territory, so that would be -- that would be seven out of eight if it were to close higher today. we'll see. nasdaq is very strong. that's it for us this morning. we can take a -- can we get everybody in usually we don't have time for that but i skipped the rest of the futures just so we could say see you tomorrow and thank you. >> bye-bye. >> see you you tomorrow. >> "squawk on the street" is coming up right now. ♪ good wednesday morning, welcome to "squawk on the street," i'm quintanilla with jim cramer live from separate locations, faber has the morning off. futures are climbing into the green after the dow's first drop in seven and the nasdaq's first inter day trip above 10 k. a lot of news today. a fed statement, a news conference this afternoon, corporate updates from starbucks, delta, yum, high profile down grades, oil 38, ten year 80 basis points, jim, but interesting confluence of news

whether it's medical, some of these states posting some of their highest caseloads since the pandemic began, but then again optimism about the recovery at the same time. >> right look, i think that we are all kind of thrown it's governor to governor, yesterday in new jersey suddenly we get the you can have 100 people outside, 50 people inside. versus six we are all kind of confused. with he see some parts of the country looking worse, other parts of the country that were so terrible it's wide open and the confusion to me is what are the numbers going to be look like -- what are they going to look like given the fact that new york now feels like post wuhan and the rest of the country seems like, i don't know, maybe is it going to be italy, is it going to be spain i don't think it is. i think it's going to be better, but i have to tell you, carl, that the stuff that's being bought is not in synch with what's happening, particularly

the airlines, the hertz rental car, we saw a very good piece in the "journal" about the new young investors and what they're buying and what they're buying is very out of synch with what's happening in the economy. >> i think one of the headlines on our website is if you want your stock to pop consider bankruptcy or at least have somebody report that you are considering bankruptcy hertz meantime confirms today they got a d listing proceeding from the nysc that's moving ahead, they're going to challenge that, but the commentary regarding robin hood, even their marketing, jim, the way they're pressing young millennials to invest, it's not fomo, they're using yolo, you only live once. >> yeah, yolo that's not an investment strategy. i was pushing last night for hertz to be delisted on ""mad money"" because there were 500 million shares that traded two days ago and there are only 140 million shares in the flow or 250 million yesterday.

there's a lot of people, young investors, who don't understand the capital structure, don't understand the common stock is the lowest, don't understand if carl icahn sold his 38% stake in the 70 cent area don't think that he is someone who throws in the towel, think that he is someone who knows what that common stock is really worth there was -- my friend david portnoy was quoted saying you buy stocks, they go up well, they didn't go up yesterday and they might not go up today i think that david has just -- he has a great time, i love him on sports, he is enjoying himself, but, remember, these are stocks and stocks don't exactly what you think they do, which is that the more enthusiasm you have does not mean they go up. it can mean they go down it does bring out sellers at a certain point. >> so you think the dynamic of a younger generation of investors thinking they know better than truck and miller and carl and

tutor jones who yesterday, jim, economic club of new york sort of joined stan and said humble pie. i did not see this coming in western ways. >> one of the things that portnoy did that was indicative of what someone away from the game sees is he thought that warren buffett can a pit lated and sold the airlines at the bottom, created the bottom buffett did if you listen to stan yesterday, stanley truck miller at the economics club he compared it to 1999 going to 2000, well, maybe it is, but in the interim there are people who made a great deal of money if you took things off the table. dave tepper was negative, i've seen him go positive anding negative why? because the facts change ray dalio made me feel, well,

wait a second, in my 60s i'm listening to ray dalio, i'm playing with fire, walking around with all this stock the guys who really got people out were the people who we consider to be the most responsible people there are the guys who kept you in would be the people who are neophytes, but you can stay too long and i think yesterday's reversal said they're staying too long >> interesting you know, another name that sort of fits into this framework is nikola, of course, now a company not troubled by any means, jim, but no revenue and a market cap that now exceeds ford and fiat chrysler, crossing the $30 billion mart inter day yesterday. >> i question nikola on twitter and my wife said, stop looking stop looking at your twitter feed people just -- they just hated me too much. when i did profile that i said, look, it's going to shoot up and then it's going to go down and the fact that i said it was going to shoot up was greeted positivity, but because i said

it will cool off and go down i spent another day not on twitter. i've been on twitter since 2009, but these two days were too vicious and i wanted to try to enjoy my life in a period that is very hard to get any enjoyment. i had to stop looking because i was so despised that i questioned there could be a top to this stock. these are not wise people who say things like that there are tops -- there are tops to stocks. >> sure. yeah we're going to talk to the question of ford motor later on today about nikola and this new partnership, jim, with ford and vw, shared production of commercial vehicles, of evs and now the story out of reuters about elon musk and a memo, jim, where he says it's time to bring the tesla semi to volume production so lots of moving pieces in autos today. >> right now, i use a word that people won't like so hold your ears they were running ford the other day in robin hood, they were

running it and running it means they're taking stock from 5 to 7, it was not ford's numbers it was the game that people play bag them, gun them, and then liquidate them you get in first, that's the bag, you gun, you say ford is good and then you liquidate into the people who were late bgl is an old style from the 1980s and bgl is back and ford was going up we may hear that ford is doing better but it's more likely that the stock is doing better than the company. >> bgl. >> bag them, gun them and liquidate them that's what they called it in the '80s i wrote against it in the '80s i wrote against it in the '90s and it's back. younger people do t they figure out a stock to run, they ran hertz, they ran american air, they ran a company called genius brands where i have a letter here basically from the ceo that says, listen, we do exist. there is one for you we do exist.

that is very advised so you're seeing stocks that are being run and you have to recognize that they're being run. that hertz was being run that all of the oil tanker stocks that were being run from a dollar to $2 that's just a process and it's a bad process. it's a top process it is the ultimate sign of froth but it's new investors i wish new investors were buying fractional shares in amazon, but, no, they love those stocks that are a dollar because they can gun them, they can bag them, they can gun them and liquidate them at 2 bucks and bgl is being played and bgl is something that the sec used to not like but the sec, i don't know, the question is will it be back on cbs -- i'm sorry, will it surface from washington where are they where are they where are they with hertz? why didn't they stop trading hertz? where they at chesapeake why don't they stop trading chesapeake >> jim, in your view how long

can that process run and what finally brings it to an end other than financial pain? >> the canceling of the stocks that are worthless would certainly help a four-day decline in american air back to where it might be worth being in light of the delta number delta being cut by 90% certainly doesn't bode well for american and a recognition that some of these tanker stocks are worth far less if oil goes down. it does not end well it ends well for the people who get out yesterday, before they started going down and, carl, you know what it really takes, us talking about it saying they may not be worth what they're worth that's what it takes because the government is absent. >> that's what we're trying to do right now, jim. you mentioned airlines certainly jpmorgan has a corresponding view when it comes to jetblue and ual, down grades

today. >> ever core had a dollar price target when american was at 12, they had a $10 price target before that and they just said, listen, take a huge amount of debt on. we have a lot of companies, the crews lines have taken on a huge amount of debt but haven't had a huge amount of bookings at prices they used to have these planes were flying, there was a fantastic article in the "new york times" about flying from germany being one of the few people on the plane and yet they gunned -- when i say gunned, bag them, gun them, liquidate it, the people who are uninformed or people who are early if you want to call them that now find that the game of musical chairs is over today will not be a day when i look at twitter, carl, other than if my wife is sending me some pictures of my beef steak tomatoes we can pop the balloon right here right now and that's what we're doing. >> they're not the only down grades today, either chevron, you were talking about yesterday, rbc takes it to sell. micron today bear on cisco do you see this sort of

gathering steam? >> yeah, but chevron downgrade was intriguing because what they were saying it's obviously done better than the rest, time to rotate into lesser times i disagree with that i think that mike werth the ceo of chevron runs the company as if it's not a wild cat company i want to compare that to the late and good friend aubrey mcclendon while he was actually more of a business type than a wild cat or did turn chesapeake into a great wild cat company and it never was able to recover. i thought the chevron piece was suboptimal in the sense that you don't put out a piece saying to sell chevron when it is the best run oil company in the company it also compared to international companies was veiled that bp was i felt not that good. why i like that downgrade. i don't like to downgrade great stocks and chevron -- i don't like the energy stocks, i think that their time has gone away, people ultimately from robin hood will run big money and won't buy chevron, but right now

chevron and oil are here to stay you don't sell that. that's the highest quality there is. >> chevron right at 100. after a break we will talk about powell and what we might expect to hear from the fed chair today at the news conference at 2:30 a statement coming out at 2:00 p.m. as well as jim alluded to, some corporate signs about the quarter, out of starbucks, delta and yum. we are back in a minute. as business moves forward, we're all changing the way things get done. like how we redefine collaboration... how we come up with new ways to serve our customers... and deliver our products.

