good morning, violence erupting in minneapolis ov overnight. president trump's tweet about it has been flagged by twitter. in the meantime, high anxiety between washington and beijing as president trump is set to hold a news conference today on china. and a big payday for elon musk tesla's ceo earning the first crunch of a massive incentive deal worth more than $700 million. it's friday, may 29th. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cn cnbc

what a week it has been. we have been watching the u.s. equity futures the first couple days of the week, we saw the dow pick up more than a thousand points. almost 1100 points yesterday it gave back a little bit. turned down by 150 points. and that happened late in the session. the dow dropped over 100 points after the president said that today he would be giving a press conference on china. we'll talk more about that in a moment you see this morning, futures have been climbing their way back they have been down a little bit weaker this morning. right now, it looks like all of them are in positive territory dow futures up over a point. the s&p over 3 points. the nasdaq up 16 today is the last trading day of may. believe it or not, this is the second month in a row stocks are on track for gains we have been watching the treasury market.

a lot of that happening in the world and a lot we're focusing on >> i'll send it over to you. >> protests in minneapolis over the death of george floyd escalating it happened lst night. the focus of the police precinct where four officers were based who were fired after floyd died in thundershower custody that happened on monday. demonstrators pushed down temporary facing and occupied property at the precinct and fires burned on both sides of the building officials said the building was cleared shortly after 10:00 p.m. local time and protesters forcibly entered the building and ignited several fires. this is turning into more than a local story. this is becoming a national story and a public policy story. president trump tweeting about the violence just before 1:00

a.m. eastern time. one of those tweets was flagged by twitter this time twitter says the second is part of a two-part tweet violated the company's rules about glorifying violence. twitter determined it may be in the public interest for that tweet to remain accessible here's what the president said i can't stand back and watch this happen to a great american city a total lack of leadership either the very weak radical left mayor get his act together and bring the city under control or i will send in the national guard and get the job done right. these thugs are dishonoring the memory of george floyd, and i won't let that happen. the military is with himall th way. any difficulty and we will assume control but when the looting starts shs the shooting starts. thank you. twitter explained that the last line violated its policy based on context and its connection to

violence and the risk he could inspire similar actions today. yesterday president trump signed an executive order seeking to limit the broad legal protection that federal law provides to social media and other online platforms we talked about it it seeks to make it easier for regulators to hold facebook and twitter liable if they are deemed to be unfairly curbing user speech. we had that conversation yesterday about where social media companies come down on these things and when they are going to be stepping in or not >> and here we are i don't envy twuter. you heard mark zuckerberg. who would want that responsibility he doesn't want it either. but who dough you separate yourself it's really tough.

>> this has been a situation where they have been held to a different standard than other media. obviously, when you are a newspaper or a radio station or a television station, it's easier to have some control over the voices that are going out there, but when you have millions of people that have their own platform, it's difficult to monitor that. the question has been all along are the publishers or simply bulletin boards. once you take actions and start editing things, that puthouse in a position of saying, yes,you are a publisher. >> then you can really do whatever you want. as we now have seen. but it's that one provision that gives them leeway that people want to mess with that that allows them a lot of leeway on what to censor. president trump is going to push it and his supporters are going to

see everything now and just feeding into what he wants to do in terms of controlli controlling this i don't know how this ends well for anybody. >> the question i was going to ask is whether if it's not being censored, if the platforms are not taking the stuff down but are adding other information, call it a fact check, call it related information, other information, how the public views that, how candidates or others view that, i think that might become such a regular thing potentially depending on how the algorithms work you'll see it so much across the board that maybe it loses its meaning. but i imagine it might start seeing these sort of related items or fact check items or other things that add some kind

of extra piece of information. i don't know how the public is going to view that >> i thought about that. just as taking it to an insane conclusion, just shutting this horrible thing down that i see right here, it's up right now. there could be some merit to that not really twitter, i get a lot out of it it's a news feed you do think about things you certainly need to take it with a grain of salt i don't think you ought to be watching it all day long especially in certain instances. >> definite hi not healthy the question i have about this is what does congress do now this actually puts a lot of democrats in a difficult position to this point, it was a very bipartisan move to try and want to regulate facebook, twitter, any of the other big social media companies. they have been in the process

hairs from congress all along. but now that the president stepped things up, you wonder what their response to that is going to be. because i'm guessing they are going to want the to get in in some way, shape or form. i wonder if it's a bipartisan issue or if there are different divides that are starting to build in congress. >> it's friday the reason i'm saying that is it's been a long week. but friday is margarita night. i still have people i would like to answer here and i don't want to get a tui. tweeting while under the influence. it only takes one. and margarita night, i better lock this phone up in a place that doesn't open until the next morning. >> good idea >> i suggest you do that too >> good idea

>> longest four-day week ever. >> no kidding. was it only four days? >> we're just starting day four. >> china is in focus today china in focus today president trump said he's going to hold a news conference on china today, but offered no details on what he would say announcements marked a drop in the dow swinging from gains to a loss of nearly 150 points. i was worried about the open this morning and looked at it late last night and was surprised this morning that maybe it's the fed. >> i don't know when's holding it up at this point. all the news is bad. we're heading into a weekend >> minneapolis >> right >> it's the last thing we need

president trump has promised a swift response to the crackdown on hong kong how is this going to end it's been increasing pressure over what he described as a cover-up of early coronavirus cases. the china and hong kong, the government of hong kong issuing a new warning to the united states late last night telling it to keep out of the internal debate over its future saying a withdrawal of the financial hub's special status under u.s. law could backfire in their words, any sanction ises are a double-edged sword that would photo only harm the interests of hong kong, but cig is cantly those of the u.s this is going to be controversial. your next story, this has been a big success -- >> the next story is like nothing. it's like candy compared to the rest of the stuff we're talking about. this is something we would have got b worked up about in the past, but at this point, it's pretty good. >> in an entrepreneurial world where this fwie has kicked butt

his entire life, he has. we were watching to see him launch astronauts in space a couple days ago. maybe it will happen tomorrow. because he's going to make a lot of money but it's america >> here's the story. tesla ceo earned the first massive incentive payout it's about 1.7 million shares of tesla valued at $775 million based on yesterday's closing price. his options have a strike price of $350.02 he has a minimum holding period of five years. here in the first portion of the payout for keeping the market cap at $100 billion on a trailing average, i honestly thought this payout already happened i thought we talked about it a couple times, but ugh he had to keep it to the levels. he did that despite his own tweets coming out saying he thought taste la was valued too

high >> there's one way of setting an us sentive payout and doing buybacks but this is whatever you want to attribute it to, and i don't want to get into snig about tesla. but for whatever reason, we're all blown away by the stock price, aren't we >> absolutely. and i will tell you also, we have ron barren, he has been a defender of tesla who will be joining us in about a week and a half he has a lot of thoughts on what's been happening. he will be joining us to talk about what he sees as a tesla shareholder and backer on all of these issues and what he thinks about the moves with these things but he has been a long-term supporter and defender >> here's a circle here's the amount of fan boyness for elon musk. and i'm going to talk about we can only split it up between us.

it used to be, i think, one place. now i have almost the whole circle >> i'm a total fan boy after just recent. >> are you a fan of when he's done there are things you know i don't always love how he does some of the things, but i'm in awe of all of it >> we're going to split it down the middle >> you guys made a smart point about this he gets this money now or he gets this stake in the shares. irrespective of whether the stock continues to go up or down this is a lot of money he hbt gotten paid this entire time because he was a pay for performance operation. and we never even thought he could ever get paid. a lot of people thought he would never get paid because it was so crazy to think the stock was

going to go up that much to begin with >> as far as historical, i'm not sure who is going to be right or wrong on some of the other stances he has taken either. i'm not saying that. but any of the the historical figures that are real visionaries, did any of them operate from a defensive, fearful position he's going to do what he's going to do and come what may, he's going to do it it's crazy sometimes his tweets >> you think he needs to reign it in? >> i just remember when this pay package was first announced. i was not a fan of it. i thought it was kind of crazy you can see he's an entrepreneur, but he owns a huge stake in the company the idea to reard him with even more seems insane. you think about warren buffett what happened if he had been incentivized the same way. he only makes $100,000 a year

and always has >> for him, i think it's about hitting that number. getting the stock up to where it is >> i don't know he needed to be invent vised that way. >> i don't think bezos is going to spend the trillion dollars he has when he becomes the first trillion nar in history. i'm not sure -- it's almost like that's a score card for how well he's performing with what he's doing. >> two things. i remember talking to him about the pay package and asking elon why he needed the money. or why he was asking for the money. he said, look, i want to pay for space. it's going to be very expensive. i think he really thinks all this is a down payment on all of those efforts in space and the other thing is this

whole elon maiks me think of the ad that steve jobs ran when he first came back to apple about the crazy ones it was about how the crazy ones are the ones that change the world. i was thinking about him and that i think there's a lot to be said about that >> there's another one, steve jobs he was scared of what people thought of him that's another one >> putting this in the context of this week >> i'm still scared of what people think i can tell you that. i'm fearful and scared as you can see >> we're all so nice i love you guys. i'll miss you this weekend doesn't mean we can't zoom or something. >> a virtual margarita >> we occasionally do zoom on friday nights. >> let's do it after drinks.

i can totally do "squawk box" every morning. no food, no football or alcohol. when we come back, reopening america. we'll ask kevin how his businesses are getting back to work check out shares of costco sales fell in april. social distancing rules limited visits they had jumped in march on consumer stockpiling the company will be bringing back the free samples in mid-june. i'd like to see the safety protocols. it's like the cone of silence thing we were talking about yesterday. "squawk box" will be right back. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts

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welcome back the "squawk box" studio is in the middle of times square, which is no longer packed with people it hasn't been in months but we have noticed a little pickup in activity sorks we decided to use our location to gauge the recovery joe has been watching out the window here's what sometimes square looked like on march 19th when everything shut down you can see what it look like right now. we'll keep this comparison going as the city continues to open up i'm assuming that's march 19th at the same time of day. but you have been watching this pretty closely at out the win doe every morning.

