hundreds of local organizations provide food and other critical needs... when you need us, wells fargo is here to help. ever something's gone mogotten into the office.m,

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some of these restaurant stocks have been major participants in the rebound. chipotle up more than 55% so far this quarter papa john's, 33.5% jump in north american comps in may. and dominos up 20.9. if you can deliver or if you can deliver either remotely or curbside, you have something going on >> i am just -- these were shocking numbers papa john at 33% they were on for "squawk box." incredible dominos when they came on "mad money" signaled that something crazy was going on march to may, 16%. these are unheard of numbers and i think that what's going to happen is those who buy these stocks on these numbers are not understanding that those numbers will start going down as other restaurants open up. this is the on the couch playing

the video game, the video game stocks have tanked and i don't think that you can buy either dominos or papa john on these numbers then next month won't be as good because there will be other alternatives some people will want to stay oh some some people will want to cook. but i think people feel cooped up >> do you go to cheesecake factory and darden instead >> i think so. darden had a good move yesterday. i think people want to go out. i think people are tired of cooking and ordering the same stuff over and over. >> doing the dishes. >> oh, my god. i did the dishes this weekend. we finally did contactless place, and i was like wow, at least i didn't have to -- it was joyous to not have do the stuff i've been doing. i'm not alone. i think there's just 70 million,

80 million households saying let me go out, please. let me dominos go. >> right here, baby. the cleaning never ends. it never ends. >> did you put the dishes in the dishwasher what is that in the sink how about that what's that in the sink? how about that glass. >> those kids, they don't help what did i do wrong as a parent? >> they never help how about the coffee grinds in the coffee pot when you come down yeah, that's good. i left those no no a great reason why they should go off, graduate, move on. >> the mopping, the dusting, and the -- >> the dusting >> don't talk to me about the bathrooms. jim, tractor supply, that is the key to this market >> that is counter urbanization. get to know that term. counter urbanization

the same thing diana olick is seeing in housing. >> counter urbanization. guys, we'll come back and have a mad dash from jim we'll have the new ceo of nxp semi join us. there he is, kurt sievers. stay tuned

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lockdown restrictions continue to expire around the world. central bank is on the case, the japanese with another trillion dollar stimulus package. futures are positive as the aalti hh.ks to open within 5% ofn l-meig [music] [music]

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welcome back to "squawk on the street." time for a mad dash. tesla is the name, not one that's unfamiliar do mad dashers everywhere >> david, today is historic. elon musk as we were told by wedbush is laser focused on the spacex crew dragon which is launching for the first time in nine years, man going back to the international space station.

what we're learning is storm clouds starting to clear with fremont engines. it turns out that demand is very strong for tesla, both here but particularly in china. wedbush puts it at $300 a share. at the same time we have a terrific series of calls from different companies, different brokerage houses about how it is time for people to realize that it is okay to buy tesla here what's interesting, david, this is about 500 points from where it was when nobody liked it. now we're starting to get some positive feedback on tesla itself, even though the man is laser focused on florida this is what -- this is what passes pore research deutsche bank, tesla ramps up production in shanghai gig ga factory and suggests a large backlog of chinese orders it

looks like once again he wins. he's on leno tonight he's popular he has a kid whose name is not pronounceable. >> it's like a series of letters and numbers. >> you have to decode his name >> there was a time when gasoline prices were high where it was better from a financial standpoint to have an electric car. that's no longer the case, but demand is undiminished so it's people trying to be better to the planet or they like the car >> they like the car it's technology. it turns out the other guys, people didn't think their models were interesting it's the allure of what i regard as being some oone who champion technology, who doesn't have to run a lot of ads on tv and it's

still a novelty. long after it started that attitude prevails. shanghai could be huge for them. those who are still betting against tesla, sorry, bad day. you can come in, try to short it knock it down a little but wow. the analysts have been waiting for the space launch i hope the space launch goes well if you have not been to one, you should go. quite exciting >> i would like to. >> never been to one >> no. i would like to go it's a great thing trump weighing a whole menu of action against china could that be tesla? i don't know that's the big menu against

china. >> that's got to -- that's got to continue to be an issue that the market needs to reckon with. increasing tensions between our country and china, what form that will take after two years of on again and off again trade talks that did result in a deal, china has been raised as a focus in terms of the virus and what it's done and how it withheld information apparently to some extent. being blamed for that. and the protests inhong kong so many different things under way. a bipartisan issue when you hardly see those >> yeah. house will vote maybe today on a bill on human rights abuses regarding the uighurs, but we'll see. kudlow had some interesting comments yesterday about the trade deal and how the president is miffed about it maybe thinks about it differently than in january. as for tesla, there are reports that they've trimmed their prices by 6% in north america.

we had a discussion about consumer household budgets, pressure, unemployment, pay cuts why would you want to spend 75,000 on a new car like tesla >> the 1%. the 1% is not heard here because that spending is unabated for tesla. the numbers don't lie. maybe it's more worldwide. a stock to watch, regeneron. priced last night at a much lower price than where it is this is the big sanofi piece people are up big on it. watch that stock if you want to find out the tenor of the market, regeneron this was a $515 price tag. look at that go. wow. >> yeah. >> guys, we'll watch that. there's the opening bell just looking up to see who rang

this morning i want to mention quickly, jpmorgan -- warner media >> exciting. >> hbo max john stankey earlier on "squawk" talking about that launch and the sort of business strategy, david, in all the myriad numbers of hbos and maxes and so forth but that's going to be a big one. it's been a long time coming >> yes we've been waiting for it for quite some time. i can remember when i sat down with mr. stankey who is going to be taking over as at&t's ceo in a short amount of time when we spoke last fall when they launched it so to speak in the sense of unveiling it, i should say today is the launch. the price point is something that has had people wondering about the uptake given where it is priced. there's so many different things involved with it in terms of,