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why don't we put capital into the neighborhoods i could come up with a project that is not a project, but something that willover haul the system i get infrastructure that allows for vocational training and technology and i get capital 1% less than 1% of $70 trillion that then helps me create -- that helps me create more wealth which goes into the community. so there are a number of tangible things that can occur, that we can -- that we can invest in. citi's ray mcguire there, i know you tweeted about it when he was on squawk this morning and the keyword it tangible in terms of the solutions we are hearing from some of these executives. >> right ray is a great friend of mine, he was in my law school class,

candidly the smartest guy in my law school class he was going for law -- doing the j.d./am. ba, glen hutchins, too, who is on a lot, he was just on a different level. >> it's like the academic iron man. >> yes he was just -- ray is a different level. he's always been at a different level and always the greatest guy. we got a change and we have to have the dialogue and ray could have come on and talked about the m&a and he did at the beginning, but ray has taught a lot of us, but we are not doing enough we are not doing enough. we have to change. when ray comes on and says this stuff, i've heard it and i say to myself, okay, i've heard it, what have i done and the answer is not enough everyone who heard ray heard the story about his family and we have to get our act together and we have to change. thank you, ray thank you for coming on and talking the truth. >> yeah. that was good. certainly the momentum not slowing down by any means. jim, one more break here

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our phil lebeau joins us this morning with the coo of ford good morning, phil. >> good morning, carl. let's bring in jim farley, coo of ford. lots to talk about including this deal with volkswagen that you finalized this morning let's start with a status check. how do things stand in terms of ramping up production and what do you see in the market in terms of consumer demand for going back out and buying vehicles >> good morning, phil. we're seeing great very strong demand we have for more than a month now. actually, some of our model products on retail were up year over year like f-150 very strong demand on production we're adding second and third shifts now. by july 6 we will be up to full north america production and by the end of this month almost all of our plants will be on three shifts or overtime. >> jim, you are entering a crucial stretch where you will be unveiling the new f series,

give us our first look at the bronco that you will roll out over the next year and the all electric mustang coming out later this year. how much did the covid-19 pandemic set you back in terms of your product portfolio? >> not much, but, phil, you will see i have my bronco shirt on today. look, the launch is really critical for our north america profitability and for our customers. the macm-e and bronco are brand-new products, it will be incremental to us, brand-new customers, we are really excited. the f-150 is our key launch this year the team during covid, the lockdown, made a lot of progress on the software verification, a lot of the technical items for our launch as well as supplier readiness. but until we get into those facilities and start building prototypes we can't progress the launch we don't see any delays to the launch at all outside of, you know, the covid shutdown of the plants and, in fact, during the

break our engineers and supply team made really good progress that we feel great about our new launches, the f-150, we have bronco coming, as you said, and we also have a new small utility, offroad utility coming which we are excited about and the mach-e with lots of reservationes. >> when does the ford restructuring take hold? you've heard the critics who are saying ford is not moving fast enough this seems to be a perpetual restructuring going on for the past couple of years when do we see that pay off in terms of restructuring this company in a new direction >> great question. you know, the bottom line is our new lineup comes out later this year in the third and fourth quarter. that's the high leverage opportunity we've been waiting for. we've worked for three to four years to get this new lineup to market we're going to have the freshest product lineup in north america, it's our key market, our profit

standpoint, north america is our key opportunity. we're also working on costs. we have a new coo in north america, lisa drake, she's been working on our warranty material costs. between the cost progress of the new vehicles, we have an unprecedented opportunity to really create a lot of shareholder value. and also get a lot of new customers to the ford brand with this brand-new product lineup. >> jim, it's great to see you, jim cramer >> hi, jim. >> you've done a great job in america, i've bought the 350, the super duty, excuse me, it's incredible truck, just lasts forever. i think that you are -- that whole series is amazing. i want to know when i see elon musk do a pickup that is, i don't know, kind of fanciful to me and then i read that he's selling a tremendous number of cars in china, i think why in china is the f-150 not the biggest seller and what happened

in china and why do you really need -- do you need vw, say, to get into china they sell a lot there. because to me i just don't get the disconnect the 150 may be the greatest vehicle ever made and i don't get why that isn't the biggest seller in china. >> yeah. so good question first of all, phil, i have to say, you know, there is a lot of attention to electrification and new companies, but ford in the next 24 months will launch an all electric f-150 and an all electric transit van we are number one in the pickup and the van market in western europe and the u.s. and this is our chance we are electrifying and we are a brand that people trust. on china, you know, our products got old, phil, and we didn't invest in new products now we are we're launching four new utilities and the transit is really strong. we gained retail share in china for the first time in several years the last two months, more

than half our sales are transit vans, we do offer pickup trucks to the gmc brand, but really our version of the pickup truck and f-150 in china is the transit van and it is selling like hot cakes, more than 48% of our sales last month were transit commercial vans. so the commercial industry is hot in china right now and it's more -- almost half of our sales. >> wow okay that's news to me. so i always want to say when something is news rather than just yawn about it that's terrific. it makes me think of one thing, jim, what would happen tomorrow if you went into ford, you went into ford and said we are profitable in the following four markets, let's close everything else and put up big numbers. what would happen? >> well, we've been working through that, you know, scenario we have lots of unprofitable product lines in south america, we've stopped focus on fiesta, we've stopped the fusion in the u.s. hard decisions

hard decisions to get out of legacy name plates that people love, but, you know, we saw no future and no profitability and, you know, with the pandemic, phil, we are looking at every part of our business if we are not convinced it's going to be profitable in the long term, you know, we're not going to allocate capital, we're going to restructure, we're going to do what's required to set the business on the right path we have doubled down on our really profitable businesses now. that's the new name plates and we're growing in new places, you know, we're the number one cross-shopped brand with jeep, key contributor to the revenue and profit for fca, they have had that market largely by themselves, we will have a whole new lineup of broncos and it's about time but i would say, phil, you know, basically, jim, bill would say what you need to do. >> hey, jim, i hate to cut you up but we're running up against the opening bell

quick question, if you could give us a quick answer what do you think when you see a company like nikola, no revenue, no products and yet the market cap surpassed ford's market cap in the last couple of days >> i think of an electric f-150 and an electric transit, customers who trust us, fully connected vehicles with connectivity, we're more than 50% of existing market, we're electrifying our lineup. i'm thinking opportunity for ford motor company >> jim farley, coo of ford not shying away from the question when it comes to nikola we appreciate you joining us updating us on where things stand with ford as it restructures operations. carl, we will be watching to see what happens with ford over the next two months or next two years. carl, back to you. >> you got that right, phil. thank you so much. our phil lebeau. take a quick break here, we will get et opening bell in just about four minutes as we are ainghe f decision this afternoon. don't go away.

