over drive aisles. but once you get into the store itself, that is up to each individual retailer at the local jurisdicti jurisdiction i was at one shopping center the past weekend and some would not let you in the door without a mask some were not as dramatic, but every retailer i went into, people were coming in the store and they were limiting occupancy. people in the store were allowed -- that were allowed to not wear masks, i would say that 75% were and there was some that are not. as far as contract tracing, i am not qualified to answer that every jurisdiction is different on that front. >> we appreciate the color, josh, keep us posted thank you. >> thank you

>> the dow is down now 1040 points now >> live from ep rate locations, you're looking at the worst day for the s&p since may 1st. for the dow, it is since april 1st, and you really have to go down about 1200 points to go further than that. we're watching a number of different dynamics at play one is just the reality check that we got from the fed and jay powell, it is the recovery, the covid spike that sarah was juk talking about, and the success in various pockets >> apple is down, but it is

still up more than 7.5% for the week microsoft is similarly down almost 2% today, but up 5% for the week sam z amazon, google is just up 1.3 for the week and down today, but you can't just look at one day up or down so we have been up so much, morgan, one wonders how much of a reaction in the market this is going to be. >> we have been hearing for days and weeks now the idea that the rapid run, off of the lows, for major averages from that march 23rd low that we're looking overboulgt or even like they were getting ahead of themes. perhaps in some ways this is, i don't want to say an execution, but a pull back in is perhaps

warranted other everything that we're seeing the worries over the fed, the reemergence of the covid cases they have efforts that continue to combat or develop treatments or vaccines to combat covid-19 >> we're going to talk about it with roger macnamee. great to see you >> great to see you, carl, how are you? >> i'm looking at all-time highs today. dominoes, docusign it is like we're going pack six or eight weeks that is the mood right now, what is driving it? >> i think market has detached

itself from the economy. the fed has been incredibly adom dating if you pay attention to the news on a daily basis there is a lot of things to be worried about, but if you pay attention to money throws and i will quiddity, it is a good time to be an investor >> i assume you think that environment is not efemeral, right? that overall envelope of protection will be around for awhile >> it is but i don't know that the fed has the tools to protect investors against the kind of economic issues that we're dealing with right now if we're going to sustain demand we have to find a way to keep the buying power of all of the people that lost their jobs in the last, you know, ten or 12 weeks, and we'll have to keep them in pin money nap will require additional stimulus and

unemployment points. we have 40 million people who filed for unemployment benefits and that is a significant drag on demand and it is better for the economy eventually there is only so long that i think the fed can keep pumping things up in the absence of getting people back to work. there are signs that we're trying to do that. there will be a big spike, i think, it has gun. infections, and whether or not that slows us down or not remains to be seen >> i wonder from where you sit, is the start up tech echo system following the money or the marks? i wonder if maybe the investors feel richer because the markets have held up and they're not pushing as much. or have the customers dried up so start ups have to tighten the

belt the private companies that are not flush with three years worth of cash has to be incredibly careful. we don't know what the funding environment has been going forward. i think venture investors have backed up very much. what is all of the news going on for the big guys, what will it mean for start ups ibm and amazon announced they will not sell facial recognition software the way they were for at least a year. they said they're no longer going to sell the standard package of facial recognition. if that is a a response to political pressure, and you start to see changes going on,

the safe harbor for internet platforms, that will great opportunities for start ups. if i were a venture investor i would pay attention to all of that stuff it will tell you where to go. >> what i'm wondering, too, is i remember the dotcom bust it was like a bolder running downhill they were taking out jobs with increasing momentum as time went on there was a sent, a rumbling, has that slowed or stopped with the markets behaving the way they have. maybe people feel like they should tighten the belt, but is that sense of the momentum of disaster slowed down >> i think the great thing about being a venture investor is that the market is not your daily reality. it does provide you can signals and i think that things have

really slowed down what remains to be seen is whether or not the consumer interest, the things that people want to buy is going to change it really feels that things like air bnb. it seems like they will have to adjust to a new reality and things like we work may not have the same market opportunity going forward that they had in the past and this will reallocate the capital in silicon valley that will create changes, so which i think be good for the venture business and to my mind, there is a real bre break. if you looked at section 230 of