well, are you going to no longer take it from your cable distributor and are you going to have a direct relationship with at&t by signing up for the app on your tv or through any number of ways that you access it >> that will be interesting, how they go about marketing it and the separation they are between themselves and the cable distributors.. and still other questions p at&t's business. directv and the loss of subscribers. not to mention warner media itself ratings may be up but pressure in some areas. and film production, there isn't any. so 2021 may be an interesting year you may get a huge slate of films, i don't know how many of them will go direct to hbo max from the warner library or from the warner production side or will still go to movie theaters

if people are still actually going to movie theaters. >> this is the blue state versus red state. people think maybe it was a hoax a giant hoax a light flu. we have people in hazmat suits and i think that the hazmat suit crowd is overdone. i'll sit next to anybody is overdone i think people will go out except for the thing to watch is the best buy the 60 to 70-inch big screen, that's a killer for a lot of the movie theaters that's fun hom home >> right hbo max versus netflix, he was

quoted incorrectly saying they were trying to kill netflix. he's looking to differentiate the hbo max product by library and obviously by just the content itself take a listen to what he said earlier. >> our goal is not to be netflix. our goal is to be something different. there's other streaming services that are starting to show up in the market that clearly hit different needs for the customer hbo max will have a unique focus and position with the customer, we'll play our game. our goal is to not crush netflix but meet customer needs, engage them every day that the household finds something worth while to spend time with us that's what we'll stay focused on >> hbo has been a successful product. but there's still continued questions as t expand the audience beyond what

has been the hbo audience so far. >> i remember jeff bukus, great american often spoke about how this was such a valuable property it was lost within now it tells a good tale does it offset what's going wrong away from it >> i don't know. that remains to be seen. precovid-19 and post, this is still an important effort for them setting them up for the direct to consumer future and putting them in a good place after they struggled to close that deal to acquire the company, sat there for a year longer than they anticipated when the world sort of kept moving on. at&t has an important wireless business it was interesting listening to

stankey talk about the broader tends they're seeing amongst consumers. they have a good feel for small to medium sized businesses warner is still an important part of that company hbo max will be an important effort for vestors will be watching closely >> today is another day where they hate the stay at homes. anything travel is overbought today. american express has been down, down, down people hated it. suddenly they like it because people are traveling >> city, tremendous credit card company, and wells fargo is now the darling. we don't want stay at home for the morning, maybe the afternoon, but the market is a little too much. you don't go to these extremes each day i would rather people calm down a little

a lot of this might be etfs. give me an etf for finance numbers have to come down. when numbers come down, stocks go down. >> jpmorgan first trip above 100 since april 14th we didn't comment on dimon's presentation at the deutsche conference forecast for loss provisions, maybe we could be done by q3 the ongoing conversation about the industry maintaining dividend dividends. >> that was very encouraging that's who he is he was sick when they reported but this was the classic jpmorgan i don't know what people are doing with my stock. the dividend is fine business is good it was a v recession call.

and he's never going to be the guy who will say it's a long drawn out recession. his take was it's over again, i think it may be over for some of these banks. it's a case where the regional banks are so cheap i don't know if it's the case. jamie was his old self yesterday. it was electric. i felt terrific when i listened. i thought we have to get more bullish, but this bullish? >> it's interesting hear you talk about back to work and jamie dimon. he's very focused on getting employees back and how they'll go about doing that, which is a part we're all talking about here how do you get people back in tall buildings with elevators?

how do you do that in any real way? it's a real problem. it's a problem a lot of businesses are trying to deal with so everybody is not sitting there waiting for an elevator that they can take given the amount of space. >> the ceo of palo alto said we have to give people a choice it's those elevator buttons. the cafeteria. men's room >> yeah. >> barclays is tracking headquarter staffing for s&p 500 companies. and if you baseline it to march 1st, we're running about 90 points to the down side. we were down 95 in april that's an interesting chart to watch. let's get to rick santelli here and check in on the fixed income hi, rick >> fix the income markets will get exciting i'm not talking about the u.s. markets, i'm facing overseas

the european union will announce a 750 billion euro, 8$825 billin stimulus package, shared debt. they'll issue it in the public markets. look what it's done to the bunds, the best quality versus the italian bonds, far from the best value that spread narrowed from 250 plus to under 1.90 the closer it gets they're selling the good credit and buying the sloppier credit because it will get bailed out look at their currency the euro at a two-month high let's look at the dollar index closed yesterday at a 1 1/2 month low. shared debt will be great for the economies of europe and bullish for the euro currency. we have to stay tuned. carl, jim, david, back to you. >> okay. thank you, rick. i will take it let's get in an interview now. a lot of semiconductors have felt pressure from the

coronavirus on their ability to produce and in their end markets. nxp semi, how are they doing let's check in with the company on their first day for the new ceo. kurt sievers joins us now let's start with auto, if we can. it's such an important end market for your product. i know you were asked a great deal about it on your conference call roughly a month ago when you reported earnings. what are you seeing in the automotive markets now specifically to china, which has been open a bit longer and demand seems to be coming back and both here in the u.s. and europe >> first of all, good morning and thanks it's a pleasure to be on right here and now as you just said, i'm literally rushing out of our shareholders meeting where i got a fantastic

vote of confidence for being the ceo for 45 minutes for nxp, a great moment after being for 25 years with the company it has been 11 years a member of the executive management team. indeed, that's a great moment. a pity we have to do it in this virtual way. still i'm glad for having the opportunity today. speaking about auto, yes, this is about 50% of nxp's revenue. a very important piece and also from a future perspective a growth area for us if you think about radar, safer driving or battery management in electric vehicles in a short-term basis, clearly the covid-19 pandemic has had significant impact at the end of quarter 1, going into quarter 2, from a factory shutdown perspective of the auto oems but, yes, it is faced.