>> announcer: the opening bell is brought to you by nuveen. a leader in income, alternatives and responsible investing. welcome back opening bell in just a few moments on this wednesday. it's a pretty busy one with the

fed decision coming up in afternoon, jim, and then a lot of medical news, nih sort of playing out a timeline for phase three trials, md earn in a in july, astrazeneca in august, j & j in september those comments from fauci yesterday, jim, saying the virus in general is his own worst nightmare the way it sort of decimated the world in four months, but said on a vaccine it's going to take more than one and i guarantee, he says, that we're going to get one. >> i was with some guys to celebrate the reopening of jersey yesterday and i was saying first quarter for -- for the vaccine. there wasn't a soul who felt it was going to be that late. everybody feels it's going to be q4, it's going to change the country's face i don't know i think it's too optimistic, but if dr. fauci is there and all these drug companies are saying -- it's really risky to say it and not deliver wow, it would be amazing

it took four years to develop the mumps vaccine, that was the fastest ever, we have ai now, great stuff when it comes to just to the genome and what jensen wong told me from nvidia, graphic user interface chips that are so fast that you can run a lot of different things and discover what's not working. maybe the idea that you can get rid of a lot of the bad does ak sell rate. boy, it would be incredible. it just would be incredible. >> as we've said -- as we've said before, jim, i mean, no one is out there man dragt that he say this out loud, the fact that he's voluntarily talking about a q regard, q1 timeline is interesting. another record high on the nasdaq, i think that makes it three days in a row for an inter day high >> i have to tell you that some of these moves in the major -- in the majors now, they are acting like small cap. you know how hard it is to get apple going like this. this is not a bag them, gun

them, liquidate them that is a group of people that realize 5g is here going going to be explosive. nvidia winning big business that people are talking about, winning some apple business maybe with amd, there's every -- everyone is speculating and everybody is winning business. things are just better in the stock market than they are in the real world, but i guess if they think there's going to be a vaccine in q4 the numbers for everything are too low >> yeah, jim, i mean, headlines like -- there is a couple in chinese media this morning, sort of speculating that the chinese could limit qualcomm chips, apple chips in government agencies or in areas that are -- involve national security, headlines like that completely getting ignored right now. any discussion of chinese tensions is getting ignored. >> look, a few weeks ago we were worried that taijuan semi might

be deeply hobbled by taiwan saying they are us so let's go buy the rest of the semis. we are in such bull market mode, remember, we are the most overbought in the history of the s&p oscillator the most overbought. it is showing no signs of dissipating. now, there's two overboughts hertz might be worthless, but there is the overbought of facebook there is an article facebook saying they're losing ads. the stock is only una dollar now, maybe it would be up 5 if they were not losing ads. >> the "times" talks to advertisers and say some find in morally impossible to advertise on the platform. jim, to your point it's not just records, it's records on volume, it's 6 billion shares of the nasdaq a day, numbers we went ten years without getting 5

billion. >> it's dbewildering, but it's people believing in the v, it's a belief that, let's say, the fed talks today and they are not going to take the foot off the gas pedal because we still have 13% unemployment, it's one of those moments where because the numbers -- aggregate numbers are so weak, the fed feels it's supposed to do -- step on the gas pedal but look at the housing numbers, housing numbers are very strong. what i find interesting is that the recession stocks are doing well and the stocks that signify a dramatic increase in activity are doing well you typically do not get both of those doing well one group is supposed to be losing, but it's not so i'm baffled like other people, i'm used to the idea that if j & j goes up you have to expect we're going to see declines in the industrials. we're not. i'm used to seeing if mccormick the spice company goes up then

any industrial should be getting completely hammered and that's not happening. i think we all have to kind of marvel this is a very different market from what we've had in -- since maybe -- not the '90s, you have to go before that, you have to go before the beginning of the great bull market in the '80s when you see this overall group move this is not as fanciful -- i know -- i know stand druckenmiller what he said and i know the comparisons to 1999 but if you get the second half rebound led by europe by the way because europe is incredibly strong and their banks are getting better then you can see that this rally is not fanciful. it is, like i said, it's a little baffling because we are not used to everything going up, but that's s&p money coming back into the market after pulling out of the market because a lot of the hedge fund managers that have come on air have been so negative and they had great power. >> right speaking of which, jeffrey's today puts a three handle on

amazon that's six firms now, jim, according to bee spoke that have targets on amazon of 3,000 plus. there's two schools of thought on what powell -- how powell might come at this, if he comes at it at all one is explaining why there's 20 -- what, 20 billion in purchases a week when the markets appear to be working just fine. the other is that the fed what do they really care care if some robin hood traders are making double, triple their money on. >> i think they can ignore that but can they ignore the numbers of the airlines which are so horrendous, that was bag them, gun them, liquidate them group but the numbers are just horrible will they get better i don't know look at the numbers that blinker put out today with chili's, the numbers are bad but chili's is cash flow positive that means a restaurant that's big, a chain, can close half its tables in order to be able to stay within the socially distant

rules, but if independent operators did that they're just going to close their doors and they can't pay the rent. i mean, i just don't think the economy is as good as the market says it is jeff gennette comes on, gets its money from macy's, what happens, the stock does it go from 10 to 12 no, it goes from 10 to 8 i continue to look at pockets of the stock market that are signaling don't get too ahead of yourself when the ppp money runs out, we are going to have another setback. if we have another full outbreak we will have a setback right now the market is saying, shut up, jim, will you just get on board what the hell are you doing there? why are you stopping the hertz who do you think you are to take away our money we're trying to make some money in chesapeake, why do you hurt us i'm not trying to hurt anybody but i'm regarded as being someone who is trying to make it so people make less money and i don't know what to do, carl. look, the starbucks, i was thinking that was a decent number, people obviously say

it's not starbucks is not a bag them, gun them, liquidate them stock i accept the market's judgment if you come on air and you say the following oil tank company is not worth anything, well, then you better, you know, check under your car before you go home >> yep jim, it has big implications for ipos, we will talk about vroom and some of these other headlines on snowflake and airbnb in a minute but also m&a. we will bring in even on his day off, again, david faber to talk about uber and fwrub hub good morning. >> good morning, carl. yeah, i had a feeling that, in fact, you guys might hear from me again two big stories, of course, one we talked about for a while and we will get to that, no need to look forward than taught man's stock price, simon says they're going to terminate that agreement. i want to share some news on -- on uber, grub hub and grub hub and those european companies

that cnbc reported on over the weekend. here is what we can tell you right now, what's going on uber appears to be moving towards exiting their talks with grub it was not about price, the two companies had agreed to a ratio of 1.925 weeks ago, but as we've been indicating and reporting for weeks now, the two really have not made progress, significant progress on agreeing on how they would deal with the antitrust review that would come their way and what remedies uber was willing to offer grub in order to deal with any potential opposition on the antitrust front. so it does appear likely from what i'm hearing from people close to the situation on both sides that uber is moving towards exiting those talks. they will have a board meeting i'm told fairly soon and there may be a decision made there the decision may be made for them and that's actually maybe

the more important part of the story which i should have started with which is that grub hub does appear according to people familiar with the situation to be moving much closer to doing a deal with one of the two european delivery companies, i don't know which one, though. that's part of the problem with being on vacation, take away or delivery hero, but i'm told that within days grub could reach a deal it would be fairly interesting to see how that deal is structured given neither one of those companies has a u.s. listing for their stock and it wouldn't appear that the synergies available in grub hub and uber are available in the same way because the overlaps in the business are not nearly as significant for those two companies. but it would create obviously a global player or a larger global player on the delivery business. so that's kind of where we stand on that. we will see whether uber officially xits, perhaps on this point they will see they've been slow rolled because grub hub is engaged in talks with one