>> people have masks i can tell you that. but i haven't seen this many, there's ten people out there right now not including the workers. i guess it's anecdotal, but that seems more than what we have been seeing. and cars and cabs, this is a pretty good cater. it doesn't look like new year's eve out there yet. >> this is like when we talk about the airlines and they say we're off our lows there's 12 or 14 people traveling this month if you compare that to what sometimtimes square looks like a normal occasion and the busier times in rush hour on new years, we're like, things are back. i did just see about eight cars drive by >> there were no people walking around before.

there are some people. some people are going back to work and more cars, but i don't know. it's not new york. there's a guy on a skateboard. pretty good. s some day it may be bustling. but it is only 6:20. these are just early birds like us >> not everyone is as whacky as we are with much of the focus on covid-19 vaccines and treatments, there's a growing concern of a possible slowdown in the fda's drug review process for other issues, other illnesses. joining us is a former fda commissioner and cnbc commissioner doctor, thank you for being here this has been a big concern for me i think anybody who has a loved

one who is dealing with other illness or disease is now looking a at this and saying, fantastic, we want to see coronavirus, we want to see covid-19 solutions but what about the other solutions that have been put on hold what are you hearing on this what do you think? >> there's been a number of approvals by the fda in the last month or so. what's happened and what i see is a lot of drug companies put clib call trials on hold they didn't go forward with trials they were going to initiative or trials in the field currently conducting they suspended enrollment so they tried to contain or complete oncology trials, they tried to preserve because of the shutdown of the health care system, it became very hard to conduct clinical trials all the academic medical sirnts that's going to create delays going forward what the

agency put out was a notice because of the covid workload they had, i presume they didn't explicitly say this, but anticipate there will be a surge in work as companies now try to go forward with clinical trials. they might miss some dead looips that they commit to in terms of the full-titimeframe they take. i'm going to expect to be some delaying going forward in clinical trials as a surge in activity as clinical trials get underway again >> it's not just the drug companies that have shut these things down. if you look at research centers, or academic centers, they have done early studies all those places have been shut down entirely except for essential work it's hard to get this labeled as essential work

how long are the delays? what are the ripple effects? are we talking about years of compounded delays we could be facing >> there shouldn't be a compounding effect there's been some shutdowns. clinical trials that would have been in the field didn't go forward. a lot of drug companies will rethink how they do clinical trials do more data collection outside of medical centers f so it's going to accelerate a transition to decentralize the conduct of clinical trials but this should pick up. where they should be able to get back mostly where they left off with this. with some built-in delays thaz restart activity, but a lot of trials were put on hold. now that you see the workload work through, you may see a burst of activity start to hit the regulatory authorities that's going to put pressure on the fda. that was behind the aa announcement yesterday it's not just the covisit

workload it's going to be a disperse in activity we saw the same thing after the shutdown of the government that was one month where there was delayed action when the government opened up, we had a burst of activity that was just a month. >> does the fda need additional resources just looking at the board, all of the different companies that are trying to colt up even with covid-19 vaccines or solutions. >> this is going to put pressure on the vabs seens for sure it's hard for the fda to on board resources quickly. the hiring process is slow there's unfilled positions the agency is understaffed but the buy logics this oversees vaccines is a lean operation they are going to get a lot of work now because of the activity so they are going to get pretty stressed the drug has more capacity and more people and reserved capacity they are not getting as much

activity as a buy logic center and the vaccine group in particular >> real quickly as we're heading into the weekend, have you seen any numbers about the number of cases across the country that concern you or make you feel better about things? >> we're going to be putting out data on hospitalizations it look liex they have gone up it's not a surprise we expected to see it's not a very large increase, but it is a trend up so it just needs to be watched closely. we knew as we reopened, we'd see an uptick in cases and hospitalizations sort of within the range of what we expected. that's why a lot of governors prescribe d a staged reopening it needs to be watched caref carefully. i'm hoping that's going to be a backstop to offset that increase >> doctor, thank you have a great weekend we'll see you next week. >> thank you coming up, when you need to know now about your kids 529

college savings plan and later congressman kevin brady will update us on the potential for a second round of stimulus checks to americans here's some images of pandemics impact from yesterday.

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it's may 29th. is that's 5/29 national 5/29 day, a day to focus on college safings about $370 billion are held, more than 14 million accounts. the money can be used for other things than tuition, room and board. did you notice that? i know about april 20th. i know about march 14th. is that it

when's pi day? this is like that. have i got this right? >> this is like that especially if you need to be saving for college and a lot more this is the dau you want to know more about that. and that's away we're talking about. two of the main benefits of 529 plans are tax-free fwroet and withdrawals. but the money has to be used for qualified education expenses those include a lot more than college tuition. students can use 529 plan money to upgrade their technology, computers, printers, internet service, software, all of those items that are now special as many and more classes are moving online that's important to know if you're rethinking your job prospects, you can use 529 plan money for graduate school as long as the schools are participating in federal student aid programs the money can also be used to pay for apprenticeship programs, as long as they are registered

with the u.s. department of labor. if you're struttiggling with student loan et debt, take out the funds and use up to $10,000 to pay off some student loans. and finally, k-12 private education, you can use money up to $10,000 a year for tuition for that it's a great opportunity to use it for a lot more things and also to realize if your child is not going to decide to go back to college, you can change the beneficiary of a 529 plan as well >> better not to wait but it's hard to -- it's not hard to get started. >> it's not hard to get started. the best way to start is to make it an automatic savings. just like you do with a 401(k) plan or retirement plan. you want to make sure you have that money direct deposited from a paycheck into a 529 plan your state, another state, it doesn't matter it's important that you research what's going to be the best plan for you, follow the rule there is in terms of how to debt set

it up. it can be very simple and important to do and to start early. >> if you don't use it for that purpose, what do you do? >> you will pay a 10% penalty and taxes on the gains in that 529 plan so that's important to note. in this time when so many people are struggling, they are look the at pausing or reducing kribss there was a survey that just came out today from college backer talking about how many parents who had decided to withdrawal funds, half saying their child isn't going in the next five years, but still withdrew the funds they weren't sure whether they will recoop some of the losses but again, the key is to stay the course those people who in this survey who took money out of a traditional savings plan, had many more were taking it out of

traditional savings because it's set up to make you invest for the long-term for your child's education. >> great obviously not all just about following the market this is helpful. thank you. coming up, a lot more on "squawk. we head into the weekend, we are in the green but just barely. but it's better than the red dow up about 5 points for now. s&p 500 looking to open 3 points higher the nasdaq looking to higher 23 points higher. we'll talk strategy and how to play it all, after the break right now, here's a lock at yesterday's s&p 500 winners and losers these days, it's anything but business as usual.

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good morning, welcome back to "squawk box" here on cnbc effect wit futures keep to bes alating lrnd almoaround almost t the s&p 500 looking to open about 2 or 3 points higher u.s. china feud taking a toll on the markets, even though there's still optimism about the

economic recovery. joining us is jeff sound, founder of sound strategy and portfolio manager and chief investment strategy at capital wealth planning. what does the algorithm say? >> there was a character in the book called mr. parker he was a very shrewd stock operator people would ask what to do in the stock market he would tilt his head and say, it's a secular bull miles an hour market. that's what we're in we're in a secular bull market. we have to time things on a trading day. our short-term flash to sell signal on january 13 isth staying negative until march 24th and we started another leg up. and we ran basically 800 points from 2200 to over 3,000. it wouldn't surprise to see the market pause here or even try to

pull back a little bit i don't think it's going to pull back much. >> i think a lot of the question now is in terms of to the extent if it can go higher, how it gets higher and in particular whether you think investors should be rotating out of those stocks that have had so more success during the pandemic. and actually try to rotate into more traditional industrials or banks or some of the stocks that thus far have been somewhat unloved relative to the tech giants >> i think you stick with the winners. i do like the financials i like the energy stocks here. but the main point is even though we timed this thing pretty successfully over the last you have nine years, secular bull markets tend to last 15 to 20 years. you had 22.6% in '87 in one day.

and the secular bull market went on for another 13 years. these people that think we just went through a bare market, they don't study market history >> but i think there are a lot of invest tovs who say maybe it's a bull market, but it's not a natural bull market. it's a bull market with a tail wind of a federal reserve and a government that's just thrown trillions of dollars at it and at the economy so how do you really think about that and the complications of that are long-term >> if the fed keeps throwing money into the economy, some of it is going to find its way into the energy markets once you get this month you'll see ugly economic earnings but i think the markets are looking past that. i thus you're sgieng to get a really strong rebound when the country reopens, so to speak so i think we're in a bull

market and it has years left to run. >> just on that particular point, baa i think we're getting ready for the next earnings season and people will will sea what we imagine ugly numbers and everybody is bracing themselves. at least based on where the stock market is today. but do you think there's going to be a subset of those investors that say, okay, they get rattled by us it >> the retail investors i talked to are scared to death they have a ton of money on the sidelines. and that's not the way bull markets end. think about what happened going into 2000. that's the way bull markets end when everybody is on board and everybody thinks it's going to keep going we're nowhere near that. you talked to retail investors they are scared to death

>> jeff, it's always good to see you. and it's always good to have your optimism. we appreciate it have a great weekend >> you too, thanks when we come back, take a lock at shares of nordstrom. retailer lost $3.33 a share for its latest quarter etat's more than triple what the stre was expecting overall sales were also down almost 40% and yet the stock is up 15 cents. we'll be right back. see, incident resolved. how did you... gotta enjoy the small wins. you keep being you, derek. keep being you.

it offers a members only portal and chat. plus exclusive industry content with access to breaking news calls and digital networking experiences. the network at resources need now. apply to the workforce executive council. welcome back to "squawk box. the futures and the dow are now indicating a a slightly lower open down about 7 points but that is better than most of the overnight session. it was down more than 100 poi

points the nasdaq was indicated weaker yesterday almost all day long buzz of worry about social media and what the end result is going to be there. the s&p is indicated up a couple points we're going to talk to kevin o'leery about how his businesses are getting back to work we'll also give you a sneak peek a at his latest project, which is a tv project. "squawk box" will be right back. (vo) our communities need help like never before