so we see china coming back in the second quarter so in april already, but now also in may with the first car sales numbers which we are seeing from china, it looks like china shows car sales which is for the first time for many quarters up year on year that is in contrast to the u.s. and europe, their factory shutdowns only started in april. while europe has restarted car production in the first half of march, in the first half of may, excuse me, the u.s. just restarted in the last week or so it's always hard to say what the right numbers are. i saw ihs was telling us that they expect that at the end of quarter two, the car production in europe and the u.s. should be like 65% of the pre covid

period that's sharply down, but china is coming up china is the largest geography when it comes to car production and we have significant exposure on china that's helpful >> when you mention china, it also is figuring into a lot of investor concerns in terms of trade between our country and china. do you share those concerns in terms of the u.s. government saying that your production to some extent is not able to be going to china i don't know how much of it is produced in the country. give me a sense of if this is a concern for you. >> we've been living in this trade tension world for quite awhile we always comply to the control regulations from the u.s even the latest ones which came

out, it looks like we don't see a material impact from that. so far we are faring well. honestly, this is a dynamic world. we are watching this closely always to make sure it can be in compliance with the rules. >> one of the things that was done right is in 2015, he bought freescale, where other companies were hostage to apple. do you need to make an acquisition to bring out -- to do more in communications or do more in mobile rather than just wait for automobile to come back automobile may not come back the same way as we thought before the pandemic that's a great point i've been involved in the deal and the merlm emergency witmerge

we are the leader now in automotive that's a result of that combination between nxp and freescale. mentioning qualcomm, i've been living and to an extent suffering through that episode in our history what we found after exiting this deal is the one thing we were missing is connectivity. we have to be all about secure edge processing, connected secure edge processing we were missing the connectivity piece. we fixed that. just at the end of last year we completed the deal of acquiring the connectivity assets of marvel so my answer to your question is from a portfolio perspective, we're complete at this point

there's always small tech investments which we will do consistently from a bigger perspective, we have what we need. now it's all about execution yes, i would say on automotive, clearly the days now with covid-19, it might take a while to come back, but the growth in automotive comes from the content gains. it's not much about the absolute number of cars it's about the growth and innovation of the content in the car. think about radar systems, all the cruise control systems the blind spot protection systems, the emergency brake, all these systems need radar these are electric vehicles. now in the covid-19 period, i'm seeing the government stimulus programs which are coming up this morning, i saw that france and europe launched a large program. they are all aimed especially at electric vehicles.

i do believe that through this period, there will be more electric vehicles and we are benefiting from it all of that was a result of the combination from free scale and nxp and now augmented by the connectivity as it is from marvel >> as we wrap up here, i want to ask about your view of gross margins. on the conference call a month ago your cfo indicated they would be under pressure for a couple quarters. how do you view them over time in terms of normalizing and is there an opportunity to gain efficiencies that will allow gross margins to grow when we're on the other side of this pandemic >> yeah. we kept saying that when we run 2.4 billion revenue per quarter, we hit the 57 mark, but it doesn't stop there we want to grow beyond 55, and then it's really about the

product portfolio. it's about the npis, new products coming out, which are higher value where we can get better value from our customers and that over time will lead us from 55% to 57%. >> kurt, certainly appreciate you joining us 45 minutes, i guess, according to you after having taken official control as ceo. nice to have you look forward to having you back in the future. >> thank you thank you. we'll take a break here. markets hanging in there financials leading the way up 3.5%. the top performing sector followed by industrials up almost 3%. we're back in a minute at mercedes-benz, nothing less than world-class service will do. that's why we're expanding your range of choices.

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it's going to have an option to have rocket thrusters >> rocket thruster >> yes from spacex. >> all right >> yeah. >> all right how does that work i don't know when you're kidding or not >> serious >> what provides the thrust? there's no fuel in the car >> ultrahigh compressed air. the main thruster will be behind the license plate. so for acceleration it drops the license and just -- and behind the license plate is a rocket thruster it's like full on james bond >> that's elon musk talking to jay leno about the tesla roadster with rocket thruster. you can see more tonight at

10:00 p.m. on cnbc today we're paying attention to the thrusters that take the astronauts to the international space station, first man to mission off of u.s. stale in nearly nine years. >> it's terrific it's not like a james bond car he's talking about but phil is unbelievable he -- remember you asked me, well, how the electric vehicles would be doing with gasoline down he has a study he's going to be on our website. karen e.r., a consultant says that next year they're poised to explode europe, major incentives china not slowing down surge in certain models. elon is the leader, but it looks like the ev without, even with gasoline low incredible i don't know if they're going to have rockets it's not an aston martin remember, you first drank

smirnoff that was questionable >> that's right. good gun a quick break, we'll come back in a moment don't go away.