of these european companies and appears to be getting close to a deal, guys wanted to update on that now, jim, i mean, you asked me about this numerous times, taught man and simon properties. the lawyers i spoke to always indicated how tight this contract was but it does not appear to have given pause to mr. simon who has decided to try to exit the deal as we heard a few moments ago when we learned they're exercising their contractual rights to terminate. they can say they have those rights, jim, and they seem to be taking in a quick read borrowing from a number of books, maybe the forced out plan but also the sycamore plan where they say that the company and taubman did not do enough, did not make -- make essential cuts in operating expenses and capital expenditures so failed to take steps to mitigate the impact of

the pandemic all i can tell you is right now this is going to be a war. it's interesting, it's a michigan court, as opposed to somewhere else a delaware but it's going to be a war, jim. perhaps this should not have been unexpected except that the titans of this contract from everybody i had spoken with think in their minds a reason why simon was stuck. you can always try dow tried. they closed on terms but it was a war. we can go through a lot of the wars we've seen, maybe there's no harm in giving it a shot as we see taubman shares down 35% when i look at the things that simon is talking about, the idea that perhaps the taubman did not do well and mismanaged its business during this period, it was disproportionately affected versus other malls, i think that's going to end up being a little subjective, david, but if i understand it according to that february 9th agreement that

there was an out if taubman did a poor job i'm a little surprised, but then again simon stock went from 55 five days ago up to 90 momentarily. so i think people must have been thinking that perhaps they could get out of it. do you know what, the mall business, i mean, how do you do a good job during the mall business you're closed. i think everyone did equally bad, but, david, you're right, it's going to be a war i do want to point out that david simon is a businessman that people revere in this industry, he's paid out $33 billion in dividends, he's a good judge of who is a good operator and who isn't, but it is surprising why did you like taubman's operation and then when all malls are closed not like taubman's operation but, yeah, i think this is going to be one that we're going to be talking about a long time. >> yeah, it's going to be a lot of conversations with lawyers here who have perhaps different opinions i mean, again, it will come back

to things like disproportionate because the merger agreement or at least according to the simon side says that they have the right to terminate in the event that the pandemic disproportionately hurt taubman. >> right. >> i'm not quite sure what that means. we pointed out there was a carveout in the material adverse effect clause that gave them the right, said you can't terminate because of a pandemic. remember the pandemic had already kind of begun a bit, hadn't turned a global pandemic yet when they signed this deal, 250 in cash by the way not a stock deal in any way, simon properties has been responded positively recently although down now jim, this is just going to be a war. david simon is a tough guy. >> oh, i'm glad you said that. >> not unexpected in some ways they were getting closer and closer to having closed this thing, they were on the clock so by the end of the month potentially, but still a shock in some ways as well. >> do you think it's been a shock that david is suing gap stores >> i guess, yeah, that should have been a sign maybe that he's

willing to take anybody on you know, i don't know, but this is going to be ugly, it's yet another deal in a long and -- you know, a quickly lengthening list of deals that we have watched fall apart, whether it be l brands and sycamore, add this one and we've discussed tiffany in the past, in terms of at least focused on trying somehow to get a price cut this comes back to lawyering, this comes back to contracts, this comes back to courts and in this case michigan courts apparently not delaware courts but, jim, it's going to be a fight. >> i do want to emphasize, again, david simon a revered figure in the industry, a person who has paid his shareholders a great deal definitely a tough person, but a person that people feel is above reproach that may not matter in court but i think our viewers need to know this is a man that is not a scoundrel. this is the best operator out there, maybe don wood of federal

reality, but, wow, i want to follow this one. everybody has been to one of their malls. everybody. they just may not have known it. >> right right. well, yeah good i'm looking forward to you following it and i am as well and -- >> go back on vacation, will you? this is the hardest time on earth and you're calling in. it's okay. >> maybe i will just give up and come in tomorrow entirely. >> no. >> it's not that hard to turn a camera on and sit down at my kitchen table. >> your kid is going away to college, i hope. >> yeah. we hope, too. >> this should be the time that -- do what you want, but i screwed up i screwed up i worked >> thanks for the advice, old man. appreciate it. yeah all right. guys i will probably talk to you tomorro tomorrow >> i will tell you the news never stops, jim, but there's always more news so it's like a city bus, you can take your day off because there's going fob more news when you get back. >> oh, yeah.

never ends it never ends. today was a day, by the way, when there weren't that much earnings but the analyst notes are really driving things. look at all the down a lot of those are because of analysts saying different things >> yeah. micron, cisco, chevron, jetblue, united, some of the down grades today. jeffrey's actually took the entire tech sector to market weight on a downgrade there. i know you talk about the starbucks with the squawk guys before the hour, comps down 43 in may, they did say 90% of corporate owned would be open by june 1 and that's essentially what they did, jim but then the preliminary adjusted loss for the quarter of 55 to 70, how does that match with what expectations were? >> yeah, when you hear that it's within the range, so to speak, it's not within the top of the range and that's why they will be selling i do think by the way the second half is going to be stronger, they are going to open up a lot

of stores, china will be open, they're going to take advantage of the vacant storefronts, move in, have walk-in starbucks this is a fits and starts story. it wouldn't shock me if starbucks creeps right back as kevin makes it clear that the second half is going to be stronger than you think and that's what we should be trading on starbucks is a company that's here to stay and i say that because as you listen to us talk about david simon, simon properties, not everybody who is in a mall, not everybody who is in brick and mortar is here to stay a lot of outfits won't be with us a year from now, starbucks will be. >> yeah. then ipos, jim, axios says that airbnb has resumed internal discussions, snowflake eyeing $20 billion in valuation according to the ft today and vroom who we talked to on "squawk alley" yesterday take a listen to what the ceo said. >> when we first got the early days of covid we were kind of evaluating obviously that didn't

seem to be the right time, we saw some interesting momentum in our business through the later half of march and into april and then we actually saw that there was a great opportunity for us to move the business forward so we got into testing the waters, got into the road show and we're obviously well received >> this is the time. >> any argument, jim, window is open >> no, at the beginning of the ipo one of these periods where we are going to have an ipo train coming through, the first cars they give away. you're going to make money put in with your broker right now for snowflake if you have a broker because flank absolutenen is the ceo, he built service now which -- well, right now it's run -- bill mcdermott runs it, sap and he does done a remarkable job but he is incredible, he is one of the toughest ceos i have ever seen when he retired i remember him telling me, listen, he's sick of sleeping on a cot when he's

trying to be in there building a company. he is the real deal. he's tough he makes david simon look like a real sweetheart. so bank going to, the enterprise software sector is very hot and sluten, mark benoff would say it's someone to fear and respect. snow flake good point >> we'll watch for that. we're holding 3200 holding nasdaq 10k rick santelli brought us cpi a little over an hour ago. >> good morning. cpi roughly as expected. no market moving implications at least at this point in time. tomorrow is ppi. what is important today is how we continue to see yields come off after spiking on unemployment friday. let's bring all the charts back to friday. the 5th of june.

look at two-year note yields they spiked up to 23 that's the high water mark they've been drifting. if you look at ten-year notes, they're drifting under 80 base points this means the jobs report was to many, just a mathematical calculation. if the worst is behind you, and you start turning things on, jobs are going to improve. and we saw the nervousness leading up to us as every day leading up to the jobs report saw higher rates and higher equities the point is once that was out of the way and whether it was the last blast on friday or new longs, almost doesn't matter because now the fed and we know jay powell is not enamored with the economy in many ways thinks it's going to be a long slog the drift is lower this is important. maybe yield curve control is something you're going to talk about heaven forbid, but it's out there. let's look at ten minus twos spiked up to 72. it's lost a dozen basis points

if you are really thinking yield curve control, think about where a two year note have been and the long end it's basically all about the long end it's about the ten year. i can't imagine they're going to pick any maturity longer than ten at this point. and the dollar index today is a big day yesterday was the second day in all of 2020 the dollar index closed down on the year. the other one was march 9th. well, it's below 9640 again today. pay close attention nrmt for the month of june we've lost close to 3% on the dollar index. carl and jim, back to you. >> all right another one to watch, rick thank you. so market being led lower at least on the dow by energy and industrials and financials, and that's despite apple, another record high above 350. we're back in a moment