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what are you seeing? >> there are interesting outcomes i never would have anticipated. nobody would force a larger small business to ever shut down and go remote but we went into this pandemic with some

remarkable technology. we use it. and businesses have been forced to work this way now we're doing it for months, some of them very successfully there are going to be some impairments to some sectors of the economy as a result of this. i call it the unintended consequences i'll give you an example some of my businesses have hundreds of locations in new york, florida, texas, california, that kind of thing we're probably not going to reopen the marginal retail outlets. we've been negotiating with reets now for three months we are also going to take a really hard look this is where it gets fascinatingly interesting. i see a new america 2.0 that is much more efficient. we're going to offer 20% of our employees the right to work from home perpetually, particularly in compliance, accounting, logistics. we're agreeing to upgrade their internet, provide them with

equipment, they can stay at home and do their jobs. what i find so incredible, we're getting people working ten hours a day right now at home, more than we were asking them to, because they don't have anything else to do our productivity has gone through the roof all at the expense of the landlord and that sector i think is going to have some significant challenges because we're going to reduce our square footage probably by 20% and we think, don't know this yet, but i think we can save 5 to 7% free cash flow across the portfolio i'm really excited about the new america we're going to have. we're going to save a ton of money. >> andrew? >> hey, kevin. i have a work from home question for you, which is historically the folks who were working from home were always considered the less ambitious they were not the ones trying to climb the ladder because there was a view that they were trying to -- they were more interested in work-life balance than they were in work, if you will.

the question is longer term what you think that looks like. do you think that the culture can change in such a way in this remote world where you have really senior people or even junior people moving up the ladder to become senior in this remote first approach? >> you know, i agree with you. i was always skeptical i remember when yahoo! tried this first years ago and i thought that wasn't going to work, but the amount of productivity, i mean, i can now measure -- let's say we've got to get a task done, we're designing something and we're doing it in multiple cities in different time zones now i don't care when they work, it's when the task is finished productivity is significantly higher when you give people what they want. maybe they're taking care of an aged parent, maybe they're raising kids, maybe they don't want to commute. whatever the reason is, the productivity has gone up we were forced to test this. we had no other choice now i really want 20% to stay at home because i really, really

think it's more efficient and it saves a lot of money i think i'm going to make more money from my companies in the years ahead, and i think the market senses that, not just for small businesses for all businesses at the expense of real estate. sorry about that, but i'm moving my cash out of that sector into other ones like health care, when we bring back the supply chain from china and everything else, i think there's huge opportunities. i love the fact that we're being forced to test all these theories and finding good outcomes i love what's going to happen. >> i want to hear about this what's happening you're working on a new project called money disputes? tell me about it >> yeah, joe, you know, there are so many disputes going on in small business and large business now the courts are jammed because of covid. i deal with it every day, particularly the negotiations we're having with landlords, for example, but there's many others what we're doing is we're

throwing a net out saying, look, we're going to look at all of these disputes as i'm doing all day long with my companies, i'm going to try and help resolve them. we're picking categories where there's lots of disputes in the same area. i want to read you an email i got last night which i think sums it up it's just a sentence my partner has been watching you on "shark tank" for years, thinks you are a cold and ruthless -- well, i can't say this word with no soul but has agreed to abide by your decision on this matter so please consider the facts carefully i think my mother would be proud of me on this one but, you know, the point is, you settle the dispute, people move on without going to the courts. i think there's billions of dollars tied up in this. >> that's amazing. i think we've got a clip here, kevin. in this one you hear from a young man named jordan he's fighting with his gym >> i spent $900 on training

sessions and gym's been closed for two monchths and they won't give me my money back. >> for the business proprietors, the trainers, you've got to be fair you've got to offer your time and service to your clients and they will not forget jordan's not going to forget if you do that. they're going to make sure that they work with you going forward because you cared about them at a time when they couldn't work with you directly at a gym so i reached out to your gym it's good news, my friend. >> that's an example >> find out what that goods news was and how kevin helped resolve the dispute. we can't watch it now but if you go watch the video, site's on cnbc.com/moneydispute. you need more to do, by the way. how many businesses have you got? how many do you have seriously. >> portfolio's past 50 and they're not all going to make it, joe, i've got to be honest

with you 80% are doing quite well the beneficiary of this are companies like facebook, shopify, docusign. those are the stocks that have been the beneficiary of this digitization of america. there's a reason facebook has hit a new high we are using it to replace retail locations if we have a tallahassee store shut down, we're doing a geo locked ad and we're advertising to our customers there facebook has -- you know, for all the pros and cons, and i saw the interview you did with zuckerberg yesterday, i'm glad i have that tool that's a very, very useful product. >> kevin, thank you. thanks for joining us. >> thank you. >> good luck we'll see you again soon make a date. >> take care. >> andrew. judge judy's got some competency competition judge kevin. when we come back, a lot more on "squawk box. president trump announcing plans for a news conference that's going to happen today on china

live report from washington right after the break. then investment advice from krk'ri rieder. stay tuned for that and more right here on cnbc it's not "pretty good or nothing." it's not "acceptable or nothing." and it's definitely not "close enough or nothing."

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stocks looking to cap off their second straight week of gains. we will speak with rick rieder president trump set to give a speech on china. preview of what could be coming. twitter responding to president trump's reaction to the technologies the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures right now. we've been oscillating right now up, down, up 25 points on the

dow s&p 500. nasdaq up about 31 points. a lot of news taking place we want to get to that. >> joe >> a lot of people tied a weakness late in the session i was going to call it a big selloff. it really didn't get out of hand but when this was announced, and that is some tensions between china and the u.s. rising. now president trump said he was going to hold a news conference. ylan mui joins us. the market went -- and sold off into the close >> reporter: well, that's right, joe. that press conference though has not been formally added to the president's schedule just yet, but trump has vowed to respond powerfully if beijing moved to impose new restrictions on hong kong yesterday after china's congress did approve those measures, the president made very clear where the u.s. stands. >> we are not happy with china

we are not happy with what's happened all over the world people are suffering. 186 countries. all over the world they're suffering. we're not happy. >> reporter: the white house economic advisor larry kudlow did lay out a couple of options for the president. he mentioned tariffs, financial transparency, stock market listings he also talked about the phase one trade deal he said that that is still on for now, but he said that beijing has made a huge mistake. as for sanctions, now that the state department has officially determined that hong kong is no longer autonomous from china, the white house has the authority to impose sanctions and they could include blocking visas or going after property. in addition, there is bipartisan legislation on the president's desk right now that calls for sanctions on chinese officials over the treatment of muslim

minorities in the country. guys, we did see that statement from hong kong's pro beijing government calling prohibitions a double edged sword the chinese embassy has put out a statement saying there are necessary measures for what it calls meddling in hong kong's affairs. back to you. >> ylan, obviously this is ramping up pretty rapidly. we've watched it go through the course week what are you hearing from people about where to watch next, what to watch next, what might happen >> i think everyone's going to be paying attention to this press conference i think in washington there's certainly bipartisan support from many of the people of hong kong there's bipartisan support i think for the president's ultimate goals the question here is going to be the approach how big of a stick does the president bran dish. we'll find out later today >> okay. ylan, thank you. we'll be watching too. in the meantime, joining us right now is rick rieder

he's also the head of global allocation team there. rick, we have these sessions maybe every week or two. we get to talk through and find out what's on your mind. i have to say things are moving and changing so rapidly that i'm sure you are having to rethink everything on a daily basis, too. you've watched what's happened with this twitter, facebook fight, the executive order that's been signed the tensions are really ramping up with china. i wonder it's friday. thank goodness how do you put all of this together and think here's what we're going to do on the last trading day of the month. >> thank god it's friday like you said, there's so much data so much information across currents i can't tell you the relief when it's about 4:30 or so on friday. that being said, becky, the thing we talked about last time i was on was china the thing we're going to talk about next time i'm on is going to be on china it is, as you were saying, this

is bipartisan in terms of not just the president pushing back on china, there's a bipartisan dynamic at play here that it's going to continue to be a governor on where markets can go by the way, china's not going to back down. this is the one you have to keep an eye on. that being said, the thing that just blows you away about the markets, we talked about it a couple of weeks ago. the market looks at it then all of a sudden the 5 trillion of cash that's sitting on the sidelines has to find a place to go. my sense is we're still going to iterate towards that. it's going to be frustrating if people are in the equity market because there's so much cash you've got central bank policy that's going to promote it >> yeah. i mean, watching those two things play out, we can say that china's big issue, we've been

talking about it, for the last two years, even longer, but we're now looking at the dow back above 25,000. we're looking at the s&p above 3,000. the nasdaq 100 has taken off small caps have taken off. i guess that brings us back to the point that the fed is still out there. policy is still out there. how do you fight those two things is it that simple right now, rick >> it is i was looking at something this morning, becky, i thought would be interested to talk about. you think about who the employers are in this country. i was looking at restaurant, hotel, leisure this morning. you think about what the fed has to do. you have to keep policy easy because the unemployment rate could peak 18, 19% potentially and it's still going to be high at the end of the year you think about those sectors, hotel, restaurant, leisure the first percent and a half of the equity market when you add them all up. i was looking at airlines. airlines are under 25 basis points technology is 26%. health care is 15%

that's 41% of the s&p 500. that's virtually half the market so while employment, you think about the fed's paradigm, it's going to be a long time for some of these sectors to come back. got to keep rates at zero for a long time. we're not going to have full employment for a couple of years potentially. what happens, you keep rates easy look at free cash flow generation, the equity market and you get free cash flow, that's just under 5% i have free cash flow, nothing in rates it's as simple as you described. >> except for that something you just said, okay, your analogy to this concerns me a little bit, rick if all of the sectors, like you said, restaurants, leisure, hotels, you add them all up, they're not a very big part of the market but they're a huge part of the employment picture you cannot have other sectors