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rally gets extended to wednesday. south of 3 k right at it. a lot of stay at home names in the red. netflix, hormel, and others. we're back in just a moment.

it's time for jim and stop trading. >> dr. anthony fauci said things about how we could have a vaccine in november or december. no longer the second wave of co-vid if that's the case, think about retail ralph lauren, it looks like the stock could be bottoming they're branching off to be more iconic it has lots of stores not in the mall it has some good management, and the numbers were pretty good when you went into the inside of it so that may be one if you're thinking well, you know what, maybe things are better, this stock is well off the highs. ralph lauren, may be an interesting buy. >> yeah. a lot of factory outlets that are outdoor, too >> exactly that's what people want. outdoor. not a lot in the mall. i have workday breaking

earnings hp breaking earnings after the xerox fiasco on their part and airlines, phil interviewed the ceo. i have a chairman. we're probably going to talk about the notion calhoun was talking about. one of his best customers is going to die calhoun is looking like -- -- you know, he ought to not speak at all and carry a big plane >> yeah. we'll see you at 6:00, "mad money" on cnbc good morning welcome to "squawk on the street." i'm carl quintanilla with sara eisen and david faber. s&p 3 k hanging in down a touch from yesterday's highs but still some pretty good action with the exception of some of the names that have done well under a stay at home paradigm the netflix and amazons of the world giving back financials doing quite well as jpmorgan

returns to 100 for the first time in more than a month. >> yeah. first thing you look at it is stocks like carnival cruises or united airlines which are higher tech lagging that's the theme over the last two days joins us this morning, jamie cannahan and keith learner as we've seen the markets surge and we see the rotation from growth to value, what are your retail clients doing >> well, they've been somewhat similar in the fact that they've been primarily in stocks that are more conservative most of the time we're starting to see a little bit of them go out of it it's been a consistent pattern really since this crisis started. and that is investing in stocks that are more dow-like have plenty of cash to withstand any longer-term bumps but the

one area that they have been very consistent in investing has been the travel stocks since march. the airlines the boeing itself. and some of the cruise lines and so they've been handsomely paid this doing so it's interesting over the last few weeks they've also become a little more attracted to the financial stocks also. and the strange thing is i thought we might see our clients go out into more health care, but we haven't seen them really go out as much into some of the health care stocks as i thought we might see even though it seems that has a little bit element of speculation in health care in a way we necessarily haven't seen in the past. >> what about the megacap growth names. what's the sentiment on that with retailers you deal with versus where it's been

>> facebook, apple, have always been traditionally the last few years, number one, number two traded stocks for us as a firm that continues to be something netflix kind of goes back and forth at the beginning of this crisis netflix was something our clients were very very attracted to that has sort of waned off a little bit as we've started to see people in the go back to work mode or at least the optimism trade as i would call it in terms of people going back to work overall. and it's been very interesting in terms of the fact that we've also been able to get a lot new accounts a lot of people going through our education in terms of trying to interact with the market. in fact, we released a new web-based platform we're trying to get more people to be more interested in the market through education, but with that, we're seeing people i

think make smart choices in terms of the fact that they're not necessarily chasing many of the stocks that you would think they made. >> we're seeing in force today this significant move out of growth and into so-called value. yesterday i think was a six standard deviation in terms of that is it sustainable continues to be the key question. >> i think short-term it is sustainable. if you look at how far the rubber band was stretched between value and growth, it became extended. and i think this weekend changed the perception we saw people out on the roads again. you saw hotels start to more bookings and so forth. i think those things are being up, there's some more room longer term, we still like some of the secular growth stories. think about technology and health care. they outperformed by so much

they're consolidating. a lot of stocks made new highs recently and after consolidation, we think that's leadership and you want a barbell between the two, and after all consolidation, we're looking to add attack >> you say in the short-term the value trade is going to work how do you define value, keith what sort of names and sectors are you looking at >> well, typically you're looking at financials, the industrials. really all the things that are more sensitive to the economy as a whole. and again, even though one place we saw more favorable is small caps on the a short-term basis even with this recent snapback, there's still pretty stretches to the downside. we think it has more to run, sort of term over the next several weeks and we think eventually the rotation goes back toward the large and more sustainable tech and health care

companies. >> one of the questions about the rallies off the lows has been participation how much money is sitting on the sidelines and could that be a tail wind for this market? >>. >> well, you know, i think as i said, we have a lot of new accounts i think you're seeing people who are more interested in the market than they ever have been and it has to do with the fact that they have time to pay attention to their investments in a way they probably have never really had before. and so with that, getting educated, et cetera, so do i think people are all in? absolutely not in fact, i think that if you would say the people were going in with their toes or whatever, maybe they're up to mid thigh to was waist right now. but there's a lot of people waiting to see what happens next as we got above 3,000 yesterday and we were approaching it, i would say it started -- the times we've hit 2940 on the s&p

500, people are very nervous when we get there to really start committing because they're like have i already missed the move and so it's very interesting to me that even with some of that, you're seeing people perhaps be a little bit cautious about continuing to put more money at work so it will be interesting to see psychologically getting over the 3,000 level fantastic, and getting above the 2 00-day moving average on the s&p 500, fantastic. but are people going to be tepid going forward until we get more reassurances in terms of getting back to work and in mid june to late june, do we see the airlines ticking up like we want do we see hotels getting booked like people expect them to as we're still not a in situation where all states are back to work >> keith, we've also talked a great deal here, and i know you're focussed on it as well, at least in trying to answer the question that divergence between the real economy and jj just referred to it and the stock market we have all-time high

unemployment numbers and i can go on and on from there. what co-do you make of it and how should investors view that divergence >> in some ways we think it is normal but it's compressed as far as timeframe the economy or market tends to bottom about four or five months before a recession is over so we might have the sharpest and shortest recession in history, and our base case for some time has been we'd start to stabilize in the economy in the summer it's happening a little bit beforehand let's go back to 2009. markets bombed in march. recession was over into the second quarter the first quarter of growth we had was in september it was only about 1.5% in some ways, the market's forward looking and also going back to technology, health care, communications, those areas combined account for about 50% of the overall market, and those earnings have held up really

well one last thing as i may as we talked about this rotation earlier. yesterday we saw 90% of stocks in the s&p now above the 50-day moving average the market is broadening out, and historically, that's a good ohmen when you look at one year. one year after similar signals the market's been up 14 out of 15 times double digits again, a little bit short-term overboard, but it's a healthy signal for the overall market. >> and just, i feel like when we're talking about the economy versus the markets, the news today, more than 80 0 billion from europe. 1.1 trillion from japan. keith, is it enough stimulus to keep the market totally detached from the economy and ease the pain of all the horrible economic numbers and what's going on beneath the surface >> i think it is important the thing with the stimulus