@ communications act, that was a third rail that politicians were not going to touch when president trump comes out and says we need to look at that again, it gives license to a lot of people who are genuinely concerned about the lack of accountability that occurs for things like spreading d disinformation about -- covid pandemic it will have some impact on the start up market. it is too early to know yet what that impact will be. every time you get a change that affects the big guys it creates opportunities for the little guys >> roger, i want to go back to the comment you just made about some of the companies, some of the newer industries having to realign and rethink their business models in this post covid world. >> yeah, morgan, i assume so and i think this is a great time

to be a buyer in a really rocky time to be a seller. and this is the kind of environment where there will probably be -- there is no regulatory scrutiny. people will not be able to make transactions for offensive purposes and they are trying to protect themselves and i think that the market, what the market is doing right now is giving the potential buyers more currency to do that with if i was a potential buyer trying to decide is now a better time to buy or a year from now i would do it now. i think that the risk is high and people should make sure they have the business base and the liquidity they need to operate >> and when the fed comes out and says they're going to hold rates near zero through 2022 i

wonder how much tire that adds . >> look at yesterday, that announcement did wonders how long it lasted is the real question, right? they're saying wow we have a couple more years to go. again i don't think there is any way that we can say decouple d until we have government spending and things that move it forward, i think there will be a lot of uncertainty on the market >> the federal reserve is wrong so often

i see the numbers also and do better than they do. we will have a good third quarter. we will soon have a vaccine ander thand er th therapeutics cure, watch i was watching given his lack of an endorse mement how long will take for them to report. in order for that r to happen, we would have to be focusing differently on the way we are. >> the markets are benefitting there will be a price to pay for

that and i don't see how the economy can make a v shaped recovery -- you can't my any recovery at all until you have done that >> where is your head right now on a vaccine the president is not wrong fauci himself, yesterday, said he guaranteed we would get one there is 100 drugs in development. we're going to get phase three and that is just in the next couple of quarters i know it is a bianary outcome >> the thing that i learned from years and years of being partnered with a guy that really understood bio tech is exactly that point you never know until you're finally approved that you have something or not i surely hope that is right. the market is making a bet that that is right. i hope it is correct about that,

but i have no clue i don't know that any of this does i think the fact that there are 100 fiinitiatives is really bullish. if we can get something approved then we have to get in and make a lot of it and they have to distribute it. and there are a lot of problems to solve my guess that whatever they have is not available in the quantity that provides herd immunity for at least a year, right but what do i know i'm just a tech guy looking at a medical thing. as an investor i look at this and i say i would like to believe that is true the mark is telling you they believe that is true, and if it turns out that is not right then we're going to have, you know, stock prices make a real change. >> problems young lower stock price, that is for sure, roger we'll check in again with you soon >> see you soon.

>> bank of america taking it's apple target up to 390 this morning. analysts behind that joins us on the other side of this break 70ple down 1.5% and the dow down 10 points right now. ♪ limu emu & doug [ siren ] give me your hand! i can save you... lots of money with liberty mutual! we customize your car insurance so you only pay for what you need! only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

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apple is in the blue chips involved in the sell off apple still at 8% for the week wamsey is joining us now on that call >> i'm doing good, i hope you are, too i want to told in rumblings of the past few days that they will move to air their own armed based chips. this coming after apple recently bought intel's 5g modem business what we have seen, when they focus on vertical integration like that, what does it mean for margins and growth, how much does that play into a call like this for you >> i think the call that we're making today is really focused

on the visibilities of cash flows. we have no idea how they will pay out, but here you have a company where 200 million phones, the viz ability of that free cash flow they want to deliver next year is a real number and people having that viz abili visibility is worth a lot at this point most other options thatyou loo out there there is a tremendous amount of uncertainty with regard to how the cashflows will billion play out and they get into questionable territories for many of them i think this is the fundamental call that we're making that you have a company where the viz ability is strong. there is a big fish ybeneficiarf all of theinflows.

so that will be a tremendous beneficiary. a question on sort of what is going to happen to the margin structure, the sbe addition has been going for a long time they go under pressure or elongated period of time you talk about apple's relative stability. we talked about their cash hoard for a long time. the apple consumer has been very consistent i would argue their their

ability goes down to making refinement there is as well. >> absolutely. i think it is very important to consider you have the ability now to off set gross margin it can come from an increased bill of materials. you might add 30, 40, or 50 billion more, but overtime, once they insource that, they won't be paying any more for that particular business. it will not be an increment table margin that they benefit from it will off set some of the pressure they have or some of the incremental bond cost. so this is universally playing out across all of their devices. th they are a real power house.