that do well if you have such a massive part of the employment picture that's not it reminds me of something that zuckerberg said to andrew this week mark zuckerberg said, look, big companies can't do well if little companies get shut down the idea that you're going to lose so many people and take consumers out of the equation which is the part that holds the whole economy up eventually there are ripple effects and that catches up to everybody else is the market anticipating that? how do you kind of play that out? >> so, becky, that is totally fair so you think about it, you have to map this to the actual data that comes out and think about the amount of fiscal stimulus. the amount of fiscal stimulus that's come in is extraordinary. we talk about well over 15 billion. we talk about the income degradation in the economy now the hope is and i do think you will see this bear out over time is that you are going to start to see businesses reopen

you are going to start to see employment come back listen, we're going to have -- if you go into next year, you know, we think you're still going to have gdp that gets into next year that's going to be 5% after a big bounce back in the third quarter. listen, this is all, by the way, based on the fact you don't get a second wave of the virus my point is not that we're on a tremendous consumer boom, i think that you have a relatively stable economy and people have nothing else to do who are sitting on a lot of cash that will propel the equity market in a frustrating way. i think it should pull back. it's hard not to be in the equity market. >> we spoke with brian moynihan yesterday, the ceo of bank of america, too he talked about right now people who have less than $5,000 in their account have more than they might normally. the averages have gone up because they've gotten stimulus checks

you start wondering what happens when the stimulus money runs out, when they are paying their rents, mortgages, starting to spend money again. then when the unemployment benefits run out it makes you wonder not only how reliant the market is on the fed continuing its programs but also on fiscal stimulus and the idea that congress can get together with the president and the administration and continue those programs is that likely as we get closer and closer to an election? >> so, becky, your point is right. part of why, you know, you see it china's been pretty interesting about how it's v shaped and you hear china talking about what they're doing in terms of persistent fiscal stimulus we're putting a lot of debt onto the united states. the government is putting a lot of debt on to this fiscal stimulus you have to hope that the economy still stays stable running close to what is potential growth of 2% and the

nominal growth at 4% gdp the economy will come closer to its potential. the hope is in the near term you bridge to the other side i'll throw out one other thing people aren't talking about. europe european recovery fund, look at what's happening to the euro it's pretty impressive for the first time in many years, instead of waiting for mario draghi and christine lagarde to go to further negative rates, for the first time you're getting a coordinated response that's helping stabilize it they've been a drag for a while. >> that's a great point. rick, i really appreciate these conversations. makes me think, so thank you good to see you. >> thanks, becky. >> i hope we'll talk again soon. >> thanks. appreciate it. >> andrew? coming up when we return, the reopening of america and the challenges facing the hospitality business

ian schraeger is going to join us costco, the big box retailer stock falling after hours and missing estimates. the company reporting $283 million hit to net income costs. that's related to the pandemic quk"etnsig aer this it's hard to eat a whole pizza. but a slice is just right. that's why fidelity offers dollar-based trading. buy what you want based upon how much you want to spend, even if it's just a slice of a share.

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president trump just tweeting twitter is doing nothing about all of the lies and propaganda being put out by the china section 230 should be revoked by congress until then it will be regulated. this is happening in real time, andrew unfortunately, we've got to stay on twitter to see if anything else comes out over to you. >> exactly exactly. meantime, i want to talk about restaurants and so many other businesses that are beginning to reopen across the country. most of the hospitality industry remains shuttered. what tourism and night life might look like about one of the gurus of that world. ian schraeger. he's the founder of public

hotels and the edition it's great to see you this morning. >> thanks for having me on. >> what does the future of this look like? i imagine there's two futures, there's the immediate future in terms of what some of these hotels, bars, restaurants will look look over the next 6 months, 12 months and then there's the longer term question as to whether that persists and changes everything fundamentally or whether we go back to what hopefully is some semblance of normal >> well, i think we'll definitely go back to normal i've not experienced any calamity it's the history of humanity where we haven't gone back to normal after we've adjusted and made the appropriate changes so i think we will go back to normal i think it will be the way it was before however, the restaurant business is a little bit under siege with the wages have risen

dramatically so they're going to have to make some adjustments but i think there, too, it will return to normal there may be some adjustments with the labor -- amount of labor involved. >> so, ian, speak to that. what do you think happens to labor over time in terms of cost of labor and also what about all of the costs that are going to be incurred by hotels and restaurants and bars, especially in hard-hit cities like new york where maybe people are a little bit more skittish. you read stories about people implementing not just new rules but having to actually bring in dividers, plastic dividers, other things that to some extent change the experience, at least temporarily. >> well, temporarily is not a major issue for us because it's temporary. you know, i think, you know, we have to do everything we possibly can to make everybody feel that they are safe, that

they can come back to the hotel. we have to let them know that that's a big concern for us. it's not a marketing issue i don't see things like partitions and fundamental paradigm changes we have to follow what the regulatory agencies are recommending that's all we can do and i think that will be a transitional phase you see a lot of times the pandemic ends with the people. at a different time than it scientifically ends and as soon as the states come out from being locked under, people are going out, bars are packed, going to restaurants so i think it will return to normal pretty quickly, too i think there's a real pent up demand >> what about that labor issue you just raised? >> well, i think for restaurants in particular we're going to have to find a way to reduce the

amount of labor by perhaps -- you see this in a number of restaurants now where there's a lot of self-delivery and there's a lot of ways of trying to cut down on the amount of labor if you have your food costs and kitchen costs and front of house costs. i think this is coming before the pandemic this is something that was in the works for a while. i think we'll find a way to do things we always do. restaurants is too much of a mainstay in our life bottom line, i do think there's some impact on the labor for the restaurant

>> do you think there's any shift that they would never have considered five, ten years from now we'll look back and say that was a big change >> you know, i think in the hotel business the benefit of the pandemic is that it will allow the hotels to take initiatives they've been wanting to take but the people have been a little bit reluctant as they are with everything. with the pandemic they'll be more receptive to things then when the alarm for the pandemic goes down, the hotels will be able to continue doing that one is like automatic check in there was some consternation about that, but i think now people will require it because it's a pandemic. get used to it it will become a way of life for

the hotel. then on the other hand, something like room service, which i think was on the way out, it's going to be coming back now because i think a lot of people will probably want to eat in their rooms when they go to a hotel until they feel absolutely safe. i think it may be choices in the selection of items in restaurants, but i think it's the delivery of the service to simplify it, cut itdown withou impacting the experience you know, if you undermine the experience of the restaurant or in the hotel, you're not going to have a business so we have to maintain those things, we require them, but i think we have no problem finding an adjustment >> right okay ian schraeger, always good to see you. we hope to hear about your progress as hopefully new york city and much of the country reopens as it comes back.

>> thank you very much, andrew thank you. when we come back, a read on car sales. phil lebeau will join us with some interesting data as states begin to reopen. and as we head to a break, a deal in the cloud to tell you about. cisco acquiring software company thousand eyes. that company monitors network outages. clients include microsoft, lyft, paypal, many others. "squawk box" will be right back. time now for today's aflac trivia question. chrysler fiat's ram truck outsold which american truck for e e very first time last year? thanswer when cnbc's "squawk box" continues a hundred dollars. i had good health insurance. why isn't this covered? well, then they started getting bigger. eight-hundred dollars. eighteen hundred dollars. i saved for this. but not that much. i'm glad i had aflac. they gave me money when i needed it most. that's why aflac is here,

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now the answer to today's aflac trivia question. chrysler fiat's ram truck outsold which american truck for the very first time last year? the answer the chevy silverado. with more cities and states opening for business, you might expect car sales to pick up, but that's not what's happening. phil lebeau joins us now with more hey, phil. >> reporter: they have plateaued in terms of a rebound, down as much as 56% at the beginning of april. the last three weeks, according to j.d. power, which tracks the sales at dealerships around the country, they've been down basically 25%. so if you go last week, and this is the end of each week, down 25%, 25%, 23%. so we're not seeing it come all the way back or get even closer to break even. we'll see what the sales come up with this week a couple of factors here first of all, you have a slow lease market a lot of people did not bring

them into a dealership subprime buyers. this is not a surprise the economy has slowed down. the economy has shot up. the buyers are holding back. lackluster sales memorial day weekend is typically one of the big weekends of the year for auto dealers. they did not have that in part because you have some of the country that is not completely reopened used car sales as you take a look at the auto dealer stocks, they have outpaced new vehicle sales. that's another factor why they haven't come back as much as many people were expecting what's going to be the pace for auto sales for automakers next week edmunds believes the pace of sales will be 11.8million vehicles that's well below the estimate of 15.5 million. nowhere close to where we were the last several years of 17 or 17.3 in the case of 2018, 2019 one other note, general motors

announcing late yesterday that it will be increasing its p producti production the supply of full size pickups, there is a shortage. people need to buy those general motors has done a nice job in terms of managing covid-19 and exposure of employees. it will be increasing production next week. >> phil, just want to ask you on that front, again, we spoke with brian moynihan of bank of america yesterday. it's important because he touches half of all of american households he said the people are kind of hoarding money like we've been doing with groceries and everything else because they're worried about what's to come >> sure. >> in a situation like that, i can't expect that auto sales are going to be roaring back any time soon because that's a big ticket item, big purchase. >> right. >> if you're worried whether you're going to keep your job, what's to come, you don't do it unless your car is breaking

down. >> i think you're absolutely right, becky i think we're seeing that with the auto dealerships they are not seeing the level of traffic in part because people have been laid off or are worried about what might happen over the next several months with their job one thing that might change that, becky. you throw out a sweet deal that's what we're seeing with full size pickup trucks. those are fantastic deals. 0% for seven years that's when people say, i've got to have a new truck at some point. going to need it this offer means my payment's only $50 more a month. i'll bite the bullet and i'll do it >> phil, thank you >> you bet. >> take a quick break. still to come on "squawk box," vanguard chief investment officer greg davis fixed income and much more. president trump signing an executive order targeting social media companies. if you are going to do that, where do you start we're going to discuss with the

former unid attestes technology officer anish chopra we'll be right back.