package, not only was it more than twice the amount in 2008 but also happened more quickly and we're seeing this on a global scale because of the low yields, we have the dividend yield and s&p relative to the ten-year at the highest level since 1940 the old saying was don't fight the fed. today, don't fight the fed, bank of japan, don't fight the ecd. that continues to be a tale for some time. >> thank you both. >> thank you >> thanks, sara. when we come back after the break, an historic launch for nasa and spacex. we're going to talk to a nasa administrator when we come back. >> it's an honor to be on this launch pad we're grateful this is like times square. it's not just opening a plant. it's opening a plant on times

square it's the best pad in the world >> what does this moment mean for you? >> well, this is the culmination of a dream this is a dream come true. in fact, it feels surreal. if you'd asked me when starting spacex if this would happen, i'd be like 1%, .1 % chance. this moment right now... this is our commencement. no, we'll not get a diploma or a degree of any kind. but we are entering a new chapter in our lives. our confidence is shaken; our hearts cracked. the kind of a crack that comes from the loss of a job; from life plans falling apart. we didn't ask for it... but we are rising to meet it. and how far we've come isn't even close to how far we can go. we just have to remember how patient we were... how strong we can be. (how strong you can be.) and remember this;

there's a crack in everything for a reason. how else can the light get in? ♪ tomorrow starts today.

markets going strong here. let's hit our etf spotlight. today a look at financials leading today's trade for second day in a row

the banking index, on pace for the best week, up until 4 %. citi group and wells fargo leading the charge higher. goldman sachs in the green gains of at least 4 % for the names. later today, don't miss our interview with john wald ron on closing bell we'll talk about this bank rally. dow is up 273. stay with us on "squawk onhe re." t ever since we've gone mobile on the now platform,

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shot from the kennedy space center where later today nasa and spacex are set to send humans from u.s. soil for the first time since 2011. let's get to morgan for more >> hey, carl that's right nasa administrator jim bridenstine, thank you for joining us today on what is a very historic moment not just for nasa and spacex but for the country. carl mentioned first attempted orbital human space flight from u.s. for years it represents a paradigm shift for nasa from operator to customer how does this redefine american priorities in space and what does it mean for the agency? >> yeah. that's right we are launching a new era in human space flight there's a number of milestones

being achieved here. we are launching american astronauts on american rockets from american soil for the first time since the retirement of the space shuttles back in 2011. as you said, we're doing it differently than ever before nasa is not purchasing, owning and operating this vehicle we partnered with industries nasa wants to be a customer. we want to be one of many customers in a robust, commercial marketplace for human space flight we also want to see numerous providers that are competing against each other on cost and innovation the goal being we need to drive down cost and increase access to space. >> all right i want to dig into that more first, i'm looking at the weather behind you you're joining us from kennedy space center right now where the launch is currently scheduled to happen a few minutes after 4: 30

eastern today. i think you put out updated conditions, looking at about 50% possibility today. got this tropical storm that's brewing off the coast of the carolinas right now. how like think is this to happen today? and when do you have to make the call >> i think we're more likely to launch than not. right now we're pressurizing the helium tanks that's how we pressurize the fuel, and all of that is underway we're going to have a weather update here as early -- as soon as i get off this interview. and we're going to make another assessment right now we are go for launch and planning to launch >> okay. we're looking forward to that. just to go back to this idea of costs, this mission is called demo 2 technically it's the final test, potentially the final test for spacex before its crew dragging capsule is certified for regular use by nasa.

the astronauts that are going up are going to be doing an extended stay at the international space station one to twofour months. what's the cost for the mission and how does it speak to savings baked into having a public/private partnership like this >> that's a great question this mission represents the final test flight. this is an end to end test flight we cannot forget this is a test flight but this is the final test flight in a $3.5 billion investment by nasa to get to this point where we are ready to launch american astronauts from american soil yet again. of course, part of that contract is six launches in what we call crew launches. and then beyond that, it's going to be negotiable it's the element when we get into negotiating where we have numerous providers competing on cost, innovation and safety,

that's where we'll get the cost savings. right now we're buying access to the international space station and we've been doing this nine years, buying access from the russians they're charging us 8 -- $90 million per seat we believe we'll pay less than that going forward and keep it in the united states >> i want a personal question about the astronauts i've read their wives are also astronauts that's very cool have you been in touch with them how do you collaborate with them as they prepare for a mission like this, and how are they feeling right now? >> absolutely. so for the last two weeks we've been in touch almost every day yesterday i met with them personally today i'll see them as they're getting suited up. they are both cool as cucumbers. bob hurley is a test pilot of

the united states marine corps, a veteran of numerous shuttle missions and bob is a test pilot or a flight test engineer in the united states air force, another veteran of numerous space shuttle missions these guys are ready to go i told them if there's anything you want me to do to stop this, you tell me. they said we're ready for launch they've been involved in preparing and developing the rocket and the capsule this is their mission, and they're ready to go. >> they've been working closely with spacex. as the saying go, space is hard, space that involves humans, even harder everything needs to be perfect there are some new protocols, at least versus the history of nasa and nasa's protocols implemented including the fact a astronauts are going to be on board an in crew dragon when the rocket is

fuelled. what's gone into safety and how does i guess that speak to this collaboration? this partnership with a commercial company >> that's right. what nasa did, when we came up with this program to launch commercially, we did not say how to design your vehicle we did not tell them how to do it what we said is here are the top line requirements for capability and the top line requirements for safety and you need to prove to us through your engineering prowes how you're going to achieve the end states of course, through the engineering process and the testing process, make no mistake, there were concerns about how that -- about fueling while the rocket -- while the astronauts were on board over the last number of years, we have been made very comfortable. this is probably the safest vehicle astronauts have ever launched on.