the a 14 chip, it is an incredible piece of delivery they are dining it in house, and when you think about property aggression, the cadence. the ability to integrate there is critical. it will not be super meaningful to margins, the volume is not as high, but at the same time it is just yet another lever for them to allow gross margin stability. >> i get that services growth is accelerating right now, it is a bigger and bigger part of the story, but how important to the story through the rest of the year will be the new iphone cycle as well. >> i think it is a two-pronged approach here. if you think about the first element of it that you brought up, the situation is creating

some acceleration and services, the services growth is accelerating now, well beyond 40% growth it is impressive in and of itself, so the near term data points are very, very positive when you flip over to the hardware side, it matters, iphone matters, 50% of revenue is still iphone and when you think of something important like 5g coming through, that drives multiple expanse in the stock. so you usually see the expansion even more. and i think that we're moving away from a cycle by cycle by cycle. it becomes less about the cycle. we think it will be about 200

million ones per year. we believe that stability itself is also a multiple enhancer for the stock. >> what is your most extreme case for apple's exposure to china and the punitive issues. >> i put the china risk fairly low. i think i put margin pressure, deceleration, and regulatory risks ahead of the china risk. don't think they want to just play tit for tat i think they are more focused on what will get our president's attention.

what will it take for us to change, and apple is not necessarily the first target for that they're a huge employer in china. and if anything is done on the services side, i think it is immaterial you have to calibrate it through the lens of how much is it really going to impact how the u.s. policy response is going to be and i don't think that apple is the first target for that i put it fairly low on the policy risk side >> it is an interesting and important take >> a couple names are bucking the trend. the trend. back in a minute

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welcome back, everybody. here is your cnbc update at this our. officials are criticizing the

international criminal court after president trump secretary of state mike pom pay owe called the icc a kangaroo court while attorney barr accused them of financial corruption ford is recalling vehicles because of problems with door latches and brake fluid leaks. and amazonwants to give regulators more time to implement guidelines for more go to cnbc.com. japanese officials are working to avoid collisions with space junk by equipping a satellite with a laser you're up to date, "squawk alley" continues next.

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welcome back to "squawk in the alley. the do you w is down 3.8% rightw welcome to you both. i'll start with you. we started this hour having a conversation about the fact that this market was looking, given the tremendous move off of the march lows, looking overbought i want to get your thoughts on the pull back that we're seeing today. whether you think it has further to go or if you would be buying at these levels. >> we have been seeing the market as overbought short-term. longer term especially if you take your time horizon out of it, it is 12 to 24 months. short-term this week we saw a call ratio that was the lowest

in ten years there was not a lot of protection out there so we have been expecting, and from my perspective i'm a little relieved to see some profit taking coming off of the table we're in a higher volatility regime i expect these moves to be larger some consolidation is necessary. we're still slightly under weight two equities, but we are looking for a little bit of a more rational market to reenter with more aggressive positioning. we're expecting this to continue in a little bit. >> i want to get your thoughts as well especially that the nasdaq is lower today. we're coming off of record highs for that index that is fuelled

by what has been an incredible run in tech stocks >> i think aagree with megaen. it would be a great pull back. i think we're not that lucky i think we have seen 200 to 400 basis point pull backs looking at tech specifically, they said they will remain extremely accommodating for a long time, and you know it things get messier as far as the market goes trump will come out and be vichirpl chirpleing, andy chases fame blindly today or tomorrow probably not, but you look for attractive stories

selective names, there is great stories that i think you really have to be careble about buying the names that retail has been powering in for the last two months >> we're just above the levels we were last tuesday when we were still talking about how much the market had run. i don't know how excited we can really get about the dip that we're seeing today how far down would it have to go before you think okay, now we're talking. now it is a chapter. are we talking a standard correction or more than that >> yeah, i can't put a specific number for short-term movements in the market. i think if we came down 10% or so we would be more comfortable. as i said at the outset i think we need a longer term view in

this particular market, but i think when you look at tech and other areas of the market, valuation in some of the growthy areas they may need to come down a little firth i think you still need to own tech and growth. but the valuations there are a little further than in the more beaten up areas of the market. i think the 10% to 15% level would be an interesting place. >> you'll, you know it is a few days out, but powell is expected to talk to the senate on tuesday and the house next wednesday is there any feeling that he needs to do any clean up after the presser, yesterday, and if he reiterates the cautious tone, what does that mean for