vanguard is one of the largest active fund companies in the world with $5.7 trillion in assets under management. vanguard's core bond fund ranks in the top 4% in its category year to date investing in a full complement of items. joining us is greg davis thanks for joining us.

certainly would be nice to lessen the volatility and risk in portfolios at this point. how can they do that >> well, thanks, joe thanks for having me on this morning. you know, it's one of those things where we've always tried to encourage clients to make sure they maintain a highly diversified and balanced portfolio across equities, bonds, cash, ultimately trying to focus on controlling what they can't control and that's ultimately costs we never know what's going to happen with the marketslonger term if you have a highly diversified portfolio, you can weather any significant market volatility. we've soon a lot of our investors doing just that during this pandemic. >> what can be done to just enhance yield and not really give away any of the lower

volatility >> you've seen in our active fixed income, you know, process we've been focused primarily on taking advantage of the dislocations we saw spreads widen when it comes to emerging markets. there are unique opportunities when it comes to within mortgages, tip sector when it comes unbelievably smart we had the ability to earn risk in that market we created a highly diversified portfol portfolio. we've been able to add risk along the way. >> in any instances where you heard something that the new initiatives from the fed and where you just said, well, wait a minute read that again? does it affect how you're managing things? this has been "shock and awe" with some of the moves any of them really surprise you and change be your outlook or

what you should be doing >> i mean, we've been really impressed by the activity from the federal reserve as well as the fiscal response that we've seen out of dc in terms of trying to mitigate some of the economic challenges coming out of the pandemic. what i would say is if you go back to march and take a look at how dislocated portions of the market were becoming the fed stepping in, buying large amounts of treasuries, buying large amounts of mortgages, coming out with the money market liquidity facility, which was a big, big improvement to market functioning, you couple that with the secondary market, corporate credit facility, those helped stabilize the market and have a pretty significant rebound across all risk assets from that point forward. we think the fed has done a tremendous job helping stabilize and provide liquidity. that's why we've seen a pretty significant boost in risk assets. >> i was kind of asking about --

and we haven't heard the term. the vigilantes if you were to tell someone where the fed's balance sheet would be and where the fiscal balance sheet, what that would look like in terms of deficits, i just don't -- i don't know if this is the -- what you would expect in terms of the yield and the yield curve. won't there be a day of reckoning if interest rates go up and we have all of this floating, that it's going to be a problem? >> i think longer term -- first you have to keep in mind, joe, look, you have an environment where we're in a crisis situation. you want to make sure that you throw everything that you can at it to get us out of this significant downturn from an economic standpoint, this health crisis that we're facing the fed and fiscal authorities have done that longer term clearly there's some reckoning that's happening in terms of the amount of debt and

the impact if you look at markets outside of the u.s., you look at japan where they have a debt to gdp ratio of 200%. we're a long ways away there's still significant room in the u.s. for us to expand the balance sheet. it is a risk factor that, you know, the federal reserve, the treasury, you know, investors need to keep in mind longer term right now the focus should be on stabilizing the economy and getting people back to work. >> i guess we're starting to see some glimmers and people pointed out yesterday that yields backed up a little in spite of some of this china rhetoric heating up is global growth -- are we on the other side of the concerns there from the pandemic at this point? are we never going negative here like some of the rest of the world? can we take that off the table, greg >> those are real interesting questions, joe when we think about the economic side of the equation first, we would say that, look, things are probably still going to get

worse before they get better we are expecting the second half of this year will start to see improvement. a big part of that is assuming that, you know, we are going to get closer to seeing a vaccine develop. probably some more details in terms of your question around negative interest rates, the federal reserve has come out multiple times indicating they have no desire to go negative. they have a number of policy tools they can use to boost economic activity. have negative interest rates been affected in places like europe and japan we have a big difference with the u.s. market is that we have a much larger money market, you know, industry in the united states relative to those other countries. the impact it would have on money market funds in the u.s., the banking industry is something the federal reserve is

keeping top of mind. >> i mean, i just can't believe you got an 8% one year return on the vanguard core bond fund. anyone would want that if we did have a big backup in rates, would you be able to handle that if it ever comes when we're least expecting them? can you actively manage it to not boost principle in some of the long stuff >> the way you think about it, there's always going to be that interest rate sensitivity in a fund like that where we try to typically add value is around the corporate positioning, the weighting we have in emerging markets trying to be thought full in the types of mortgages and the existing pool and trying to add value from a security standpoint overall you'll have the interest rate exposure. if you do get a big backup, you run the risk of some price deterioration. >> always something, greg. all right. anyway, thanks appreciate it. happy friday. >> my pleasure likewise >> andrew?

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welcome back the shares of williams sonoma rising all 616 stores were closed for more than half of the quarter. the online business surged

revenue up more than 30% pottery barns sales were up. the ceo cited what we all know, a new found appreciation for the home joe? >> beck, thanks. coming up, twitter once again taking issue with one of president trump's tweets this time regarding the developing situation in minneapolis we'll discuss his executive order against social media companies and the role of social media as we head to a quick break, here's a look at the winners and losers in the s&p 500. "squawk box" coming right back

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welcome back to "squawk box. president trump tweeting about the violence in minneapolis. twitter is saying the second part of the two-part tweet violated the company's rules about glorifying violence. twitter determined it may be in the public's interest for the tweet to remain accessible here's what the president said he said i can't stand back and watch this happen to a great american city, minneapolis a total lack of leadership either the very weak radical mayor jacob frey will get his

city together and bring it under control or i will send in the national guard and get it done right. these thugs are dishonoring the memory of george floyd and i won't let that happen. just spoke to governor tim waltz and told him the military is with him any difficulty, we will assume the control. when the looting starts, the shooting starts. thank you, exclamation point the last line violated twitter's policy based on historical context, its connection to violence and the risk that it could inspire similar actions today. yesterday president trump signed an executive order seeking to limit the broad legal protection that federal law provides to social media and other online platforms. it seeks it hold it responsible.

good morning to you. thanks for joining us. we're here it's happening it's happening, frankly, in real time. >> yeah. >> what do you think should happen i mean, it's interesting because in a way it's become a bipartisan issue and in a way maybe it's diverging in other ways >> well, i think what we're seeing here are two really fundamental debates that are happening in washington. obviously we're in a political season and we are witnessing statements and policy interests by the president in the executive order but then there's a broader discussion about what should the rules of the road be on the internet economy. if we separate out the sort of political bluesster ri about who's up and down on politics, there's probably a colonel of a debate having about how do we get content moderation in the internet better squared up i think that conversation is productive but not the blustery side of the who's up and had's down

>> aneesh, here's the regulatory question when it comes to free speech and all of it, which is this on twitter's side, for example, they decided to fact check that initial tweet by the president about vote by mail and you've heard both twitter and facebook say, for example, that on certain issues they will fact check things, especially when it comes to what they think of voter suppression, electoral issues or health and people's own danger to themselves so in this instance twitter takes the position that the president's comments effectively amount to potentially some form of voter suppression or interference in an election. facebook takes the position effectively that the president is making an argument that potentially vote by mail could have fraud involved in it. and you're seeing both sides of that argument. should the government be the one

to be the arbiter? who's supposed to be the judge and the jury >> the reason there's a healthy debate, the provision of the law that we're describing that allows us to have this debate is called section 230 of the communications decency act, and the principle of it was that we would provide liability from these content platforms that are basically enabling the kind of discourse that we're seeing and they have the authority to develop their own rules of the road for their own terms of service. so you see diverging opinions. that's sort of the nature of the immunity shield. the other side of the law i would imagine, we were hopeful, that the social media community would come together to reach some more broad consensus about the standards by which certain actions may be taken is twitter right, is facebook

wrong? maybe a little bit off from the broader conversation should the community reach consensus with stakeholder input so the government doesn't have to micromanage the industry? it's the lack of action that causes the tension. >> right >> but part of the conundrum may very well be that you want a market, if you will. maybe you want a market where twitter makes one decision an facebook makes another or no do you think that should be one decision across the board? >> oh, no, no, no. that's why the government dictating the micro details of this is very complicated the idea that the industry may reach consensus. let's talk a less politically controversial but more public health oriented issue. if someone were to post comments around say suicide or other sort of difficult challenges on a personal level, there may be agreement amongst the group to say, hey, let's all agree that we'll post a notice that you should contact the suicide hotline so we can connect people

to services. so there may be areas where there's agreement and consensus and some mechanism for feedback to say, hey, is that the right thing or the wrong thing these multi-stakeholder groups that have come together to really help regulate the internet, they're working in parts. content moderation hasn't gotten off the ground. >> let me throw a different one at you the president of brazil had posted something to facebook saying hydro chloroquine was scientifically proven to, would. it was the wording that i think facebook objected to our president, president trump of course, has encouraged people to take hydro chloroquine, he takes it himself, and facebook chose not to take that down. some people could say that's a distinction without a difference others could say it's a nuance or they're looking at the words. the real question is whether you want one organization to effectively be overseeing all of this or whether you want to see

these things being done individually the other piece is is it about censorship meaning taking them down or when you quote, unquote, add something to it or a line or related information or what have you, how the public and public policy people should think of that. >> the public policy people have to stay -- there's several dimensions to this one is, if there are criminal actions that may come from these sort of social media platforms, there is further action. when it comes to the goals, each platform competes on what they want the user experience to look like, when they choose to remove accounts and handle individual content. we want a flourishing economy so not the two large platforms you've identified but the new ones that haven't yet emerged have a place to bring their new offerings to market. you want that liability shield,

so to speak, but you're hopeful that some consistent terms of service and they're equally applied. there may be a set of circumstances, can they come together and say, this is the bar. let's set your terms to meet the bar. if you don't hold yourself accountable to the same terms you've put out, we have existing rules in the books, like the federal trade commission, that can say you've been deceitful to your customers there are mechanisms in place to build some constraint, if you will, on a completely free form internet economy and the goal to me is getting this sort of consensus process going may be a path to get a little bit more of the temperature down on what's happening on the harmful content debate >> based on what you have seen in this executive order, what do you think the liability long term will be for these companies? investors are looking at these companies and saying to

themselves, is this a side show? is this meaningful how should they think about it >> i would view the executive order as a political statement, not a particular piece of regulatory text. the president is basically directing the government to make an argument to the regulators, in this case some combination of the fcc and ftc. it's more a statement of principle in my language than it would be law so i would not view this particular set, it just opens up a conversation about how do we strike the balance let's not forget, the internet economy is driving growth in the u.s.gdp and that's for a reason, because we have these sort of baseline principles for how we want to regulate the internet. they were working. we've been consistently outperforming the world on our internet economy so we don't want to lose our strength we want to make sure that we build on progress and that to me is facilitating that next

chapter, getting the industry to step up to do more within the authorities of section 230 is what i meant when i was saying that is an opportunity to continue the debate. >> aneesh, want to thank you for the conversation hope you come on back. it's not going away. we're going to be talking about this a lot i imagine over the next several weeks and months. talk to you soon >> happy to. coming up, texas congressman kevin brady joins us to talk about his proposal to get americans back to, would futures fractionally lower nicely up on the nasdaq. here's another look at the "squawk box" economic indicator. times square, hit or miss. march 19th, there's live sometimes i look out and there are more people. now it's 7:56. it's kind of not as busy as it was five or ten minutes ago, but

we want to get in early on this indicator. some day we may see many more people "squawk box" will be right back. (vo) since our beginning, our business has been people.