of course, i'm saying that in theory because it hasn't been tested end to end with humans on board at this point. and that's why we're doing this particular test. but look, this rocket is not just a rocket for humans the way the space subthuttle was this is launching all the time international payloads, weather payloads this is a well-proven rocket and at the same time the -- there's a launch abort capability with the capsule which is space shuttle never had. all the way up to orbit, if something goes i don't thiwronga launch abort capability. we have to make sure the weather is good down range if there is an abort, we have to make sure they're safe and right now we're looking pretty good. >> spacex is one of two partners you have boeing is the other one. we've seen some delays on that

end as well as that company looks to do a second on crude test flight of the star liner vehicle. how special is it to the broader nasa mission around this program to have them up and running too? >> very important. we need to not have numerous customers but numerous providers. you have to have the supply and demand side both of course, we're developing side by side with boeing, their vehicle. and i would also say it's important to have dissimilar redundancy when we have the space shuttles, if they went down, we were down for years at a time. now we have dissimilar spacecraft and rockets they don't use the same parts, and of course, that puts us in a position where we can go forward even if one has a setback. so i think it's important to remember we're committed to both, not only for the principles of market economy,

but also for the principles of safety and moving forward. and remember what we're trying to do. we're trying to commercialize low earth orbit. right now we're using the international space station to prove that we can print human organs in 3-d using adult stem cells, skin cells. we're proving we can create artificial retinas for the human eyeball so people who have macular degeneration don't have to lose their eyesight these activities are available because of a resource we all microgravity it's only available in space, i would say almost zero gravity for the folks who aren't familiar but this is a capability that we believe there will be large investments by the private sector large capital investments for not just launch which is what we're doing today, but eventually commercial space stations themselves. >> yeah. and of course, potentially movie starring tom cruise at the

international space station as well lots to watch. jim bridenstine, the administrator of nasa, thank you for joining us ahead of what is poised to be an absolutely historic launch and mission. for not only america but for the space industry and the world as a whole. thank you. >> thank you always all right. and thank you for bringing that to us, morgan. wow. 3-d printing of organs in space and retinas. that went interesting places speaking of going to interesting places, let's goat to see herrera with an update. >> thank you good morning, everyone a vaccine for covid-19 is unlikely to be available to the general public until next year that's what former fda commissioner scott gottlieb said this morning he says significant doses of potential vaccines will be on hand this year, but the data proving safety and effectiveness will probably take longer to gather you can go to cnbc.com and see

the full interview house republicans are suing speaker nancy pelosi and other congressional officials to prevent remote voting during the pandemic calling it unconstitutional democrats passed the proxy voting measures over unanimous republican opposition. and in europe, the eu has proposed a coronavirus recovery fund worth some $825 billion money for the fund would be raised by selling debt and that is a first for the eu. two-thirds of the money would be given as grants. all 27 member countries must agree for that plan to take effect you are up to date carl, see you in an hour back do you. >> all right sue, thank you when we come back, the head of one of the world's largest commercial real estate firms, curbman and wakefield joins us on the other side of this break. don't go anywhere as we're trying to hold onto 3 k with yields and oil now down %. -- 3%

we are continuing to track how eased rules are impacting the health of the country. our map breaks down state case counts the dark shade those with above 80%. today we're watching florida, kansas and new hampshire all three weeks post opening florida has seen a 45 % rise in total cases week over week new case the state has seen a 56% rise in hospitalizations an average of 152 patients per day. testing since reopening has risen. 3% of the tests returning positive over to kansas, the state has seen a 78 % rise in total cases but week over week they're seeing improvement with new cases falling 24 % hospitalizations in kansas increasing 46% an average of 11 patients per

day. testing since reopening has increased 121% 9% of the tests now returning positive results and then in new hampshire, total cases have increased 68% new daily cases higher 6% from last week. hospitalizations in new hampshire up 54 %. an average of 6 patients per day. 5% of the tests are returning positive david? >> that's very interesting data. thank you, sara. of course, on the subject of getting back to work, we want to bring in our next guest, brett white from cushman and wakefield. the company has just finished conducting a 40,000 person survey of workers from around the world and across all industries and brett, want to hear about that, and i want to ask whether it's changed your view at all in

terms of the return to work, because when we had you on a number of weeks ago, i think you were referring to a smaller survey of 317 cfos where you thought perhaps there would be about 5% of the work force that would remain working remotely. has this new far larger survey of workers changed your view of that >> good morning, david no, it really hasn't and so there were some data points that came out of this survey that were obvious and not surprising but frankly, there were some data points that came out that were very surprising on the not surprising side, we have seen that across the board these were companies in the u.s. and europe and asia all types of employees, these employees were reporting great collaboration with our colleagues, great teamwork with their colleagues, and great productivity in the work they're doing they feel a great sense of trust from their employer because they're at home, they're not

supervised they're getting their work done. they're reporting significant challenges from working from home many employees have poor connectivity many don't have a private work space at their home. many are missing the social interactions that are so important to business. i think most importantly, david, what we're finding across the board is that people are reporting a lack of or losing of that cultural adhesion that makes them feel special in their company and their company feels special to them. all that taken into account, we believe and according to these results, 40,000 folks we polled, something less than 10% of the work force is going to be at home permanently i would suspect closer to the number we talked about a few weeks ago. 5% or 6% >> interesting you mentioned cultural adhesion and perhaps that being under pressure at the same time, your survey found 75 % of the respondents