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it's time for jim and stop trading. >> jpmorgan does it again. talking about how 5 below would have a great number. bingo. stocks up 10% on 8 % comp numbers. this is a company that most of the stores are being closed. it's a fun store for kids, and it's back. and i think you can have very large run. so don't think it's over when it's up 10 the loss really likes it says it goes much higher, 150. >> yeah. interesting. jim, today on long island, it's phase two, beginning today outdoor dining hair salons. phones going to be ringing off the hook at a lot of nail and hair salons today. >> look, i had guys over last night. people over for my house, and outside because it had been limited to six, and look, we have no illusions. it's not over. we didn't shake hands but it's nice to at least see people and have kind of a normal life as close tonormal as you're going to get >> yeah. that's true. how about tonight? >> the mayor, timeshare, an

interesting, people, it's different than airbnb, and i have a company called cerus. it's blood remember, we're trying to figure out exactly what plasma means for people who have co-vid so some chinese study says it doesn't matter american studies say it does let's find out i think the american studies are better >> all right we'll see what happens today our point about the engine overheating is documented every day. not that everybody is listening. >> bgl, bag them, gone them and liquidated tough to see >> yeah. >> jim, we'll see you tonight. good morning, welcome to "squawk on the street. i'm carl quintanilla with sara eisen and mike san tolely. waiting for the fed decision at 2:00

the news conference at 2:30 despite a slew of downgrades nasdaq is holding in at 10,010 and mike, 3200 the levels at least at this point remaining intact although traders on alert. >> yeah. the levels are intact. the big cap indexes are holding together for now it's a second day in a row when most stocks are down and actually down appreciably. it's an unstable moment. agree, came into the week, things were looking stretched in terms of field position and sentiment. that's getting sorted out right now. and obviously some of the recent kind of speculative names coming off the boil hard to know exactly whether it's going to be one of the situations where the indexes themselves get fatigued and we have to have a pullback or we just flatten out but you're right. so far the s&p 500 has not really gone much below 3200. each of the pullback days. >> i think the fed is going to be key obviously it's been key for this huge runup we've seen, the 45 %

runup for the s&p since the march lows and unprecedented amount of stimulus we're looking for the language from chair jay powell. nobody is expecting big action, but will he still sound dovish will he still talk about the great uncertainty facing this economy, the risks that are out there and say the fed is still strongly committed to using all available tools and even more action if necessary? that's something, for instance, the market probably would like to hear. if he sounds any rosier about the economy, about the surging stock market, i wonder if that could be negatively interpreted. also the lending facilities. the fed has stepped outside of its perhaps comfort zone or traditional zone in terms of lending to medium-sized companies, municipalities, corporations including junk. and what will he say about that? and whether -- how effective it's been and whether it defuatdef

deviates from the mandate are huge questions >> you have to assume chair powell is going to acknowledge the improvement in things like the jobs number, but probably not extrapolate that out of course, recent comments of his have been all about the risks down the road. we don't know how this virus is going to go. we don't have our arms around the implications and he's in risk management mode it would be unusual for him to strike a tone that things are better and maybe we don't have to do as much when so much in terms of the capacity of their existing programs have not even really gone into effect. there hasn't been all that money actually utilized yet. you have to imagine i would think that he's still going to be giving a nod clearly in the collection of we just don't know how this is going to play out from here, carl. >> right >> finally -- >> and also the uncertainty factor >> yeah. >> we spend so much time this week talking about essentially an echo of the day trading game

in the 90s is question is it related to the population that would ordinarily be at work and once those people go back to work, mike you've tweeted about this, does the activity subside >> it's going to be a fun test to see that. i think there's a chance of this a lot of things, though, came together as everybody has been talking about. including zero commissions, including brokers allowing you to trade in tractifractional sh and people being idle at home when there was a move to the downside, and one could say maybe this is a time to find a lot of completely obliterated stocks that are cheap and i can buy them now a lot of specific circumstances. it's tough to say how it plays out from this moment on. but a pretty good test of whether this is going to be a new strain, a new driver of this market, or a little bit of a temporary side show. >> i think the other interesting

dynamic is the fact that a lot of these retail traders and many of them robin hood because we're able to track the data now are going against the biggest, most reputable investors in history warren buffett, a number of the big hedge fund managers that have been bearish. pu paul singer and stan druckenmiller who have had to come out in some ways and capitulate >> i think we, with our tools, we could be empowered to know better or at least have a little bit of an opportunity to make some hay here. one thing different from the late 90s in the last round, aside from something about nikola, if you look at the penny type stocks going up, it's not like the late 90s where people were saying this is the future this company can go to the moon. i believe in the trends and new innovation i'm going to pay any price for it now these guys are maybe going to live a little longer and

maybe the credit markets keep them afloat or maybe it's a lottery ticket on survival that's a different feel in terms of what the intellectual overlay on this activity >> right the other interesting story -- >> let's continue the conversation now with our market panel at the top of the hour to talk about what to do next omar aguilar and brad mcmillen join us now have how do you see this retail frenzy what would you caution, omar >> it's interesting to see how the market is taking over the optimism for reopening and clearly the support provided by central banks, i think as was discussed earlier. a lot of the focus has been on what the fed language will be today. i would probably say a lot of these activities related to the

labor market i think any comments that had to do with the labor market will translate into what is the key part for the oreopening, the consumer activity. i think the consumer activity on how much the consumer is spending and confidence starts to play out into the potential future earnings is what the market continues to hold on. >> brad? how would you interpret some of the retail activity we're seeing in the market? >> the world isn't coming to an end. i think this is a similar reflection of people going out and shopping and people going out to clubs and casinos there's a sense that we've been pent up. we've been locked down and this is just one more way that's coming through. we saw the market come down. we saw the market come back. and people are voting with the dollars they have because they're not spending it on other things i do think this is a consequence of the shutdown, but that means

it will probably fade when the shutdown opens and people have other stuff to spend their money on >> how are you looking at the federal reserve today in terms of what could dictate about the direction of trading >> well, there's only one way to go with the fed. if jay powell says we're pulling back, not that he will, then all of a sudden i think the market panics but if this is more likely, powell comes out and says we're going to keep getting behind the market and pushing, we're not pulling back, then the party continues. we're not looking for it to -- for the fed to knock the market off, but we're alive to the possibility. >> omar, an investor who has pu off what to do with the portfolio up to this point, if you had a balanced allocation to up a year, should they be thinking about taking any off

the table or reallocating in other directions based on how different parts of the market have done? >> well, our advice continues to be to reassess risk. what we have lived through so far is being a great example of how people need to understand the level of risk tolerance they have i think if you close your eyes at the beginning of the year and open it right now, to your point people will say it was not a big deal i don't think that was the case right at march 23rd, with market down significantly and even the subsequent rally i think reevaluating the level of risk people have taken is always a way for us to realize whether or not you have the right ol kagallocation the second point is related to rebalancing. even though you may be already flat or slightly up for the year given how the dynamics are, most

likely your underlying allocations have been distorted. going back to the long-term objectives to figure out the trades you need to make to get back on track is always a good place. right now it's probably the best example as we continue to have stability in markets lastly, it is probably the diversification. there's a lot of rotation of possibilities that probably we didn't have before that i started to open up as we start thinking about the potential recovery of the economy. >> brad, that idea of reallocating based on where we are in this emerging recovery cycle has been a big one obviously a couple of weeks, pronounced performance by value and cyclical areas now it's staticy the last couple days, but how would you treat that relationship? >> i tell you what we've done. the commonwealth, we manage a fair amount of money the past several weeks has been a testament to the necessity to rebalance when it feels most