equities >> i think he played ball with the white house. he has fallen in line since early 2019 so i don't think what he said was overly dramatic. i think he just wanted a picture of the u.s. economy and the global economy there is a lot of uncertainty out there. i think that is well flagged for most of us i expect him to really, now that could change if the s&p falls another 5% in the coming days and the white house raises the pressure, but i think he will just say the fed has more tools in the tool box to pull out and will be there to support the market, the economy, and you know the growth pockets of the stock market i would not expect anything too dramatic of a shift. but if the market told us a

different story that could shift. >>. >> okay, so given your take on that where within tech would you be a buyer right now where do you see the opportunities? >> one group overall on a global basis i mentioned it is a straightforward spending they are continuing to gain momentum across the world. a beneficiary from people being locked down which is in my opinion to say they increased the up grade cycle it is happening in the holiday season coming up that is the longer term, the mobile pure play and another name that looks for an interesting experience they fall squarely into that

camp valuations are still relatively reasonable so those are the names that i'm looking for under the hood to differentiate that has been going up every day until today >> megan, the same question to you for near term and longer term >> i would focus more on the longer term. there is this is really part of a structural story, but we expect the move into autos and the amount of semi conductor concentration in autos to be a longer term play cloud growth is also an area that we like, and lastly certain areas of hardware, specifically those most geared to the 5g cycle, we think they could be good areas to be investing within tech right now. >> all right, thank you for

joining us on a day when the s&p is down 3.5% thank you. >> coming up, in a bit, on power lunch, we have to mention this, even spiegel, you don't want to miss that at 2:15 p.m. eastern hey! lily from at&t here. i'm back and while most stores are open, i'm working from home and here to help. here's a tip: get half-off the amazing iphone 11 on at&t,

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the global leaders out there right now. that was the grub hub ceo matt maloney earlier they don't have a presence in the u.s., john, so less antitrust risk and uber in their own statement said the industry still needs consolidation but it doesn't mean that we're interested in doing any deal at any price with any player. >> yeah, grub hub found a solution to that promiscuity problem, i guess that sets up an interesting battle they say we deliver people, food, goods. now this who sonnal delivery happening through mna, it is an

easy company that wants to deliver food around the world. maybe they will do deliver around the world >> hopefully we get back to those days, but they're down 9%. i thought it was interesting the way he touched on the economics. just getting food from a restaurant and that some of that misunderstanding has, from his viewpoint, led to some of the regulatory scrutiny that the companies that been dealing with in markets like new york also door dash, i feel like that is the other name to really keep

your eye on. given their pulled into the number one lot >> i want to see if one of these food delivery companies really gets, if they get vertical and really push into kitchens and get their own brand and build that in, we're talking about apple having their own chips, that would hardship margins, karl >> true enough a lot of the street thinks that grub hundred will be a shared growing not a shared gainer. we're going to watch that. on the ndx only three names are positive, zoom, netflix, and regeron. 'lta short break and be back in a minute

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let's take a look at airlines as we're near session lows phil has a beat check. >> a second straight day that the airline stocks are just getting hammered down anywhere between 9 and 14%. there's no place to hide within this group they all had such a huge move over the last week to two weeks that you knew there was going to be some pay back that started yesterday. it continues today let's look at specific names remember yesterday delta came out late in the day. saying they're out to raise another $1.25 billion. that offering closes tomorrow. this is an indication that we'll see this from a number of airlines looking to raise more capital in the weeks and months ahead. also american, it's cash burn by the end of june, they gave us an update it's down to $40 million a day instead of 50 million. yes that's an improvement but still an indication of how much

money this airline is losing and finally take a look at united airlines another example of a stock thad had a huge move within the last few weeks and it's given a lot of that back over the last day and a half back to you. >> that's a good temperature check on what we're seeing out of aviation. bob pisani watching the sell off. i know you were telling people this was due in some form given where valuations have been and where earnings guidance has been >> this is valuation story it's a reopening story and the retail trade story i've been tauging about. these are the reopening stories. bank, retail, travel and leisure stocks they have been weak for several days now they are to the downside don't kid yourself, it's the