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today. and always. good morning it is the final trading day of may. the second positive month in a row. the dow's on pace for the best week since early april president trump escalating his feud with the nation's biggest social media companies hours after twitter flags one of the president's posts. trump hitting back saying twitter will face regulations. with the shift to working from

home looking more permanent, we'll speak to bill reuben about what office buildings will look like once the pandemic subsides. the final hour of "squawk box" begins right now. good morning, everybody. welcome back to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. we've been watching u.s. equity futures. it's been a bit of a wild week as every week seems to be lately we saw tuesday and wednesday, the first two trading days of the week the dow up by more than 1,000 points the dow up by over 150 points yesterday. this morning things are relatively calm, relatively flat the nasdaq is up by 55 again, a lot of people waiting

to see what happens with the president's press conference with china that he has said he'll be issuing later today we're keeping an eye on what's happening with the treasury market right now the ten year is yielding around 0.664% joe? >> headlines this morning. tesla's ceo elon musk earned the first tranche of his massive incentive payout it's about 1.7 million shares of tesla valued currently at around $775 million really, this is not his reaction after that was announced remember, he did this a couple of months ago. anyway, based on yesterday's closing price of $805, pretty nice his options have a strike price of $350. he has a minimum holding period of five years here he earned the first portion of the payout for keeping the company's market cap at $100 billion on a 30-day and six-month trailing average

i don't know what he's going to do with all the money. what's the deal? he's given everything away all of his material possessions. what was that, sorkin? >> he's selling all of his homes. he's selling everything he owns, he says. he's getting rid of it i imagine he's going to keep some of the cars, the tesla cars homes are all gone and then he's going to rent. he's acknowledged he might need to get one property to own for the family or at least to have on a regular basis he was talking about staying at friend's houses and stuff. >> that ticked me off. you're a billionaire and you want to crash on my couch? come on. >> if he's not going to spend it on material things, i don't know what -- drink some great wine, i would think, or maybe art? what do you do >> space rockets. >> i'm trying to spend it in a month and there's nothing i

don't have i don't know what he has. >> we just watched brewster's millions it was the greatest. i made the kids watch it it's such a great film if you haven't seen it, go watch it. >> we'll finish people's sentences. people always say that to me i miss him i miss it. he was great he was funny >> yeah. >> when you get to where i am, there's a lot of people i guess i miss anyway yesterday we learned an additional 2 million americans filed for unemployment last week, but in an effort to help things get back to normal, a proposal from texas congressman kevin brady and ohio senator rob portman would deliver a bonus to people who return to their jobs. joining us is congressman brady. this addresses something that we've talked about a lot on the show, and that is the incentive with that $600 that you do better staying at home is that the rationale here, kevin? >> yeah. clearly.

it made sense to give people help because we knew so many businesses were shut down. there was no choice. there was going to be temporary unemployment we think the focus ought to be making sure these 40 million americans are permanently unplied. one of the keys is to get them back to work in a safe, healthy environment. we think a return to work bonus allows workers to keep $1200, two weeks of their unemployment for taking that job that they just left makes good economic sense. what we now noah cording to the latest report is between 2/3 and 3/4 depending what state you're in, 2/3 or 3/4 of people get paid more on unemployment than their previous job. that will make it tough for that business to remake and rebuild their work force and reopen again during this recovery and -- which is bad for everyone if we can't make that happen >> where are we in terms of

getting this done? i know larry kudlow said it's being considered white house looking at it? >> i think there's momentum looking at it. we hope we can attract our democratic colleagues to it as well we know there are labor unions equally looking at it. truth of the matter is, unless we can reconnect these workers with those businesses soon, you know, there's a likelihood that business won't make it through this crisis. and we need them to. that's the only way we get a strong recovery and avoid a prolonged recession, which is, again, really bad for those who are temporarily unemployed right now. >> becky >> kevin, how long do you think that this would last, this bonus would kind of continue for going back to work is this something you are anticipating lasting a month,

five months, six months, a year? >> i would tie it to the existing federal unemployment. i would do it for sure between now and june -- july 30th, excuse me, when the current federal unemployment design expires. i think the economy, you know, by the beginning of august may look different than it does today. we certainly hope so we're learning more about this rescue package each day. we're learning more about th recovery certainly here in texas where it's just not anecdotal. they're frustrated they cannot bring their work force back. start with the existing unemployment through the beginning of august. that's a good place to start >> kevin, other than this, where are you now on what else needs to be done you're in texas or you're from texas and things are -- may be

reopening in certain states than obviously we're used to in times square in new york and new jersey is more needed or we're already on the way back to being self-sustaining? >> you know, there's no question we are on the way back it does vary from state to state and region to region we have as a congress put out the largest rescue package in american history we ought to watch to see where it's working and where it's not then make those adjustments. we're now on the third week of opening. the attitude, the change in the attitude of the economy is significant and we are reopening safely our infection rates are down 2/3 from the peak in april, down 20% since we began reopening hospitalizations dipped almost

20% the last three weeks and we're very fortunate that our fatality rate per capita is the best, that is the lowest, among the top ten states with covid cases. so i think we're showing you can reopen safely, not that you don't keep the pressure on the virus as you do it you do but it was really encouraging, too m too. yesterday you hear dr. fauci talking about there's a very good chance you can see a vaccine deploy by november and december i think that's a bit of a game changer in how we recover as a country. >> congressman, we are looking at incredibly high unemployment. obviously things are starting to open up again. a lot of employees are going back to work a lot of businesses are opening up again inevitably despite the efforts of both the federal reserve and the federal government, there are going to be businesses that don't reopen they can't withstand the

shutdown they've seen. that's why most think unemployment will be stubbornly high all the way through the end of the year. it gets dicier through the end of july when the benefits let up there will be lots of questions. we are heading towards an election i wonder, is there an endless supply of money from the federal government to try to continue to help workers, businesses, small business that is have had problems with this, too, or is there a time when you say, this is it, we can't spend anymore, we've taken on too much debt >> great question. and those questions are being asked right now. but i think the key for us as a congress should be in addition to obviously keeping that pressure on the virus, all that we do for the health care side of us, we have to make sure that the 31 million americans are totally employed

later this summer, that economy, we know the states will continue unemployment benefits. the question will be what role, if any, does the federal government play in that. my thinking is let's assess that economy when it comes. >> congressman, i wanted to ask you about how you look back now with a little bit of hindsight on the bailouts for the airline industry when it comes to the unemployment, we are keeping people employed through september 30th however, we'realready hearing that the airlines are making plans for what may turn out to be significant layoffs after that date. we're also seeing airlines in europe get saved with a bit of a difference in terms of the approach to it insofar as taxpayers are actually getting material equity in those airlines and will hopefully participate in any up side as

the recovery takes place when you look back at the construct -- the construction of the bailouts for the airlines, potentially by the way people speculate whether they'll need further bailouts here in the future, whether you think you do it differently >> well, i don't know that we would. the airline industry is big, employs a lot of people including here in my community as well here in the woodlands area you know, i think that the government negotiating six months of guaranteed employment for airline workers while 41 million americans lost their jobs i think was awfully beneficial to the workers, my neighbors, at our airlines i think assessing, too, where they are in this, obviously there's travel, tourism, hospitality, recovery may look much different than the rest of

the economy. we may be rethinking, you know, what help is provided beyond that and how it's provided beyond that. i think the initial thought of lend like heck to help these airlines get through this, negotiate a very long guaranteed job for those employees was an awfully good start >> i want to thank you this morning. i'm looking over your twitter account right now. seems okay i don't see anything -- >> are you going to fact check it all >> looking at a couple of these things here that seem a little bit -- at least exaggerating, i would say. you're okay so far, congressman. you're good. i'll let you know, believe me. if i see something, i'll let you know thank you. >> i know you will, joe. thank you, sir >> you've got a nice blue check mark i know this is you >> andrew?

coming up when we return, one of the surprise winners of the country's current economic upheaval, that's housing, at least that's one view. we will talk about it and get a live report and then talk to real estate executive bill rudin on whether the pandemic has changed that business forever. then the president a's argument. stay tuned you're watching "squawk box" right here on cnbc

welcome back, everybody.

the housing market is an early surprise the nation's home builders have seen their stocks rise sharply in the last month. diana olick joins us she has more on that front diana, good to see you >> reporter: good morning, becky. this came as a real surprise for most in the industry and to the builders themselves. new home sales outperformed. luxury builders reported as a super strong start and tailed off. web traffic has steadily improved from the lows we experienced in mid march and has returned to the same strong activity we enjoyed precovid-19 in early february. these suggest the housing market may be more resilient than anticipated two months ago the home construction etfs have recovered pretty quickly it's the mid-atlantic.