uncomfortable. we rebalanced into the equities, close to the bottom because we looked at the allocations. 60/40 portfolio is closer to 50/50. we reallocated into equities in the past week or so, we've reallocated to fixed income. again, that's 60/40 portfolio looks like a 7 0/30. if you stick with your allocation and rebalanceon a regular basis, that's the purest fom of selling high and buying low. it's worked out for investors pretty much the past couple months >> omar, do you think the market whether it knows it or not, wants to hear from congress? we've done enough or wants to hear from powell, we've done enough because the recovery appears to be on track enough >> well, i think the -- the market seems to be very comfortable, you know, so far by

thinking that the fed. i would not necessarily say they think it's enough, but they certainly thought it was timely. and i would probably agree with that consent the market has enjoyed the fact that the fed did not hesitate on -- when and put the stimulus in place right off the bat the market itself will continue to just look into what the future holds, and i think the opportunities and the tools that the fed has is still has enough runway that the market will feel that it's possible i think on the fiscal stimulus side, the challenge will become how strong of a recovery we have and if the economic data is soft without further stimulus from the fiscal side, the market may take that as a need for further monetary stimulus. so i think the connection between the two needs to be avoided going forward. >> omar, we haven't really mentioned the case numbers in the u.s. on co-vid which are ticking higher and economically

states, especially like texas, the hospitalizations are back over 2000, actually, it's a record, they're over 2000. it's a sign that reopening might not be going as smoothly where is that? why are investors not more worried about that and more optimistic about the future and the reopening? >> well, a simple answer is the fed. thinking investors right now, and this is a typical behavioral finance behavior looking at the last trends that we have gone through, and thinking about the actions the fed stability has provided if you look at everything that lines up against that theory, there's enough reason for the market not to be up. whether it's the number of cases. i've always discussed the fact this is a health crisis it's not resolved and we're not going to know the impact to the economy until we have a clear path to the solution of the health crisis it has not been there yet.

we have a number of bankruptcies continuing to go up. we started the level of debt in the market continues to rise the balance sheet of the fed continues to grow, and et cetera, et cetera. there's enough things that the market continues to ignore in terms of the hard data that is affecting the economy, that is all going back to the liquidity and program inputted by the central bank >> even though the fed can't fix the virus. jay powell would be the first to say that, and they can't create economy when things are shut down how do you hedge yourself against the reopening risks and the fact that cases are rising in the country >> first, i want to agree that cases are rising, but they're holding steady at about 20,000 a day. that hasn't gone up in the past couple weeks it hasn't gone up since we reopened if you look at the case growth rate, it's ticked under 1 % for the first time

we're at a sustained status quo. i think that's what the market is seeing. i think that's what the fed is going to be reacting to. certain states are getting worse, but the fed is saying we've bottomed out we're not going to pull back but at the same time, we're not going to jump ahead and provide more support either. the healing is going well. now, that said, i think the market wants everything. they want the economy to recover, and they want the fed at their back. and i think that's what they're going to get until we get a much better happenedl on the medical. we're not out of the woods yet, you're right >> brad, omar, we'll leave it there. thank you both very much >> thank you >> thank you >> dallas mall and restaurant owner is up next on how reopening is going in texas. don't go anywhere. we're back in two minutes. this is decision tech.

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our next guest is the owner of a shopping center in dallas as well as over 40 restaurants in the dallas area as texas continues forward with its path to reopen, ray washburn is the chairman and ceo of thanks for the time today. appreciate it very much. >> sure. thank you for having me on >> so paint a picture what shopping is like in dallas right now in terms of capacity, levels of demand, how does it feel when you arrive at the store and so forth? >> 95% of our stores are now

open in our shopping center. it's about a 250,000 square foot shopping center. it's a high-end center the state of texas on friday is going to 75% occupancy right now we're at 50% and the stores have had to make due. they meet you at the front door if you want delivered to your car, they do we've seen a robust return of the customer to the center >> is it so much that you're waiting in line? i know it's -- it's open air right? if i'm not mistaken. you have some advantages on some other malls still waiting. >> yeah. we're an open air spot very little common areas there's nowhere really to collect. it's parking store front you see the video on the board, and you see. so customers like it they can pull right up to the front of the store, get their goods and go back out.

a few stores still haven't opened back up which we wish their would, but it's been -- we're in a neighborhood. we're not a regional center in the sense of being tourist driven or travel driven. so it's local people have come back out, and so we're very encouraged by the return of the customers. >> i think starting friday, right, restaurants can go to 75% capacity now you're getting somewhere in terms of a semblance of normal what's your projection on that number outside of restaurants alone, and is there any concern or attention being paid to some of the case loads that we're seeing in states like texas and arkansas >> well, what we do at our restaurants is we file cdc guidelines everyone has to sign in before they go into the restaurants we haven't had an issue whatsoever with any of our employees or our customers

and now the city has been very helpful both city of dallas and the suburbs on allowing what's called popups out into your parking ot so people feel comfortable being outside, and so we've taken over pieces of parking lots to drop tables in, because outside you can have people within six feet of each other. inside the restaurants we can go up to as of friday, up to 75 % it's over 100 degrees in dallas. so we need to get people inside eati eating where it's cool our business is up to 80% of where it was last year at the same time. we're encouraged by that during the pandemic, i mean, previous to pandemic we were doing about 10 % of our sales to go there's a fundamental shift in the business model in restaurants where it went to 50%. we're still around 35% takeout

but our kitchens are all bistro kitchens it's not a manufacturing operation. so we've had to refigure our kitchens and on the go for it basis, we have to ourselves as well as every other restaurants or all restaurants have to orient more for a takeout model for about a 30-year business versus today when before it was about 10% of our model >> biggest news in your industry, 3 $.6 billion deal cancelled raising questions about how much pain the retail landlords like yourself are facing and dealing with and how much of a long-term sort of structural issue this is going to be. how do you react to that >> what's interesting about that is i saw simon also sued gap a

couple days ago because gap hadn't paid their rent in any of their centers for the last three months there's going to be winners and losers out of all this i think open air centers like ourselves are going to be big winners out of this. people are hesitant to go to the malls. we have restaurants in some malls as well. foot traffic has declined in going in so what happens on that merger, i don't know i mean, we had issues. for example, it's well-known that starbucks sent a letter out trying to get 12 months free rent from tenants. they pay a billion in dividends. why are they paying dividends but not rent to landlords. i think as we go into this fall, the ppp money is going to be running out on a lot of people, and right now a lot of our small shops, that's the only lifeline they've had is the ppp money

business doesn't come back by august, september, i think you're going to see another hard fall if f for restaurants and smaller independents there's the public companies with access to the public markets. you have the small independents, the guy on the corner with his pizza shop, and then you have the mid sized which our company falls into we're privately owned. we started it 29 years ago we never took on any private equity the private equity groups that bought out all these restaurant chains that are heavily indebted, i don't know what they do come this fall, because the banks aren't going to be loaning money, and it's hard to refinance a debt i think you're going to see a heavy closure of restaurants, primarily, i think the private equity backed ones this fall >> i mean, there's also -- everything you talked about, the rent, and the finances and the

stimulus money running out, there's a question of consumer behavior totally changing as a result of the pandemic and speeding up a lot of the trends we have been seeing. people buying clothing and accessories and basics online. people cooking at home in a way they haven't been doing, and wondering how much of that is expected to be permanent, and therefore, shifts the whole economics of mall, centers, and places like yours. >> well, one thing -- i don't know if you've heard the term geo fencing around the shopping center, but i think centers that can do it will that means basically we'll sign a lease with the tenant and we'll be able to capture a percentage of their sales been a geographicalarea, let's say a three to five-mile circle around your shopping center the argument is you have somebody like a william sonoma no one goes in and buys 12