agreed they're collaborating effectively with colleagues in the current environment and that was up from the preco-vid surveys. that would seem to me to speak to the effectiveness of remote working. >> they're different things. you're at home, you're at home right now, david you're having to work a little bit harder to create the connections but you're making the connections work through zoom or conference calls, however you're doing it. people are reporting that is going really well. but when you poll the people and ask them how they feel as an employee at home about the company, about that overall company experience, this is where they report challenges i think what we're going to find is although only a small percentage of the work force will be sent home permanently, i think the vast majority of the work force is going to be given

tremendous flexibility to define where they work on any given day in the workplace eco system. and that eco system is going to include the office it's going to include the home it may include the starbucks or barnes & noble down the street i think that's the shift employers have learned they can trust their employees. employees are very productive not being in the office, but the employees are saying, that office isn't to me a physical place to do work that office is where i feel part of this company. i build the bonds. i build the relationships that allow me to be more effective and make me feel good about being part of the company i'm employed by. >> right what is that going to mean for occupancy at this point in your view again the competing issues of some portion working remotely. you believe it's less than 10% and the need for social distancing at least for some period of time in the office

place? >> in the short-term, the co-vid era, you're going to have 50%, 70% on any given day of your work force working remotely because you can't fit them in the office we spoke about that before the same six feet does not allow for a full repopulation of the office in this co-vid era until vaccines are widely available and used, you're going to find a minority of employees in the office, majority at home once the vaccine is widely available, once there are therapeutics that make people feel safe, i think we're going to see a reversion back to the old ways i've spoken to many ceos of very large companies who said look, when this is back to what it was and we feel safe again going into the office, we think most of our people are going to want to be in the office. there are a lot of companies, however, that are look agent the idea of what if i rotated my employees forever? could i take less space? that's an open question right

now. i think the answer to that for some companies is going to be yes. >> what percentage of your commercial tenants are paying rent >> in the office sector and the industrial sector, the vast majority are paying rent on time by vast majority, i would say upper 90% range. in the retail sector, this is where the real carnage is. and we've seen depending on the location and the type of retail, we've seen number ks as low as 30%, 40 % actually paying rent so very different by sector. but definitely the office and industrial is showing good health not so much on the retail side >> brett, what do you see to people who are thinking about when they're going to start getting called back to the office and their attitude is what's the point of the office when i go back and so few of my

teammates are doing the same i can't sit next to the person i'm supposedly supposed to be here to talk to, and also how do you train new people, sort of bringing them in for an extended period of time and how do you get them to bond with the team >> two great questions first, let me tell you something that has shocked me that we have learned over the last few weeks. as companies begin to open offices, we thought the challenge would be convincing employees it was safe and designing a program to get those employees back into the office in a measured, measured coherent way. in fact, what has happened to some companies is too many people are showing up to work. they said we're going to invite 20% of our people back, and they've got half their people showing up at the office and they're having to tell them to go home. they're not ready to accommodate that many eople, but this is very much generational

this is if you're under 40, what we're finding is you want to be back at the office and you want to be back now if you're over 50, you don't want to go back to the office. the question on collaboration, the reason these people seem to want to go back to the office is, again, a combination of suboptimal work space at home, along with a need to reacquaint themselves with their friends, socialize with their work colleagues and get things done and you're right, it's going to be a strange environment when people go back to the office and they see empty desks around them they're telling us that's better than having no one around me >> finally, i brought this up earlier. it is a real concern even though it may seem funny to some. how are you working with your buildings in terms of the idea of, for example, of elevator traffic. as a new york city resident, well aware of all the towers that we have it seems to be a real issue in terms of how you get people in

elevators, how you transport them in a timely manner so everybody isn't showing up hours apart and/or having to wait hours to leave the building. >> it's a big problem. so when you think about downtown environments and high-rise buildings, i think one of the biggest issues that's going to make it hard for people to go back to work is that issue and so how are building going to deal with it many buildings and tenants are going to tell their employees to stagger when they come to work and stagger when they leave work some companies are looking at satellite offices in the suburbs where people can stage in the morning or stage in the evening. so they're coming into the buildings on let's call it off commute hours. by the way, that is the same issue with commuting as we talked about before, the biggest risk for employees is going to be the commute, the subways, the trains. so people are very focussed. employees are very focussed on really almost setting

reservations for when the employees can come to the building and use the elevators because what won't work, if there was no process around this and you imagine you're in the gm building midtown manhattan, you see lines wrapping around and it taking hours to get in either a reservation system or you're given a block of time to come to work and a block of time you leave from work to stage people going in and out of buildings. it's a very big issue. >> yeah. that puts it in perspective, brett. certainly. that coupled with mass transit as you say always appreciate you joining us and look forward to continuing this conversation, of course, as people start to get back to work in more numbers. thank you, brett you bet. thank you. later today on the "closing bell." don't miss an exclusive interview with john waldron, 4:00 p.m. this afternoon we have the quest diagnostics ceo as well. and disney ceo is live

exclusively on squawk alley. big interviews coming your way the dow and the s&p firmly higher being propelled by banks. we'll be rightac bk.

session high up about 360. we're about 200 points below that s&p has gone red ten-year now yielding 67 basis points some cross currents here in this

mid-morning session on this n'gonyesy. dot awhere.

welcome back to "squawk on the street." it's a micked picture for stocks with industrials and financials the top performing sectors tech and health care are some of the weakest groups today medical device makers are the worst performers along with big pharma companies including rejune ron ageneroreg. west pharmaceuticals is down 7 %. it's a newcomer to the s&p 500 getting addelad st friday. "squawk on the street" is back in two minutes feels like there's no barriers between departments now. servicenow. the smarter way to workflow.