a sharp drop in the supply of existing home sales. they're also dropping prices 22% said they had dropped prices on average 5% and that's according to a recent nahb survey as for the flight theory everybody is talking about, there's no hard data yet two facts point that way one, builders are seeing far more first-time buyers and rents in big cities are falling harder than in the suburbs. rents fall when occupancy falls. you add it up and it does point to at least some urban flight. andrew >> okay. diane, thank for that. we are joined by bill rudin. the co-chairman of rudin management company he's the chairman of the real

estate board of new york good to see you, bill. you have had a somewhat more optimistic bill than others. we talked to kevin o'leary this morning. i don't know if you got a chance to see it. one of his calls was to be effectively short office space because he said he genuinely believes over time we will be living in a much more remote first or remote world. what do you think? >> we all learned a big lesson that we can function you lose significant cultural cohesiveness when you're not together you can do a lot of face time and zoom and all of those things but in the end of the day we've seen surveys from gensler and christian wakefield reporting back that, you know, over 75% of the employees want to come back to work. they want to be with their

co-workers and interact and have that cohesiveness that is missing right now. and the way to build brand loyalty and corporate culture is to be together and have those off chance discussions and the meetings, coming up with the break through thoughts that will drive company's profitability. some of that can be done online but i think people want to be back in new york just this morning in the real deal was an announcement that tiktok is moving into the building that joe's in right now in times square on 42nd street they're taking about 230,000 feet the deal was just signed recently and they're growing from about 150 people to over 1200 people. so i think that's indicative, you know, of the counter trend will the office of the future be different? yes. we're going sort of back to the future where you have more

space, social distancing and partitions and, you know, things to make sure everybody's safe, but on the other hand you're talking about the vaccines my friend, congressman brady was talking about that, dr. fauci. you talked to ian schraeger, another friend of mine, and he talked about the hotels and restaurants coming back. so we're optimistic that when we get through this, the office building will still be a central hub for creativity and entrepreneurship >> bill though, what do you think of -- and we've seen some of the numbers already, house buying people who have lived in new york city, i know we're in a very new york city specific conversation here, but we can even expand it to what might be called the super cities throughout the country you are seeing families that have spent a lot of money historically in places like new

york city saying, and at least we're hearing it a lot anecdotally, you know what, we're going to move out of the city we think we can do our jobs remotely, we can do it cheaper we don't need to be in the city. maybe we'll live so far away we'll fly in and do it as a vacation or a work trip instead. >> there's always an ebb and flow of people coming in and out of the city. all -- you had mark zuckerberg on talking about facebook. >> the headline is they're going to remote learning that mentorship that happens, he's not going to do remote working. he's going to have limited remote working because he knows

he's the face of the company has to be there. >> you just had the segment about the rental housing we're seeing reasonably strong activity in the last month or so yes, are people making decisions? i think the uncertainty of schools have driven some people to think about where they're living, but as we start getting back to normal and vaccines are available, it's great to hear that it's coming this fall and next year, i think you'll see people coming back in the city and, again, this ticktock deal i think is an important message for everyone there are other deals out in the marketplace. facebook itself just leased a few months ago $2 million worth of space you have google, you've got apple, you've got microsoft all looking or taking space in the city and will there be some

shifts yes. will some companies go to a hub and spoke? we're building a building in brooklyn there are millions of people who live in brooklyn who work in manhattan and this will be a great opportunity for some companies to have people have less of a commute. new york city is such a -- zuckerberg talked about diversity. what city in the world has people speaking over 700 languages? you've got kids in school who speak 150 languages. this is the most diverse and cultural diversity in the country and that's where the young people want to be. my kids work with me and my cousin they and their friends want to go back to work. they want to be part of the culture of our business. that's what i see is the future. we always go through these issues we went through it in the mid 70s.

we went through it in the 90s when lower manhattan had vacant space. today 30% of people walk to work living downtown. we have to be innovative and look at ways to reimagine ourselves and look to the future take this crisis as an opportunity to be more cost effective. to deliver services from the government level in a more cost effective way and remain competitive. yes, we are higher cost city but there's always been a draw of people who want to come and live and work and be a part of this incredible ecosystem you have the camera behind joe there's still thousands of employees going to work every day at the financial service

firms and hospitals and taking the subway and using citi bike or driving we're going to have to adapt and change the way we do things, but i'm confident every time we've had a crisis we've come through those crises better, more resilient, stronger and so, yeah, there will always be people coming back and forth there was a great article in the journal the other day that i was in the key point was the young woman at the end of the article who left the city about ten years ago and decided a few years ago to come back to new york city with her family. she has three kids she's a drug rehabilitation counselor. and she reinvented herself she had a drug problem, but she thought about leaving the city in the last few months and she said, no, i want to be here. this is where my family is this is where my job is. and it was almost like a

patriotic duty that we're hear from people. as i said before, don't bet against new york city. >> bill, i agree with you over the long term we have seen new york come in and out of these cycles there are still a lot of people going to work in new york city, but we were just looking at the camera that shoots all the way from times square all the way down to central park and i think i saw six cars drive by. we are in for some time and at what price how much do rents come down for apartments, commercially what does that mean for the city and services it can offer. there are much less taxes around >> first of all, not just us, not just new york, every municipality in the country, every state, you know, you have -- kevin brady was talking

about unemployment rates this is all over the country we need that covid 4 and we need that help because our budgets, we're devastated because of the lost revenues and, you know, we shut down the whole country. so it's just not about new york. hopefully something will happen in the next few weeks or months to help these cities and states, but of course there will be some price adjustments. my daughter is going to open a vegetarian cafe downtown young people will come back and take advantage of the price difference can i say one point? you know, several years ago we didn't know about et ceteray, data dog, peloton. they are now over $10 billion in

market capitalization. the next generation of those companies will come to new york. i'm going to put my mask on. >> bill, we always appreciate seeing you and you are a true believer in new york and we love you for that we appreciate you joining us this morning appreciate you wearing your mask and we look forward seeing you soon. >> we have breaking economic data coming up rl easoon personal income and spending just minutes away. stay tuned

welcome back to "squawk box. we're literally just seconds away from personal income and spending data for april. take a quick look at futures before we get to rick santelli who's standing by at the cme in chicago. dow off by 44 points rick, the numbers. >> reporter: yes personal income spending, april numbers. as i await their arrival -- here they pop in. spending down 13.6 down 13.6. of course, we've never seen spending at these levels it goes back to 1946 that is the largest drop on record and if we look at the income side, it's trickling in. i will move towards the advanced goods trade balance number this is for april. minus 69.7 billion so it continues to get more negative what's interesting, february of 2020 it was a whisker above 20

billion. that was the smallest since september 2016 you can see there's some growth there. let's go back to the spending side the spending side as i said was 13.6 the income is 10.5 10.5 this is kind of wild i'm a bit shocked, actually. it's a positive number, at least that's what i'm seeing on the news 10.5 so income is moving up and i'm not exactly sure of the reasons why, where these distortions are. do keep in mind on the income side the historic number on income was down and that's an odd balance. a month over month basis that was down half of 1%. it was up half of 1% year over year you get that distance going back to kind of muffle over march and april there. and finally month over month on the deflator, minus .4

later we'll have the chicago pmi. we see wholesale inventories popping up that's up .4 inventory is going to be a big deal at some point in a huge way. retail inventory is coming out, down 3.6, also an april number that rounds out all of the data as it's trickled in. inventories, whether they will ask, how much have we billed making people whole and giving them money as we're reopening. how is that all going to pan out when we see the dust settle on the other side of the coronavirus. will employers and employees be matched up will there be extra chairs when the music begins it's all very complicated. i will tell you though that some of the biggest moves this week are in foreign exchange. and at the head of the list is the euro versus the dollar it's basically at 2.5 months high but what's interesting is the dynamics behind this

shared debt, and i've talked about this weeks ago, is going to be really bullish for their currency and the dollar index after closing below some very key levels yesterday maybe challengin challenging. andrew and the gang, back to you. >> thank you, rickster have a great weekend want to get over to the professor, steve liesman who's crunching some of these numbers. what sticks out to you >> reporter: so the reason why you had this surge in income here is because of government transfers. those are social -- these are the benefits that have been paid this gets it -- i want to thank rick for taking a good amount of time there, gave me a little bit of time to find these numbers while rick was talking yeah, we work well together that way. what happened was absolute surge in unemployment benefits, other transfers. i'm trying to find these numbers

here right now on the fly as a result of extended unemployment or enhanced unemployment benefits as well as the $1200 check. this gets to an absolutely critical issue for the market. on the one hand the salary declined from the shutdown, was it offset? the extent to which it was offset by government transfers that's one question. that's the sort of here and now question the question for the future upon which people make certain decisions is what happens when it runs out? a lot of talk about first of all how the idea that it may run out affects behavior by consumers today and the idea that if it is enhanced, well, you have another chance then of having at least a decent number when it comes to consumer spending. the other number i'm looking for, i'll throw it back to you while i look for it, is the savings rate number. the importance is that are

people changing uncertainty. that would save more having lasting effect on consumer spending that has to be wiped out or do they go back to their old ways of spending very much what they bring in i'm going to look for that number and i'll get back to you in a second with it. >> all right, steve. thank you. we will check in with you in a little bit. when we come back though, the potential tech investor fallout from president trump's new executive order targeting social media companies much more on that straight ahead. as we head to a break, check out shares of house wears williams sonoma. crushing earnings expectations all of the stores were shut for most of the quarter but the online sales surged during the virus. that stock is now up 8.8%. people were looking at their homes to update and williams sonoma is the necibefiary of that stay tuned

you are watching "squawk box" right here on cnbc

welcome back to "squawk box. there's a new tweet from president trump just a short time ago on the subject of regulating social media. the president tweeting that

twitter is doing nothing about all the lies and propaganda being put out by china or the radical left democrat party. they have targeted republicans, conservatives and the president of the united states section 230 should be revoked by congress until then, it will be regulated. overnight for the third time this week twitter flagged a tweet of the president's, this one centering on the violence in minneapolis sparked after a black man named george floyd died in a confrontation with police twitter singled out one part of a two-part tweet from the president because it said it may violate the platform's rules against glorifying violence. it came just hours after trump signed an executive order calling for oversight -- new oversight of facebook and twitter.