plates and take them home. they go in there and look at them like a showroom they order them and they're delivered online but the shopping center doesn't get the benefit for the things they offer as a showroom so higher-end centers and centers that are strategically located, i think you're going to see going into this geo fencing. that means we capture all sales whether they're online or held in the shopping center, because a lot of things you might buy online, they're the wrong size or color, you don't necessarily want to ship them back if you're in close proximity to the store, that's where you make your exchange. but the shopping center gets no benefit from that. i think geo fencing is something you'll see a lot of people talking about in the short-term. and as far as the restaurants go -- and the geo fencing deal, the argument could be from a tenant, why would i do that? it's like well, if you want to be in the premier centers and you want to make a sale there

versus being an independent building, you can be an independent building, but if you want to be in a community environment that a shopping center provides, i think that's something you're going to see like i said, in short-term happening. >> you're offering protection to some businesses in some way. this dark picture we paint when ppp money runs out and so forth, when you say it's going to be wor worrysome unless businesses come back do you need they need to improve from here? >> well, for example, the restaurant business, we're back to 8 0% sales. we are basically breaking even you make your money on the last 10% of your sales. we're at break even right now. and we can go for a while, but after a while, especially the indebted companies that have debt outside of ppp, because ppp

will be forgiven as long as you hire people back that's when the banks show up and how do you refinance your debt and get expansion capital and things like that the customer at 80%, i think we'll see customers coming back. who knows what happens if the pandemic comes back in the fall. you get another shoe that drops for all of us. but i think this fall is going to be very, very challenging time for everyone in both the restaurant business and the retail business. i would -- and the other thing is on the hotels which we haven't spoken about on this show, but their ppp money, i mean, it's been extended to 24 weeks, but they've had no business come back so that's another bomb that's going to blow this fall. anyway, and i -- >> i was going to say we're all praying for some good luck, good fortune. we hope you'll come back it's great information for our viewers. thank you very much, ray >> sure.

>> from dallas sara time for our etf spotlight today we're taking a look at the tech sector. ticker xlk hitting an all-time high along with the nasdaq amazon, microsoft, facebook, nvidia and apple hitting highs facebook is the only notable outlier there. look at amazon up another 2 % if you bought apple 20 years ago and held on to the stock, you've had a gain of more than 10,000%. just as one example. we're going to take a quick commercial break stay with us on "squawk on the street." s&p is lower despite the nasdaq's new record high a grandfather of 14. a newlywed... a guy who just got into college...

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welcome back and good morning, everybody i'm sue herera here's your news update. some of the barriers near the white house are being removed this morning the national park service has said all the new fencing would be taken down by today as well but the secret service says discussions on the fencing are ongoing. new cases of the coronavirus are surging in many states as reopening efforts ease restrictions in arizona covid-19 hospitalizations have hit a new record they are up 49 % since memorial day weekend. in georgia, one of several states that suffered election problems creating massive lines. these atlanta voters were online after 10:00 p.m. several precincts reported issues with in the new voting machines if you've ever wondered what a quarter billion dollars of co-stain looks like, here you

go this represents about 5% of the country's estimated annual cocaine production you are up to date i'll see you in an hour. carl, back to you. >> all right sue, thank you when we come back, richard fisher is going to talk to rick santelli about the fed, the meeting today, the economy and markets and a lot more stay with us ♪ ♪ ♪

welcome back dow is down about 250 points let's get over to rick santelli with richard fisher on a fed day, rick. >> yes thank you, sara. i'd like to welcome richard fisher richard, thank you for joining me on this fed day >> thank you, rick, for having me >> all right let's get right into it. leading up to the big jobs report, many including myself thought it would be more optimistic than many of the surveys more from a mathematical reversal that was the case.

and yields moved up and equities moved up going into the number after we have to look forward to jay powell and company, which to put it funny, i guess, he's been a debbie downer with regard to what's going onin the economy. he hasn't been the most optimistic and rates start to go down how do you see us going into the meeting and do you see anything big happening after the meeting? >> well, rick, i've never heard the fed or anybody at the fed being described as funny, but a sense of humor, i think we're looking for clarification. again, they're buying about 20 billion a week now if you look at the amount of treasuries held over last year, it's up almost 2 .6 times on the balance sheet. it's now punched through 7.2 trillion i think there is a need to somehow get further along the curve of when he talks about the future and what we're going to do after, as you put it. it would be a good thing to

start talking about the afterward now. we'll see. there probably should be more coming out about the issue of forward guidance there may even be a reference to, although i'm not sure how effective it is to somehow capping rates. i'm not sure how that works. the fed's job is to be as realistic as possible. they're not to be either happy nor sad but conduct themselves like the only remaining adult in the room and i expect that will continue. >> now, when it comes to capping rates, everybody, of course, that i seem to communicate with, think the shortest distance between where we're at and capping rates is yield curve control. yield curve control, anybody who watched it over the last several months realizes the action has been on the long end short-rates and the feds zoom close to zero. steeper is considered better if you're going to cap interest rates, you want a steep curve and you want to hold it there,

but aren't all the benefits of a steeper curve, the natural organic way they develop, not when they're placed there by the central bank >> yeah. i agree with you and it inhibits price skroefdis. i don't feel they can control the yield curve. we see how the market has buffetted the ten-year down to 40 basis points in march and back up to 90, and now in the 70-basis point the yield curve is steep now doing what it's supposed to do rates have risen the 30-year bond, used for liability management i'm a skeptic as to whether or not the fed can control the longlon longer end of the yield curve, and i think it will inhibit price discovery. it's important as we discover the setbacks from the covid-19 you're right i think the -- >> the train may have moved out

of the station let's get to another area that is a price discovery inhibitor, so to speak. and that is today i wake up and i do a lot of prefed meetings with stories about negative interest rates this story hit the st. louis fed research group and said there's a lot of positives with negative rates. you have to stay a while good things can happen well, the problem i see is that i don't agree. but i see the ongoing nudging going on there's stories coming out whether it's within the federal reserve system of research or outside the system of research, the nudging continues. and whether you call it stimulus or subsidies, like negative rates, these aren't transient issues they recalibrate markets markets learn. they grow over some of the changes, and they become permanent no matter what anybody says it seems as though researchers kind of forget this one point. so once you recalibrate, to think you're going to remove some of the programs in any

short order seems illogical. >> yeah. rick, you've been on this theme for a while. a couple weeks ago we were looking at what was happening short-term, and the markets were forecasting negative interest rates at the shortest end of the yield curve. i think the fed's been outspoken about this there's always going to be research within the fed with different points of view i'm not sure st. louis is advocating for this, but the negatives outweigh the positives. i think powell has been articulate on that they don't want to go there. it didn't work in europe or japan. it's done nothing but crimp the financial sector, particularly the banking seb or the, and given our highly developed funds available here, plus our powerful banks that cannot make money on a negative yield environment, i don't believe they're going to go there, and i would firmly resist it if i was at the table

>> we're about out of time give me a real short answer to the following. everybody sees dollar weakness that's been pervasive in the last ten trading days. i see it as euro strength. weigh in on it >> you have to look at the whole index. it's down for the tenth day. out of the last 12 it's roughly where it was a couple years ago, and i think that's a real shift, because before i really felt strongly that we were seeing a lot of hoarding of dollars and treasuries from around the globe. as the situation changes here and as we've had some disturbances and the presidential election is approaching, i can see this continuing not forcefully, but gradually as it has been over the last 10 of the 12 stritrading days that should influence the yield curve in terms of liabilities for dollar holdings. >> excellent

richard fisher, it's always a pleasure to talk markets with you. thank for joining us today sara, back to you. >> rick, thanks. david faber reporting earlier uber is likely to pull out of the merger talks with club hub th -- grub hub confirming they're in advanced discussions just eat takeaway confirming they're in a deal with grub hub. we'll keep an eye on that. the stock trading in europe, down about 8 % "squawk on the street" will be right back ever since we've gone mobile on the now platform, something's gotten into the office. i hear you. feels like there's no barriers between departments now. do you think everyone appreciates it? i do.