reopening trade that's getting hit rather badly i want to remind everybody that moves the markets these days think in terms of buckets. is the reopening going well or is it not going well e had concerns about new outbreaks. this will last longer than most people expect. he put a puncture in the v recovery that's been rallying the market for the last two weeks. that's the most important thing. you know, he talked about high levels of uncertainty yesterday. that's not translating into more policy initiatives now the fed said they would do something. the most important thing is the valuation story. the reopening trade has been crazy. retail, travel been on tear for two weeks. obviously a valuation problem. look at the reopening stocks i'll echo what phil had to say about the the airlines united went from 30 to $50 in three days

now it's come all the way wrack do -- back down. it's aurks inverted. we saw this with norweigan and with carnival cruise we have all been scratching our heads about bank stocks. the banks have rallied about 40% in less than a month the kbe which is the big bank etf rallied about 40%. lower net interest income. it's going on there with that here there you can see jpmorgan, goldman, bank of america, citi, wells fargo. u.s. bank went from 32 to 40 45 in a month 50% rally many these banks in a month on not great economic news that didn't make a lot of nick sense. people were scratching their heads about that same with energy this is favorite of the retail apache was $4 a few months ago it went to 10 and then it went to 17 in less than a week.

to 10 10 to 17 in less than a week that's a v that's what we mean when we say the valuations didn't make any sense. the reopening trade isn't going away you'll nodes the fang trades ta are all down but not down nearly as much now the market is quickly taking the air out of that. the volume in these airline stocks, they're going to go back to normal very quickly i think you'll see a lot less activity in a week if this keeps up for another day back to you. >> yeah. i know one of the other buckets you have been watching in recent weeks and i think this goes to the broader point you're making has been the developments, the progress we have seen on the medical front too. we did get a number of head license today. i think that stock hit a fresh high earlier in the session.

we're seei ining some of these vaccines continue to move into their next phases of trials and development right now. that does seem to be largely something that's being shrugged off by the market, at least today. >> right the other two buckets and you're right, you're very perspective on that. the treatment and vaccine the the other bucket that's moving the market we had very good news. we had consistent good news on that think in term tofs bucket, gad news or vaccines and treatments but still valuation and the v shape recovery is not present and it's not going to pan out exactly the way the bulls had been panning out for the last several weeks.

>> bob, last time we talked about the virks x, i was commenting on the fact it gotten down below 25. that was interesting now it's up above 3250 where it hasn't been for about a month. how much of that is just we had a string of rough days on the market how much of it is indicating something else as far as what some investors expect to happen next >> what the vix is saying there's more risk. it's not going be completely smooth sailing it's not going to be necessarily be a v shape recovery. when you have that, people start seeing this and they stop buying a lot of protection. there was a problem with that. now the market is saying, we have woken up a little bit you might say why had they not rael realized that before with the valuation getting crazy. traders tend to get to

remarkable herd mentality. the market is driven by momentum these days that means i'll keep playing it until it doesn't work. one day we'll wake up and somebody will cite a catalyst. yesterday it was the fed pow is telg us it's not a v shape recovery we have issues here. that's not a surprise to anybody been watching the market you see how frothy things can get. it's amazing how human beings are, john. you and i have been watching this a long time they tent to go with things a little longer than they have to. a lot of people saying this doesn't make a lot of sense, folks. eventually, it does make some sense. now you can see what's going on. >> kramer's point this morning some of this froth might have been led by people locked in their home, no sports, nothing else to do but bet on hertz. golf is back today and tomorrow. i wonder if you think that stay at home mentality will take way

some of the froth. >> jim has a great way of encapsulating everything with those sports, what else do you have to do i believe that these rallies are generated by zero dollar commissions and the stay at homes. you couldn't sit on your phone and make the trades you have today. ease of trading, stay at home. maybe a bit more educated work force. people at home, not lot to do. a little more money they getting from the ppp that makes some sense to me in terms of explaining why we had this frothy move main some of

these retail names >> we'll see how much of that unwinds. we didn't get to dow down 1200 if we return to that level you're talking the lowest since march 20th or so let's get to the judge and headquarters and the half. carl, thanks we begin with break news the big sell off on wall street today. the biggest since april 1st. welcome to the halftime report i'm scott wapner 4.25 the s&p is 3,03,077. nasdaq is down by 2. maybe a bit of a reality check going on today on wa