that action flagged his tweets they lead government agencies pulling social media add spend julia boorstin joins it all and has the details on that part of the story. good morning, julia, early morning. >> good morning to you, joe. twitter's public policy is saying this is a reactionary polite sized reaction. it protects american innovation and refreedom of expression. attempts to unilaterally erode it go against the freedom. making it liable for content by repealing or limiting section 230 would, quote, restrict more speech online, not less. this would penalize companies

that encourage controversial speech president trump's threat of a regulatory crackdown could mean a surge of legal costs, his demand that government agencies review what he said last night was billions of dollars of ad spending on social platforms may actually be a very low risk to facebook and twitter so far this year the broader category of government nonprofit and legal advertisers was responsible for $235 million in facebook advertising up from a total of $219 million spent last year in just $7 million spent this year on twitter from that category to advertisers. this is according to a marketing analytics firm facebook's top government spender, the u.s. census bureau. followed by social security spending 27 million. now this compares to facebook's $71 billion in revenue last year and twitter's $3.5 billion in revenue. so certainly very small relative to the overall revenue

we did reach out to facebook and twitter for a comment on the importance of government ads no response there. guys, back over to you >> julia, thank you. let's bring in two voices on the potential fallout for social media stocks here. joining us is jay muenster, founder and managing partner at loup ventures. cnbc's senior markets commentator mikesantoli. gene, let's start with you do you think there is risk to these stocks because of more regulatory oversight >> becky, the simple answer is highly unlikely. while this is far from over, this will take years, if ever, to sort itself out as i really don't see risk at the core, the korean is that what is at the ultimate center of all of this is trying to arbitrate truth. truth in fact is the truth about truth is virtually impossible. someone could look at the sky and say it's blue.

someone else could say that based on some of their -- the way they see things it's not quite blue the point is is that they need regulators in order to actually have an impact on twitter and facebook's business, need to come to some sort of agreement about how to legislate that. i think that's impossible. what's the bottom line we're far from over but highly unlikely this is going to impact twitter and facebook >> let me just ask from the perspective of if the rules are rewritten and social media companies are now responsible for everything that's posted on their sites just like any other publisher would be, newspaper, broadcast station, radio station, if you were held to those same rules, would that make you liable for concerning amounts of legal payouts down the road >> so the difference here is social media by definition is social it is not a publisher that is

held to a different standard. >> not when you start end ditdig the content as twitter's doing now. >> i think there is a difference between editing the content and applying some sort of notification around the content. understand that ultimately this gets to, again, the core question about what is truth if we take it to a deeper level and look at i think that twitter and facebook will not be impacted by this based on the difficulty to actually get to the bottom of this, but if you're going to say which one of those two, twitter or facebook is on better ground, i think facebook is ultimately on a stronger ground and the stronger ground, they say they want to step out of it and stay away from it. while i don't think either of them are going to be impacted if you ask me which one is at greater risk, twitter is at

greater risk. >> let's talk about what's been happening in the broader markets. these stocks have been the ones leading the way. do you think that continues? >> well, there's been signs now of an emerging rotation away from that. not that the big tech stocks have suffered much but other more cyclical stocks have come back it's unclear if there's a direct all at once linear transition away i will say the very largest nasdaq stocks, not only have they held up they built their valuations you look at apple, alphabet, microsoft. not too far above where they were a few months ago. it seems as if they're approaching some kind of limits of how much more they can drive things so far the overall index has been rescued by some of this rotation but it's unclear if that happens in a clean way once you've been rallying for two months by more than 35% >> mike, you bring up apple and the other big issue that's kind of hanging over that are the tensions with china, whether or

not that could be a big problem for apple. what do you think when you kind of watch the market here >> the market is only showing early and tentative signs about being too concerned about that i wonder if callouss have built up apple seeming like it has a pretty well entrenched position. semiconductor stocks down a couple percent that can happen on almost any sort of day. the china issue i do think can rise to become an excuse for the market to back off after it's had this run it's just unclear. we have to know the details of what might happen. it's not the lynchpin of the bull case that global growth is going to be accelerating and, therefore, china is a big piece of that. it's a different equation. here we're talking about normal lieszing the u.s. service economy for a first line landmark of what we're watching. >> mike, gene, good to see you both thank you. >> thank you a lot more coming up on

"squawk box" this morning. the markets on this final trading day of may check out the prices of wti crude right now. it is up more than 70% since may 1st and on pace for the best month ever if you can believe that. you remember when we were negative briefly stay tuned squawk returns right after this. clean is a feeling. it's the simple joy of washing your hands, without ever touching a faucet. it's the little things that matter. that's why we create moments to feel kohler clean, every day. ♪

welcome back to "squawk box," everybody. the futures this morning are indicated -- turned down nasdaq still holding up about 41 points it's the last trading day of the week the last trading day of the month. we'll see how we end this week which started off so strongly with the dow up more than 1,000 points in the first two trading days steve liesman was talking to us earlier. he was flagging, looking for a statistic that he found.

u.s. personal savings rate hit 33% last month that is an all-time high this comes as americans curb spending amid the pandemic smart thing to do when you worry about what's coming ahead. you make sure that you start hoarding things, including cash. also happened as people were shut down at home, not eating out, not going out shopping. obviously some confined consumer behavior when we come back, we'll check in with jim cramer, that's ahead of the opening bell. then we'll talk market strategy on the final dadie i trading da month. "squawk bo wl rhtacx"ilbeig bk. it's not "pretty good or nothing." it's not "acceptable or nothing." and it's definitely not "close enough or nothing."

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welcome back to "squawk. want to get over to cnbc headquarters where jim cramer is jim, you seem to be getting more cautious given where we stand in the markets now. >> it's kind of like the lead story in the new york sometimes that is just too overlooked, we're getting near the end of the stimulus when you read that, you start thinking let's see, let's put that consumer spending down with the end of the stimulus. you think what's going to get us to the next level? i've been saying without another package, i know it's trillions of dollars, that we're just going to sputter out when 1 in 4 people are unemployed, we're talking about 1931/32. i never like to invoke things like that the stock market did go a lot down then almost to zero, that was because we had no safety net, the banks went under. i get worried, just too many

people don't have jobs it is eventually going to catch up with the market >> what do you think of the prospect -- we talked to kevin brady earlier today, that we do get a second stimulus, maybe it doesn't come as soon as we want. if you're trying to trade the market -- i know there's a short-term issue right now, do you want to bet against that >> boy, i'll tell you, that's what we need i wouldn't bet against that. that's the bridge to the vaccine. we don't want to be in a situation where we're so far away from the vaccine that many businesses close there's a lot of instances where we're seeing restaurants open up everyone is excited because the same-store sales numbers are down 40% you know, andrew, only national chains can survive at that level. so i just think that there's a lot of unemployed people who don't have a lot of hope we need those people back in the work force

we can take this work at home theory a lot of stocks can benefit from that in the end, it's a country of a lot of people and they have to get involved you can't just all go to amazon, costco, walmart, target, lowe's and home depot we need people to go to nonessential stores. i'm worried. aren't you worried >> jim, you know, i'm always worried, you know that >> but that's right. it's our job to be skeptical >> that, it is yes. the professional skeptics. i appreciate it. we'll look forward to seeing more from you on "squawk on the street." >> have a restful weekend. it's important we have to recharge. >> we all do it's been a long, short week

thanks for that. >> best of >> we have some jumbo shrimp later, like the long short week. jumbo shrimp as we are on this final trading day of the month, the dow and the s&p are up about 4%, and th nasdaq up 5% joining us is richard bernstein. rich, i want to reference something. you said it right here you're not firmly planted in either camp, bear or bull, because investors have not lived through a pandemic like covid-19 one of our guests once said if you lived through one pandemic, you've lived through one pandemic no one has any idea what we're doing here

then at the risk of sounding iss wishy-washy, don't give me ammo, that's really the stance a lot of people might have right now >> as you said, we've never been here before. i think one could err on the side of being bullish to bearish. our issue is how can you be so -- not you, how can one be so ardently bullish or bearish in such an uncertain time savings rate jumps to 30%. who was expecting that nobody has anybody analyzed what the results of that are going to be or hypothesized what the results of that will be? no we don't know what's coming next from our perspective it's prudent to sit and watch the fundamentals, restructure the portfolio based on the evolving fundamentals rather than guessing whether you

should be bullish or bearish >> i will tell you, personally i thought maybe we can think about 1918 and 1919. not to say it's going to be similar, but the next ten years were pretty wild there's a lot -- >> the roaring '20s. >> now on "roari i"peekie blindy just hit the roaring '20s. jim just mentioned 30 in 31. we don't know. who knows with that pandemic, modern medicine, the internet, everything else we can do now, supply chains, maybe we really don't have anything analogous to this to look at. >> joe, the thing is, if the fundamentals get better, there's every reason to be bullish if the fundamentals get worse, there's reason to be bearish

to me, that's common sense in the current environment rather than guessing. look, what we're doing is we're diversifying our portfolios. we were defensively positioned our latest moves have been to try to balance that out. we're investing in energy because what you want do is balance out the risks. if you think of a seesaw, it's not wise now to end up at one end of the seesaw or the other end. >> let's see we got -- in terms of asset allocation, you raising cash you buying bonds are you just staying where you are? about 20 seconds >> the market moves are setting our asset allocation quicker than we can move, but we're keeping our allocations roughly the same on the margin, making them a little bit more cyclical. we were so defensive

things like gold and energy i think are worth looking at if you don't have any in your portfolio. >> great, thanks we'll go now -- we're at not great levels we could take a three-shot or not. andrew and becky, have a good weekend. did you see the one person they loved your hair you're doing great i don't know if you're shipping people in here not that hair matters. >> look forward to seeing you on monday >> good. make sure you join us next week. "squawk on the street" is next good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber live from separate locations on this final trading day of the month powell speaks at 11:00 a.m. eastern time