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cough inclusion. >> the problem with not saying anything is you are implicitly allowing the current state of the world to continue, and that, i think people are coming to realize is unacceptable. this is a $100 billion company. >> $100 billion company? >> because t solving the biggest problem, decarbonizing transport fuel that's the biggest problem honestly, that's the hardest thing to do. so the next $100 billion is going to be this t a company that solves the biggest problem. it's not door dash >> it's like amazon. it's nothing without their logistics. amazon is logistics. it's not retail. it'slogistics. this is a complete eco system. >> nikola along with chesapeake, tesla hitting $10,000.

investors increasingly turning speculative as they look for value in this market brian sullivan is here not clear if they're looking for value or just the price action >> very good question. you know, i heard nikola, i thought ricola i don't know if we've been here before it's a bull market in bankruptcies whether it's hertz, the latin american airlines, pier 1 imports, all of them are favorites right now of traders particularly on the smaller platforms like robin hood. let's focus on hertz we're not going to pick on it. i'll get to nikola in a second hertz up despite the fact not only that it's bankrupt but it has a delisting notice from the new york stock exchange. it will fight it if you're a bull on hertz, you can make the case the economy is coming back. they have to sell their fleet. the government now owns junk bond etfs, so hertz''s debt is

in some of the etf mike, you're going to love this. have you been following faang dd it's a -- the ticker is duo. it's not bankruptcy. it's a chinese real estate firm nobody had heard of a couple days ago it went up 1100% in four years yesterday. yesterday. because somebody thought it was a faang stock. i don't know it trades on the nasdaq. faang dd, and there you go it's down now 38%. it was halted. it's come back they say it's all about the benjamins. it's all about the georges check this out citadel securities ran a research report and found that stocks trading under one dollar, literally the price is under a buck, the george washington had an average gain of 79% the five days coming into yesterday mike, it does appear that people are not just buying nikola but

they're also buying stocks with i mean, just cheap low prices i guess you can buy more right? >> you can buy more. >> what do you think >> zero commission you have a small account size. it's frictionless to do that i think the big question is is this just like the e runruption cannabis speculace and crypto, or does it say something about the market sentiment >> i think there's a couple things here. this is probably a great piece for your next piece, mike. we need the retail investor to get back in the market we had someone on "squawk box" and we got into it jj is a great guy and got friend the retail investor, we moaned, oh, the retail investor is gone. now the retail investor is back and we're moaning the retail investor is back under bankruptcy, remember, equity can often be zero not always, but zero because you -- yeah. it's in the hands of the courts. >> that's right.

most lessons learned the hard way. we'll see how that plays out thanks a lot coming up next hour, how to regulate social media when there is no good answer. at nt.n rs joins jacquus to expi wh'sex a newlywed... a guy who just got into college... that's why behind these masks, johnson & johnson scientists are working to accelerate development of a covid-19 vaccine, drawing on decades of experience responding to public health emergencies like ebola and hiv. for the life behind every mask, the clock never stops and neither do we.

♪ take a look at shares of tesla. on march 18th, this stock was $350 today it's $1,009. from 350 to 1,000 in less than 90 days as musk comments to employees about the semi we're back in a moment

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welcome back racial inequality both at a societal and corporate level in focus this morning as protests around the country continue over the murder of george floyd our next guest has long worked with communities and businesses to invest in education and help provide equal opportunities to all regardless of race or gender joining us now is shot foundation for public education president and ceo john jackson thank you for joining us john, obviously there's a lot of attention being paid right now to the inequalities and inequities in our society, education front and center what is the scale of the problem we're looking at now >> thank you for having me i think that we recognize that the public education system provides -- plays a significant

role in our democracy and our economy. having a high school and post-secondary degree is an economic stimulus. and as the only mandatory institution for children and families, our american public education system is the lifeline for opportunity for urban, suburban and rural children and families so, what we saw in covid, covid ripped off the band aid in our countries in the inequities that exist, inequities around health, inequities around transportation, inequities regarding livable wages. in 2018, the schott foundation we published a report, the loving cities report and in that report we highlighted the needs for local cities and states to begin to address the supports that are necessary for all students to have an opportunity to learn soon thereafter because of the significance of addressing those disparities, we launched a loving communities response fund

and made grants to families and grass roots organizations in 17 states and puerto rico in order to address some of those food and learning gaps. but the damage that's caused by these inequities is significant. >> john, you know, here on cnbc, business channel, we talk to ceos all the time and share a lot of the corporate statements that have come out pledging change and support and for instance, changing their hiring practices and wanting to add more diversity to their management teams what would be your message to them how can business be a part of the solution starting at a young age in education >> well, i think what we have seen in the markets if you look at the dow, the markets have relatively bounced back from the impact of the virus. however, we are yet to feel and the market is yet to feel the impact of the sickness of our

economy. you know, we have over 30 million people unemployed. the largest wealth gap that we've seen in our country's history. individuals who are working full-time jobs still living in poverty. we see black businesses who were devastated by covid. 41% recent study, 41% of those businesses may not open. and last month we saw the unemployment rate increase for whites, decrease for whites at 12.4% but it rose for african-americans at 16. 8%. so this means we're talking about increasing the wealth gap in a country where african-americans only have one tenth of the wealth as white americans. that plays a significant role in our ability for our -- the ability for our democracy to grow, our economy to grow. and while i think it's good that we have companies like jordan

brand that made $100 million commitment and visa that made a $10 million commitment to support black students who are college bound and even bank of america with a $1 billion commitment i think it's good that companies are leaning forward with their resources and their cash, but we also need to address this problem with using corporate cache. it's cash and cachet a group of black executives through the association of black foundation executives pulled together a document that can be found on schottfoundation.org that lists ten imperatives for philanthropic foundations in addressing this particular moment and those imperatives are relevant to the moment for corporate america. we have to see more representation at the highest level of corporate america

you know, alexis o han ya did and gave up his board seat on reddit, a company he founded makes an impact. if you don't think so, think back when vernon jordan joined the board of xerox and american express, soon thereafter you saw black ceos in both of those companies. and it's surprising today that we only have four african-american ceos in fortune 500 companies. having marvin ellison at lowes makes an impact. it made an impact before covid and makes an impact in this moment after covid and in this social justice movement. ken frazier at murk and roger ferguson at tia. but the fact that we can name the black ceos in fortune 500 companies is part of our challenge. so, i will say while corporate america has made investments in diversity and inclusion, to use a term that your viewers i'm

sure understand, they've made investments but they don't have a lot of equity in the space because those investments have been too shallow or too sporadic in response to damage control. and when black communities look at the leadership of those companies and they look in the board rooms, they don't see individuals that look like them. and in fact, these corporations too often are not investing in the very communities and the grass roots organizations that are out in the streets right now protesting and led us to the moment that many of them are responding to. and that has to change >> john jackson, thank you for joining us and raising awareness on this issue. >> thank you for having me. >> the schott foundation. market is losing steam, dow down 300 even though the nasdaq stays positive over to you. >> yeah. about two-day low on the s&p, sara we'll see you this afternoon

good morning, everybody, welcome to "squawk alley" i'm carl quintanilla with morgan brennan and jon fortt. across technology, this sentiment, nasdaq continues to touch new highs, above 10k a moment ago for the first-time ever yesterday coming off its 18th record close of the year. names like apple, tesla leading the way, the ladder hitting $1,000 for the first time today. is it too late to join the rally or still time to get in? we have a power panel to break it down for you this morning allen patrickkroft is with us as well as steve wesley founder of the wesley group good morning, guys good to see you. >> good morning. >> good morning here. >> allen, let's start with you because you've seen chapters like this over and over again. how does this one feel is it sustainable? is it worrisome? or is it just another era in which it's easy to make money on