zblvrj welcome back amazon is outdelivering the post office amid the pandemic frank holland has the story for us >> thank you amazon is delivering about half its own orders 18% more than the post office. as the etr continues to grow the shipping network that's a 10% increase since march with partner ups seeing the biggest decline in amazon orders when it comes to all of e-commerce since march, amazon outdelivering the post office in the most recent week of data u.s. e-commerce is rapidly responding e marketing raising the forecast for 2020 to 18 % growth from a previous estimate of roughly 12 %. grocery delivery companies expected to be the biggest beneficiaries with a new forecast of 58% growth in 2020 from a previous estimate of only 23%. publicly traded amazon and

walmart seeing triple digit sales growth for their grocery services in the first week of may. instacart nearly 500%. overall grocery delivery tripling they also deliver health and beauty products with a 32% hob consumer electronics expected to see double digit increases due largely to working and learning from home. covid-19 impacting how we get our e-commerce pick up at the store expected to increase by 60% this year. david, back over to you. >> frank, thank you. frank holland. shares of disney down a little bit a little less than 1% right now. the company is going to be presenting the plan for reopening its parks and we'll speak to ceo bob chapek, or the gang on "squawk alley" will at 11:30 eastern. t he ret want to miss this one buweavmo for you on "squawk on the street" after this

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♪ let's get to rick santelli and the santelli exchange. rick >> good morning, carl. i like to welcome jim grant. jim, thank you for joining me today. let's get right into it, the fed's balance sheet a little under $6 trillion, the ebd, their balance sheet just under $6 trillion, if you look at a chart of both on top of any

equity, balance sheets go up, stocks go up, balance sheets go down, stocks go down your thoughts, jim >> the rate of growth in these things is nothing less than astou astounding if you take the past three months of the federal reserve's balance sheet and analyze it, it's 606%. money supply is up an exexcess of 20% these are like so many figures and facts nowadays one had not previously seen or imagined. so what does it mean the future, as usual, is keeping its council but we can observe the following, we can observe there are almost $12 trillion worth of bonds priced to yield less than nothing. we can observe the commodities, at their relative lowest value compared to stocks since 1970 and equities are priced at the

highest forward multiple since at least 2001. so the world, which ought not to dogma tuesday about these things, is dogmatic that there will not be inflation. >> you just hit on the key i'll give you a what if. an easy what if. say three years from today we see unemployment at 7 to 8% and we see inflation at 6% is the fed raising rates or not raising rates? >> the fed is not raising rates. not this fed >> then -- okay. that was the answer ire a harris gave me. if the fed doesn't raise rates under those conditions, first of all, do you want to own dollars? >> do you want to own those almost 12 trillion -- i mean, bonds are selling, as my father used to say, as if the russians are in the bronx

the rate of growth in corporate issuance is almost as astounding as the expansion of the national debt it took us 192 years to a i mass the first trillion of national debt and we are now adding a trillion about every month this is not an argument whether spending is necessary in the crisis but that's not the investors' question. the investors' question is, what might be the consequences of these unprecedented and heretofore unimagined policies and we can't know. but what we can observe is that everyone seems to be thinking the same thought i'm not sure if that thought is the correct one or not, but to say no inflation ever, but you are not being paid necessarily to agree with it >> no. you just hit on the key. now, in the scenario i outline where inflation goes up and unemployment is nowhere near where it is on the worst case

scenario we're analyzing recent numbers but higher than it was at 3.5, 4% to me the equity markets may indeed be the vehicle that takes into account that inflation, given some of its price structure, i don't know, given a choice maybe you'd rather own stocks under that scenario than any of the fixed income products what do you think, jim >> maybe or commodities or something besides promises to pay you in the future in the currency that the central banks are creating in such immense profusion. so this is a world that is preoccupied with financial assets but can't get enough of the debt kind. i don't mean to insist on a certain outcome, but what i do not quite -- what i don't understand is this -- is this urgency, almost obsession, to get long these things that almost pay you nothing, and which pay you nothing in a

currency that the central bankers are doing their best to depreciate it's a mystery. >> i couldn't agree more so many seem to scratch their heads why is to stocks are doin they're doing. let's switch gear the ecb and european union look as though they found a way to put germany into the box with regard to suck coming to a shared debt structure with regard to the coronavirus bonds. but this is a big deal why don't you weigh in on that >> i'll ill suited to weigh in on that. i'm in upstate new york thinking about how mayor de blasio may or may not allow us back in the city of new york in six to eight years. i'm going to duck that out of ignoran ignorance. >> when central banks get the go

ahead to issue dead, it seems as though they get quite good at it we're out of time. thank you for joining me today. >> you are welcome >> carl quintanilla back to you. good wednesday morning, everybody. welcome to "squawk alley" i'm carl quintanilla with jon fortt and morgan brennan coming to you live from different locations. we're keeping an eye on different things first is washington. gfr cuomo of new york set to meet with the president on a couple things, and the kennedy space center at florida with spacex for launch this afternoon. morgan, as we not only sort of watch the historic nature of this particular launch but the way in which nasa's business model has evolved over the last few years. >> that is right, carl the image we showed you was launch pad 39a where the rocket,

falcon 9 with crew dragon attached to the top, where later today if all goes to plan and the weather holds, chances at about 50%, as we heard from the nasa administrator a short while ago, going to sent two veteran nasa astronauts into orbit to the international space station. a journey that's going to take about 19 hours they'll stay anywhere from one to four months if all goes according to plan. it marks not only this new era of human space flight. the fact that the u.s. has not actually been able to launch people from u.s. soil for the better part of a decade since the space shuttle program required in 2011, but also the first time we're seeing a launch, with people, with astronauts on a commercially made and developed and operated spacecraft as well so this is a major day for elo